What is Talent Management and Why is It Important for Your Business?
Some professionals claim that talent management is needed if a business wants to build a workplace based on high quality performances, to encourage a strong learning environment within an organisation, or to add value to their employer brand. But what is talent management? Why is it important for the growth and success of a business?
We’ve answered these questions below, while setting out a helpful guide on talent management, what you can expect of a typical process model, and what you’ll be getting by implementing a strategy in your own firm.
What is Talent Management?
Talent management is a constant process within a company which involves attracting and retaining high quality employees, developing their skills, and continually motivating them to improve their performances. Originally, its purpose was solely about recruiting talent into a firm or an organisation, but since then has evolved into an essential management practice that looks at many different areas. These include:
- Individual performance and development
- Organisational capability
- Workforce and succession planning
The practice has quite a broad definition, as many organisations will expand the list of “talent” to include their whole workforce. By doing this, they can then look at working on ways to develop all of their strengths as a business, and every business will set up its own strategy to achieve its goals.
Every company out there has its own interpretations and approaches to talent management, but every interpretation will agree that it’s not enough to simply attract talented individuals. Managing, developing, and retaining them to create a motivated workforce that stays with your business in the long term is equally important.
What is Talent Management in HR and Human Resource Management?
The talent management process naturally covers many of the responsibilities you’ll find going to Human Resources (HR). It’s also one of the most popular current topics in HR and Human Resource Management as a whole. It uses a range of processes that would normally be used by a typical Human Resources department, including attracting, developing, and retaining talent for a firm.
However, saying that your business has an HR department is not enough to claim that you’ve also got a talent management strategy or framework in place.
When a talent management framework is set out in a firm, it will cover a key set of areas in HR, from hiring and employee onboarding (the process in which new hires become familiar with a workplace), to performance management and retention. It will also be all about the Human Resource Management processes which integrate with each other, as talent management activities are usually larger than the sum of their individual parts and should be brought together in a clear, comprehensive strategy in order to bring about its full potential.
Talent Management Activities
Many firms will set up talent management programmes that include a range of activities. We’ve listed some of the activities you might find below:
- Formal or informal leadership coaching
- Formal or informal leadership mentoring
- Networking events
- Opportunities to meet board-level individuals or directors
- Secondments (employees being temporarily transferred to another part of their organisation)
If you are in need of a prime location to host a truly memorable networking event, you may wish to take a look at our Monument location. This fantastic address offers four communal roof terraces with stunning views out over the River Thames, so you are bound to make a great first impression with any prospective client or investor.
Why is it Important to Set Up a Strategy for Your Business?
The main reason a talent management strategy is important for your business is because it capitalises on the most important asset of your company: your employees. It helps you to bring in and keep top talent for your firm, while consistently improving their overall performance.
There are also a few extra benefits that you’ll be getting by setting up a good talent management strategy for your business:
- You’ll be building a high performance workplace and increasing productivity
- You’ll be able to contribute to inclusion and diversity in your firm
- It gives you a competitive advantage against other firms
- It helps to drive innovation, so your team can harness new tools and technologies
- It encourages your team members to learn more all the time and motivates them to grow
- It adds value to the employee value proposition
- It leads to strong employer branding to help attract future hires
- You’ll be able to access people analytics and make better decisions for your business
- You’ll find that turnover decreases
- You’ll be creating meaningful work and growth opportunities for your team
What Features in a Good Talent Management Strategy?
Any good talent management strategy should align well with the objectives you’ve set out for your business, and having a clear, organisation-wide strategy in place should allow the process to go ahead without any trouble.
Creating a good talent management strategy will start with workforce planning, which means analysing your current workforce to determine future workforce needs. To do this effectively, you’ll need to look at:
- Current demographics
- Predictions for skill shortages or surpluses
- The labour market and workplace trends
- Your workforce supply and demand
Having your workforce plan in place will then help you to focus and prioritise activities when setting out your talent management strategy based on the points offered by the most common model:
- Building “talent pools” of individuals
- Career management
- Employee engagement
- Employee retention
- Leadership development
- Lifelong learning
- Recruitment (talent acquisition)
- Succession planning
It’s also important to remember that you should analyse the return on your investment in terms of business outputs, succession pools, and staff turnover and productivity, in relation to its costs. By doing this, you’ll be able to determine which activities are best for your strategy and your business overall.
Who Should be Included in the Process?
It’s possible to carry out talent management in a number of ways, and you might choose to use an exclusive or an inclusive strategy to get it up and running for your business. An exclusive approach involves focusing on key figures within your business, or employees with a high amount of potential. Conversely, an inclusive approach uses the whole workforce.
You might also think of using a blended approach, in which you’ll strive to engage and help develop all your employees, while still focusing on a core group or several core groups of workers within your firm.
Whichever approach you decide on, it’s vital that the process is carried out fairly and consistently.
Involving the Right People in Your Process
You should also ensure that you’re involving the right people in your talent management process. Senior leaders and management, for instance, should always be actively involved in the process and they need to make it their top priority.
Finding the right participants to take part in formal talent schemes (or leadership programmes, as they’re sometimes called) is also paramount. Having a structured selection process tends to increase the value of talent programmes in the eyes of employees, which then increases their motivation.
It’s even been suggested that the negative effects of employees being “passed over” for these programmes are not as harmful as once thought. This is especially true if those employees are then given sensitive but practical constructive criticism and feedback, as well as opportunities for ongoing personal development that’s based on their strengths.
You will need to maintain dialogue with your employees once the programme is complete, perhaps through ongoing networking structures, so that your workers can see how the process is continuing to develop and will reward them with greater opportunities in the future.
Your management team must be seen to be present and supporting other team members during the process. Forming a “talent panel” is often a useful way of getting directors and other senior members of staff involved.
Line managers are usually responsible for managing individuals’ performances, as well as for identifying and developing talent in their own areas, but seeing talent as organisation-wide is more encouraged than keeping to localised areas of expertise.
HR and Learning Teams
These team members have an important role to play in giving guidance and support when you’re busy developing and designing approaches that fit your company’s needs. Human Resource Management can also help to facilitate talent pools and programmes, and keep them maintained once they are working.
If you’re planning on creating a formal selection process for talent pools, your HR team will also ensure that the selection criteria are applied fairly and consistently. They should also do everything they can to ensure there is a learning strategy in place for team members who aren’t selected.
The Talent Management Model or Loop
A talent management model, which is also sometimes called a talent management loop, usually has six main areas of focus:
This is the ability to attract external talent (talented people who don’t yet work for you), and how well it works all depends on what applicants think of your business, your industry, or the sector of your industry in which you operate. Creating an attractive employer brand and employee value proposition is key to this.
Business-critical roles have to be identified for any framework to be a success. These are the leadership roles and specialist positions within your company that could leave it vulnerable if they’re left unfilled for any particular length of time. By carrying out efficient succession planning, you’ll be able to prepare potential leaders and key talent from within your firm to take on those roles before any gaps are created.
This is when you have to start identifying the talent you want to take on these roles. There are a number of different ways to do this, but the most common is to evaluate employees based on past performance and future potential, collecting them into talent pools of individuals who can step into key positions whenever they are needed. Having a strong performance management process in place should help you to do this early.
Employees that take part in talent management programmes usually value coaching, mentoring, and networking, as these often give them a chance to meet with senior members of staff within an organisation. This makes them a great learning and development strategy, though talent development should also be linked to other initiatives and learning interventions.
Secondments can also be a valuable development strategy, as they offer career development opportunities that might not otherwise be open to your employees. Utilising them can also help organisations to be flexible by expanding a worker’s capability, knowledge, and skills across the whole of your business.
What’s the Difference Between Talent Management and Talent Development?
The difference between talent management as a whole and talent development is that talent development is focused purely on developing the skills and competencies of your employees. Talent management, on the other hand, is far broader and covers recruiting and retaining talent, as well as succession planning and other key areas that may be covered by Human Resources.
You are more likely to see a happier, healthier, more fulfilled and better-performing employee if they:
- Are well-managed
- Have a good quality job
- Have some autonomy in their work role
- See a clear link between their role and the objectives of the company
Investing well in development activities should reduce employee turnover and improve talent acquisition and retention in a business. You might also offer a reward and recognition system, which uses a good mix of rewards and praise. Examples of these include incentives, rewarding an employee’s contribution to the firm’s success, and acknowledging their value to the organisation.
This is using your workforce in the best, most efficient way possible. The most effective way to use it is as part of workforce planning, longer term investment in skills, learning, and development, and with a fully supportive mobility policy.
You should understand where the skill gaps are in your business in order to plan the training your team will need, and to deploy identified talent with strategies such as:
- Additional qualifications
- Giving out challenging assignments
- Job rotations
- Leading on special projects
- Secondments to aid progression and growth
- Skill enhancement opportunities and training
If you are a global firm and you have an international team elsewhere, you may even consider providing relocation opportunities and secondment opportunities to talent.
Tracking and Evaluating Talent Management
It’s often difficult to track and evaluate talent management efficiently, but it’s also necessary to ensure that the time and money you’ve invested into the process has been well-spent. You will need a large amount of reliable, high quality data that’s robust enough to stand up against careful scrutiny.
Ultimately, the best way to measure the success of your talent management is to take note of your company’s success. However, there are many ways to carry out tracking and evaluation if you’d like to see the close results of your success.
We would highly recommend carrying out your own research to find the evaluation method that works best for your firm and its needs, but one example would be to collate employee turnover and retention data specifically with those employees who’ve been selected to take part in talent management programmes.
Need New Premises for an Expanding Team?
If your business is growing just as you’ve always wanted it to and you know you’ll soon need a new office space to comfortably accommodate your whole team, plus equipment, contact Halkin today. We take pride in the portfolio of luxury serviced and managed offices we have available to rent, and each one can easily be set up and made ready to mirror your company’s ethos, values, and ideals.
Each address we have available is offered on a flexible tenancy as well, so you can change your address to something newer or more spacious whenever you need it. We also keep transparent rates with all of our services when you sign up for membership with us, meaning you’ll never have to worry about what it might cost.
Get in touch with us today and let’s find the ideal location for your firm to continue on the path to success.