This article was first published in March 2018 and updated in May 2024 with new statistics and information.
Over the past few years, it’s become clear that businesses need strategic talent management to weather uncertain and unpredictable conditions. Unprecedented events, an increasingly competitive job market, a demand for new skills, the rise of remote work, and changing priorities among job seekers — they all impact your workforce. Without a talent management strategy, any one of them could jeopardize achieving your business goals.
A talent management strategy is what companies do to attract, develop, and retain their workforce. We saw firsthand what happens when that strategy doesn’t resonate during the Great Resignation. Millions of employees quit, often after realizing their companies weren’t prioritizing them as people, and reevaluated what mattered most to them at work.
The result? A workforce that’s seeking a role where they have purpose and can grow, and, most importantly, are treated like people first. Create a workplace culture that’s exactly what top talent is looking for with a great talent management strategy.
What Is a Talent Management Strategy?
Talent management strategy refers to a company’s approach to:
- Recruiting and hiring
- Onboarding
- Performance management
- Employee engagement
- Learning and development
- Compensation and benefits
- Company culture
- Workforce planning, including internal hiring and succession planning
Talent management strategy is your plan for bringing exceptional employees on board, ensuring their happiness at work, and retaining them long-term. Your strategy answers questions like:
- Where do recruiters find the best candidates?
- How does my company engage its employees?
- Why do employees choose to stay or leave my organization?
- How does my company compete with other employers to win top talent?
- Are we providing sufficient employee development opportunities?
- How does my company handle employee departures, including retirements, terminations, and resignations?
- What is my organization’s ideal headcount today? In five years? Ten years?
Talent management strategy not only helps you effectively recruit, engage, and retain your people now but also enables your HR team to plan more accurately for the future. Some certainty among all the uncertainties we’ve experienced is certainly an excellent reason to develop a talent management strategy for your workforce.
Most HR teams use software to set up and manage their talent management framework. HR software for talent management includes applicant tracking systems, employee onboarding software, performance management and engagement systems, payroll and benefits administration, and people data analysis. Other teams use an integrated talent management system to handle their strategy, which connects — or replaces — their various software solutions.
What Are the Key Components of a Talent Management Strategy?
Seamless talent management strategies are built by efficiently managing each component. It’s essential to consider how these building blocks work together to create a talent management framework that drives business success.
Your strategies for these HR functions are what determine the effectiveness of your overarching talent management strategy:
- Talent Acquisition and Recruitment: Your methods to attract, find, and hire talent, including your employer brand and candidate experience
- Employee Development: Your approach to offering and supporting training and development opportunities, including internal mobility
- Performance Management: How you set performance expectations and give employee feedback, including goal-setting and performance reviews
- Succession Planning: Your plans for ensuring key leadership positions remain filled, future leadership needs, and closing skills gaps
- Engagement and Retention: Your methods for creating a positive company culture and increasing employee satisfaction to encourage retention, including employee recognition and workplace flexibility
Talent management is all about providing an optimal employee experience through their complete life cycle, from their first encounter with your brand until their departure. With solid strategies for each of these components, you’re tuned in to what your workforce needs and how you can best support them from application to offboarding.
Why Is a Talent Management Strategy Important?
A holistic approach to talent management helps ensure you offer an employee experience in which your people have the support they need to:
- Fulfill their role responsibilities
- Grow their strengths and gain new skills
- Maintain their well-being
When these needs are met, your people are more engaged and equipped to meet their performance goals and contribute to the success of their teams, which in turn determines business performance. To put it simply, a talent management strategy enables greater business success.
Talent management statistics show that effective strategies boost employee performance, engagement, and retention:
- Among employees who are unlikely to look for a new job, 69% say they find their work fulfilling.
- 76% of employees say they work harder for a company that invests in their growth.
- 37% of employees would be motivated to do better work more often if they received more personal recognition.
With the right talent management processes and software, HR functions are aligned with business goals and your people are able to reach their full potential, giving organizations a strong competitive advantage. That’s why it’s important to plan a full-scale talent management strategy and consider what tools you’ll need to execute it.
What Are Talent Management Strategy Best Practices?
According to McKinsey, there are three indicators of talent management success:
- Rapid talent allocation, or the ability to reassign talent swiftly when business priorities change
- An HR team that’s involved in creating a positive employee experience
- An HR team that plans and operates strategically
But how do you get there? Follow these best practices to support a successful talent management strategy.
1. Align With Business Strategy
To be as effective as possible, the business’s goals should directly inform your talent management strategy. If, for example, one of its annual goals is to increase the number of brick-and-mortar locations, your talent management strategy should include increased recruitment efforts in those geographic areas. This alignment ensures that your team is focusing on work that contributes to the overall success of the company and establishes the impact of HR as a strategic department.
Talent Management Strategy Tip:
Establish top-down goal alignment as the standard practice at your company. With this approach, individual performance goals support departmental goals, which align with business objectives. This transparency motivates employees, making it clear how their team — and their own work — contributes to achieving big company goals.
2. Support Learning and Development
There’s a wealth of evidence to show that employees who have growth opportunities are happier at work. They’re less likely to quit and more likely to be high performers, and they put more effort into their work. When you create a culture of learning and constantly offer ways to learn new skills and hone strengths, you also create a more agile workforce. Employees with a wide range of skills can more easily pivot into new roles, giving you the chance to close skills gaps and extend their tenure.
Talent Management Strategy Tip:
Employee onboarding is an excellent time to map out new hires’ desired career paths — and boost engagement while you’re at it. New hires are still fairly likely to quit during the first few weeks at a new job.
Give them a great reason to stay by showing them the possibilities for their future in the role during the onboarding process. Include a task for managers to work with the new employee to discuss the role’s career path, as well as employees’ strengths and areas for growth.
3. Personalize Employee Experiences
Employee experience (EX) is a top priority for 70% of CHROs, and for good reason — it can either drive employees away or lead to innovation and loyalty. It can motivate your people to do their best or result in discouragement and disengagement. A personalized employee experience makes it more likely that said EX will be positive.
Personalization means considering each person’s unique needs, preferences, and goals. When you personalize EX, you’re more likely to make your employees feel welcome and connected — like they belong and are part of the company. Tailoring aspects of EX for each person creates a positive work environment where they feel valued, appreciated, and supported.
Talent Management Strategy Tip:
Learning opportunities tailored to each person’s strengths and interests, as suggested above, are the perfect way to personalize EX. Managers can also contribute significantly when they provide detailed constructive feedback during performance reviews and one-on-ones.
4. Leverage Data and Technology
In today’s world, operating strategically requires the use of data and technology — no exceptions. Talent management software is the best way to incorporate these into your strategy. This software offers tools you can use to recruit, hire, engage, evaluate, and retain employees, plus analytics features that let you explore your people data. You can use that data to develop a talent management approach tailored to your employees, rework ineffective strategies, and help each person achieve their full potential at work.
Talent Management Strategy Tip:
Download ClearCompany’s Buyer’s Guide to find a software solution that has everything your team needs to support your strategy.
How to Find the Best Talent Management System for Your Company
To manage your people and processes as effectively as possible, you need a modern talent management system with a fully-stocked digital feature set. A top-notch talent management strategy and a software system to match are crucial in order to hire, develop, and retain top talent, which drives the performance of your organization.
With the right software, your HR team can confidently execute your talent management strategy, prove its effectiveness, and learn from your people data.
The right talent management system seamlessly transitions talent through every stage of the employee lifecycle, from applicant to productive and engaged employee. A cloud-based, user-friendly platform enables streamlined communications and HR workflows. Its robust feature set improves talent management processes for HR users and employees while analyzing huge amounts of data to provide in-depth insights.
How far can your workforce can go when you use the right talent management system? And how do you choose the “right” system in the first place?
Our Talent Management System Buyer’s Guide can help.
The Buyer’s Guide walks you through every step of the decision-making process for choosing a new talent management system. We’ll help you define what “right” means for your company and discuss what to consider when investing in a new software solution.
Download the Guide to learn how to:
- Prioritize your organization’s wants and needs
- Correlate industry trends to your workplace and goals
- Get executive and HR team buy-in
- Ask the right questions in product demos
- Thoroughly vet talent management software systems
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