The secret to talent management boils down to one simple concept: hire (and keep) the right people. Of course, if it was that easy, you wouldn’t be reading this guide! A practical and efficient talent management strategy aligns with company goals and positions your business to recruit talented people that blossom into engaged, active long-term employees, eventually forming the next generation of company leadership.
However, superior talent management programs go well beyond business buzzwords. In fact, they can be the key ingredient that transforms an organization into an industry leader. Because successful talent management strategies integrate cohesively with company culture, mission and future goals, they are able to build the kind of workplace that everyone—including the best talent—wants to be a part of.
Of course, a corporate culture like that doesn’t happen on its own. It’s the result of careful planning and collective action. Everyone—from human resources managers to the CEO right down to the newest hire—must be wholly invested in employee development as an integral factor in company advancement. Human resources not only needs backing from the executive team, but also a genuine connection with each employee.
Naturally, this kind of authentic and cohesive work environment requires investment. But it can be well worth the effort. Case studies performed on Silicon Valley titans like Google, Facebook and Apple credit innovative talent management programs with these companies’ rise to the top. Whether or not you subscribe to each organization’s brand of management, with CEO approval ratings in the upper 90s and top employee ratings on Glassdoor, it would be difficult to argue that employee fulfillment didn’t play a part in their success.
At this point, you might be saying, “well, that’s great for multi-million-dollar companies. What about those of us without the capital to make huge changes?” Studying the talent management tactics of these kinds of businesses, what jumps out is their commitment to human capital as their organization’s premier asset. And you don’t necessarily need to buy the whole company barbeque or host a hackathon to reflect that corporate philosophy—which is exactly what talent management is all about. A successful talent management strategy works to instill this attitude into every aspect of your business’s operations. Here’s how it all works.
What is Talent Management?
First thing’s first: let’s get back to basics and discuss what talent management really is. At its heart, talent management is about identifying talented recruits and steering them through every step of the employee lifecycle, from hiring to future development. A strategic talent management plan, however, not only focuses on identifying and retaining engaged and active personnel, but also on hiring employees that align with the company’s mission, values and goals.
How to Create a Successful Talent Management Strategy: A Step-by-Step Guide
Now onto the good stuff: how do you build your own talent management strategy? Unfortunately, there’s no clear-cut answer. Your strategy, like your HR priorities and company goals, should be unique to your business’s special challenges and your organizational approach.
So, while the steps below represent some of the best practices in developing a talent management strategy, your real-life plan should be uniquely yours, modeled to best achieve your company’s definition of success.
1. Identify Organizational Goals
Even seasoned HR professionals struggle to relate objectives to the larger goals of the company. And that can create friction between HR and management: HR teams are branded as poor team players, or worse, siloed off away from a company’s core focus.
Talent management strategies attempt to mitigate that conflict by hiring and supporting employees with company goals in mind. To do so, however, it’s necessary to get everyone on the same page about what those objectives actually are. Although it may seem redundant, a good talent management strategy begins by clearly defining your company’s goals—for this year as well as the long term—and by naming the qualities that make up your unique culture. Once you have a clear definition in front of you, it will be much easier to see how those connect to personnel and recruiting.
2. Convert Company-Wide Objectives into Human Assets
Now that you have clearly stated company goals, you can see how those break down into individual roles and functions. For instance, if one of your company goals is to release a new product, you must analyze what new roles are needed to fulfill that objective.
This is where “talent-management-as-a-company-wide-effort” comes into play. It’s unlikely that you’ll have the deep knowledge of each department to make those decisions without consulting with managers and team members. As a general rule of thumb, you’ll need to:
- Assess the headcount and business functions you need to fill to achieve each company goal.
- Convert your objectives into a measure of human assets.
- Decide who you need to hire, train, or promote and what new jobs need to be created.
3. Analyze Future Challenges
Because talent management deals with human emotions like engagement, excitement and authenticity, it can be vastly unpredictable. However, your job as an HR professional is to anticipate those challenges and—as much as possible—create buffers against them.
If you know, for instance, that you may face geographical limitations when recruiting new talent, an attractive relocation package may make all the difference. A good HR team member also has their finger on the pulse—not just when it comes to employees—but also in terms of your competitors. Keep your eye out for layoffs and recruit talent from others in relevant industries. And don’t forget about the talent inside the building as well. A dedicated and loyal internal hire is often worth three external employees, which is why employee development is so pivotal to a successful talent management strategy (more on that later).
4. Develop and Refine Job Descriptions
Communication breakdowns often result in poor hires. To further your talent management strategy, it’s imperative that you review and clarify the descriptions of each role in your company.
A common pain point for team members is that job descriptions are written without full understanding of the functions and inner workings of each role. When developing these descriptions, you absolutely must gather feedback from the team members who perform similar roles, as well as getting insights from management about where they see each role in the future.
5. Hire for Company Culture
At the heart of an innovative talent management strategy is the reinvention of company culture as a top-down initiative. Skills can be taught, but finding a candidate that fits well into your business’s general vibe is something truly unique and valuable. There’s a saying among HR professionals that recruiting is a lot like dating, while retention is more like marriage. And like the dating scene, a potential hire can look a lot better on paper than they do when you talk one-on-one. Keep culture at the forefront when you do recruiting and hiring:
- Say no. Don’t be afraid to turn away talented candidates if they don’t fit into your company’s vision of corporate culture.
- Advertise your values from the word go. Being able to succinctly and demonstratively express your company values is a real skill—and it will draw the kinds of employees you want. Facebook is great at this. They have a slogan: “move fast and break things.” Instantly, anyone who hears that can imagine the kind of workplace culture they bring to the table. Someone who is slow, careful and risk-averse is not going to be a good fit for their company. You don’t have to model your values on Facebook’s, necessarily, but you should be able to boil them down to a few succinct, catchy phrases. Once you’ve got that, be sure to include it on the ad copy!
6. Focus on Employee Development and Hire from Within
No matter how carefully you filter your candidates, you take a risk every time you hire. Hiring from within mitigates some of that risk, offering the opportunity to groom and train your talent pool well before you even put out an ad.
However, you absolutely need to meet one-on-one with employees and get their opinion on the matter as well. Where do they see themselves in the next five to ten years? What kinds of tasks do they most enjoy? What do they find challenging? A human-centric approach like this will go a long way to establishing a pool of qualified leaders and talented specialists.
Additionally, it’s much more cost-effective in the long run. According to studies, external hires expect 18 to 20% more in salary than those promoted from within. And they inflate turnover: they’re 61% more likely to quit or be laid off than internal hires. Numbers like that make a fairly strong argument for talent management, and they’re also quantifiable metrics you can use to track your program success—more on that to follow.
7. Designate Metrics to Measure Program Success
It’s easy to tell when a talent management strategy is working. However, a plan that requires no tweaking is essentially a human resources unicorn. Additionally, you’ll be a lot more likely to convince executives to consecrate your talent management strategy if you can produce quantifiable metrics—particularly ones with dollar values attached. Here are a few tips on designing your metrics.
- Measure your impact on revenue. Although it can be tempting to shy away from revenue-driven numbers, the bottom line is that profits capture executive attention. And HR is connected to company margins. Statistically, adopting a holistic talent management program has been shown to increase earnings by about 15% on average. So don’t be afraid of revenue-oriented metrics.
- Show executives how you’re saving the company money. Employee retention also offers an obvious dollar-value measurement, since the cost to recruit, hire and train new employees is so high. However, it’s also useful to break down retention rates by performance—for instance, if you have high rates of retention for high performers, that could be a more precise barometer for program success. Also track the rate of turnover for perspective.
- Other useful metrics to track. In addition to revenue, retention rates and the breakdown of hiring and recruiting costs, there are a couple of other useful measurements. These include the revenue per full-time employee, employee engagement levels (as evidenced through surveys, stay/exit interviews and one-on-ones), and the number of number of internal and external promotions. These are some ideas of metrics to track, but you’ll want to winnow to those that best represent success in your eyes, given your company’s philosophy and goals.
8. Win Support from the Top Down
The bottom line is that without buy-in from executives, your talent management strategy is unlikely to succeed. Long-term employee development programs depend on support from the leadership team—if your C-levels think HR equals “headhunter” or start talking layoffs at the first sign of falling profits, it will be next to impossible to deliver extraordinary results.
To make the case for talent management, CEOs need to be wooed with the potential business outcomes. Fortunately, that’s precisely the goal of a well-designed talent management strategy: aligning your human assets so that they run parallel to broader business objectives. When addressing your top-level executives, give them the tools they need to give their support.
- Be Bold. Don’t shy away from strong, revenue-driven metrics. A gutsy talent management strategy has the power to virtually transform company culture and to redefine your standing as an industry leader.
- Stay Focused on Business Outcomes. As much as your CEO may care about the employees, their job is ultimately to drive business and steer the company forward. Knowing this, your pitch must be centered around business objectives.
- Design Measurable Performance Metrics. Executives see the world in terms of dollar values—and so, to win leadership support, your talent management strategy needs to include quantifiable values on employee assets. That may feel uncomfortable at first, but every company with a successful talent management program has done the work of assigning dollar values to each role.
9. Try an Unconventional Approach
Ultimately, talent management is about separating yourself from the crowd, rather than going along with convention. It’s that kind of thinking that will attract top-tier talent and bring the energy and excitement that keeps high-performing employees engaged and working at the top of their game.
- Make onboarding count. One of the most notable lessons from Facebook’s talent management strategy is to ditch the tired routine of employee onboarding. The rote first-day task of filling out paperwork is completed well before each employee begins. Their onboarding consists of real-life participation in existing projects and lasts six weeks. Then new hires are given their choice of teams and projects. Essentially, they’re allowed to experience the day-to-day up close before being given an assignment, which means they’re much more likely to deliver high-performance outcomes.
- Create a recruiting culture. Take a tip from Google’s “20% work” recruiting culture. Google has managed to make the work itself—rather than trendy benefits like a pingpong table or office keg—the main attraction for recruiting candidates. Twenty percent work means that employees devote 20% of their time at work—essentially one day a week—to their own projects or employee development. That benefit by itself makes for a powerful recruiting tool. It also helps to drive innovation within every department and role in the company. This has had such a positive effect on engagement that it’s effectively eliminated turnover. Because of that success, the approach has been replicated with some success at Hewlett Packard Labs and other organizations.
It will take time to convert your culture into a talent-management-driven organization. But with 15% earnings and your industry standings on the line, it’s well worth the effort.