Everything you need to know about talent management

How to upgrade your employee experience in the new world of work

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By Nicole Schreiber-Shearer, Future of Work Specialist at Gloat
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With the Skills and Silver Tsunamis on the horizon, overcoming talent shortages should top every leader’s priority list. As Baby Boomers prepare to exit the workforce and the rapid proliferation of AI shifts the skills people need, it’s up to business leaders to craft new pathways to encourage their people to develop in-demand expertise.

Future-fit skill-building is a core component of successful talent management in our Post-Industrial era of work. Now that priorities are evolving and the pressure to hold on to all-star employees is reaching a peak, every business must have an overarching talent management approach designed to boost engagement throughout the entire employee lifecycle.

Although talent management is likely a familiar term, there’s still a lot of uncertainty about what goes into a superior strategy. And as we approach our next chapter, challenges are only going to get more complex in the coming years. So what does it really take to get talent management right in the new world of work?

What is talent management?

Talent management is the strategic approach employers use to attract and cultivate a highly productive workforce that is inclined to remain with the organization for the long term.

To get a better picture of what talent management really is, it’s helpful to think about what it’s not. Here’s how talent management differs from a few other terms that sound similar to it:

Talent management versus talent acquisition:

Talent acquisition is about recruiting, hiring, and onboarding internal and external candidates while talent management focuses on bringing out the best in your workforce and identifying the career paths and skills employees need to build to flourish

Talent management versus performance management:

Talent management is a broader term that encompasses recruitment, retention, development, and recognition, while performance management is more specialized and dedicated to measuring how employees are contributing to their organizations based on metrics and feedback

Talent management versus talent development:

While talent development focuses on how employees build skills and connections, talent management is a broader term that describes an organization’s commitment to recruiting, staffing, and succession planning.

How has talent management changed?

In the past, talent management strategies were primarily prescriptive and administrative. Employees participated in the same set of talent management practices, like annual performance reviews and L&D curriculums, and the overarching focus was on managing performance.

In contrast, today’s approach to talent management is significantly more personalized, purpose-driven, and underpinned by emerging technology. Rather than expecting team members to climb traditional, linear career ladders, companies are recalibrating their approach to empower employees to take charge of their own professional development.

There’s also an increased emphasis on helping employees find and identify opportunities that align with both their personal ambitions and business priorities. As this shift continues, conversations about talent management and performance are transitioning from top-down to increasingly open, and at times, employee-led.

Much of this change is being fueled by the rise in new technologies that enable employees to see the kinds of opportunities that are available within their organization and the skills they’ll need to obtain to step into new roles. Talent marketplaces are a key example of the kind of disruptive technology that is underpinning significant changes to traditional talent management strategies.

Why is talent management important?

Talent management is one of the most important components of any overarching business strategy because, at the end of the day, your people are the heart of your company. Without the right talent, you won’t be able to satisfy customers, continue to innovate in your industry, and meet the benchmarks established by your leadership team. To make matters worse, your corporate culture and overall morale will suffer if you don’t hire the employees you need to support your business’s growth.

The talent landscape has never been more complex, which means leaders need to go the extra mile to ensure their talent management strategies are cutting-edge and employee-centric. The businesses that are committed to managing talent well will gain a significant competitive advantage, as these companies will be able to retain their top employees and ensure that people continue to grow within their organization.

In the past, many companies tried to keep expenses related to employees low in an effort to improve their bottom lines. But in today’s competitive landscape, investing in your people has become increasingly important. Rather than prioritizing perks and benefits in an effort to retain top talent, businesses need to make investments that align with what their employees are really looking for: purposeful work and the opportunity to continue to grow and develop their skill sets.

What is a talent management system?

A talent management system (TMS) is an integrated software solution that covers the full scope of talent management, including recruitment and employee onboarding, performance management, learning and development, compensation management, and succession planning.

While talent management systems are a crucial technology to support HR’s role in optimizing the end-to-end employee life cycle, they’re far from the only platform that you need to have in your HR tech stack.

Talent marketplaces have emerged as another essential technology that enables employers to democratize access to opportunity and uncover talent that they may have once overlooked. The two-sided platforms harness the power of AI to match employees to internal opportunities such as projects, gigs, mentorships, and full-time roles that align with their skills, experience, and ambitions.

What are the key benefits of talent management?

A superior talent management strategy is a major competitive advantage that can help ensure your business has the skills needed to thrive in the new world of work. Four of the key benefits of talent management include:

#1. Improve employee engagement and productivity

Identifying and nurturing employees’ skills and development is at the heart of every successful talent management strategy. Rather than allocating the same handful of employees to projects and causing these team members to become burnt out, talent management ensures that people from across the organization have the opportunity to take on projects that align with their goals and business priorities. This approach will likely lead to a significant performance boost, as Gallup noted that utilizing the skills and strengths of employees regularly improves their engagement by six times.

#2. Enable succession planning for critical positions

The right talent management strategy will also make it easier to create a future-proof succession plan that will prepare the next generation of talent for leadership positions down the line. During business expansion or management turnover, succession planning ensures that productivity and employee morale aren’t impacted. Training and upskilling must be core components of succession planning, and a strong talent management strategy will ensure that these growth opportunities are readily available to your next generation of leaders.

#3. Enhance retention

As the race to build skills intensifies, no organization can afford to watch employees with in-demand expertise walk out the door. To prevent turnover from wreaking havoc on organizational efficiency, you need to make sure your talent management strategy is designed to optimize people’s experience throughout every stage of the employee lifecycle. If you prioritize growth opportunities and encourage employees to play an active role in their professional development, you’ll be able to protect and retain the talent your business needs to thrive.

#4. Increase agility

Agility is much more than a buzzword; it’s a prerequisite for success in the new world of work. As the pace of change accelerates, every organization is going to need to pivot quickly to respond to situations as they evolve. A core component of agility is the ability to rapidly reallocate talent as business priorities shift, and that is only possible with an effective talent management strategy. When you prioritize building future-fit skills, you’ll have the talent and resources needed to respond to change quickly and outpace your competition.

What are the key components of talent management?

Since talent management is a comprehensive process, it can be broken down into the following components:

Recruitment and attraction

During this component of talent management, Talent Acquisition teams search for external candidates who possess the skills their organization is looking for. Businesses use various recruitment marketing tactics, such as job postings and videos, to showcase their employee value proposition to potential workers.

Onboarding

Once employees join an organization, they complete a series of introductions and training programs to familiarize themselves with the business and how it works.

Learning and development

Throughout an employee’s journey with an organization, the business should provide ample opportunities for them to build new skills and deepen their expertise to continue advancing their career.

Engagement and retention

HR teams develop various strategies to keep employee morale high, including team-building activities and opportunities to develop new skills and move into new roles within the organization.

Workforce planning

To stay one step ahead of evolving skill needs, HR leaders forecast the capabilities and headcounts their workforce will need in the future and create plans to meet those needs. The rise of AI-powered skills intelligence tools like Gloat’s Skills Foundation helps executives gain the insights needed for comprehensive strategic workforce planning efforts.

Skills required for talent management

In order to effectively manage talent for their organizations, HR leaders must prioritize developing the following competencies:

#1. Communication and relationship-building

Talent management impacts the entire organization, so it’s essential for HR teams to feel comfortable communicating with employees about any related initiatives, including mentoring programs, lateral career moves, and skill-building schemes. HR should also maintain open lines of communication with managers and line of business leaders to gain insight into how different teams are performing and various upskilling and reskilling initiatives for these employees.

#2. Strategic planning and problem-solving

Talent management is a complex ever-evolving process, so it’s almost inevitable to run into obstacles along the way. Whether it’s a shift in the types of skills employees need or a manager’s struggle to help a struggling employee boost their performance, HR leaders must develop strong problem-solving skills to help their organization through every talent management hurdle it encounters.

#3. Data-driven decision-making

We’re living in a world that’s data-driven by default—and HR is no exception. Now that a new generation of AI-powered skills intelligence tools is gaining traction, HR leaders must become comfortable using these systems to gain insight into their workforce’s capabilities, emerging knowledge gaps, and skill needs that are on the rise and on the decline.

Talent management process

Every organization’s talent management process is going to look a little different based on factors like their business priorities and the industry they’re in. However, generally speaking, the talent management process can be broken down into the following 6 steps:

Planning: Planning includes pinpointing the skills your ideal candidate will possess, developing a job description, and creating guidelines for recruitment.

Attracting talent: Next, talent acquisition teams will look inside their organization and/or externally for candidates who possess the requisite skills and experience for the role leaders are looking to fill.

Selecting: After an application process that typically includes interviews, written tests, and evaluations, hiring managers will choose the candidate who they believe will be the best fit for the role.

Developing: When the selected candidate steps into the role, their skills will be developed according to the job’s responsibilities. Usually, their first step is completing an onboarding process to get familiar with the role and company culture.

Retaining: Talent management doesn’t end once an employee finishes onboarding. Instead, organizations need to make a concerted effort to hold on to top talent by providing growth opportunities as well as rewards and recognition.

Transitioning: The final step occurs when employees are offboarding. HR teams typically conduct exit interviews and make decisions about how to fill the upcoming vacancy.
Talent management model

Talent management models can help leaders visualize the key milestones in the employee lifecycle and what they’ll need to prioritize at each stage. Josh Bersin’s model outlines the most crucial steps in this end-to-end talent management process:

Building a talent management strategy

Every element of workforce strategy needs an upgrade for the new world of work and your approach to talent management is no exception. As employee expectations evolve and operating models are recalibrated, there are a few steps you can take to create a superior talent management playbook, including:

Detailed job description

Whether you’re hoping to fill your role internally or externally, you need to go into your candidate search with a clear outline of exactly what skills and capabilities you’re looking for. Job descriptions should articulate the responsibilities your desired candidate will carry out, what competencies they’ll need to possess, and allude to potential opportunities for future growth.

Person-organization fit

It has never been more important for employees to feel connected to their organization’s culture and values. Consequently, HR and Talent teams need to make sure that a candidate’s beliefs align with their employer’s mission.

Reward and recognition

Recognition needs to be part of your talent management strategy, especially as the war for talent intensifies. Gallup found that employees who feel they’re not adequately recognized at work are three times more likely to say they’ll quit in the next year.

Opportunities for continuous improvement

Internal mobility is another non-negotiable when it comes to retaining top talent during the Great Resignation. Our own research reveals that a lack of growth opportunities is the second most common reason that employees cite in their decision to switch jobs. If you want your people to stay with your company, you need to demonstrate that their future with your organization is bright.

Aligning talent management to overall business goals

Your talent management goals should align with the overarching objectives your business is looking to achieve. Sometimes it helps to work backward by first identifying what these company-wide priorities are and then creating skill-building pathways to ensure your workforce has the capabilities needed to meet these objectives.

Building a strong employer brand

Creating a strong employer brand will help your business stand out in a sea of competitors that are looking to acquire talent with in-demand skills. To bolster your employer brand, spotlight employees who are growing and succeeding on your company blog and social media profiles, and make sure to spread the word about any development initiatives that your business is spearheading.

Using technology for talent management

A new generation of AI-powered technology is becoming a game-changer for talent management. Leaders can harness skills intelligence tools to gain insight into their workforce’s capabilities, as well as utilizing a talent marketplace to match people to open opportunities across the business that align with their skill sets and long-term goals.

In the new world of work, simply being familiar with the term “talent management” isn’t going to cut it. Instead, HR leaders need an in-depth understanding of the best practices that will optimize every stage of the employee lifecycle and the innovative technology that can take talent management strategies to the next level.

If you’re looking to learn more about how you can leverage talent marketplaces to put employees in the driver’s seat of their professional progression, check out our guide, Talent marketplace 101.

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