Talent management is a critical component of human resources. But just like many other aspects of HR, talent management is changing.
The effects of the COVID-19 pandemic, alongside widespread digitization, have upended the state of work and how businesses approach managing their people processes. There's a clear need to modernize the HR function to meet the needs of today's employees, and failing to do so means falling behind.
Let's dive into the core components of talent management and look into ways you can refine the traditional approach to meet the needs of the modern employee and prepare your business now for the disruptions of tomorrow.
What is talent management and how has it changed?
Talent management first emerged as a core pillar of HR in the early 1990s. The past parameters of talent management were designed for a brick-and-mortar, jobs-for-life workforce. This was a time when the war for talent was won through recruiting.
Talent management’s functionality was to acquire, hire and retain skilled employees who were expected to commute to work every day, operate under very different standards of connectivity and, in many cases, accept a diminished level of autonomy within their role.
The basic purpose of talent management remains the same — to implement a robust strategy to acquire, hire and retain key players for their workforce. But today’s HR landscape requires processes that look very different than even a few years ago.
Some of the factors influencing this necessary change include:
- Digital transformation: Continued reliance on digital solutions demands a shift from an on-paper talent management strategy to a more tech-friendly one.
- Shifting employee expectations: Changes in the workforce landscape mean employees expect greater flexibility in their workday, better pay, better opportunities for education and professional development.
- Hybrid and remote work: A workforce that collaborates both in-person and virtually requires new and expanded processes for effective team communication and manager/direct report relationships.
- Improved diversity, equity and inclusion practices: Talent management methods of the past were often designed for a limited demographic. Modern talent strategies require greater flexibility to foster diversity and be more inclusive and equitable for a greater number of people.
Before we dive into strategy, let’s briefly review the meaning of talent management as it relates to other critical HR job functions.
Talent management vs talent acquisition
Talent management provides an overarching strategy for recruiting and retaining top talent, delivering a workforce that’s equal parts productive and engaged. Within this strategy falls talent acquisition which focuses on recruiting candidates, filling vacant roles and onboarding new hires.
Talent acquisition is just one small piece of the talent management puzzle.
Talent management vs talent development
Talent development is another process that falls under the umbrella of talent management. The primary focus of talent development is to engage employees after they’re hired, and provide them with the resources and learning opportunities required to grow within the organization.
Internal career mobility within an organization is among the top priorities of many contemporary employees – 94% indicate they would remain in their current position longer given better learning resources – and should be prioritized as a key component of a larger talent management strategy. For employers, providing learning opportunities can also source untapped talent within the workforce and give them the tools to grow into their potential.
Talent development also serves a dual purpose of driving recruitment and acquisition, with 70% of U.S. employees at least somewhat likely to leave their current company and accept an offer with a new company that’s known for investing in employee learning and development.
An effective talent management strategy combines both talent acquisition and development to funnel external and internal employees into the talent ecosystem and fill needs within the business.
The importance of talent management in today’s world
The global labor shortage is leaving companies in every industry scrambling to meet their basic organizational needs. Not only are skilled employees a challenge to find in the current market, but retention is posing an unprecedented problem with 47 million people quitting their jobs in 2021 — a record high.
Combine this with an endless tide of digital change, increased employee expectations, hybrid/remote work challenges and the pressure to take action on DEI — people leaders are in a critical position to swiftly address these talent challenges.
These numbers paint a bleak, but realistic picture and the only way to get ahead of the labor crisis is by rethinking talent management. The companies gaining traction are listening to the needs of their workforce, analyzing the shifting needs of their organization and employee base, and creating a new, more effective and contemporary method. Without fundamental changes to HR processes, organizations run the risk of losing out on skilled workers and falling behind.
How to elevate your existing talent management strategy
While the tried-and-true frameworks for talent management may not change, current systems and the way leaders think about talent management has to in order to keep in step with the new and emergent world of work. As you navigate today’s labor crisis, you have an opportunity to create a foundational talent management program that will influence talent acquisition and development for years to come.
The first thing to understand is that the task of building, maintaining and modernizing your talent management strategy is continual. As with other business tactics, this aspect must be regularly evaluated and updated to help future-proof your organization. Prioritize a flexible and agile program that can change course quickly as the market demands.
As you re-envision your talent management program for today, here are a few contemporary components you may want to include in your strategy:
Skills development and workforce education
The global talent shortage has organizations scrambling to find skilled employees to fill job openings. But with the right talent development initiatives, your company can cultivate this talent from the inside. Prioritize developing skill-building programs that allow your employees to develop the in-demand skills needed to fill your most critical roles — including those in leadership.
This can look like a mentorship program that’s focused on building on-the-job experience and critical soft skills, or something more robust such as a strategic workforce education program that provides employees with the opportunity to earn degrees, certificates or credentials.
If you offer skills development for employees, it’s important to also provide opportunities for them to use those new skills. Talent mobility, whether through horizontal repositioning or vertical advancement, is a critical process in talent management that supports better retention rates and organizational advancement.
Diversity, equity and inclusion
Historically, talent management strategies were often designed for young, white, able-bodied, college-educated individuals — excluding entire demographics of people from the picture. A modern talent management strategy is only effective if it integrates with your existing diversity, equity and inclusion efforts. Prioritize ways to uplift team members from underrepresented groups throughout every phase of the employee lifecycle — from hiring to onboarding and continuous development.
Talent management shouldn’t exist in a silo. When evaluating your efforts, ensure that all of your talent management systems and processes are strategically aligned to overarching organizational objectives. Looking at talent management from this lens ensures that the skills workers are building are relevant to the needs of the company and that your efforts are driving measurable business outcomes.
The future of talent management
How the world does business is changing, and the time to rethink your talent management strategy is now.
Today’s workforce expects more from employers than ever before. After a lifetime of commuting, more than 70% of employees want to stay remote or hybrid after the pandemic. Employees actively seek organizations who offer workforce education and opportunities for upskilling, reskilling and advancement. Each day brings changes in technology, requiring frequent updates and training. With a max exodus of employees and millions of open jobs on the board, the challenges on HR feel relentless.
Outdated talent management methods can take a heavy toll on an organization, exacerbating a litany of issues from recruitment to retention. Take the lead in helping your organization solve its labor crisis by refocusing on development and mobility, creating an environment where people feel valued and supported in growth.
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