Importance of Talent Management
Without the right talent in place, an organization’s ability to meet its objectives is severely limited. Learn why talent management is so important, and where to start.
The Importance of Talent Management
What would you say is the most difficult part about attracting and retaining high-quality talent? We would venture to guess that if we were to ask a half-dozen different companies, we might anticipate just as many different answers.
- Some would quickly point to the challenges of recruiting and competing for potential talent, especially in the tech industry.
- Others might point to difficulties related to effectively onboarding new talent or helping new members quickly feel like a valued part of the team.
- Finally, some companies are well aware that their learning and development programs might not be up to par—while others see offboarding as the trickiest piece of the talent management puzzle.
Clearly, though, there is one thing each of these talent hypotheticals has in common—each dilemma falls within the scope of talent management, and each plays a role in an effective talent management strategy. By creating strategies that align with each stage of the talent life cycle, companies can avoid many of the challenges of attracting, recruiting, and retaining the best talent available.
Before we get too deep into the objectives of talent management, it’s important to define what, exactly, we’re talking about when we use the term.
What Is Talent Management? According to{" "} McKinsey , there are five main components of talent management:
- Identifying, hiring, and retaining the right people. {" "} The productivity gap between high-performing employees and the rest is significant, with high-performing employees being “up to eight times more productive than others.”
- Empowering employees to learn, grow, and thrive within their role.{" "} Encouraging employees to develop their skill set not only empowers them, it also demonstrates that the organization values its employees and wants them to be successful.
- Providing meaningful incentives around employee performance and productivity. {" "} Incentivizing performance is far from a new concept, but not every organization understands how to motivate their employees in meaningful ways. By tracking the right metrics and helping employees understand what matters most, you can start building a culture that champions improvement.
- Understanding and optimizing the employee experience. {" "} It’s difficult to overstate the impact a positive employee experience—one where employees feel understood, valued, and supported—can have on an organization’s ability to retain their highest-performing talent.
- Optimizing workforce planning strategies{" "} Especially in tech, the most in-demand skills can quickly change, so companies shouldn’t be hesitant to adjust or refocus their strategy as an organization’s needs inevitably evolve over time.
As McKinsey notes, establishing a “talent-first culture” can help virtually any company to “improve organizational performance and potentially gain a competitive advantage.” (You can learn more about this by reading the{" "} full article .)
What Is the Purpose (and Benefits) of a Talent Management Strategy?
The primary role of a talent management strategy is to serve as a well-rounded and effective framework for identifying talent needs, attracting the right candidates, and empowering employees to thrive. In other words, optimizing the talent management process and strategy helps to ensure each stage of the talent management life cycle is considered.
Over time, organizations can fine-tune and adjust their strategy as needed. Taking this approach—rather than having to start from scratch every time you have roles to fill—is much more cost-effective and helps to ensure business continuity.
Why Is Talent Management So Important?
The importance of talent management in the workplace essentially comes down to its beneficial impact(s) on an organization’s productivity and culture. The right talent management strategy can positively impact an organization on multiple fronts, with its key benefits including the ability to:
- Improve business performance and outcomes. When the right people are in the right roles, it makes success much, much easier to come by. By carefully considering the approach to talent management and putting a talent management framework in place, organizations can put themselves in the best possible position to succeed.
- Reduce costs. Not only is great tech talent costly and frequently difficult to attract and retain, there is also a major (negative) cost impact that comes from unfilled positions. When crucial positions go unfilled, it hinders innovation and productivity. Replacing departed talent is expensive, too, underscoring the importance of underscoring the importance of recruiting and securing the best talent available.
- Empower employees. Most modern business leaders understand the importance of employee experience within their organizations, including its impact on their ability to attract and retain talent. While some employee churn is inevitable, effective talent management strategies help to make employees feel understood and valued—leading to increased productivity and loyalty over time.
- Unlock competitive growth. One of the biggest competitive differentiators among today’s employers is their ability to attract and retain the best talent on the market. When the right talent is in place, teamwork, collaboration, and innovation also tend to improve. Finally, implementing a comprehensive talent management strategy helps companies find the right talent without up-ending their budgets.
What Are the Common Approaches to Sourcing Talent in Tech?
Depending on the organization’s current needs and both short- and long-term strategic priorities, they may opt for permanent or contingent solutions—or a combination of both. How do you know which is right for your organization? Let’s take a closer look at each of these segments that define traditional talent management approaches.
- Permanent workers are employed on a long-term, often salaried basis—the traditional or go-to approach for most companies. They are typically entitled to employee benefits (like PTO and retirement benefits), and contribute to the overall organizational culture.
- Contingent workers are not usually considered “employees” of the company in the same way permanent workers are, yet their contributions can be just as vital to the success of the organization. They can be brought on to work on specific projects, offering support to your permanent workers.
As you can imagine, for many companies, the best results come from combining these two approaches. By doing so, employers benefit from maximum flexibility, as well as an improved ability to optimize hiring budgets and get crucial roles filled with qualified talent. This is especially true for tech companies, which often have a balance of long-term employees and project-specific teams of contingent workers.{" "}
No matter where you’re at in the process of talent management and strategy development, {" "} Lorien is ready to help . Whether you’re working to assess your needs, or you’re looking for the best talent to fill one or more specific roles, we can provide you with the insights you need to make the best possible staffing decisions for your organization.
Once you’re familiar with the fundamentals of talent management, you’re ready to start thinking through what an effective talent management framework looks like for your organization. Then, you can develop and fine-tune specific staffing strategies in response to the needs of the business.
What Are the 7 Components of the Talent Management Process?
While every organization’s talent management framework should be tailored to their particular needs and priorities, there are seven components that the most successful frameworks are built around:
- Talent Acquisition: Determining personnel needs and developing a strategy for bringing the right talent into the organization.
- Employee Experience: Ensuring that new hires feel welcome, included, and set up for success.
- Performance Management: Developing a framework for incentivizing and improving employee performance throughout the organization.
- Change Management: Helping the organization to navigate change through effective communication and employee empowerment.
- Learning & Development:Investing in employee growth by offering meaningful opportunities to develop new skills and grow professionally.
- Organizational Design: Aligning talent management strategies with the short- and long-term priorities of the organization in order to increase efficiency.
- Succession Management:Creating a framework to identify and encourage internal candidates to fill current vacancies, as well as those that emerge over time.
In addition to the seven talent management framework elements listed above, the most effective talent management strategies are those that best understand the talent management life cycle. When developing a strategy, be sure to take concrete and data-driven steps to enhance the ability to attract and retain the best talent by optimizing each step of the talent management life cycle.
What Are the Steps of the Talent Management Life Cycle?
While every organization’s talent management strategy should be tailored to its specific needs and priorities, there are certain strategies that talent management programs should include in one form or another. The goal is to ensure that each stage of the employee life cycle is optimized, organized, and consistent. Some of these stage-based strategies include:
- Recruitment: Evaluating organizational needs and working to identify and attract the best talent available.
- Orientation: Setting new employees up for success, including acclimating them to the company culture and work environment.
- Engagement: Making sure new hires feel welcome and valued by creating an inclusive and supportive workplace and recognizing individual contributions.
- Learning & Development: Investing in the organization’s best asset—its talent—by providing meaningful opportunities to grow their skill set and/or advance their career.
- Retention: Reducing employee turnover through the entire process.
- Offboarding & Outreach: Ensuring that when an employee leaves the organization, it’s on the best terms possible—and leadership understands their motivations or reasons for leaving.
While these phases may overlap or occur out of order in some cases, it’s important to develop individual strategies for each. This ensures that there are no blind spots in the strategy or weak points within the employee lifecycle. Let’s take a closer look at each of these six core functions.
What Are the 6 Core Functions of a Talent Management Strategy?
The best talent management systems are tailored to the needs of the business and tend to include at least six core functions: recruitment, orientation, engagement and motivation, learning and development, retention, and offboarding and outreach. Let’s briefly define each of these, and how each can impact an organization’s overall talent management strategy.
- Recruitment: The effectiveness of an organization's recruitment strategies greatly affects its ability to attract and retain great talent. Recruitment includes spreading awareness, promoting the company as an employer, and seeking out talent at job fairs or similar events. While tech recruiting can be challenging, working with a staffing partner like Lorien can have an invaluable impact.
- Onboarding/Orientation: Once a candidate accepts an offer, their onboarding and orientation process is meant to provide valuable information about the company as well as their specific role and responsibilities. This includes educating them about workplace expectations, employee benefits, and other practical matters.
- Engagement and Motivation: The onboarding and orientation process naturally leads to the next core function of talent management: engaging and motivating employees. No matter what industry they work in, people do their best work when they feel valued, respected, and included in the company culture. While it shouldn’t be your primary motivation, there’s also a direct correlation between employees’ happiness with their employer and their productivity.
- Learning and Development: Especially in dynamic industries like tech, it’s hard to overstate the importance of committing to employee development. There are plenty of statistics to support this connection, including the fact that a majority (86%) of professionals “said that they would change jobs if a new company offered them more opportunities for professional development,” as one study found.
- Retention: Replacing employees is expensive—so is leaving vacant positions unfilled. In fact, turnover costs U.S. businesses an estimated $1 trillion annually due to lost productivity and the disruption of operations. In many ways, reducing employee turnover is among the most significant benefits of having a solid talent management strategy in place. The keys to retention can be found in the previous points: finding the right people, engaging and motivating them, and committing to their growth.
- Offboarding and Outreach: Departing employees can be an invaluable resource for understanding the employee experience and where it could be improved in order to increase retention. Through exit interviews, companies that ask the right questions can uncover actionable insights that can enhance their ability to secure the best talent over time.
The Right Talent Is Out There. We’ll Help You Bring It Aboard.
At Lorien, we have deep experience with navigating the distinct {""} challenges of talent acquisition and retention in tech, {" "} like the increasing demand for—and price of—high-quality tech talent. We understand that every organization is unique, and we are committed to helping companies find the right talent at the right time. Whether you’re looking to fill roles on a permanent or contingency basis, we can help you develop and implement the right talent management strategy for your needs. Visit our website to learn more about our solutions, or{" "} get in touch {" "} today to speak with one of our experts.
