29 April 2024

What is talent management? A practical guide

10 people stood smiling, happy after effective talent management with MHR's HR software.

People power every aspect of your business, from its products and services to relationships with customers. This means that your success depends on the skill and motivation of your workforce, making talent management essential to achieving your goals. Let’s explore what talent management is and how to use it effectively in your business.

Defining talent management

What is talent management?

The term “talent management” might sound like it belongs in a game of corporate buzzword bingo, but it simply means making sure the right people are in the right jobs and doing the right things. 

This relies on finding and keeping top-notch employees who are a great fit for your organisation. But recruiting and engaging talent is just one part of the puzzle; you’ve also got to manage employees’ performance and keep them focused on the most valuable activities. 

The evolution of talent management

Back in the day, talent management fell under recruiters’ remit. This meant companies often focused their efforts on filling roles with the right people, while neglecting what happened afterwards. 

As businesses got bigger and competition got fiercer, it became clear that a more strategic, long-term approach was needed. And that’s where talent management comes in. 

The role of talent management within a business

Talent management isn't just an HR matter – it concerns the whole business. After all, your employees are your biggest asset, so it makes sense to invest time and effort into every major touchpoint they have with your organisation. 

From recruiting and training to performance management and succession planning, talent management encompasses a whole range of activities aimed at getting the best out of your people. It involves colleagues in every part of your business, not least managers and leaders at all levels. 

Why talent management is important

Here’s how talent management helps you achieve your goals. 

Attraction: A robust recruitment strategy builds a steady pipeline of skilled employees who are capable of achieving your strategic objectives.

Retention: There’s no use recruiting and developing great employees if you don’t put the same effort into keeping them on board. Effective talent management helps you reduce your turnover rate and recruitment costs by holding on to the people you’ve worked so hard to integrate into your business.

Productivity and performance: Done well, talent management motivates and empowers your people to reach their goals and bring valuable new ideas to your business.

Agility: Your business is part of a fast-changing landscape, meaning you need to be prepared to tackle new challenges and opportunities swiftly. Talent management equips your people to swerve pitfalls and grow your business.

Company culture: Investing in your employees' success is likely to boost morale and encourage an open, innovative, and ambitious culture.

What does effective talent management look like?

Talent management affects almost everything and everyone in your business. To get it right, you need a holistic approach that includes plenty of different stakeholders, from your recruitment team to line managers in every department. It may also include employee talent management software. 

The talent management process

Let’s take a look at some of the main components of talent management. 

Recruitment: Hone your recruitment process so that it consistently delivers skilled, motivated people who are willing to commit to your organisation for years to come. That might sound easier said than done, but it’s worth fine-tuning every aspect of your approach, from job descriptions to interviews, until you’ve found what really works. 

Development: Developing your people not only makes them better at their jobs – it also shows you’re invested in their success and motivates them to go the extra mile. Everyone learns differently, so create individual development plans and offer a variety of opportunities such as training workshops, e-learning, and mentoring schemes. Development doesn’t have to involve formal training, and you can give people more autonomy by encouraging self-directed learning.

Engagement and retention: Happy employees tend to perform better, and talent management ensures your people find their roles rewarding. By recruiting the best fit for every role, providing opportunities for growth, and recognising achievements, you can help people feel valued and engaged. This in turn makes them more likely to stick around.

Performance management: Don’t leave employees without clear direction. Work together to set measurable goals that align with your organisation’s objectives, then review progress regularly to make sure your people have everything they need to succeed. 

Talent management in practice

How to develop a talent management strategy

Your talent management strategy should start with a clear understanding of what you’re trying to achieve. From there, you can identify which employees you’ll need to reach your goals and come up with plans to attract, develop, retain, and get the best out of them. 

Don’t forget to involve stakeholders from different parts of the organisation so that you can win their support and ensure your plans align with long-term business strategies. 

The role of HR in talent management

While HR is no longer solely responsible for talent management, it’s often the glue that holds the whole process together. HR professionals are experts when it comes to things like recruitment, learning and development, and performance management, but they must collaborate with leaders and other colleagues to bring these strategies to life.  

HR professionals are there to guide managers through talent management processes, keeping them abreast of best practices and emerging trends. However, managers are directly responsible for developing their teams and keeping them engaged on a daily basis. 

A good manager can make the difference between a fulfilled employee and a disgruntled one, with things like communication and autonomy contributing to overall employee experience. Of course, managers also need to be able to address performance issues and keep employees on track towards meeting their goals. 

Developing employees through talent management

Talent management isn't just about finding and holding on to the right people – it's also about helping them grow over time. Even the most capable team members need to keep up with evolving trends and organisational goals, and employee development keeps your workforce resilient in the face of change. 

Learning and development can involve everything from formal qualifications to on-the-job experiences. It all depends on the nature of someone’s role, what they need to achieve, and how they learn best. Training shouldn’t be an annual tick box exercise, so encourage team members to look for continuous learning opportunities that will help them succeed in their roles. 

Many companies use a learning management system to offer a wide range of e-learning that employees can complete as and when they need to, fitting learning around their busy schedules. This is also a great way to empower people to take control of their own development. 

Why succession planning is essential for talent management

It might feel like some of your senior leaders and veteran team members are part of the furniture, but eventually even your highest achievers will move on. So consider who’ll take on these vital roles once current employees have outgrown them. 

The most promising candidates may work in a completely different department and lack some of the relevant capabilities; often, it’s about identifying those with potential and then developing the hard skills they’ll need to progress. Beginning succession planning for key roles early on can help you avoid skills gaps and minimise disruption in the future. 

Talent management and business planning

The role of workforce planning in talent management

Workforce planning helps you align talent management with wider strategic objectives. It means that, as things change, you won’t be left with a workforce that’s no longer suited to what you’re trying to achieve. 

Start by assessing your business’s current and future needs to identify potential talent gaps and surpluses. People don’t stay in the same roles forever, so consider factors like promotions, retirement, and turnover when estimating future staff levels. It’s a good idea to use data and analytics when making long-term, high-impact decisions such as this. 

How talent management supports strategic planning

The whole purpose of talent management is to smooth the path to business success. Whatever your objectives, you can’t achieve them without the right people, so make sure each one is underpinned by the appropriate human resources. 

This might involve plans for recruitment, training, or adapting existing roles to meet the needs of major new projects. 

Talent management and organisational goals

Above all else, talent management exists to help organisations achieve their goals. Whether you want to increase profits, expand into new markets, or develop cutting-edge products, none of it is possible without capable, motivated people. 

As we’ve seen, talent management isn’t just about the present; you should also look ahead and start building a workforce that’s fit for the future of your business. That means considering investing in tools to support you, including cloud talent management software. 

Learn more about talent management best practices in our ultimate guide to talent management. You can also explore our HR talent management software, designed to help your people reach their full potential. 

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Emma Reid headshot

Emma Reid

Content writer at MHR

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