How HR Can Create a Comprehensive Talent Strategy
Talent strategy (often referred to as talent management strategy or talent acquisition strategy) is essential if organizations want to ensure they have the right talent in the right place to meet their long-term financial, marketing and operational goals and objectives.
Therefore, being able to recruit, develop, engage and retain the right people at scale should be a top priority.
Contents
What is a talent strategy
The benefits of a well-developed talent strategy
Components of a talent strategy
How to develop a talent strategy
Tips for developing a talent strategy
What is a talent strategy
A talent strategy is a strategic plan that helps organizations recruit, develop and retain top performers, and plan ahead for skills gaps and the future.
The best talent strategies help the organization meet its goals, create a competitive edge, and meet the career development aspirations of present and future talent. The right talent management strategy can move beyond typical activities such as talent acquisition and performance management to managing talent relationships and creating a more diverse and inclusive talent system.
The importance of having a comprehensive talent strategy
It’s important for HR to develop a total talent strategy because it creates a north star for your entire talent team (including talent acquisition, diversity and inclusion, analytics, and learning and development teams). It’s a strategic data-based approach to workforce planning that allows you to focus on internal mobility, flexibility and diversity.
The risks of not having a talent strategy in place are seismic. You won’t be able to prepare your workforce for the future (which as we know is changing rapidly due to technological advances and AI), you will leave the organization vulnerable to wide skills gaps, and the organization will likely lose its competitive edge. Without the right people in the right place performing in their roles, there is no way for a business to meet its goals. Talent and the management of that talent is everything.
The benefits of a well-developed talent strategy
- Learning and growth opportunities for employees
- Increasing productivity and engagement
- Attracting the right talent to your organization
- Being able to place the right people in the right roles
- Building a high-performance organization
- Strengthening diversity and inclusion
- Creating a culture of continuous learning
- Strengthening your EVP (employee value proposition)
- Using people analytics to make better business-led decisions regarding talent (which also provides more confidence to business leaders)
- Developing and updating internal skills
- Increasing flexibility and promoting a better work-life balance.
Components of a talent strategy
1. Talent assessment and planning
Talent assessment and planning involves anticipating future staffing needs and planning how these can be met by developing existing talent.
Look at workforce supply and demand, demographics, current and future skills shortages (or surpluses), workplace trends and the labor market to help your organization with their workforce planning. It’s also important to identify the critical roles in the business so that you can start developing employees to fill these roles later.
Developing existing employees will save you time and money and mitigate the unpredictable nature of external hires, plus, it will help to meet the professional goals of your employees who want to develop within the organization. There will always be a certain need for new talent, but with careful assessment and planning, this can be done much more strategically.
2. Talent acquisition
Talent shortage research by ManpowerGroup has found that 3 out of every 4 (75%) companies report talent shortages and struggle to acquire the right people, with large companies struggling the most. And many businesses underestimate the cost of recruiting the wrong people.
HR must focus on attracting the right people for the right roles, with a specific behavioral profile and skill set that will align with the organization’s culture and values. An attractive employer brand and EVP (employee value proposition) can help when recruiting external candidates.
For example, Google’s 20% work talent management initiative consistently helps them attract better talent. Innovative recruitment strategies will get your job vacancies seen by the talent you are looking for, and streamline the recruitment process to decrease the time to hire and avoid losing your talent to competitors.
3. Talent development and retention
An Employee Benefits News study shows that the average cost of losing talent is 33% of a company’s annual revenue. If you want to develop and retain employees, it’s important to balance the career aspirations of the employee with the short and long-term goals of the business.
Talent development initiatives like coaching, mentoring, training, extra projects and secondments are all valuable ways to help employees boost their skills and knowledge, expand their capabilities, and grow. This also helps to increase employee engagement, motivation and productivity and reduce attrition.
While a certain number of exits are unavoidable, they can be limited. Use exit interviews to understand why employees leave so that you can minimize this in the future.
4. Succession planning
Succession planning is another important component of any talent strategy. It involves selecting and developing your key talent, so they can advance into top-level, critical roles. This is essential because employees are promoted, retire, and move companies all the time, so you need a solid strategy in place to ensure your business-critical roles are always filled with qualified people who will succeed in their job.
Identifying your most talented employees (using past performance and future potential) helps you create talent pools for each of your critical roles and develop and mentor this talent, so they are prepared to step into these roles in the future. A strong performance management process (that also treats each employee as a unique individual) is a fantastic way to identify your top talent early on.
How to develop a talent strategy
1. Understand the business’s goals and objectives
An effective talent management strategy begins by looking at the wider business goals and objectives and discussing how talent strategy can support those. The CEO and CHRO should be in agreement on HR’s part in the business strategy and where the focus should be. For example, digitization, innovation, operational excellence, etc.
This then allows HR leaders and executives to make critical decisions on how to close talent gaps, attract the right people, and support the strategic direction of the business. As business strategies change over time, HR will need to stay ahead and pivot accordingly.
2. Understand the company culture
Understanding and carefully crafting the right company culture that aligns with business goals will help you stay competitive and attract the right people to your organization. It’s important to build a culture that supports the execution of the organization’s business strategy.
A poorly conceived company culture can have a negative effect on your talent strategy to recruit top talent and develop existing employees. For example, if digitization is a key focus in the business, attracting millennials and gen Z candidates will be important because they are tech-savvy and thrive in fast-paced environments. But if your company culture does not support digitization or meet their expectations, you will struggle to attract them through your doors.
Think about how you want your workforce to look in the future, then decide on the culture that will support and attract those people.
3. Conduct a talent assessment
A skills gap analysis can help you see the difference or “gap” between how your teams currently look, and where you want them to be in the future so that the business can achieve its goals. A talent assessment helps HR identify any skills or knowledge missing among employees, and then create a plan to address these gaps through upskilling, re-skilling, succession planning, and more to help employees flourish.
Make a note of these skills gaps in your recruitment plan and refer to them when creating job descriptions and advertising roles to make sure you attract the right people to fill these gaps.
4. Develop a plan to address these gaps and needs
Take a look at your current organization chart. Who is likely to be promoted, retire, be made redundant or exit the business over the next year? Are there any upcoming moves (vertical or horizontal) that you need to be aware of, and how will this affect your structure? Look for current gaps and predict future ones. You can use historic trends in data as a baseline. Add these gaps to your headcount planning sheet.
It’s equally important to assess where projects or teams are expanding and will require more resources over the coming year. Sit down with managers to see if they have plans to create new roles. Develop a talent strategy that aims to address these gaps and needs over the next 12 months.
5. Develop a recruitment plan
The right recruitment plan will help you attract, hire and retain the right people for your organization. It should include your recruitment goals, headcount planning, ideal candidate profiles, your EVP, your recruitment strategy, your selection and onboarding process, tools and technology you will use, as well as your budget.
A carefully crafted recruitment plan will save you time, help you secure and spend your budget effectively, make better hiring decisions, ensure your recruitment objectives align with wider business goals, and build the right talent pipeline.
6. Develop a learning and development plan
The next step is to develop an effective learning and development process to improve employees’ skills, knowledge and competency. This will improve performance and engagement, and help them meet their personal career goals.
Once you know what skills are missing or need improving, you can then specify the learning objectives, design the training needed to meet these, create a plan for how this training will be delivered, and then monitor and evaluate the effectiveness of your learning and development plan.
7. Create a retention plan
When employees have the skills to perform in the jobs, set clear expectations, have opportunities to grow and progress, are well managed and can see the part they plan in helping the business meet its goals, they are far more likely to be happy and engaged at work and also perform better.
Investing in L&D initiatives and rewarding and recognizing good work will reduce turnover and help you retain top talent.
8. Establish a succession plan
Identify the critical roles in your business, then start to think about which candidates could potentially be a good fit for each role. Make them aware that they are one of multiple candidates for these roles, and start to train and mentor them so that they acquire the skills, knowledge and leadership qualities needed to succeed in these positions.
Tips for developing a talent strategy
1. Measure the impact of the talent strategy on business performance
How is your talent strategy contributing to the overall performance of the business? Measuring and analyzing key metrics will help you understand what strategies are working, what are not, and where to improve for the future.
Starbucks believes their baristas are fundamental to the success of their organization, which is why they invest heavily in employee training programs to ensure they have the skills to do a great job. They also offer all employees incredible benefits including health care, savings plans, and even an Adoption Assistance Program.
These HR and talent strategies mean that employees have stronger relationships with their managers and feel more connected to the company and valued. The training and benefits programs have led to an increase in employee motivation and retention, and have reduced turnover.
2. Involve key stakeholders in the talent strategy
Commitment from key stakeholders helps deploy talent management strategies throughout the business and ensure that line managers are held accountable for spotting, developing and retaining top talent.
BlackRock has a global Human Capital Committee made up of 35 senior line leaders who come from all across the business, with only one person from HR. This sends a message that talent is critical to the success of the business, and has been fundamental in placing the right people in the right roles at the company.
3. Develop a flexible talent strategy
Market and labor conditions along with technology are constantly changing, which is why your talent strategy must be flexible and easy to adapt.
Out of children currently in primary school, 65% will be applying for jobs that don’t exist yet. Certain jobs will disappear while new ones will be created. Organizations can either let go of a huge chunk of their talent and hire new talent equipped to perform in these new roles, which could be an incredibly tough recruitment challenge, or retain their current employees and re-skill them to migrate from these dying roles into new ones.
4. Use data to inform the talent strategy
Leverage technology and use data to make informed decisions about your talent needs, gaps and effectiveness. For example, if data indicates to HR that there is an emergency skills gap, skills that are difficult to develop internally, or a blank history of needed skills or knowledge within a specific department (or the entire company), it then makes sense to consider recruiting externally to fill these gaps.
Microsoft excels at workforce planning and heavily leans on HR analytics to attract and recruit talent. The company places a heavy focus on digital transformation, so they look for candidates who have already, or are willing to, digitally transform.
5. Communicate the talent strategy to employees
When your employees have clarity on what they need to do to perform, grow and succeed in their jobs, and see tangible results (i.e. rewards, recognition, promotions, etc.) it builds trust with their employer, speeds up their learning curve, and motivates them to develop.
Your employees will then become a valuable source for finding new talent through referrals, and it’s reportedly 55% faster to hire referred talent than talent sourced through a job site.
Key takeaways
- What is a talent strategy: A talent strategy (or talent management strategy) is a plan to help you recruit, develop and retain the right people in the right roles and prepare and plan for future workforce skills gaps and needs. The right talent strategy will align with the overall business strategy and help meet its goals.
- The benefits of a well-developed talent strategy: Development of employees, increased productivity and engagement, lower costs, a competitive advantage, higher retention rates, strengthening D&I, developing and updating internal skills, and creasing flexibility.
- Key components of a talent strategy: A solid talent strategy will include talent assessment and planning, talent acquisition, talent development and retention, and succession planning.
- How to develop a talent strategy in your organization: Understand the wider goals of the business, conduct a skills gap analysis, develop a flexible plan to address these gaps, involve key stakeholders in your plan, leverage technology and measure and analyze key metrics and make adjustments accordingly.
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