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What Is Talent Management?

August 28,2020 Leadership
David DeFilippo Reworked Talent Management Contributor
By David DeFilippo

There are numerous areas of expertise in the human resources field, including organizational development, learning and development and talent management, and the terminology to accommodate them has progressed and evolved in meaningful ways over the years.

First, there was the shift from personnel to human resources, which added an air of increased sophistication to the practice. More recently, the HR field has shifted further and new titles have come into use like chief people officer, chief experience officer and people partners rather than HR managers. While a bit confusing, the changes are more than symbolic. They are a positive advance that brings the work of practitioners closer to its intended audience – people.

Regardless of the variety of titles and ever-evolving areas of expertise, the overriding objective is consistent: to optimize and sustain the performance and potential of individuals and organizations. So, how similar or different are these specialties and how do they connect one another?

The War for Talent

The similarities and differences become clear when we trace the roots of the various disciplines. The field of organization development was established by Kurt Lewin based on his research in the 1940s and 1950s focused on group dynamics, action research and reflection. Lewin’s systems model of action research (planning, action and results) set the stage as a model for human and organizational behavioral change.

The learning and development field focused on enhancing the effectiveness of individuals and teams through training, career pathing and goal-based development. This human capital practice is underpinned by methods such as instructional systems design, which was established as a methodology for developing training courses during World War II when educational psychologist Robert Gagné worked with the U.S. Army Air Corps to test and design materials to train pilots.

Related Article: 5 Ways to Have More Effective Performance Conversations

The shared theme of both is creating systems that facilitate change and improve performance. Talent management is the integrator of these practices.

The discipline of talent management was popularized by McKinsey’s 1997 research survey, 1998 article and 2001 book all focused on the impending “war for talent." The idea was that hiring and developing great people leads to top tier results and, in turn, best in class performance within and across industries. The expression eventually came to more generally describe the challenge of finding the right talent to build key organizational capabilities, whether that was through the dot-com bust of the early 2000s, the Great Recession of 2008 or more recently the rapid digitalization of the workplace.

Ultimately, talent management’s goal is to improve an organization’s performance and value by aligning human capital requirements with business goals. This is accomplished through processes that focus on individual, team and overall organizational capability building. Talent management practices connect the stages of the employee lifecycle from the business need to hiring and through each phase of an employee’s experience.

Ideally, these practices are sequenced and integrated (Figure 1) as part of human resources business-as-usual processes.

Figure 1: Integrated Talent Management

Phases Talent Management Practices
Organizational PlanningWorkforce PlanningCritical Roles Talent Acquisition
Capability BuildingOnboardingCareer PathsDevelopment
EvaluationPerformance ManagementTalent ReviewBench Strength 
OptimizationMovementPromotionsSuccession Management
Adjacent Practices

Employee Engagement and Experience

Diversity and Inclusion

Key Talent Management Practices

Here are definitions of the core talent management practices:

  • Workforce Planning: the comprehensive review of business goals and human capital requirements to plan for supply and demand.
  • Critical Roles: roles that are essential to the organization's strategy and performance.
  • Talent Acquisition: sourcing and selection of new talent for an organization.
  • Onboarding: an organized process to bring new hires into an organization.
  • Career Paths: organized progression through a series of roles with increasing responsibility to prepare top talent for critical roles.
  • Development: Specific, targeted individual and leadership development that occurs in addition to experiences gained on the job.
  • Performance Management: A company-wide process to evaluate each employee's performance, determine compensation rewards and conduct development conversations.
  • Talent Review: a company-wide process to discuss talent for planned moves or targeted development.
  • Bench Strength: a comprehensive view of the talent ready for each leadership role.

Related Article: Digital Transformation Came for HR. Where Do We Go Now?

Integrating Practice Is Key to Success

Each of these talent management practices needs to be organized and linked to one another. But they work best when they are part of the annual business planning cycle.

For example, when designing and launching a new product, it's important to define and assess the required current and future capabilities of marketing, sales and operations roles to determine if they'll have the ability to carry out a successful launch. This analysis yields a workforce plan, talent acquisition goals, role-based development needs and even the movement of talent within the organization to accomplish the business objectives.

While the goals of talent management make intuitive sense, Bersin by Deloitte’s 2015 Talent Management Maturity model showed 71% of organizations reside in the bottom two tiers of the analyst firm's four-level maturity model. With more than two-thirds of organizations only doing the basics, it begs the question why.

First, it has become increasingly challenging for organizations to take a long-term view based on quarterly earnings pressure, activist investors and more frequent CEO and executive team turnover. Next, employee expectations are higher. They want deliberate career pathing and a positive overall workplace experience that includes frequent manager feedback and challenging assignments.

When considering these two factors, it's not surprising that a well-established talent management practice is less prevalent. Take the example of new college graduate recruiting and development. This type of long-term human capital investment, requiring intensive training, planned job rotations and manager involvement, is more difficult to justify, thereby reinforcing short-term investments such as hiring for specialized skills versus building them.

For talent management practitioners, keeping a sustained focus on measurable benchmarks is key to articulating meaningful progress. Taking the new college graduate program one step further, analyzing indices such as engagement, promotion rate and retention of that group compared to the rest of the workforce takes planning and discipline to carry out.

Talent management aims to establish systematic processes to optimize an organization’s overall capabilities. Done right, it benefits both individuals and teams, helping them reach their potential through a set of planned and deliverable practices.

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