What is the Talent Management Process and Why is it Important?

By: Lauren Dellarocco

A company’s talent management process will serve as its non-linear guide for attracting, acquiring, retaining and developing the best talent. The purpose of having an effective talent management strategy in place is—quite literally—to manage the talent at a company. Managing a company’s talent means managing its human resources to maintain a work environment filled with top-talent employees who are engaged, motivated to achieve, and motivated to remain with the company. 

It’s up to leaders to cultivate a work culture that supports new talent acquisition and the further development of employees’ skills. Leaders must communicate clearly and openly with employees and fellow leaders throughout the process of talent management to keep everyone on the same page. Establishing a clear process of talent management encourages both employees and leaders to progress in the same direction.

Alongside a core values communication software that communicates each employee’s role in creating a positive work environment while achieving the company’s goals, an effective talent management process can keep everyone in the company working toward similar goals that drive the company’s purpose.

What is the talent management process?

The talent management process includes every aspect of attracting, selecting, and retaining the appropriate talent for any given company. 

Although the process of talent management will vary based on a company’s overarching business objectives, upcoming goals, current talent pool, industry, and size, this process includes key phases that should remain static no matter the company. Phases that focus on talent acquisition, performance management and succession planning should remain as critical phases of the talent management process for any company. 

The fundamental steps of the talent management process include:

1. Identifying the needs in a company from business objectives, goals, and the current talent pool.
2. Collaboration from employees in workforce planning to determine the resources available for new talent acquisition.
3. Attracting and recruiting the right talent that will fulfill the company’s needs.
4. Onboarding new employees through a new employee orientation that clearly defines expectations and goals. 
5. Creating a strategy for persistent performance management to acknowledge employees’ hard work, evaluate their processes, and plan for future development and succession to ensure employee retention.

Why is the talent management process important?

The talent management process is one of the most important processes a company can master. 

“A company is only as good as its people. The hard part is actually building the team that will embody your company culture and propel you forward,” says Kathryn Minshew, the CEO and co-founder of The Muse (a career development platform).

A company can only operate as well as its employees operate. After all, employees are the ones who essentially establish and perpetuate the work culture, carry out the company’s core values and mission, and fulfill the company’s processes, goals, and objectives. 

When the right talent pool is selected for a company, employees bring the necessary skills and experiences that align with the company’s purpose. This alignment between a company’s purpose and its human capital enables different solutions to emerge as new employees will bring fresh approaches to various challenges. Acquiring the best talent for a company’s overall culture and objectives can ensure that the company maintains a competitive advantage in the market. 

No matter the industry, any company that attracts and retains top talent in the area will secure an advantage over competing businesses in the area. 

Later phases of the talent management process, specifically performance management and a focus on employee retention, are equally as important as the beginning phases focused on attracting and acquiring talent. An effective talent management process will ensure employees’ job satisfaction, safeguarding the company from high employee turnover rates. 

Ongoing performance management is vital for keeping employees happy, engaged, and motivated to succeed. Because employee engagement, satisfaction and motivation are essential components of employee retention, establishing an effective performance management strategy that cultivates these components will promote a positive work environment of employees who continue growing with a company. 

A Breakdown of Steps in the Talent Management System

Once you understand the importance of talent management, you may be wondering how to start the process. 

What is the first step of the talent management process?

Stage 1: Define business objectives to understand how to fulfill gaps with the needed talent.

When creating a talent management process, you can’t fulfill a business’s needs without knowing what its needs are. Leaders should come together to clearly define which objectives and goals need to be satisfied by new employees. Determine where the gaps are in the company’s talent pool and which skills aren’t currently filled.

Identifying the specific skills and experiences needed by new employees will help in creating the job descriptions used to recruit the right talent in stage 4. 

Stage 2: Employees collaborate during workforce planning.

Workforce planning is necessary for aligning the needs, requirements, and resources of the company with its human capital. Leaders in the HR department, finance department, and project management will come together to determine the following circumstances, and much more:

• Current workforce needs
• Budget available to hire and train new employees
• Upcoming milestones
• Deadlines and projects that require new talent
• Quality and quantity of work at hand
• Upcoming employee departures/retirements

Stage 3: Recruit the right talent.

In the talent recruiting stage, job descriptions are created based on current workforce needs, and open job positions are posted to social media as well as various job recruiting websites (like Linkedin and Glassdoor). Within the company, employees are asked to refer new employees, recruiters seek new talent that aligns with current business needs, and interviews are scheduled for new hires who have high potential. 

Leaders of the company have to be sure that potential employees meet the company’s needs determined in stage 1. They’re responsible for choosing the best talent to satisfy any decision-making and problem-solving gaps in the company. 

Stage 4: Onboard new employees.

Once the right talent is selected, it’s time to onboard new hires. The onboarding process, or new hire orientation, serves to engage new employees, and to define clear expectations, guidelines and requirements for the position. An optimal new employee orientation will make a positive impression on new employees, excite them, motivate them to start achieving goals, and help them to feel acquainted with their new work environment and team members. 

Using a talent management program, or a talent management software, can help the onboarding process to run as smoothly as possible. These programs facilitate constant communication, from onboarding to performance management and further training and development.

Stage 5: Commit to ongoing performance management and succession planning.

The final step of the talent management process is to establish a process of ongoing performance management and succession planning. Performance management includes performance reviews, or performance appraisals, monitoring and evaluating employees’ performance, planning for the future, rewarding employees for good work, and providing constructive feedback. 

The processes of performance management and succession planning overlap when it comes to further training and development opportunities. Succession planning is the process by which a company identifies employees who will fulfill the positions of leaders who are planning on quitting or retiring soon—when their talent lifecycle is up. A company must take precautions to avoid leaving a gap or unfulfilled position by training current employees for professional development.

Performance management and professional development are critical pieces of human capital management that secure employee retention and assist the transitioning process for new leaders in the company to emerge.

HR Daily Advisor determines that “49% of HR leaders named retention and leadership development programs as the top priority among talent management goals.”  

What happens if a company lacks a talent management process?

A poor or ineffective talent management process can negatively impact a company in a few ways:

• Creating a talent pool that doesn’t fulfill the company’s needs.

If a company lacks an efficient talent management process, it’s likely that the company acquires new employees who don’t fulfill its needs. The first step of the talent management process is to identify the business objectives and gaps to be filled by new talent. If this step is left out of the process and goals or objectives aren’t identified, new employees brought onboard may not be conducive to the overall goal. This means the company’s resources are being used to satisfy a goal that isn’t relevant to the company’s success i.e. an inefficient use of resources. 

• Acquiring employees with redundant talents.

Similar to acquiring a talent pool that doesn’t fulfill the company’s needs, if the leaders of a company don’t determine business objectives and goals before hiring new employees, they’re inclined to hire employees who possess the same skills as current employees. This oversight renders new talent acquisition as pointless (in a sense), if new employees have the same approach, experiences, and skillset that the current group of employees also has. Acquiring employees with similar talents is also an inefficient use of company resources. 

• Dissatisfied employees who don’t feel valued or motivated.

In the talent management process, the onboarding stage and performance management stage present the opportunity for leaders to show appreciation for their employees and to engage employees. The onboarding process sets the tone for a new employee’s coming years. According to a Glassdoor study, “organizations with a strong onboarding process improve new hire retention by 82% and productivity by over 70%.” The onboarding process can make or break the experience for new employees. 

In a similar study, it was determined that 24% of employees see inadequate performance feedback as a job dealbreaker. Continued performance management and regular feedback from managers, supervisors and leaders are critical for ensuring employee engagement, motivation, and job satisfaction.

• Incurring costs that exceed the budget.

One of the first steps of the talent management process is workforce planning. This piece is vital for determining the amount of resources available to acquire new talent. Without preparation and collaboration between leaders in different departments to determine upcoming goals and milestones and the available budget for acquiring new human resources, it’s possible that leaders will overhire or hire employees who don’t align with the company’s current resources. Over time, this could cause the budget to be overrun. Capital must be used to fire employees who don’t align with the goal, and to hire and train new employees who do align with the goal.

• Necessary roles or job positions left unfilled. 

Succession planning is an important phase for ensuring that significant roles and job positions are filled at all times. If a company doesn’t put effort into training employees and developing their skills so they can one day replace leaders who retire or quit, positions may be left vacant. This vacancy in job positions can stunt projects from completion, cause clients and consumers to be dissatisfied with the product or service, and place a strain on current employees and employers who have to pick up the slack.

Many companies are shifting their brand focus to emphasize the employee experience and culture. Leaders of successful companies understand that a company’s success is only possible if its talent pool is above par and aligned with its business objectives, business goals, and business strategies. They understand the consequences a company can incur if its leaders don’t recognize the value in a talent management strategy.

An effective talent management process can lead to a work environment filled with high-performing, talented employees who are highly satisfied with their work culture and leaders. When employees are talented in their skillset and happy in their job position, they’re encouraged to perform at their greatest potential. High-performing employees can lead to increased profits, higher overall productivity, and a significant competitive advantage in the market—the ingredients to a successful and prosperous company.