Today’s guest blogger is Heather McCulligh talking about talent management strategy. It’s a great complement to this three-part article we’ve written before on the subject of why HR strategy fails (check them out too). Here’s Heather:
Great companies have a well-articulated strategy that guides their business decisions. But many of them fail to then take that strategy and translate it into a talent management strategy. Yet the successful execution of a strategic talent management plan can determine your company’s ability to succeed.
Let me explain how…
Why is it important?
More and more research is showing the strong link between mature, integrated talent management processes and financial results. The Hackett Group recently found that companies with more mature talent management capabilities have on average18% higher earnings, 54% greater net profit margins, and greater return on equity and assets than their counterparts without mature capabilities.
The Aberdeen Group’s latest research finds that companies who integrate their talent management processes see significantly greater performance gains, and can measure a correlation between their talent management efforts and business operational results. IBM, HCI, IDC and others have shared similar findings.
Truly successful companies are realizing that the only sustainable competitive advantage they have is their people. It’s clear that to achieve your goals, you need to effectively manage your workforce.
Now let’s stop for a minute and look at what I mean by a talent management strategy.
What does a talent management strategy encompass?
Some companies or even HR groups would tell you that all you need to do is make sure you have sufficient resources to support your business strategy, and draw the line there.
But an integrated talent management strategy looks at all the processes you need to have in place to support a high-performing workforce – from hire to retire – and ensures that every one of those processes is working to support your business strategy.
It should start by examining:
- business goals and priorities
- internal and external business drivers and challenges
- identified gaps
Your HR team should then establish goals and priorities to ensure the company has effective talent management programs in place to address all of these – at all stages of the employment lifecycle.
For example, if your analysis of drivers and gaps reveals a need for additional skills/resources in the organization to support growth in a particular market, you need to do more than just ensure you have recruiting programs in place to hire those skills. You should also ensure your retention, job description management, competency management, employee development, performance appraisal, succession planning and compensation/reward programs all support the strengthening of these skills too.
An effective talent management strategy takes a bigger, broader look at your workforce and business needs and attempts to support your company’s strategic goals, not just its HR/employee management needs. Without this tight linkage to business strategy, your HR and talent management programs risk becoming nothing more that administrative processes that yield little business value.
Many companies have some or all of these talent management processes in place, but they often function as disparate, independent programs that are in no way tied to business strategy. They typically fail to integrate, share and aggregate data that allows your leaders to effectively manage your workforce and address challenges before they become stumbling blocks to success. They therefore fail to contribute to the organization’s strategy and success in tangible, measurable ways.
All your talent management programs, including recruiting, job descriptions, onboarding, goal setting, competency management, performance appraisal, employee development, compensation, succession planning and offboarding, need to be grounded in employee performance and linked to your business strategy, so they contribute directly to its achievement.
Where do you stack up?
Do you have a strategic talent management plan and associated programs that support your company’s strategic goals? Does your HR team have goals and priorities in place that directly link to business goals/priorities/strategy?
If not, here’s what you need to do:
1. Identify corporate goals and priorities
2. Identify the key drivers and challenges (both internal and external) that could impact the company’s ability to achieve its goals. (e.g., highly competitive job market, new or changed legislation/regulations, new technology, etc.)
3. Identify any gaps that need to be addressed in order for your company to achieve its goals
4. Based on the goals, challenges and gaps identified in steps 1-3, define HR priorities and goals
5. Inventory the company’s current talent management processes and determine if any changes are needed to support the company’s goals
6. Ensure all current process address high level business goals as well as HR priorities and goals
7. Implement new processes as needed (e.g., succession planning, development programs, recruiting, etc.)
8. Measure the results of HR goals and communicate successes/contributions
Heather McCulligh is a blog coordinator at Halogen Software, one of the leading providers of talent management software solutions. For more of her insights on talent management, read his posts on the Halogen blog, and to learn more about best practices visit Halogen’s Talent Management Centers of Excellence.