The quality, satisfaction, and positioning of an organization’s talent is often the deciding factor of its ultimate success. You can invest heavily in recruitment, excel at interviewing, and hire employees with the ideal traits. But you might still fail to create an environment that leverages behavioral data to its full potential.
True talent strategy extends far beyond recruiting and hiring top talent.
Ideally, effective workforce planning includes the execution of a talent strategy that aligns with the goals of your organization, enhancing the employee experience, improving retention rates, and future-proofing your business.
What is talent strategy?
At its most basic level, talent strategy is the plan used to recruit, hire, onboard, and retain employees. However, a real talent strategy goes far beyond filling open positions. Rather, it considers an organization’s initiatives, the strengths and weaknesses of various teams, the skill gaps in certain roles, talent development opportunities, and how to improve the overall employee experience. It’s a lot to consider.
Talent strategy shouldn’t be limited to HR professionals. The entire leadership team should be invested in the creation and development of your talent plan, to ensure long-term success. Too often, hiring and managing talent is considered the responsibility of Human Resources alone. But aligning talent strategy and business strategy is the key to achieving business objectives, and should be a collective effort. That means HR leaders have a seat at the executive table.
There are a lot of levers to pull when it comes to attracting, placing, upskilling, and retaining the right talent. A comprehensive talent strategy considers the big picture—how each of these factors influences the employee experience, in addition to stated business goals.
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Why is talent strategy important?
There’s a reason an organization’s employees are referred to as human capital—talent is an asset, and a worthy investment. The people who work for your organization have tremendous influence on business outcomes. Hiring and retaining top talent has a broad range of potential benefits, from company culture to profits.
When you take the time to pair the right people with the right position, make an effort to foster a positive work environment, and consistently invest in professional development, employees feel valued. That, in turn, increases job satisfaction and improves employee engagement.
However, an effective talent management strategy also gives businesses a competitive advantage by strengthening the employer’s brand, making it easier to attract new talent, while helping with succession planning and leadership development from within the organization.
Creating and implementing a comprehensive talent strategy is a mutually beneficial endeavor between employer and employee.
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Talent strategy vs. talent management and talent optimization
Talent strategy is the plan an organization makes for sourcing, hiring, training, and retaining talent.
Distinctively, talent management is the active process of implementing a talent strategy, and it’s usually a collective effort between HR professionals, managers, and anyone else involved in hiring.
Talent optimization takes those concepts to the next level by aligning talent strategy and business strategy to achieve desired results.
A truly effective talent strategy evolves. It recognizes that people’s behavioral tendencies make them good for certain roles. But as they learn and develop new skills, they may grow out of those roles. When they’re ready for new challenges, those behaviors are just as important to success as the skills they’ve learned. Skills can be taught; behaviors often cannot.
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Difference between HR strategy and talent strategy
While often used interchangeably, HR strategy and talent strategy serve different (though complementary) purposes within an organization.
- HR Strategy is the broad framework for managing all people-related functions—such as policies, compliance, benefits administration, and workforce planning—to support overall business goals. It ensures the organization runs legally, efficiently, and safely.
- Talent Strategy is a focused component of HR that zeroes in on attracting, developing, and retaining top talent to drive performance and growth. It is less about compliance and more about competitive advantage—ensuring you have the right people in the right seats to execute your business strategy.
Keys to creating an effective talent strategy
There are a lot of different factors to consider when creating a talent strategy, but the following pieces are especially crucial. Make sure your talent strategy takes the following into account:
A defined business strategy
Having a clearly articulated idea of the business outcomes you hope to achieve is an essential starting point. Decide what your organization is missing, or needs to improve upon, in order to make progress toward those goals.
Labor needs
While keeping your intended outcomes in mind, assess your current staff and identify any current or upcoming staffing needs by addressing gaps in critical competencies, roles, or leadership positions. Remember that labor accounts for as much as 70% of business expenses—optimizing this investment is critical for financial health.
Recruiting and hiring
Evaluate your current hiring workflow, and strategize about how to enhance and expand your access to the existing talent pool. Improve sourcing strategies and refine the interviewing process to ensure that you’re selecting top talent for open roles.
Onboarding and development
Make a solid first impression, and empower new employees in their new position with an organized, well-communicated onboarding process—one that includes proper training and demonstrates the core values of your organization. Add to that momentum by continuing to help all employees expand their skill sets through ongoing professional development opportunities.
Retention and engagement
There are many different facets to creating a positive employee experience, from compensation to company culture. Create an environment where employees feel valued, present a clearly defined career path for each role, and offer compensation and benefits that are comparable to competitors. In doing so, you’ll also improve employee satisfaction and retention rates.
Succession planning
Prioritizing professional development and creating a positive work environment that values communication and feedback makes it easier to hire from within when positions that require advanced skills or leadership roles become available. Training current employees for future roles creates an in-house talent pool already equipped with the competencies, experience, and values that are important to your organization.
Learn more:
- How to create a talent management strategy
- Compensation strategies for attracting and retaining top talent
How to implement a talent management strategy model
Implementing your strategy requires moving from “what” to “how.” If you are looking for a model to operationalize your plan, you can follow these core steps:
- Identify business objectives: Start with the basics. What goals is the business pursuing over the next 12 to 60 months? You cannot hire the right people if you don’t know where the company is going.
- Match talent to your objectives: Once you know the destination, determine who will drive the bus. Which roles are critical? What behaviors will lead to success in those roles?
- Diagnose talent obstacles: Use data to find out where your current strategy is falling short. Are you seeing high turnover in specific departments? Is engagement dropping?
- Decide where to focus: You can’t fix everything at once. specific problems—like a lack of leadership depth or poor onboarding—and prioritize them.
- Create a plan of action: Make your solutions specific, measurable, achievable, relevant, and timely (SMART).
- Identify technology: Determine if your current tech stack (ATS, behavioral assessments, HRIS) supports your new strategy or if you need new tools to scale your efforts.
Measuring the Success of a Talent Strategy
A strategy is only as good as its results. To ensure your talent strategy is delivering ROI, you must track specific metrics. Outline Key Performance Indicators (KPIs) such as:
- Employee retention rates: Are high-performers staying longer?
- Time-to-fill vacancies: How quickly can you bring effective talent on board?
- Employee engagement scores: Are your people emotionally committed to their work?
- Internal promotion rates: Are you successfully developing future leaders?
- Training completion and effectiveness metrics: Is your team actually adopting new skills?
Example of a talent management strategy
What does this look like in practice? A comprehensive talent management strategy can be broken down into five basic areas of focus. Here is an example of how an organization might structure their approach:
- Plan: The organization reviews its 5-year growth plan and identifies that they need to double their engineering team. They map out exactly which skills (Python, React) and behaviors (collaborative, detail-oriented) are required for success.
- Identify: They audit their current team to see who has leadership potential and where the skill gaps are. They may use talent mapping software to visualize this data.
- Hire: Instead of posting generic job descriptions, they use behavioral assessments to screen candidates who naturally fit the cognitive and behavioral demands of the role, reducing the risk of a mis-hire.
- Retain: To keep these new hires, they implement a hybrid work policy and a competitive benefits package, having identified “flexibility” as a key driver for their target talent pool.
- Train: They launch a mentorship program where senior engineers are paired with junior hires, ensuring knowledge transfer and accelerating the onboarding process.
How PI helps create a lasting talent strategy
PI’s tools help you hire with more certainty, build and manage teams more effectively, and increase engagement through feedback and communication.
Optimize the entire talent journey.
Talent Optimization Essentials is the all-in-one, science-backed solution to hire, develop, and retain top talent.
As a pre-employment testing tool, PI Hire helps you pinpoint the right person for the right role, by putting behavioral data to work for you. Copy and paste your job description to set your ideal candidate benchmark. Use behavioral assessments to understand candidates and how they align with your needs, and streamline the decision-making process with interview questions rooted in people-centered data.
PI Design helps you build and manage the best teams possible by learning more about your management style and discovering your team’s strengths and weaknesses. Get insight insights about potential misalignments, as well as action items to close any gaps.
Collect anonymous feedback with PI Diagnose, an employee experience platform, and track your organization’s overall engagement health with science-based pulse surveys. See how you stack up against other companies based on 25,000 industry benchmarks, and make improvements that not only enhance your employer brand, but help you gain a competitive edge when it comes to attracting and retaining top talent.
A talent optimization platform ensures that your talent strategy is comprehensive without becoming cumbersome, so that you can focus on building the type of business people want to be a part of.
