Whatever the size of your company and regardless the industry you operate in, one thing you need to pay careful attention to effective talent management so you can better anticipate human capital needs and plan for those needs accordingly.
This begins by strategizing your talent management efforts.
But how do you build a talent management strategy?
We’ll show you how to do just that in this guide, while we’ll also look deeper into what a TMS is, why it’s important, what an effective framework looks like — and more.
Let’s dig right in!
TABLE OF CONTENTS
What is a talent management strategy?
A talent management strategy, or TMS for short, is a plan of action that helps organizations, regardless their size and industry, achieve their current and future talent goals.
It covers the entire employee lifecycle, from workforce planning all the way to talent retention and transitioning, and — when done right — it strengthens company culture and improves overall organizational success. Not only that, but an effective talent management strategy can also help companies outperform their competitors, according to a McKinsey Global Survey in 2018.
Why is a talent management strategy important?
As we briefly touched upon, an effective talent management strategy offers many benefits to an organization. Let’s dive a little deeper into them below and explore how and why exactly a TMS is important.
Talent retention
One of the biggest advantages of a talent management strategy, when done right, is that it has the power to retain your top talent and keep them from jumping ship — which can only happen when they feel valued and supported and they’re provided with career development opportunities.
Reducing turnover, meanwhile, has its own benefits — not least how it saves you time and money from having to go through the hiring process all over again. In fact, the average cost per hire is $4,683, according to research by the Society for Human Resource Management.
Employee engagement
If there is one thing you need to do, it’s to make sure your employees are engaged and motivated, and that they feel a sense of purpose and belonging. After all, they’re a company’s most valuable asset — and without them, there would be no company to drive forward.
Employee engagement through your talent management strategy can be achieved through several avenues, including personalized development plans, regular feedback and mentorship programs.
Organizational adaptability
The world of work is constantly evolving, and is often characterized by market changes, technological advancements, competitive pressures and emerging trends. An effective TMS ensures a skilled, agile workforce that can seamlessly navigate and handle these changes.
By offering employees continuous learning opportunities and providing upskilling and reskilling initiatives, they become adaptable — and so too does your company.
Company performance
A powerful talent management strategy, as we mentioned, fosters employee engagement and retention — and this creates a domino effect. It translates into higher productivity, efficiency and innovation, and this then positively impacts the company’s financial and operational performance.
This, finally, gives you an edge over your competitors. In fact, the better your company performs, the more people will want to work with you, do business with you, and buy your products and services.
Leadership development
When you strategize your talent management efforts, it offers your organization the opportunity to identify, develop and nurture high-potential employees early so you can ensure continuity and reduce disruptions during leadership transitions.
Specialized training, mentoring and project experience is crucial for this and for creating a sustainable leadership pipeline that will ensure the company’s continued success.
Company culture
An effective talent management strategy has the potential to create a cohesive, innovative, positive and inclusive company culture. This, meanwhile, is essential for attracting top talent — and retaining said talent.
Building a robust company culture is a delicate dance, but it begins with promoting values like respect, collaboration, recognition and open communication.
Business continuity
Last, but certainly not least, you can minimize the risk of operational disruptions and quickly adapt to changing market conditions through a talent management strategy.
This is achieved by ensuring that key positions within the organization are filled with skilled, engaged employees, even during unforeseen events, and involves tactical succession planning and proactive talent acquisition.
Talent management strategy model
A talent management strategy model is a detailed and structured framework that’s aligned to your organizational goals and designed to provide a starting point for your strategy.
This can be broken down into seven core components:
1. Aligning talent strategy with business goals
Any strategy for talent management strategy should align with the business’s overall mission, vision and goals.
Whatever those are, it’s important to figure out what they are and make a plan. Remember: a good talent management strategy isn’t just about filling jobs — it’s about building a workforce that powers organizational success.
2. Attracting talent
Attracting talent involves more than just promoting job openings. It’s about positioning the company as a desirable place to work through strong employer branding and a compelling employee value proposition.
Companies need to understand what makes them unique, and then communicate that to potential candidates. Whether it’s a strong commitment to work–life balance or opportunities for growth, a clear EVP can set your organization apart in a competitive market.
3. Onboarding new hires
Onboarding is often overlooked but crucial stage in talent management.
The goal here is to ensure that new hires feel welcomed and equipped to contribute to their team and the company at large from their very first day.
Effective onboarding, however, goes beyond paperwork and IT setup processes. It’s about introducing employees to the company culture, connecting them with mentors and helping them see how their role fits into the bigger picture.
4. Developing talent
Once employees are on board, the focus shifts to development. This is where organizations invest in training, mentorship and career growth opportunities.
A strong development program doesn’t just benefit employees — it also benefits the organization by building a more skilled and adaptable workforce.
Learning opportunities, whether they’re formal programs or on-the-job experiences, can also boost engagement and retention. After all, people want to work for companies that invest in their growth.
5. Retaining talent
Retention is another critical piece of the talent management strategy puzzle.
Organizations that fail to retain their best talent face high turnover costs (ranging between 30% and 200% of an employee’s annual salary) and lose valuable institutional knowledge.
Retention strategies can include everything from competitive compensation to meaningful recognition programs. However, the most powerful retention tool at your disposal is creating a workplace where people feel valued, heard and connected to a larger purpose.
6. Managing performance
Performance management ties closely to employee development and retention. It involves setting clear expectations, providing regular feedback and recognizing achievements — even the small ones.
Indeed, when employees know exactly what’s expected of them and they feel supported in meeting those expectations, they’re more likely to thrive on the job. On that note, modern performance management is no longer about annual reviews but rather an ongoing conversation.
7. Succession planning
Organizations need to think about the future and prepare internal talent to step into leadership, managerial and other critical roles.
Succession planning ensures continuity and reduces the risk of disruption when key employees leave, particularly unexpectedly. It’s a proactive approach that demonstrates to employees that the company is invested in their long-term careers.
Developing a talent management strategy
This is the point where you take the time to create and build a talent management strategy — and we’ll show you how.
1. Define your business objectives
Every great talent management strategy starts with understanding your specific business goals.
Ask yourself questions like:
- What’s the organization trying to achieve?
- Are you focused on rapid growth, improving efficiency or fostering innovation?
Your answers to these questions, and knowing precisely what your objectives are, will help you align your overall talent strategy to drive these outcomes. For example, if innovation is a top priority, you’ll need to attract and nurture creative thinkers.
By connecting talent initiatives directly to your goals, you ensure your workforce isn’t just keeping up — but, rather, actively propelling the company forward. Remember: your people are the engine behind your strategy.
2. Conduct a skills gap analysis
Do you know if your team has the skills to meet tomorrow’s challenges?
Conducting a skills gap analysis is all about figuring out where your people thrive and where they need support. You then compare the skills your people currently have with those that your business needs in the future (both in the short and long term).
This skills gap analysis helps you identify who might need upskilling, where training is needed or even when it’s time to recruit new talent. That said, make sure to revisit this regularly to keep your team ahead of the curve.
3. Develop clear talent acquisition strategies
Finding the right talent starts with a solid acquisition strategy. Figure out what makes your organization stand out (is it its culture, employee benefits or growth opportunities?), and use that information to create a solid employer brand. Remember: today’s workforce wants more than a good paycheck — they’re looking for purpose as well as growth.
When developing your talent acquisition strategy, it’s essential that you use multiple recruitment platforms, optimize your job descriptions and showcase your USPs.
Meanwhile, be sure to look beyond skills, and instead aim to hire people who fit your culture and, importantly, align with your values. A good match, at the end of the day, means better retention and happier employees.
4. Foster employee engagement
Employees that are engaged are the heart of a thriving organization. Not only that but they’re motivated and productive, and they’re more likely to stick around.
To keep your workforce engaged, prioritizing communication is essential. The same holds true for regular check-ins, achievement recognition and listening to feedback. At the end of the day, it’s not just about big gestures — small things like acknowledging good work or giving people room to grow make a difference.
Focus on building an environment where employees feel that they’re supported, heard and part of something bigger — and watch your team’s energy and productivity soar!
5. Invest in learning and development
The best talent strategies focus on growth, and that means helping employees learn and evolve. Whether it’s technical training, leadership development or soft skills, make it a point to provide your employees with opportunities to enhance their abilities.
Using e-learning platforms, mentoring and workshops to make growth accessible is essential, as are learning pathways that are tailored to employees’ career goals, which ultimately shows them how invested you are in your people’s future.
And don’t forget: learning isn’t just about job performance — it keeps employees engaged and it prepares them to handle challenges with confidence.
6. Prioritize succession planning
What happens if a key leader leaves tomorrow? Disaster — unless you plan for it!
Enter succession planning, which is designed to ensure that you have the right people ready to step into critical roles at the right time. You can do this by identifying high-potential employees who can grow into leadership positions, and then providing them with stimulating assignments, mentorship and leadership training to build their skills.
Planning ahead isn’t just about minimizing disruptions — it’s about building a sense of stability and opportunity. And when your employees see a clear path for growth within the organization, they’re more likely to stay and invest in the organization’s success.
7. Set clear performance goals
People perform better when they know exactly what’s expected of them. And a great way to make this possible is to set goals that align with the company’s goals — use SMART goals (which are specific, measurable, achievable, relevant and timebound) for this to give employees clarity and direction.
Regular check-ins and performance reviews, meanwhile, are vital for tracking progress and managing challenges. But it’s not just about numbers — it’s also about providing constructive feedback and celebrating successes.
Indeed, when staff sees how their efforts contribute to the company’s bottom line, and they’re recognized for their efforts, it fuels their commitment and motivation.
8. Leverage technology
In today’s digital age, it’s safe to say that technology is a game-changer for talent management. Indeed, from recruitment to performance tracking, HR software can streamline processes as well as provide the HR department with valuable insights through metrics like retention and satisfaction rates.
Tools like applicant tracking systems and learning management systems can save time, while they can also help you make data-driven decisions.
9. Focus on diversity, equity and inclusion
A diverse and inclusive workforce isn’t just good for employee morale — it’s a business advantage. Indeed, diversity brings new perspectives, better problem-solving and better innovation.
In other words, make it a point to exercise inclusive hiring by expanding your talent pool and navigating unconscious biases. But go beyond diversity recruitment and onto developing a culture where every single employee feels that they belong. Providing mentoring and growth opportunities for underrepresented groups, meanwhile, is also a good idea, as is using metrics to measure your DEI progress.
Ultimately, a workplace that is inclusive is one where people can thrive — and your company will too.
10. Monitor and adapt your strategy
No talent management strategy is ever “finished”. In fact, the best ones evolve with your business and workforce.
This means frequently reviewing metrics like employee productivity, engagement and retention to see what’s working and what’s not. Don’t be afraid to make any necessary adjustments or changes — whether it’s adjusting your hiring focus, expanding training opportunities or enhancing employee benefits.
Meanwhile, it’s important to be open to feedback from employees and managers, and to stay up to date on emerging trends in the industry. A flexible strategy ensures your company can adapt to challenges, after all — and seize opportunities as they arise.
Talent management strategy examples
Need some inspiration? Here are some real-life examples of talent management strategies that some of the most recognized companies have developed:
Google’s “20% time” policy
Tech giant Google is world-renowned for its innovate talent management strategies, such as its “20% time” policy, which allows employees to devote 20% of their workday to projects that are unrelated to their core job responsibilities.
The idea is to empower staff to explore their passions, and boost their creativity and innovation. In fact, Gmail and Google Maps are two products born out of the “20% time” policy!
This strategy reinforces trust as well as autonomy, helping Google not only attract and retain top-class talent but also preserve its reputation as a company that values, among other things, innovation.
Netflix’s culture of freedom and responsibility
Next up is streaming service Netflix, which built its talent strategy around a simple idea: hire the best and let them thrive.
The company’s culture deck, shared publicly, highlights its flexible policies, such as unlimited vacation and the absence of formal performance reviews. Indeed, employees are trusted to manage their own time as well as make decisions, which fosters a high-accountability environment.
This approach keeps Netflix competitive by nurturing top-tier talent who value autonomy, not to mention results-driven cultures.
GE’s leadership development programs
GE, meanwhile, has long been a leader in cultivating top talent through structured development programs — including their Early Career Leadership Program, which identifies high-potential employees and gives them rigorous, rotational assignments.
Participants in these programs receive mentorship, cross-functional exposure and formal training, setting them up for leadership roles. This not only motivates ambitious employees, but it also ensures GE’s leadership pipeline remains robust, sustaining the organization’s legacy of innovation and operational excellence.
Talent management strategy template
Now it’s time to put it all together — this template will serve as a great starting point for developing your talent management strategy:
Vision and objectives
- Vision statement: Outline the overarching goal for talent management (eg: “To attract, develop and retain top-tier talent to drive innovation and growth”).
- Objectives: Summarize specific goals, such as reducing turnover, improving employee engagement or enhancing leadership pipelines.
Talent acquisition
- Employer branding: Describe initiatives to attract top talent (eg: social media campaigns, career fairs, etc).
- Recruitment process: Detail strategies (like leveraging artificial intelligence for candidate screening or developing employee referrals programs).
- Diversity, equity and inclusion: Explain how diverse hiring practices are incorporated into your recruitment efforts.
Talent development
- Learning and development: Specify upskilling and reskilling programs (like online courses or mentorships).
- Leadership training: Outline efforts to prepare current employees for managerial roles.
- Performance management: Explain how performance reviews and goal setting align with career growth.
Retention and engagement
- : Highlight competitive pay, perks and wellness initiatives.
- Employee engagement: Detail activities like regular surveys, recognition programs and team-building activities.
- Career pathing: Include strategies for internal promotions and growth opportunities.
Succession planning
- Key role identification: List critical positions that require a succession plan.
- Talent pipeline: Describe how high-potential employees are identified and developed.
- Transition plans: Include strategies to ensure a seamless handover during leadership changes.
Measurement and feedback
- Metrics: Define KPIs (such as turnover, training completion and employee satisfaction).
- Continuous improvement: Explain how feedback is gathered and used to refine the talent management strategy.
Implementation and timeline
- Action plan: Itemize initiatives into actionable steps, clearing up responsible parties.
- Timeline: Set realistic deadlines to achieve goals.
- Budget: Include financial consideration for talent management activities.
Frequently asked questions
Still got questions? You might find the answers to them below:
What is the purpose of a talent management strategy?
The main purpose of a talent management strategy is to align workforce planning and development with the company’s long-term goals to drive growth and maintain an edge over the competition.
How does talent management differ from HR management?
Talent management focuses on strategic processes to develop and retain top-tier talent. HR management, on the other hand, focuses on administrative functions like payroll and compliance.
What are the main challenges of implementing a talent management strategy?
The main challenges that come with put a talent management strategy in place include things like a resistance to change, limited resources, and difficulty in measuring return-on-investment.
How often should I review my talent management strategy?
Ideally, you should review your strategy at least once a year or whenever there are significant changes in market conditions, business goals or workforce dynamics.
What are some signs that I should revise my talent management strategy?
Some signs to watch out for include skills shortages, missed business targets, declining employee engagement, as well as high turnover rates.
Final thoughts
And there you have it: the ins and outs of a talent management strategy — including what it is, what it entails, and how to create one.
It can be a complex and time-consuming process, but we promise you that it’s worth it and that, when done right, your company and your people will reap the rewards.
What’s important to remember, however, is that no two talent management strategies look the same. Indeed, what works for one company doesn’t necessarily mean it will work for yours, and vice versa. The point is to develop a strategy that works for you.
Got a question or want to share your own thoughts? Let us know in the comments section below.