Strategic talent management: how to think more holistically about people development

Strategic talent management approaches take a holistic approach to people development – all supported by the right HR software and people management tools

‘Mary’ has all the qualifications and experience for an upcoming promotion, and is ready to take the next step in her career. Yet when she is offered a promotion she turns it down, and joins a competitor a few months later. What went wrong? Her former employer expected her to relocate to another country, which was impossible for her due to family commitments. Her friends knew, but HR didn’t – so the business missed out.

“We can store information on assessment, previous work history and feedback data on our talent systems but if all that information goes into the system to die, there’s no reciprocal value,” says Roger Philby, CEO and founder of workplace consultancy Chemistry Group. Talent management and planning, he argues, should be a fluid exercise where all parties contribute and actions happen because of the insights the technology generates. “If I update my personal development plan after some training and I’m pinged an opportunity a few days later, it shows it’s worth it,” he adds. With the shape of work rapidly changing due to the twin forces of a global pandemic and increased automation, having access to a ‘living’ talent map that reflects the skills and competencies available now – and in the future – will be a crucial tool that determines how organisations survive and thrive.

“On talent, we see two trends,” explains Dorothee El Khoury, HR practice leader at analyst company The Hackett Group. “Even before the Covid-19 pandemic, there was a need for the talent cycle to be integrated and for a better understanding of strategic future workforce needs – not just headcount, but also skills. This needs to feed all the strategic talent management processes: from sourcing, recruitment and training, to performance and planning. Secondly, HR processes are too often happening in silos, with people recruiting for open positions but not thinking about mobility, while training is following a different logic altogether. It’s not joined up so there’s a lot of wasted effort, and it means HR is not aligned with what the business needs.” The answer, she says, is better integration between learning, central HR, performance management, and recruitment systems so organisations can better match open opportunities to people who have the skills, potential and desire to fill them.

How to build talent pools that aid strategic talent management

Many organisations will be familiar with talent pools already – essentially a database of potential job applicants that have already shown interest in working there or who may have applied before and been unsuccessful. But this approach tends to focus on acquiring talent and bringing it in from an external source; it may save money on recruitment advertising or using agencies, but it’s still bringing in someone from outside. “We see a lot of technology innovation at the talent acquisition funnel,” says Simon Lyle, managing director of Randstad RiseSmart, an outplacement provider, “but then it tends to spring a leak. In the future there will be more use of flexible talent as organisations need to deliver smaller projects very quickly, and this could be a mix of contingent workers or people who already work in the organisation.” Many larger companies, particularly in professional services and consultancy, have responded to this by building their own talent ‘marketplaces’ that they use as projects require.

Building a flexible talent pool that can adapt as the needs of the business evolve could include:

• A database of people who have shown interest in working for the company before (including sign-ups from sources such as a careers page or LinkedIn)
• Data from feedback discussions with existing employees on their career aspirations
• Results of psychometric assessments detailing behavioural strengths and weaknesses
• Integration with an LMS so content can be curated to support employees to meet their aspirations
• A record of learning completed by existing employees
• Up-to-date details of company alumni who may be interested in projects in the future
• Data on freelance and contingent workers with details of specific experience or qualifications
• Details on people identified as high-potential workers or potential successors

Where organisations go wrong with strategic talent management

Whether an organisation incorporates all these components, or just some, the key is to ensure the information in it is up to date, and that requires a commitment from employees, managers, HR and leadership teams. This is where many organisations fail, according to El Khoury. “What companies tend to do is segment different areas of the workforce and have different talent pools, rather than looking at the workforce as one.” Instead, organisations should take more of an ‘ecosystem’ approach, she advises, and the components could be any type of worker from full-time staff to agency workers, collaborations with start-up businesses, and independent workers who sometimes work directly for a company and sometimes through an app or platform. “The challenge here is to have visibility of this ecosystem – where the dependencies are, where the risks are, who has intellectual property, and how policies apply to all of those parties,” she says. “This means HR, research and development, procurement and legal departments all need to work together.”

Despite an uncertain labour market, many organisations face skills shortages in key areas, such as technology, as companies accelerate their digital transformation plans. According to Jo-Ann Feely, global managing director of innovation at recruitment outsourcing company AMS, there are 2.7 million open tech vacancies worldwide where demand is not being met. “The pandemic has brought the future closer to us and businesses’ digital transformation journeys are playing out in the numbers. All businesses have had to pivot and they’ve turned to digital platforms,” she explains. When it comes to managing digital talent in a tight market, this requires what she calls ‘workforce dexterity’. She adds: “Rather than thinking that you need to add or replenish talent, think about how you upskill and reskill your existing workforce. Screen people for potential and they will have enhanced mobility options internally.” AMS takes this approach with its graduates, who are hired for their potential and then trained in specific digital skills as and when necessary. “This means you can reshape the workforce so it’s the tech talent you require. It stops you thinking ‘We don’t have these skills, let’s recruit a contractor’ – instead, you offer those opportunities to your internal population,” says Feely.

Organisations will still of course need to rely on contingent workers for particular projects, and using technology to support talent management means they can have oversight over where these skills are coming from. According to the Workforce 2020 report from Oxford Economics and SAP, 83% of executives plan to increase their use of ‘contingent, intermittent or consultant’ employees in the next three years. However, only 42% say they know how to extract meaningful insights about those workers. Lyle at Randstad RiseSmart believes businesses will need to ‘open up borders’ to their contingent workforce to create higher levels of engagement and loyalty. “From an engagement perspective, you can redefine engagement policies that had previously been targeted solely at your permanent worker population,” he says. “Think about the different forms a worker can take; can you, for example, open up online platforms so they can engage with you?” Rather than locking this worker population out of platforms such as learning management systems, inviting them to boost their own skills is a win–win, he adds.

Becoming more ‘borderless’ in how you map talent can also be beneficial in terms of equity and inclusion. The push to remote work means that geographical barriers can be removed for some roles, while increased flexibility over hours and location opens up work to groups that may have felt excluded before, such as working parents or those with disabilities. At AMS, bringing in talent based on potential and helping employees reskill throughout their career has enabled the company to hit workforce targets around gender, ethnicity, and social mobility.

The role of technology in better strategic talent management

A talent system that can make intelligent, automated suggestions for projects can also get over our human propensity to ‘go with who we know’, adds Philby from the Chemistry Group. “We know that often the noisiest people are the ones who get the roles. So, when an opportunity comes up, the engine will recommend someone without them having to put their hand up. We know that women tend to not apply for projects if they don’t feel they tick all the boxes, and a good talent engine will remove that barrier.”

But, with the McKinsey Global Institute predicting that around 30% of work done could be automated by 2030, how can we incorporate our new ‘robot’ colleagues into talent planning and management? El Khoury believes organisations will need to rethink the skills that employees require and this will define how they map talent. “The workforce will be a hybrid of automation and people. But while robots require little emotional management, their human colleagues need to be aware and be able to react if something goes wrong – think of how we use the autopilot function on a plane, for instance,” she says. Furthermore, AI tools will not be able to perform higher- value tasks such as dealing with complex customer queries. Feely adds: “We still need people to do the engagement work. We can get a basic legal contract from an algorithm, but you need someone to do the relationship management.” A robust talent management system will provide oversight of those softer skills, or link to a learning system that can curate courses where there are gaps in this area.

Recruitment company ManpowerGroup argues that organisations’ priorities post-pandemic should be to ‘renew, reskill and reboot’, identifying where their existing workforce can learn new skills and developing soft skills so employees can cope with changes to their roles in years to come. Strategic talent management can support HR teams to manage the ebb and flow of skills both within their business and among external workers, save money on recruitment, and retain an engaged workforce.

Five key takeaways

• Go beyond a talent database: integrate former candidate data with information on current employees, performance management and learning systems
• Think ahead: hire for potential. Functional and soft skills can be learned and developed over time
• Work across departments: collaborate with procurement teams, line managers, finance, and IT to ensure data is up to date and secure
• Use strategic talent management tools to reduce human bias and increase diversity by automating suggestions for roles
• Incorporate untapped sources of talent such as alumni networks and contingent workers rather than relying on external applicants or existing employees

This is an extract from Good Work, Great Technology: Enabling strategic success through digital tools, published by leading UK HR software provider Ciphr. For more insight into how technology can change work for the better, download the complete book for free, now.