Strategic talent management can transform companies. But to some senior leaders, talent management is HR’s job — not theirs.
However, when leaders align talent with business objectives, talent becomes a strategic tool that offers competitive advantages. When leaders develop talent strategies that correspond with business objectives, their companies are well positioned to succeed.
What Is Strategic Talent Management?
Strategic talent management is the process of attracting, placing, developing, and retaining talent to meet clearly defined organizational goals. This approach directly connects to business objectives, improves employee engagement, and drives long-term business performance.
Strategic vs. administrative functions
Traditional HR responsibilities — like managing payroll and implementing employee training programs — tend to be responsive and siloed. But managing talent strategically calls for a different method. Strategic talent management is a proactive and integrated process that leverages talent as a strategic asset.
Jonathan Levene, director of talent management at Dana Farber Cancer Institute and and instructor of Strategic Talent Management for Business Impact at Harvard’s Division of Continuing Education (DCE) explained how strategic talent management differs from traditional HR functions.
“Traditional HR practices tend to be viewed in isolation, they don’t fit together to make a coherent whole,” Levene says. “For example, you might run an engagement survey, and then have managers work on a score they care about.”
In contrast, a more integrated approach involves working with senior leadership to find out which engagement scores best align with outcomes they care about. Levene presents a common real-world scenario to demonstrate the power of managing talent strategically.
“Say people are experiencing burnout, and there’s the perception that people are still thinking about work when they’re at home or on a holiday, and it’s impacting productivity,” Levene says.
In addition, there’s a new organizational change on the horizon. Burnt out employees won’t have the bandwidth to hear about the change, view it positively, and make the necessary adaptations. A strategic talent management approach seeks to find ways to reduce employee burnout to support the organization’s new objective.
“Taking a strategic approach, you ask: ‘How can we set goals around unplugging, finding coverage when they’re off, that connects with engagement scores that tie to the business goal of launching a new objective?’” Levene says.
Meet Our Experts
Alignment with business objectives
Improving engagement scores around burnout will always provide a meaningful benefit to employees. But to be truly strategic and to see a clear, definable impact, that action also must be aligned with a greater business goal — like launching a new line of business or new objective.
Aaron Vieira, vice president of talent management at Brown University Health and instructor of Strategic Talent Management at Harvard’s DCE, explains why it’s so important for businesses to clarify their objectives before implementing a strategic talent management program.
“For talent management to be strategic, you need to do due diligence on the front end to identify your competitive advantage and the key leadership, mindset, and skills you need to be successful,” Vieira says.
With clear business goals in mind, companies can hire strategically to source talent that supports their new business endeavors.
I’ve also been part of organizations who say ‘our people are our greatest asset’ — but don’t really mean it. It affected their brand, and their ability to attract and retain talent. People knew what the culture was beyond the walls.
Aaron Vieira
Essential Talent Management Skills for Business Growth
Effective talent management isn’t just an HR responsibility — it’s a critical priority for leaders across all functions who are responsible for hiring, retaining, and developing talent.
By cultivating talent management skills, leaders can unlock new levels of growth, efficiency, and scale. However, misaligned talent strategies can lead to skill gaps, low engagement, inefficiencies, and high turnover rates. What’s more, managers who ignore talent management limit their career growth.
“The higher up they get, managers learn that developing talent is part of their job,” Levene says. “If you don’t do it, your career is going to stall.”
Communicating for influence and impact
Senior leaders want specific outcomes from their initiatives. However, they’re not always aware of the people, tools, and skills needed to achieve those results. Managers who can explain the concrete impact of talent investment on leadership’s goals are more likely to win C-suite support.
“When you’re thinking about talent management and how to build a case for it and win investment, KPIs are really important,” Vieira says.
Using key people and performance indicators — like engagement, engagement rate, cost to hire, quality of hire, and time to value — managers can use hard data to make the case for strategic talent initiatives in their business.
How Companies Grow Through Talent Strategies
To many senior leaders, employee training is a line item. While talent investments can be hard to quantify directly, their impact is undeniable. Levene describes a situation he experienced where employee training directly influenced an organization’s success.
“When I was working for a sales company, we had to hire a thousand people for a new sales initiative,” Levene says. “It was considered important to help people engage and train — which led to a flawless build that otherwise would have been very complicated. Because these new salespeople were trained up, it compressed their time to value.”
Investing in employee learning not only contributes to improved performance and innovation, but also to retention and recruitment.
Vieira says he’s been part of organizations where there’s a robust investment in people, which translated to greater motivation and commitment to the work.
“I’ve also been part of organizations who say ‘our people are our greatest asset’ — but don’t really mean it. It affected their brand, and their ability to attract and retain talent. People knew what the culture was beyond the walls,” he says.
In an era where employees can review companies on sites like Glassdoor or LinkedIn, a company’s reputation has never been more susceptible to its own employees’ perceptions and feedback. Investing in talent is one way for companies to improve business performance, enhance their reputations, and attract high quality candidates.
Measuring the ROI of Talent Management Strategies
Measuring the return on investment (ROI) of talent initiatives is a routine difficulty for talent leaders and managers alike. Unlike a new product line, factory, or market, there is no one-to-one correlation between talent management initiatives and financial outcomes.
“ROI is really great as a business decision-making tool when you’re seeking to predict how an investment will perform based on something you’ve done in the past,” Vieira explains.
ROI is useful for initiatives like opening a new medical office, developing a new product line, or investing in a new MRI machine.
However, when a business is launching a new endeavor — like building organizational capacity to pursue a new business strategy — ROI analysis will be less helpful. Nevertheless, there are ways to quantify the impact of strategic talent management.
People-focused KPIs
To secure leadership buy-in without a clear proposed ROI, Levene suggests finding other key metrics leadership cares about that can be improved with strategic talent management. However, he cautions against simply presenting leadership with every people-centric KPI available.
“Not all KPIs mentioned are valuable. Based on the business strategy, figure out which indicators are leading indicators and focus on those,” Levene says. “For example, how can engagement be a predictor of business outcomes?”
Say a company with high customer churn sets an annual goal of reducing churn by 10 percent. To help accomplish this objective, it wants to raise overall employee engagement scores by 10 percent, and customer support employee engagement scores by 20 percent.
In that scenario, relevant KPIs could include employee engagement, survey engagement rate, overall engagement scores, specific engagement for customer service, and industry percentile rankings.
Justifying investment in talent strategy
To earn executive investment in talent strategy, leaders need to show senior leadership how talent management makes the company more profitable, protects the company’s reputation, and directly contributes to achieving its goals.
“In many of the organizations where I worked, the investment in talent represents anything from 50 to 70 percent of total organizational spend,” Viera says. “If you’re not optimizing your talent, that impacts your ability to be profitable or, if you’re a non-profit, to have a margin.”
Because most companies give at least 50 percent of their total spend toward talent investment, including compensation, benefits, and contract labor costs, they need to make sure that money is being spent well.
“If you don’t have the talent to execute your strategy, that’s going to affect your financial wellbeing,” Vieira adds.
How Managers Drive Talent Strategy Forward
Development is a key part of strategic talent management, and this is where managers can make the most significant impact.
“The biggest part of talent development is experience-driven development, or development on the job,” Vieira says. “But organizations often miss opportunities to focus on that.”
Developing talent is an investment that pays dividends for employees, managers, and organizations alike. Managers who challenge their employees to grow ultimately develop a more talented, versatile, and agile team, ready to tackle new organizational challenges. Additionally, managers with prepared teams are more likely to win key projects, accounts, or new initiatives.
On the job training opportunities include:
- Shadowing someone in another department or function
- Working on a cross-functional committee
- Taking on a stretch assignment
- Collaborating with a direct supervisor on a presentation
- Writing an article for a newsletter
Learn to Lead Through Talent — Strategic Talent Management for Business Impact
Impactful talent management helps leaders deliver on organizational strategic objectives. When talent practices are aligned with strategic priorities, companies experience greater employee engagement, reduced turnover, and stronger business outcomes.
Strategic talent management gives functional leaders, managers, department heads, and HR leaders the power to accomplish organizational goals while establishing themselves as highly-effective leaders.
But without training on how to build coherent, strategic talent initiatives, most leaders revert to managing talent in an ad-hoc manner. Talent management training helps leaders learn how to develop talent management skills to progress in their careers, meet organizational objectives, and lead effective teams.
