Far from being another HR task, talent management is a powerful channel for driving organizational growth, agility, and employee engagement. Organizations that recognize talent management as the key to achieving their business goals find the competitive edge they’re seeking.
Talent management has five key components, which work together to form a coherent talent management program that drives excellence throughout the employee lifecycle.
By understanding these five elements of talent management, managers and leaders call forth the best out of their people as company needs evolve. Leaders hoping to advance their career achieve recognition if they know how to strategically manage talent to achieve business goals.
Meet Our Experts
What is Strategic Talent Management?
Talent management is a strategic, end-to-end process for attracting, developing, managing, and retaining employees.
Aaron Vieira is the vice president of talent management at Brown University Health and instructor of Strategic Talent Management for Business Impact at Harvard’s Division of Continuing Education (DCE). He explained that talent management goes beyond the basic HR tasks of onboarding, payroll, and training.
“Talent management is about creating the right processes, programs, cultural norms, and mindsets around talent development,” Vieira explains. “It’s how a company stays competitive and grows.”
Talent management vs. HR
Managers and leaders often mistake talent management for HR. While both approaches involve working with people, they’re fundamentally different. Talent management is about aligning talent strategy with business goals — not HR administration.
- HR focuses on operations and compliance. They make sure people are paid on time, ensure employee information is up-to-date, and manage the HRIS system tracking employee data.
- Talent management is about leadership and performance strategy. It connects leadership goals, people strategy, and execution.
Jonathan Levene, director of talent management at Dana Farber Cancer Institute and DCE instructor alongside Vieira, underscores why talent management is necessary — no matter an organization’s size.
“Whether you’re a large organization or a small organization, there are always things you require of leaders, things that require alignment. You always need a basis on which you engage people,” Levene says. “Do you see the value of doing those things, or you think they’re going to happen magically?”
Managers are a key part of talent management strategy. The most successful managers understand how to communicate — both upward and downward — and how to exert cross-functional influence to get things done. They see their role in talent management and use it to drive results.
Aligning talent with business strategy
Just like a proprietary piece of technology, strategic talent management is a competitive asset. Today, leaders are rethinking talent management and employee engagement to identify the skills that matter most to their organizations and build skill-based talent strategies.
“This is the cutting edge of talent management, treating skills as an asset and deploying them to business objectives,” Levene says.
In a skill-driven economy, talent management allows managers, people leaders, and executives to harness their organization’s abilities to reach their goals.
“How do we find mentors for those skills, how do we grow people’s skills?” asks Levene. “Talent management is becoming viewed as the way to do that, to use skills strategically.”
This strategic, skill-based approach to talent management gives organizations an opportunity to leverage their talents’ skills as a competitive advantage.
But there are other ways talent management can give organizations a competitive edge.
“Talent management builds up organizational capability, and that improves strategy and execution — that’s how you get a competitive advantage,” Vieira says.
The 5 Core Functions of Talent Management
Talent management has five distinct stages:
Together, these stages constitute a full-funnel talent management strategy.
1. Talent acquisition
Talent acquisition is essentially the process of bringing on talent to meet organizational objectives. It breaks down into five key steps:
Employer branding
Every company has a brand, and potential candidates will likely know an organization’s values and ethos before they apply. Employer branding can either attract competitive candidates — or repel them. Companies need to actively work on their company branding if they want to use talent as a strategic asset.
Workforce planning
Workforce planning aligns an organization’s talent with its upcoming and ongoing business goals. It involves analyzing current staffing, forecasting future staffing needs, and developing and implementing strategies to meet staffing requirements.
“Workforce planning and demand forecasting is really critical to ensuring that you have the right talent, and enough talent to deliver the strategy,” Vieira says.
Talent sourcing
Once a company knows the staffing needs necessary to achieve a business objective, it needs the talent to execute. That talent could exist within the organization already, or the company may seek to work with an agency or vendor. The company may also hire external candidates or contractors.
Candidate evaluation
Evaluating candidates generally involves interviewing, but certain jobs call for writing, coding, or leadership assessments prior to making an offer.
“Particularly for senior roles, it’s helpful to do assessments,” Vieira says. “In talent functions I’ve run, we support the recruiters and hiring managers by creating competency-based hiring guides for the skills that matter most at our organization.”
Hiring and onboarding
Once an offer has been accepted, the employee, contractor, or vendor will be brought onto the company’s systems.
When hiring employees, companies should consider the long-term skills they need. For example, an expert content marketer could learn video editing and become a creative generalist. Or, they could develop management skills on the job, and eventually become a marketing VP or CMO.
Savvy managers anticipate their team’s future needs and work with HR to hire employees who can grow. To execute this well, managers need to identify and understand the gaps on their team — and develop strategies for filling them. Lastly, inclusive hiring practices help managers find the most qualified candidates for a role, including those in protected identity classes.
Talent acquisition is the foundation of the talent management process. When teams excel at acquisition, the rest of the talent management process runs more smoothly.
2. Talent development
Talent development is the process of training employees to hone their skills, learn new ones, and develop leadership capability. Organizations with strong learning cultures intrinsically understand the value of talent development. But just like other parts of talent management, leaders need to strategically develop employee skills based on current and forecasted needs.
“Talent development isn’t just about growing talent,” Levene says. “It’s defining things in terms of skills, and then developing those skills.”
There are several models for talent development, including the popular 70-20-10 model. Vieira explains how this model breaks down talent development by learning category:
- 70 percent is experience driven (on the job learning)
- 20 percent is through mentorship or executive coaching
- 10 percent is through formal training (micro-learnings, e-learning, blended learning, etc.)
Many busy managers miss opportunities to proactively identify talent development learning opportunities for their team. However, Vieira cautions that managers need to view talent development as an integral part of their job.
“I had a very frank conversation with an HR business partner a few years ago who had a client who said, ‘You want me to manage people? I have to manage the operations!’” Vieira says. “But you can’t run the operations without people.”
This is the cutting edge of talent management, treating skills as an asset and deploying them to business objectives.
Jonathan Levene
3. Performance and talent management
Once employees have growth opportunities, managers should track their performance and potential to identify high-potential employees. Key aspects of performance management include: performance reviews, internal mobility, and succession planning.
A critical part of performance management is recognizing employee potential. Adopting a growth mindset — which views skills and abilities as flexible rather than fixed — will help leaders identify the employees with the greatest growth potential. Highly-engaged employees should be developed to learn new skills, move up, and ultimately step into leadership roles.
Successful managers advocate for their employees across the organization. Some ways managers can support high-performing employees:
- Connecting them with a mentor
- Identifying opportunities in other departments
- Offering shadowing opportunities
- Suggesting employees for short-term or one-off projects
- Giving employees opportunities for greater leadership visibility
4. Talent retention
Talent management is a two-way street, and managers need to make sure they’re meeting employee needs, or they risk losing key team members at critical moments. Talent retention is the process of keeping employees engaged and loyal to the company. The top methods for retaining talent are:
- Competitive compensation and benefits
- Opportunities for growth
- A positive company culture
Managers who can effectively communicate with senior leaders can reduce friction, which improves company culture and secures resources that contribute to employee compensation packages. Managers can also directly influence talent retention by identifying or creating growth opportunities for their employees.
But perhaps most importantly, managers influence employee engagement by setting the tone for the team — a 2022 UKG study found that managers have as great an impact on someone’s mental health as their spouse. Managers who successfully create a productive, psychologically safe, and growth-oriented workplace will see their employees thrive. When employees feel valued, challenged, and supported, they’re more likely to stay loyal to the company.
Other factors that influence retention are leadership, trust, DEIB efforts, and flexibility. To discover what matters most to their team, managers can conduct anonymous surveys or ask team members individually during one-on-ones meetings.
5. Offboarding
When talent does choose to separate from a company, the employee offboarding process presents an additional opportunity for talent management. While there are administrative HR tasks involved, leaders and managers should employ an offboarding strategy for the steps of separation that impact business performance.
A strategic offboarding process includes exit interviews, knowledge transfers, and alumni relations. Exit interviews can help organizations identify areas for improvement, knowledge transfers ensure that institutional knowledge is retained, and alumni relations help protect a company’s brand.
Respectful transitions are crucial for company morale and maintaining a brand’s reputation. Departing employees should be treated civilly, or companies risk tarnishing their reputation — websites like Glassdoor and LinkedIn make it easier than ever for disgruntled employees to air grievances.
Moreover, a respectful offboarding procedure can lead to so-called “boomerang employees” who return to a company after some time away. Maintaining strong relationships with high-performing alumni can help companies acquire talent in the future and secure competitive succession plans.
How Talent Management Functions Work Together
The interconnected lifecycle
While individually discrete, each step in the talent lifecycle is connected to the others. For example, a poor onboarding process could lead to weak talent development, thereby causing low retention. On the other hand, a successful offboarding process helps attract future candidates by protecting a company’s brand and increasing the likelihood of boomerang employees. Taken together, the talent management lifecycle represents a holistic, strategic approach to managing employees — often resulting in greater company success.
Managerial influence across stages
Managers must see the full employee lifecycle through, not just day-to-day performance. With a vision for employee success at every stage of development, managers play an integral role in talent development. Managers who use their teams strategically to meet business goals, develop in-demand skills, and deliver results build strong reputations as people who can “get things done.”
Building Talent Management Skills as a Leader
Intentional, strategic talent management is a company-wide responsibility. Managers and senior leaders who successfully align talent with business objectives are more likely to achieve their goals and ultimately drive revenue and growth.
Core capabilities managers need
Talent management is a must-have skill for any leader managing people, regardless of department.
“Developing talent is part of the definition of leadership. If you don’t do it, your career is going to get stalled,” Levene says.
The top skills managers need to succeed in developing talent:
- Communication skills (upward, lateral, and downward)
- The ability to give useful, regular feedback
- A team development strategy that dovetails with company goals
Managing up as a talent enabler
Managers who know how to manage up tend to have greater talent management success. Managing up is the process of building trust with senior leadership by understanding their goals and communicating with leadership through that lens.
Managers who manage up have a deep understanding of leadership priorities and align their teams’ efforts with business objectives. As a result, their projects more successfully meet company goals, allowing them to secure leadership buy-in for future projects, funding, or talent requests.
Reducing friction through alignment
Alignment between business objectives and team goals helps reduce friction. When teams understand what they’re doing and why, work flows more easily and sudden pivots can be understood within the larger context. Managers who communicate with their teams — and advocate for them — see better execution.
Learn Strategic Talent Management
Developing talent is a critical ingredient for managerial career growth. To win promotions, resources, or projects, managers need a committed and capable team. As the link between execution and leadership, managers are best positioned to understand both company objectives and the best way to manage talent strategically.
Discover how our Strategic Talent Management program helps emerging leaders master the tools of strategic talent management—building stronger teams and driving lasting organizational impact.
