<img height="1" width="1" style="display:none;" alt="" src="https://dc.ads.linkedin.com/collect/?pid=40587&amp;fmt=gif">
Competencies Talent Management Competency-based Management

Talent management needs to be strategic. Here's what that looks like.

By HRSG Team on November, 18 2022

Article table of contents (jump to section):

  1. What is a talent management strategy?
  2. Why is a strategic approach to talent important?
  3. The essential components of strategic talent management
  4. Critical capabilities for strategic HR managers
  5. The role of competencies in strategic talent management

All HR managers recognize the need for a strategic approach to talent, but we don't always know what it looks like or how best to achieve it. Building a successful talent management strategy demands new perspectives, new objectives, and new capabilities from HR. In this blog post, we'll examine the key requirements of strategic talent management and the capabilities it demands of HR managers.


What is a talent management strategy?

A talent management strategy is a plan for managing the organization's talent in a way that aligns with and supports business goals.

While in theory, all HR professionals will agree that talent exists to support the business, talent management decisions can become siloed and disconnected from the organization's strategic objectives. A strategic approach re-aligns HR initiatives and priorities with these objectives, creating a direct line of accountability between talent management choices and organizational resilience and success.


Why is a strategic approach to talent important?

Aligning talent management to organizational goals ensures that HR can make the most of limited resources by focusing on the areas where improvements will have the biggest impact on organizational outcomes.

Adopting a strategic approach brings benefits to HR managers as well as the organization. When talent management reflects and supports the business strategy, it elevates HR's profile in the organization, demonstrating its relevance and impact.


The essential components of strategic talent management

While every talent management strategy is different, a strategic approach to talent management is characterized by four hallmarks.


When HR is reactive, it tends to develop in a piecemeal way. Initiatives are launched in an ad hoc way in response to a leadership request, or because they solve a specific pain point or reflect a rising HR trend. Without an overarching strategy to guide decision-making, talent management becomes a collection of disparate tools—a competency initiative over here, a leadership development program over there, a learning management system somewhere else. On paper, HR might be checking the right boxes, but in reality, the system is not effective.

An effective talent management strategy is holistic, with every initiative, every tool, and every platform chosen to align with a specific set of business challenges so that every initiative works together and pulls in the same direction. It encourages HR to ensure that everything connects and contributes to the vision for talent.


HR managers need to accommodate organizational and departmental realities and limitations, which means making difficult choices. We may not be responsible for producing a profit and loss statement, but we still need to think in those terms by being cognizant of where we invest our budget and what value those dollars will return.

A balanced scorecard can be a good way to find harmony and sustainability between the sometimes-conflicting needs of the organization and HR's budget realities. Evaluating the outcomes of the strategy according to its impact on the organization's financial health, operational efficiency, organizational capacity, and customer/employee satisfaction can help you make more thoughtful decisions.

Long term

It's tempting to make short-term decisions that meet an immediate need, but effective talent management strategies unfold across years. A strategic approach requires HR managers to think about what the organization's talent needs will look like in one, three, or even five years and to lay a foundation capable of supporting the solution to those longer-term needs.

While the plan needs to address current workplace and business needs, taking a long-term view provides consistency and ensures you don't switch focus too frequently, which can result in wasted resources as we undo and redo work that becomes obsolete too soon.


A good strategy needs to include metrics that quantify success and ensure accountability. HR has been seen as a cost center rather than a value driver for too long. By demonstrating that talent activities connect with and impact business results, you can accomplish three crucial objectives. First, it's a discipline that forces you to work backward from a desired result (a 20% increase in retention, for example) rather than forward from a desired initiative (such as an investment in the latest succession management platform). Second, it provides valuable, objective feedback on your progress toward the goal, which you can use to refine and optimize results. Third, it gives you the data you need to demonstrate to the wider organization that the investment in talent management is a rewarding one.


Critical capabilities for strategic HR managers

HR managers that are leveling up to a more strategic approach to talent management may find that they need to cultivate a new set of skills. These three capabilities are a good place to start.

Strategic mindset

If you are new to the process of aligning talent management decisions and activities to organizational strategy, it can take time to acquire the capability. Strategic talent management requires you to think like a CEO—and a chess master. Familiarize yourself with organizational goals and think about how the sum of your talent tools and processes are supporting (or diverging from) those goals. Use those insights (backed up with facts and data) to determine which are expendable and which are essential. If you retire an existing program or invest in a new one, how might it impact the organization's progress against its goals today and into the future?


Communication has always been a crucial part of the HR manager's job, but strategic talent management creates even more opportunities to get buy-in from a range of stakeholders, including leadership, other business units, and employees.

You need to be able to describe your goals and activities in the language of the organization rather than HR-speak. Instead of describing the tool, describe the challenge, the solution, and the outcome. For example, instead of telling leaders that HR is investing in digital literacy training (HR-speak), let them know that you are focusing on closing the organization's technical competency gap so that it can meet its commitment to deliver exceptional digital experiences to its customers (an organizational goal).

Simplicity is also key. Ideally, your entire talent management strategy will fit on a single page. By describing your activities in simple, easy-to-understand terms and showing how they are relevant to the goals of your audience, you can raise HR's profile and influence.


While the strategy should provide a consistent, holistic, multi-year direction for the organization's talent management activities, it's important to be prepared for the unexpected. One of the most valuable capabilities you can cultivate is an ability to adapt and adjust the strategy in a way that keeps the organizational mission on track and its values intact. This can involve making difficult choices, but it should never jeopardize the organization's core values. Ultimately, HR must plan for the best, prepare for the worst, and always be ready to adjust the strategy to changing realities.

Remember, the organization is looking for you to help them make strategic business/ people decisions. HR managers need to articulate the options, including the trade-offs involved in each one.

For example, if you are tasked with cutting L&D by 30%, you may respond by saying, "Employees ranked the opportunity to learn and grow as their #1 engagement driver. Reducing L&D funding could increase turnover by X%, which would increase hiring and onboarding costs by X% in future, along with an X% reduction in revenue while the workforce gets up to speed." If you can also suggest a better alternative, so much the better.


The role of competencies in strategic talent management

When you start to see HR as a function that exists to align talent in support of organizational goals, one of the most important questions becomes: "What human capabilities does the organization need to support those goals?"

Competencies and competency frameworks can help to supply the answer by identifying the behaviors that employees who are successful in their roles demonstrate on the job. While many organizations rely on a skills taxonomy for this task, multi-level competencies provide a more detailed, objective, and actionable option for building a talent management system. Competencies define the abilities, skills, knowledge, motivations, and traits needed for successful job performance in terms of observable, on-the-job behaviors.

Take the first step in implementing a talent management strategy. Start mapping the competencies that drive your organization's success.

Learn more about how competencies can help you build a strategic foundation for talent management. Download "The HRSG Competency Toolkit," a complete guide to competency content, technology, and talent management.