Talent management isn’t just another human resources (HR) buzzword. It should be an integral part of your overall business strategy that manages your most important assets. If you want to know how to hire, train, and retain the best talent with a talent management strategy, you’ve come to the right place.

What Is Talent Management?

Talent management is the sum of the processes that include the attraction, selection, and retention of employees. A talent management strategy encompasses several key HR processes across the entirety of the employee lifecycle, including:

  • Recruiting
  • Onboarding
  • Workforce planning
  • Employee management
  • Performance management
  • Training and development
  • Compensation planning
  • Employee succession and retention

When executed through a well-thought-out strategy, talent management helps businesses attract, recruit, develop, retain, and reward their employees.

According to research, companies with effective talent management strategies are better placed to outperform their competitors.

What Are The Key Benefits of Talent Management For Small Businesses?

  • Helps attract top talent
  • Improves employee engagement, productivity, and retention levels
  • Enables strategic staffing processes
  • Boosts satisfaction levels

Talent management isn’t a tick-box HR practice. It’s essential for making sure that your teams, departments, individual employees, and overall organization is well-designed and structured. Below are a few ways that implementing a talent management strategy benefits your small business.

Talent Management Helps Attract Top Talent

Talent management strategies not only consider your short and long-term organizational and strategic goals but also consider the types of people you’ll need to fill them. Rather than a “spray-and-pray” job posting exercise, talent management processes help you identify how to best attract top talent and where to find it.

Talent Management Improves Employee Engagement, Productivity, and Retention Levels

Talent management involves workforce planning, which helps identify and develop your employees’ skills. When you invest in your employees in individuals and put their skills and interests to use in the right areas, you’ll notice an increase in employee motivation, engagement, and, consequently, retention levels.

Talent Management Enables Strategic Staffing Processes

Both succession and workforce planning are critical components of talent management that help you create plans for when critical roles are vacated, and for when your business experiences turnover and growth.

Having a strategic staffing plan in place helps your business succeed through changes, expansion, and turnover. It also ensures that your other employees aren’t suddenly left to cover critical roles or workloads, which can lead easily to burnout.

Talent Management Boosts Customer Satisfaction Levels

All of the benefits above lead to one crucial advantage of effective talent management: The ability to give your customers the best experience possible.

You deliver your best customer service when you hire the best employees, keep them motivated, and plan for all eventualities.

Common Talent Management Challenges

  • Siloed hiring and recruitment processes
  • Complex and ineffective onboarding processes
  • A lack of data to inform decisions

All businesses already perform many of the component processes involved in talent management. When performed inefficiently, however, many of these processes can become obstacles to an effective holistic talent management strategy.

Let’s look at some of the most common talent management challenges.

Siloed Hiring and Recruitment Processes

Many companies operate in silos when it comes to hiring and recruitment. This means that recruitment and hiring data is also siloed within specific teams.

When it comes to effective talent management, your recruiting and hiring processes need to be aligned and key stakeholders need to have access to all workflows and data ― this enables you to improve continually on recruiting components.

Applicant tracking systems (ATS) are the best way to help you track the most important pieces of recruiting data such as applications to vacancy ratio, resume source, referral hires, and time to hire.

BambooHR‘s ATS keeps all applicant information organized throughout every phase of hiring, which also helps you give applicants a great candidate experience.

BambooHR streamlines hiring and recruitment processes from application to offer letter.

Applicant funnel
Source: BambooHR

Complex and Ineffective Onboarding Processes

Once you’ve hired great talent, it’s crucial that you give them the best onboarding experience. Unfortunately, many companies don’t have thorough or effective onboarding processes that give new employees the confidence and knowledge they need in their early days.

Whether it’s inadequate training, a lack of clear objectives, or an unwieldy process, if you don’t get onboarding right the first time, you risk losing new employees quicker than you hired them.

Zoho People helps companies customize their own onboarding process that includes tailored workflows, personalized objectives, and the ability to track new hires’ onboarding completion progress.

Zoho People helps you track your new hires’ task completion status within a single window.

track your new hires
Source: Zoho

A Lack of Data To Inform Decisions

Investing in data and HR analytics is a key part of any talent management strategy. Without data, such as attrition statistics, payroll information, and employee engagement rates, it’s impossible to identify where you need to dedicate resources that help you attain your business goals.

Namely‘s HR analytics function centralizes all HR, payroll, and benefits information in one place and compiles multiple reports to help companies make data-driven talent management decisions.

Namely’s HR analytics function digs deep into the people data you need to drive business decisions.

HR analytics by Namely
Source: Namely

How To Create a Talent Management Strategy for Your Small Business

  1. Define your business’s strategic objectives
  2. Identify future opportunities and challenges
  3. Create a talent pipeline
  4. Evaluate your current processes

Every business’s talent management strategy ultimately looks different, but many of the building blocks look the same. Follow the steps below to help you craft a meaningful talent management strategy for your small business.

Define Your Business’s Strategic Objectives

First things first ― you need to establish what your high-level business goals are to align your talent management objectives with them.

You’ll need to think about both your short and long-term goals, and think about how your current workforce fits them, and how you’ll need to account for staffing changes as you move towards your strategic objectives.

For example, if you’ve just gone through a period of high growth and talent acquisition, you’ll need to think about how your current workforce can help you achieve your objectives through training and development. If you’re planning on launching on entering a new market or geography, this needs to be built into your talent management plans.

Identify Future Opportunities and Challenges

Once you’ve established your strategic direction, you’ll need to think not only about how to achieve your objectives, but any barriers and potential opportunities that may arise.

For example, you might launch your business in a new territory and experience high levels of growth and require higher recruitment budgets. Meanwhile, you might not experience the success you expected, and may need to scale back operations.

Anticipating and planning for these types of events is a crucial part of your talent management strategy.

Conduct a Talent Gap Analysis

Bearing both points above in mind, you’ll then need to carry out a talent gap analysis of your current workforce. Doing this allows you to pinpoint teams and departments where you need to build up skills, and more importantly, which skills in particular.

Create a Talent Pipeline

Don’t wait until you open new job roles to create a solid talent pipeline. Proactively creating a pool of potential candidates not only means you’ll spend less time on recruiting and hiring processes, but you’ll have a better idea of the talent on offer in the market. This also includes looking at your current workforce and building an internal pool of candidates who have the potential to fill future positions.

Evaluate Your Current Processes

Talk to your newer employees about their experience during the interview and hiring processes. Talk to your older employees about how well they feel their performance and development opportunities are being managed currently. Look at your retention statistics and ask all employees how they feel about your employee recognition initiatives.

Once you’ve checked out the above, you’ll have a better idea of where to start improving these various processes. Whether you need to assign more money to training budgets or need to improve your time to hire, this step gives you an idea of where upgrades can be made across the employee lifecycle.

Talent Management for Small Businesses: What To Do Next

Talent management is an essential part of the HR function, even for smaller businesses. Your employees are your greatest asset, and it’s up to you to keep them satisfied, develop them, and always have a plan for your business’s organizational future. These steps get you off on the right foot in creating a talent management strategy that aligns with your strategic goals.

But, with so many moving parts, talent management is best performed with the help of software that can help you marry each process together seamlessly. If you’re ready to get started with your software search, check out our in-depth reviews of the best HR software. Our experts have spent more than 40 hours reviewing 110-plus HR software tools to help each business make the right choice for its unique goals.