Building a Solid Talent Management Strategy for a Strong ROI
Your talent management strategy is the foundation of all related HR activities. It guides the development of policies and programs for attracting, managing, and developing the workforce. With an effective mix of strategy and tactics, you can show a strong return on investment (ROI) for talent management activities and help your organization meet its strategic objectives.
The Importance of a Solid Talent Management Strategy
Talent management is not a checklist of HR activities; rather, it is a business strategy tied to organizational performance. The ideal talent management strategy spans across all areas of the candidate and employee journey, with key activities typically falling into one of the following categories:
- Talent acquisition: The activities you undertake to attract, screen, and onboard candidates
- Performance management: Programs to help employees do great work, such as performance reviews, feedback, and rewards
- Engagement and retention: Benefits, training, and development opportunities to drive employee commitment to the organization
Having the right talent management strategy is critical to the success of any business. Without it, you miss opportunities to mobilize talent to help the organization achieve its goals. If you lack a well-defined talent management strategy, or your existing one needs a redo, you can experience the following challenges in the workplace:
- Lack of efficiency in hiring and performance management processes
- Poor or insufficient compliance with laws affecting hiring activities and day-to-day workforce management
- Inability to leverage technology and HR analytics for decision making
Alternatively, with a strong talent management strategy in place, you can build a high-performance culture and achieve excellence in hiring and employee engagement activities. Your talent management strategy can also help you achieve better overall business performance. A McKinsey global survey found organizations with an effective talent management strategy were more likely to outperform their competitors. With an effective talent management strategy, you can also do the following:
- Attract top talent and onboard new hires effectively
- Engage employees and teams so they can give their best effort at work
- Craft benefits and compensation to help you retain talent
How to Implement Your Talent Management Strategy for a Strong ROI
Talent management strategy encompasses your goals for hiring, developing, and engaging the workforce, but a strategy doesn’t get you very far without the mechanisms to execute it. When you have the process and tools to help translate your strategy into action, you can achieve a better return on the organization’s investment in people.
Take these steps to derive a strong ROI from your talent management strategy:
1. Create comprehensive policies for attracting, screening, and hiring talent.
Policies guide your day-to-day talent management activities, helping create repeatable processes and more predictable outcomes. Instead of having to reinvent the wheel with each new candidate or employee, you can rely on clear policies and practices to guide you. Here are some of the things you can do when you have comprehensive talent management policies in place:
- Develop processes for identifying and attracting a diverse pool of qualified candidates.
- Conduct background screening with high standards for compliance and efficiency.
- Onboard new hires and set them on a path for success in their new role.
- Set expectations and measure employee performance.
2. Align talent management practices to your corporate culture.
Your organization’s culture dictates how you implement current and future policies. As your organization evolves, your talent management strategy and practices will need to move in tandem with any culture shift.
Every corporate culture is different, and not all talent management practices work equally well in every organization. But when HR policies and practices align with your unique culture, you’ll be better positioned to attract, manage, and retain employees.
3. Hire and develop leaders who help others achieve optimal performance.
Leadership is the cornerstone of any successful organization, because strong leaders set the tone for high performance and help others perform to their potential. By hiring and developing effective leaders, you are not only taking steps to support company culture, but you also create an environment for HR programs and activities to have their maximum impact.
4. Provide employees with the skills and knowledge they need to grow.
Over time, advances in technology and other changes require employees to learn new skills and adopt new ways of working. When your talent management strategy is designed to provide employees with the training and development opportunities necessary for growth, there is a greater likelihood they will improve performance and help the organization keep up with the pace of change.
5. Regularly review existing talent and plan for the future.
Effective talent management requires a plan of succession and staffing for key roles. When you have a process for assessing current talent and determining future needs, you can make plans to develop people for advancement and hire for roles where you lack existing talent. As a result, you will be less likely to experience a talent shortage down the road.
6. Automate talent management tasks and processes.
Digital tools can help you increase the efficiency of the processes linked to your talent management strategy. By automating existing workflows and reducing paper processes, you can do more and experience fewer errors. Examples of tools to help automate talent management activities include:
- Applicant tracking system (ATS)
- Background screening technology
- Performance management system
- Employee survey tools
Ways to Measure Your Talent Management ROI
You can see the ROI of your talent management strategy in the overall effectiveness of your HR programs and activities. When you show improvement and achieve your goals in those areas, you know you’re moving in the right direction. Here are some tools and metrics to help you determine if you’re on track:
Investing in resources to streamline the hiring process saves money and brings new talent into the organization faster. For example, integrating background screening technology with your ATS allows you to move candidates seamlessly through the hiring process. With less reliance on manual tracking or double-entry of candidate details, you can deliver a better candidate experience and increase transparency in the background screening process.
Providing employees with new skills and experiences helps them improve performance and experience career growth. You can use the following metrics to help you measure the ROI of training investments:
- Training spend per employee
- Performance outcomes after training
- Rate of promotion after training implementation
Investing in performance management technology and other resources helps employees understand expectations and make improvements where necessary. Key metrics to help you see the impact of investments in performance management include:
- Growth in performance over time
- Performance by manager
- Change in the number of performance warnings over time
- Unregretted turnover rate
Boost Your Talent Management ROI
Having a solid talent management strategy is essential to the success of your organization. When implementing your strategy, you’ll need to consider your corporate culture, existing processes, and goals for improvement. Focusing on the hiring process is an ideal place to start, as it is the very beginning of the employee lifecycle journey and impacts the total employee experience. With the right partners and resources, you can develop an efficient hiring process to help you attract and hire high-quality candidates.
Who you partner with for background screening not only helps you keep the hiring process moving efficiently, but it also helps you manage hiring risks and stay in compliance with changing laws. To better measure the effectiveness of your organization’s existing background screening and hiring process, use our interactive assessment tool, and learn more about your opportunities for a stronger ROI.