What Is a Talent Management Strategy, and Why Do You Need One?

An organization’s talent management strategy outlines its approach to the employee lifecycle—including attracting and recruiting talent, onboarding and developing employees, and even optimizing offboarding practices through automation. But do you really need one? Next, let’s explore a few of the key advantages.

• Improve Business Performance and Outcomes:  For many companies, the ability to develop and implement an effective talent management strategy has a direct impact on business performance and outcomes. One McKinsey survey actually found that & 99 percent of respondents who reported their company's talent management was very effective said they outperform their competitors, compared with 56 percent of all other respondents."
• Reduce Costs: Not only does employee turnover hinder a company's ability to innovate, compete, and grow—it also costs the company a lot of money. According to Gallup's conservative estimate, the cost to replace an employee & can range from one-half to two times the employee's annual salary. By contrast, upskilling and developing existing talent is typically a much more cost-effective approach. Companies are also starting to understand the true costs of not filling roles within the organization, further underscoring the importance of effective talent management strategies.
• Empower Employees: When companies aren’t able to reliably attract and retain high-quality talent, it doesn’t just hurt the organization. It also impacts the morale of otherwise loyal employees, potentially driving them away from the company. This is especially problematic when top talent goes elsewhere; as Gallup  puts it, “Losing your best people means losing your reliable winners, your constant innovators and your most effective problem-solvers.” 
• Unlock Competitive Growth: Within the tech industry, the ability to find great talent is increasingly viewed as a competitive differentiator separating the best from the rest—especially when an organization understands the candidate journey and the importance of filling crucial roles and retaining key talent. The revolving-door effect of employee turnover holds organizations back from a productivity and innovation standpoint. And since tech workers are in such high demand, employees often demonstrate less loyalty than in years past. Today’s employers are competing for talent like never before, and those with the best talent management strategies are in the best position to find—and hire—the best candidates.

All too often, organizations struggle to overcome key talent management challenges, which puts them in a difficult position where the available talent never quite matches the needs of the business. Left unaddressed, excessive employee turnover erodes employee morale, making it even harder to attract and retain talent over time.

The importance of a talent management strategy is difficult to overstate, especially for larger organizations or those with complex staffing needs. A well-rounded talent management strategy brings about many benefits, many related to an increased ability to attract and retain high-quality talent that meets the needs of the organization. Other benefits include the ability to:

• Identify and attract in-demand talent through a strong brand/reputation.
• Develop a more streamlined and agile talent pipeline that prevents or minimizes staffing-related disruptions or delays.
• Increase efficiency and effectiveness throughout the organization, leading to greater productivity and growth.
• Reduce costs related to attracting, recruiting, and onboarding new talent by slowing down the revolving door of hiring and attrition.
• Enhance the capacity for innovation by building strong, diverse teams with the exact skills needed for any given role.

Just having a talent management strategy isn’t always enough to guarantee positive results—especially within the ever-growing and ever-evolving tech industry, where roles are constantly being redefined as strategic priorities shift. Next, let’s look at some of the unique challenges in finding high-quality tech talent.

Talent Management in Tech: What Are the Biggest Challenges to Overcome?

Within virtually every modern industry, effective talent management can make or break an organization’s ability to innovate and succeed within a competitive marketplace. There are often significant challenges to overcome, underscoring the importance of a well-designed talent management strategy. Some of the top talent management challenges facing these companies include:

Challenge #1: The Increasing Demand for (and Price of) Talent

Especially since the COVID-19 pandemic redefined many aspects of how many people live and work, “IT has risen in prominence as an engine for business sustainability and growth across all industries,” according to CIO.com . 

As such, there is increased competition for a limited number of highly-qualified candidates for any given role, as the demand for tech-aligned talent has increased “by 50% to 60% in the last two years.” In response, many executives and decision-makers are increasingly open to outsourcing and other non-traditional staffing avenues.

Challenge #2: Finding the Right Skills and Talent

Another major barrier facing modern companies (and their IT departments) is a widespread lack of technical expertise —responsible for roughly one-third of current vacancies in tech. This isn’t a brand new concern; instead, the “skills shortage” has been developing over the course of the last two decades. 

And it’s not just an inconvenience for employers; it’s a strategic riddle in need of a solution, one that’s causing organizations to leave positions open despite a pressing need to fill them. According to Forbes , these gaps are expected to persist, with the National Institute of Standards and Technology (NIST) estimating that there’s a current shortage of over 3 million cybersecurity professionals. 

Challenge #3: Increased Competition for Limited Talent

Identifying potential candidates for open positions is just the start of the battle. When you have an increasing demand for talent, paired with increasing skills shortages, you wind up with a real challenge. High-quality candidates are simply in too high demand. 

Talent is also expensive and its quality can be tricky to evaluate , especially in industries like tech. Some of the leading skills shortages facing the industry today relate to areas like generative AI, cybersecurity and data privacy, and cloud computing.

Challenge #4: A Poor Employee Experience

Another reason it’s hard to find great tech talent is that there’s a growing dissatisfaction among tech workers ; recent data indicates that a majority—between 85% and 90%—of North America’s current tech talent pool is actively seeking new opportunities. This, of course, isn’t just a “tech industry” problem; it impacts a wide range of industries.

These workers’ reasons for moving on from their current company include not just the desire for a different career but also “dissatisfaction with current employers” and “preferred ways of working.” The better an employer understands what their employees want or expect, the better position they’ll be in to retain quality talent once acquired. 

What do today’s workers really want? Career advancement, flexible work environments, and meaningful learning and development opportunities top the list.

Challenge #5: Inefficient Hiring and Onboarding Processes

For all too many organizations, lengthy recruiting and hiring practices work against them in the fight for quality talent. It’s a tricky situation, since talent is in-demand and yet finding the right candidate isn’t often an efficient process. Logistically, this causes problems for both recruiters (who may miss out on the best candidates) and candidates looking for work. If hiring teams can’t find better ways to identify, recruit, and hire new talent, they risk missing out and losing great candidates to competing organizations.

Another problem associated with long hiring and onboarding processes is that the most in-demand technical skills seem to be in a constant state of flux. In extreme cases, the very skills that companies were looking for weeks or months ago can become obsolete by the time new talent is fully onboarded. Gartner research actually found that over half (58%) of the tech workforce will need to{" "}  develop new skills  in order to perform their responsibilities.

This is precisely why many companies opt to partner with a  staffing or recruiting agency . But we’re getting ahead of ourselves. What is the typical talent management, and what are the challenges companies face when trying to attract and retain high-quality talent? In this article, our ultimate guide to talent management strategy development, we’ll answer these questions and more. 

Talent Management Process

Building a strong team is critical for any tech company aiming to stay competitive. A well-executed talent management strategy plays a vital role in attracting, developing, and retaining the right talent to drive your business forward. But where do you start? What is the process of talent management that leads to success? In this article, we’ll explore key examples of talent management solutions that can help your company thrive, from recruitment to specialized services that align with your strategic goals.

What Is Talent Management and Its Benefits?

Talent management is the strategic process of attracting, developing, and retaining the right talent to meet a company’s goals. In the tech industry, where competition for top talent is fierce, managing talent effectively is crucial. This process involves more than filling positions—it’s about fostering an environment where employees can grow, innovate, and contribute to the company’s success.

The benefits of talent management are clear. Companies that invest in their people see higher engagement, reduced turnover, and a more agile workforce. In fact, 72% of organizations believe they can drive higher company performance if they have the right talent management strategies in place. By focusing on talent management, tech companies can build a team that is capable of driving innovation and adapting to industry changes. This approach can improve performance and create a workplace that attracts and retains high-caliber professionals, ultimately leading to long-term success.

You don’t have to do it alone. Lorien’s talent management solutions are designed to help tech companies stay ahead in this competitive landscape. By partnering with Lorien, you can ensure that your organization not only finds the best talent but also develops and retains them, fostering an environment where your team can thrive and drive your company’s success. Whether you need permanent hires or flexible workforce solutions, Lorien’s tailored approach will support your talent management goals and help you build a winning team.

What Is the Key Point of Talent Management?

While there can be many objectives of talent management, the key point is to align the company’s human resources with its strategic goals. In other words, it’s about ensuring that the right people are in the right roles and equipped with the right skills to achieve the organization’s long-term objectives. This alignment not only supports current business needs but also positions the company for future growth and success. By strategically managing talent, companies can optimize their workforce, drive innovation, and maintain a strong competitive edge in the tech industry.

What Are the Steps in the Talent Management Life Cycle?

Depending on their chosen approach and specific needs, an organization’s talent management lifecycle may consist of anywhere from a handful of steps to nearly a dozen (or more) different activities. At a minimum, virtually every organization’s talent lifecycle addresses at least five key focus areas, including…

• Recruitment: Identifying and attracting the right talent at the right time.
• Onboarding: Getting new hires up to speed and acclimated to the work environment.
• Engagement: Demonstrating that employees are valued, through developing an inclusive workplace culture, recognizing individual contributions, and ensuring that new hires feel welcome and supported.
• Learning and Development: Providing opportunities for employees to grow their skill set through learning and development initiatives.
• Offboarding: Gaining valuable insights into the employee experience through meaningful exit interviews and efficient offboarding processes.

As noted earlier, these routine activities are not always as simple or straightforward as they seem, especially for tech companies. And this is precisely how partnering with Lorien can strengthen your organization and help you compete for (and secure) the best talent on the market. Our workforce and recruitment solutions can be tailored to meet your needs, so you can spend less time recruiting and more time innovating.

What Are the Six Primary Talent Management Strategies?

While every organization’s talent management strategy should be tailored to its specific needs and priorities, there are certain strategies that talent management programs should include in one form or another. The goal is to ensure that each stage of the employee life cycle is optimized, organized, and consistent. Some of these stage-based strategies include:

1. Understanding and Improving the Employee Experience:  With so much competition for high-quality talent, the best candidates tend to have plenty of options to consider. Making yourself an attractive destination with a reputation for employee empowerment is a great way to remain competitive.
2. Adopting a Flexible Mindset: In an industry as unpredictable and innovative as tech, “traditional” approaches to staffing and the employee experience aren’t always going to cut it. Today’s candidates have evolving preferences and ways of working that employers often must cater to if they want to attract the best talent. This might even include working with a workforce solution like those provided by{" "} Lorien —who can help with everything from talent strategy development to finding the perfect candidate for any opening. As it applies to talent management, a flexible mindset also means considering different types of workforce solutions, such as direct or statement of work (SOW) hires. 
3. Creating a Culture of Learning and Growth:{" "} Tech workers are just as aware as their employers should be of the importance of meaningful development opportunities. Companies should make learning and development a core component of their culture, empowering employees by encouraging and incentivizing them to grow their skillsets.
4. Developing Clear Objectives: Creating a winning talent management strategy requires clear strategic objectives. This includes, among other things, thinking carefully about the organization’s short- and long-term priorities and seeking out candidates with the optimal skillset.
5. Managing Performance: Employers can’t improve what they aren’t measuring, so an effective performance review process—including meaningful follow-up—is an absolute must. Engaging in productive dialogue with employees to identify areas for growth and outline steps for improvement should be an empowering process. It’s less about “fixing” an employee’s shortcomings and more about showing them they are valued by setting them up for success.
6. Career Pathing: Many tech employees leave companies because they feel stuck at their current level or in their present position. By providing clear career development paths and upskilling opportunities, employers can ensure that their best talent remains fully engaged (rather than complacent).

How Do You Write a Talent Management Strategy?

When it comes to the question of how to formulate a talent management strategy capable of achieving key objectives, what works perfectly for one company may not meet the needs of another. That’s why it’s so important for companies to develop their own specific strategies, and to revisit and strengthen them over time.

There are several steps involved in developing a talent management strategy and putting it into practice, including a number of what amount to must-have inclusions. Let’s start with the latter point, and what your talent management strategy should include or account for—and then we’ll move on to the actual strategy development points.

What Is Included in a Talent Strategy Framework?

The most successful talent management strategies are those that bridge the gap between organizational strategy and measurable results.

They’re also custom-designed to achieve specific objectives or overcome specific challenges, and yet agile enough to be modified and adjusted as needed. Despite the amount of variation between different organizations’ talent strategies, we can still identify some key inclusions that every strategy should address.

Organizations like Gartner have determined the key factors the most effective strategies have in common, for example, even creating a talent management strategy template you can download from their website. It outlines seven vital components of talent management:

1. Talent Acquisition: Finding the right talent for achieving positive organizational outcomes
2. Employee Experience: Creating an inclusive and productive workplace where employees can thrive. 
3. Performance Management: Developing a framework for assessing employee performance and incentivizing growth. 
4. Change Management: Maintaining effective communication and principles of employee empowerment during times of transition. 
5. Learning & Development: Prioritizing employee empowerment and providing meaningful opportunities to upskill and advance. 
6. Organizational Design: Increasing efficiency by aligning the talent management strategy to specific business needs, initiatives, and priorities. 
7. Succession Management: Developing a framework for identifying internal candidates to fill current and future positions. 

While you may work from a template or sample process, each organization's talent management strategy should be unique—to that business and to its most pressing objectives. Additional elements often include activities related to workforce planning, employee retention, diversity and inclusion initiatives, and even compensation and benefits. 

How Do You Turn a Framework into a Strategy?

Once you’ve thought about each of the essential components, you’re ready to start fleshing out the details, ultimately constructing your own talent management strategy framework. Knowing how to build a talent management model that works for your business probably isn’t as difficult as you think, and it can have a giant impact on your ability to attract and retain your organization’s most valuable talent. Next, let’s break down the process for developing and implementing a typical talent management process, in 5 steps:

Step 1: Setting/Aligning Organizational Objectives

First, determine or review your strategic business priorities. That way, you can take a tactical approach to identifying and filling recruitment and staffing needs. Is now the right time to expand? What skills should we look for in potential job candidates? The more focused your priorities are, the easier it will be to develop the ideal talent strategy. Once you’ve reviewed your priorities, you can set specific objectives and milestones. Ideally, you can work to collaborate and align with stakeholders throughout the organization, to better ensure strategic alignment throughout the process.

Step 2: Forecasting/Gap Analysis

Assess/audit your current employee lifecycle, paying special attention to challenges. As far as talent is concerned, where are the biggest gaps? By assessing present needs and forecasting for the short- and long-term future, you can develop a strategy that is well aligned and conducive to business objectives.

An important part of forecasting and gap analysis relates to the employee experience, since a positive experience has a direct correlation with employee retention. Which aspects of your current employee lifecycle are working well? Are there any blockers or persistent challenges in need of solutions? Thinking through these questions can help you zero in on the aspects of the employee lifecycle that provide the biggest opportunities for improvement.

Step 3: Choosing the Right Model/Approach

There’s no “one right way” to approach the development of talent management strategies. Rather, these strategies should be custom-designed so they align with the priorities and objectives of the business. Start by determining whether you can address talent gaps in-house or if you should consider outsourced talent acquisition solutions . If you’re going to need outside help, your next question should be whether{" "} full-time/permanent , project-based , or part-time/contingent {" "} solutions make the most sense.

Consider which talent management practices will provide the biggest impact/lift, and start with those. When it comes to talent management, any improvement can provide significant advantages, and any time is a great time to start reaping the benefits. Keep in mind, too, that the best strategies should evolve as your business needs change, meaning no talent management strategy should ever be considered “done.”

Step 4: Developing/Executing the Strategy

Once you’ve identified and prioritized your objectives and decided on a talent management approach/solution, it’s time to start putting together the actual strategy—and putting it into action. This includes a few specific steps, like:

Step 5. Establishing Accountability Measures/Metrics

How do you know if your strategy is working? You’ll want to start by revisiting your strategic objectives. Ideally, you’ve set specific and measurable objectives—like increasing headcount by 10% by the end of the quarter—so it’s relatively easy to define success. 

On a point by point basis, determine what strategies or strategy components have been effective, and which have not been as successful. There are a number of worthwhile indicators to consider when setting or evaluating objectives, such as turnover rates, productivity metrics, and employee engagement scores.

Lorien: Providing Custom Human Capital Solutions to Meet Your Needs

The end-to-end process of talent management strategy development might sound like a lot for one individual or department to keep track of—yet each step plays a vital role in an organization’s ability to meet its staffing challenges in the most efficient and cost-effective ways. Fortunately, expert help is available! At Lorien, we provide a variety of dynamic workforce solutions, all developed to help tech companies find the talent they need, when they need it.

Our workforce solutions experts are ready to collaborate with your organization to enhance its talent acquisition and recruitment capabilities with customizable and scalable workforce solutions that can grow and evolve along with your business. Learn more about all we offer by visiting our website , or reaching out to us directly.