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Don’t overcomplicate it: Talent management comes down to building and retaining a workforce of great employees to achieve organizational goals.

Ask any CEO or HR leader if talent management is vital to their organization, and you’d be hard-pressed to find a single person who says no. Ask them to define what “talent management” actually is, though, and you’d be hard-pressed to find any two answers that are the same.

Such is the case for a concept that has dominated the HR conversation for more than 20 years and that has spawned whole technology markets, all while remaining frustratingly elusive to nail down.

So what is talent management, and how exactly does it differ from HR? Understanding this distinction is the key to setting up your org structure and technology stack to succeed for years to come.

What is talent management?

Talent management is your organization’s strategy related to the attraction, recruitment, retention, and development of people. It includes your company’s practices pertaining to seven critical facets of HR:

1. Recruiting
2. Onboarding
3. Performance management
4. Compensation planning
5. Succession planning
6. Learning and development (L&D)
7. Workforce planning

When wrapping your head around talent management, think about your favorite sports team. Just as they have to draft, recruit, and develop the best players to execute on their chosen strategy for success, so too does your business (replacing “players” with “workers,” of course).

That’s all talent management is—building and maintaining a workforce to achieve your organizational goals.

How talent management and HR differ

Don’t think of talent management as an alternative to HR. They’re not two different approaches to the same process, and you certainly don’t have a choice in doing one over the other. Every business has to do both.

Talent management is just one increasingly important category of HR responsibilities that exists alongside three others: HR administration, HR service delivery, and workforce management (WFM).

Here’s a breakdown of what each of these categories of responsibilities entails:

Amidst record-low unemployment rates and the ever-widening skills gap, it’s little wonder why talent management has garnered the most attention and focus. Businesses know that employing the best people provides a clear competitive advantage, and it has become increasingly difficult to make that happen consistently.

The evolution of talent management doesn’t mean those task-oriented, back-office needs go away. But if you’re a more traditional HR department struggling with talent management, you definitely need to rethink your approach in order to succeed.

How to win at talent management

In 2016, only 57% of HR leaders aimed to make a measurable impact on business performance through their talent management strategy. Today, that number is 83%.

More than ever, businesses are realizing that their success hinges on their people, and that has pushed HR into a more prominent, front-facing, strategic role centered around talent management.

If you’re unsure how to handle this shift, here are some tips:

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• Re-evaluate your org structure. Traditional HR is a largely siloed affair. Not so with talent management. Everyone from your CEO to various department heads plays a role in it, so adjust your org structure accordingly to flatten things out and close the distance between you and your stakeholders. You could also hire a chief people officer (CPO) to lead your talent management efforts, or hire more specialists dedicated to specific facets of talent management (like a corporate trainer).
• Think long-term. Talent management is focused on long-term strategy, as opposed to the day-to-day transactional nature of traditional HR. How are you going to get the best job candidates to apply to your company? How do you get workers to stay and grow? These are big, tough questions that won’t be answered in a week, and there is no one-size-fits-all blueprint for success. Invest in change, test different things, and measure the outcomes to see if you’re on the right track.
• Consider a technology upgrade. Remember the four categories of HR responsibilities from before? Traditional HR software focuses on a lot of those core administrative needs: payroll, benefits administration, compliance, etc. More robust talent management software, on the other hand, can automate tasks, track data, and provide direct support for your talent management strategy, from recruiting to performance management, and otherwise. Audit your technology needs and make a change if needed.

Goal management and employee engagement measurement in Cornerstone Talent Management (Source)

What is talent management to you?

Have you had any experience implementing a talent management strategy at your organization? Do you define it differently? Tell me about it in the comments below, or find me on Twitter.

And if you’re looking for the right talent management software, head to our talent management software catalog page to compare products, filter options based on your needs, and learn more about top-rated systems.

Want more info on HR and talent management? Check out these articles:

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Note: The applications selected in this article are examples to show a feature in context and are not intended as endorsements or recommendations. They have been obtained from sources believed to be reliable at the time of publication.

Looking for Talent Management software? Check out Capterra's list of the best Talent Management software solutions.