What Is Talent Management, and How Is It Different From HR?

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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.

a woman in a circle with arrows moving around it representing talent management

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:

The four categories of HR responsibilities: HR administration, HR service delivery, talent management, and workforce management.

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:

  • 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.


The goal management and employee engagement measurement screens in Cornerstone Talent Management.

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:


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.

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About the Author

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Brian Westfall

Brian Westfall is a Senior HR and Talent Management Analyst for Capterra. His research has been cited in various publications, including TIME, Entrepreneur, Fast Company, and Undercover Recruiter.

Comments

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Today companies get to rethink their approach to talent management quite often. And talent mobility becomes more important.

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Today companies get to rethink their approach to talent management quite often. And talent mobility becomes more important. Here’s what you need to know about team relocation

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In reality, to run an organization, you need to apply both HR and Talent Management.
Because your organization is always a mix of talented and average people. Definitely, you can garnish the talented people through talent management but we cannot deny the throughput of an average worker.

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@Rod I am sorry I am not able to find the link you shared in the comments section here. Would request you to please re share.
Thanks
Swati

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Now I can clearly see and understand the distinct difference between HR and TM. With TM’s focus on hiring, training and retention of top performers at a strategic level rather then at a tactical as in HR, organisations will be able to excel much in their operations.

JT Nangolo, Oshana Regional Council, Namibia.

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Hey Medved, great article on Talent Management and the difference between HR. At Freshteam, we have come up with an explanation for “What is Talent Management” and we have indeed worked on an infographic on the difference between Talent management and HR 🙂 You can check it out below!
https://blog.freshteam.com/talent-management/

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Kevin, fantastic points. I especially agree that TM should be concerned with the entire workforce. When this post went live a couple years ago I think there was still the propensity in TM circles to focus on top talent vs. the company as a whole which has I think, thankfully evolved.

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Terrific article. TM is still a “function” of HR as it is concerned with the employee life-cycle. An executive TM & HR posting at Johns Hopkins, for example, notes, “integrate [TM] practices across the entire employee life-cycle.” In many organizations, functional (and even departmental) demarcations have become blurred, line managers’ increased involvement in Training & Development being a case in point. I have two thoughts. First, HR’s “tactics” and TM’s “strategies” can both apply to activities such as HR recruitment sourcing and onboarding. This is because employee engagement is needed for development, and the necessary strategies and tactics to enhance perceived organizational support, ensuring optimal engagement, are both employed before an employee’s first day. Second, HR is no longer being viewed as a cost center; it is now leveraged as a profit center. As a knowledge partner, HR activities (e.g., discipline, leave) add value to the organization by gauging development needs and sentiment to inform strategy collaboratively. Finally, TM should be concerned with an entire workforce, not “singularly-focused on…top talent” as alienating staff can have consequences.

[…] Medved, Content Editor at Capterra, points out the main differences between talent management and HR […]

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Talent Management become a term to be recognized; when people were regarded not a “labour overheads” but as prime resources to be leveraged The “talent” professional has bargaining power at the job interview and the entire employee life-cycle and hence the distinction between employees who we cannot afford to lose ( or it is difficult to replace) VERSUS those who are mere numbers on the payroll

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Rod and Janet,

Thanks for the thoughts!

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Great article that articulates the differences and notes there needs to be a synergy. I have found my greatest success (and the organization’s greatest success) when Talent Management engages with HR.

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A really interesting article JP, especially from an HR perspective which is often seen as the traditional function and talent management is the more strategic piece that is fed out into line management. We deal with HR Directors everyday making recruitment decisions so they definitely still have involvement in talent attraction. HR Directors today are also trying to become less functional and more strategic. My HR colleague Anja wrote a piece on this recently which may be of interest to your readers: http://www.aliumpartners.com/blog/how-hr-is-changing-and-evolving-in-2016/

Thanks,
Rod

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HR is quite administrative – pay, grievance, hire and fire. TM is more seeking out specialized needs of a job that require certain skills and expertise. Today we can easily manage these jobs with online software like SUTIHR, this really makes our job simple.

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Sophia, that’s a great point: Talent Management is at more of the strategic level, while HR tends to be more tactical.

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Talent Management is strategic in my Organization, very different from other HR activities. focused on person fit with job, Team, organization. trying to develop the potentials of all staff and keep them engaged with job redeployments, transfers etc but mainly developing the high potential employees by applying specialized TM programs and letting them know they are Talent Managed.

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