They might as well be sisters.
They look alike. They sound alike. They steal each other’s clothes all the time. If you don’t know them personally, it can be difficult to know which one is which. (But man do they get irritated when you can’t tell them apart!)
HR and talent management aren’t exactly the same, but they sure are similar.
But what is talent management, really, and how is it related to traditional HR?
If you’re unsure, you may take your people management in the wrong direction for the type of company you have. If your people management methods are ill-suited to your employee base and company goals, you’ll find yourself veering off track fast.
You need to understand the difference in order to find software that helps you push your company to achieve your goals.
What is talent management?
Wikipedia defines talent management as “the anticipation of required human capital for an organization and the planning to meet those needs.”
OK, so, what does that actually mean? Talent management is best understood as a shift in thinking around the hiring, training, and retention of great employees.
It changes the focus from, “Is this person a good fit for this role?” to “Is this person not only a good fit for this role, but also for the company as a whole, and for future roles they may inhabit?”
You may be thinking, “But wait, isn’t that exactly what HR is?” Not quite.
Think of talent management as HR’s younger sister. They have a ton in common, but talent management is a little younger, a little less experienced, but a little more friendly.
What is HR?
HR—you’ve known her forever. She’s mature and responsible, but maybe not quite so trendy as talent management. Still, she was here first and most people compare talent management to her anyway.
Who works best where? How can I move people in the most efficient way? How can employees best serve the business?
Talent management and human resource management do the same type of thing at the end of the day (managing your employees), but the approaches differ. Let’s see what else is different about them, and how you can tell the sisters apart.
How talent management and HR differ
Talent management and HR are both about managing people, but they split in several key areas:
- Structure: Hiring, training, and retention are centralized in the HR department. In talent management, many of these duties are split into their own departments or committees, spread across the company. In this way, the whole organization is responsible for, and has a stake in, these activities.
- Responsibilities: HR is more focused on administration. HR departments deal with pay, personal time off, benefits, and complaints. Talent management is almost singularly focused on helping and improving the top talent in the organization. Think professional development versus tracking attendance—both are important to a company and both are about people, but one is far more clerical.
- Implementation: Talent management is strategic, often manifesting as a company-wide, long-term plan closely associated with overall business goals, while HR is more tactical, dealing with the day-to-day management of people.
Which do you need?
That depends on your business.
It’s not that HR is better, or talent management is better. They’re two different approaches to managing the people who work for your company. You may even need both to accomplish the growth and development goals your company has.
When deciding if your small business needs to focus more on one or the other, consider what you want the department to achieve, and how the department will fit in with your overall structure and culture.
Need a more laid-back approach that focuses on employee development? Talent management sounds about right.
Need a clerical, objective-focused group that will manage frequent administrative tasks? HR is your best bet.
Need both? Then have both! There’s no law that says you can’t.
Which software do you need?
Other than the semantics of HR and talent management, the biggest difference between the two is in the type of software you should look for.
If you determine you want an HR focus, you should look for software that takes a more administrative direction. You want features that roll benefits tracking, leave tracking or scheduling (depending on if you’re a full time or shift-based business), and payroll into your employee life cycle management.
If you determine you want a talent management focus, look for software that has performance tracking features, or an employee self-serve portal, to help the department feel less closed off and more integrated with your employees’ lives.
And if you’re somewhere in the middle? Figure out the exact features you want (this guide can help) and find software that suits your needs, regardless of its HR or talent management branding. Check out this list to help get started.
How do you define talent management vs. HR?
Have you had any experience implementing a talent management plan at your organization? Do you define it differently? Tell me about it in the comments below, or tweet me @CapterraHalden.