Linking Talent Management Strategy to Business Strategy

By Human Resource Advisory, 3EA
Linking Talent Management Strategy to Business Strategy

Linking Talent Management Strategy to Business Strategy

Every organization shall have a business strategy which define the path to achieve their mission. Talent as a resource plays a major role in driving the strategy provided the organization gets the right talent on board focusing on the right initiatives. On an average, total human capital costs account for as much as 60-70% of operating expenses. Companies need to have a well linked talent management strategy to get the most out of this investment.

What happens when you align your talent strategy to business strategy?

  • High ROI
  • Increase Productivity
  • Lower turnover
  • Increase in ability to innovate
  • High efficiency and improved processes

Our Human Resource Experts assisted a client in automobile sector who were facing high rates of early attrition. We helped them to align their talent strategy to business strategy, which helped in drastic reduction of cost-to-hire and time-to-hire for the organisation. In turn, the quality of hire improved and early employee attrition reduced by 70%. The strategy for implementation of talent strategy is as mentioned below:

  1. Develop a clear understanding the business environment-
    Assess business environment for insights on emerging trends, multiple opportunities and threats in the line of business. This helped in drafting how the competitors are handling environmental factors.
  2. Define Organization's mission and objectives-
    Understand the objectives of the organization and what are the strategic action plans for achieving them. This helped in drafting a business strategy which acts as a key differentiator from its competitors who were poaching employees.
  3. Identifying organizational, functional, technical and behavioral capabilities required-
    Define the core competency of the organization in terms of human resource practices and aligned these competencies with the strategic objectives of the organization. The next step was to enable the organisation to sustain this core competency.
  4. Identifying the suitable best HR practices-
    Analyse the major HR practices that can influence the above capabilities and create an action plan with specific initiatives along with time frame.
  5. Determine talent implications-
    Human capital is an important source of competitive advantage. With respect to this, organization formulated the kind of talent dimensions required to achieve it along with the availability of the talent
  6. Aligning talent strategy with business strategy-
    With the previous inputs - Core competencies, talent required to add value, availability of the talent, an action plan was created to address the talent gaps. The well-structured talent strategy closed critical gaps and leveraged talent to create the greatest impact on strategy execution.

A key element in strategic talent management is closely linking business objectives and individual competencies to achieve desired goals. Organizations along with strategical recruiting should develop existing employee's knowledge, skills, and abilities to implement the business strategy. When an organization aligns its talent strategy to its business strategy, it is more likely to achieve its strategic objectives, perform better in the market, and retain engaged, high-performing individuals.

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Article by: Human Resource Advisory, 3EA