Generally, everyone in HR and recruiting says that they want to be more strategic. But it takes more than just using the word “strategic” to actually become strategic. As a former chief talent officer, I can assure you that most recruiting managers have not yet made the transition into becoming strategic. In fact, there’s little chance that recruiting will transition into “talent management” unless everyone completely rethinks their approach and understands how a strategic “talent” function differs from traditional recruiting. Many in recruiting use the term strategic without actually knowing it’s meaning. In business, the term means having a long-term impact on corporate goals and objectives. To the traditional recruiting function, making the strategic transition means that rather than focusing on short-term HR goals like filling reqs or setting up interviews, they must instead directly impact corporate goals like revenue growth, customer satisfaction, product development, market share or profit. These measures of success are dramatically different than most current metrics, where success is measured in recruiting terms like cost per hire and time to fill. It must become obvious to everyone that cutting the “cost of hire” by 10% in a function that costs less than .01% of all corporate expenditures cannot have any strategic impact on corporate costs. A true “talent manager” instead tries to impact the revenue side of the profit equation by focusing on the business units and jobs with the most impact. Rather than just putting “butts in chairs,” the talent function also focuses on the quality of hire, the fit (manager, team and job), retention, and forecasting future problems that impact the productivity of talent. Added Functions of Talent Management The scope of talent management is broader than recruiting because it also involves not just new hires but workforce planning, redeploying workers within the company, and “on-boarding,” or orientation. Talent management is the acquisition, retention, movement and release of workers in order to maximize the productivity of a company’s talent inventory. In addition to the traditional functions of recruiting, a talent manager also impacts:
A strategic talent manager doesn’t necessarily “own” each of the above activities, but he or she certainly coordinates with each and ensures that the entire talent pipeline is constantly supplied and being updated so that the net measurable impact on a business is an increase in workforce productivity (workforce or employee productivity is the measure of the increased output, relative to its costs, of the workforce). This might seem like an impossible goal for such a small function as recruiting. But being strategic means just that: having a large-scale impact on business goals, regardless of the size or the budget of your function. The First Step The first step in becoming strategic is to “align” or improve the connection between TM (talent management) budget and time expenditures and corporate priorities. This step is essential, because no business unit can impact a strategic goal unless it allocates the majority of its resources toward those corporate priorities. Once a talent manager realizes the need for this connection, their first step is to identify the specific corporate goals and objectives that talent management has a chance to impact. Once those corporate objectives are identified (increasing productivity is almost always one of them), the talent manager must next develop a process that ensures that the recruiting/talent management function allocates its budget and time in direct proportion to the corporation’s priorities. In other words, talent priorities and expenditures must “mirror” corporate priorities and expenditures. Unfortunately, most recruiting managers make no formal effort to coordinate their budget and time allocation with any goal (corporate or HR). This common “misalignment” is a primary reason why recruiting functions don’t become strategic. The following chart illustrates some typical “disconnects” between talent management and business priorities:
| Talent management budget and time | Corporate priorities | |
| Percentage of talent management time spent in business unit “A”: 10% | Percentage of corporate resources devoted to business unit “A”: 50% | |
| Priority given to hiring, retaining, or developing customer service reps: 0 | Priority given to improving and maintaining customer service: #1 | |
| Percentage of the talent management budget allocated to recruiting: 50% | Percentage of projects that are running behind schedule because of an inadequate supply of talent: 44% | |
| Percentage of recruiting positions that are funded which remain vacant: 47% | Percentage of open positions that have been unfilled by recruiting efforts: 47% | |
| Percentage of talent management budget spent on technology: 2% | Percentage of the corporate budget spent on technology: 22% | |
| Percentage of the talent management budget allocated to a separate retention program: 0% | Priority given to retaining top performers in key positions: #2 | |
| Percentage of the talent management budget allocated to improving workforce productivity: 0% | Priority given to increasing productivity: #4 |
The Second Step After aligning talent management priorities and budgets with corporate priorities, the next step is to ensure that the talent management function meets each of the essential elements for becoming strategic. When you compare and contrast strategic HR functions and non-strategic ones, you find that they both have dramatically different ways of goal setting, organizing and producing results. These 10 essential elements include:
Transitioning from traditional recruiting into talent management is admittedly a long-term effort, but still a desirable one. Meeting each of the essential characteristics listed above requires a shift of resources and focus. At the end of that long road however, rather than just filling reqs, you will be responsible for ensuring a steady supply of the “right talent” in the “right job.” The net result of this coordinated effort, will be a dramatic increase in workforce productivity, corporate revenues and profits.