A Talent Strategy defines an organization's talent needs aligned with overarching business goals. It ensures that relevant talent pools meet the core strategic demands of the business by identifying essential capabilities, prioritizing them, and determining worker sources and types. This strategy not only clarifies vital staff and contractor roles but also outlines how these roles will be sourced in the future, informing both operational and HR decisions.

Core to the development of a complete talent strategy is to consider the use of the "Six (6) Bs", which refer to the range of strategies used to close talent gaps. They are defined as follows: 

Buy: acquiring talent from outside the organization through active recruitment efforts. This is the most typical tactic for gaining the needed capabilities at scale.

Build: developing the capabilities needed inside the organization with learning and development activities. This is a long-term strategy used for augmenting "buy" tactics and developing a critical workforce that has more staying power due to its career development and mobility benefits. 

Borrow: partnering with outside agencies and individuals to use non-employee resources to fill skill needs on an ongoing (e.g., contingent contractors and consultants) or short-term (temporary or summer hire/intern) basis. This option is often used as either 1) an ongoing labor cost-savings tactic or 2) a stop-gap measure while building through the other methods.

Bind: building special programs for retaining critical skills employees with distinct attention, development, mobility, incentives, pay, benefits, etc. This is a commonly used tactic with high potentials ("HIPOs") and executives that can be applied to critical skills employees.

Bot: leveraging autonomous (IT) programming to automate repetitive tasks and thus replace existing employees.

Bounce: moving lower performing employees out of the organization or to roles better suited to their capabilities. 

The value of Talent Strategy

A talent strategy is not only related to filling roles; it is also critical to aligning an organization's human capital with its vision, ensuring sustained growth, adaptability, and success. Businesses should invest in a Talent Strategy to create a sustainable and robust workforce. It is designed to produce several key benefits that provide a competitive advantage from both workforce and business/operations perspectives. 

• Alignment with Business Goals: A talent strategy ensures an organization's talent pool is in harmony with its overarching business aspirations. By having a clear roadmap of talent needs, companies can pursue their business objectives more efficiently and effectively.
• Future-readiness: The strategy provides foresight, allowing businesses to be prepared for future talent requirements. This proactive approach minimizes disruptions caused by talent shortages or mismatches.
• Optimized Resource Allocation: With a well-defined talent strategy, businesses can allocate resources more efficiently, ensuring that critical roles and responsibilities are prioritized and adequately resourced.
• Enhanced Recruitment: By identifying the key worker categories and their sources, a talent strategy fine-tunes recruitment methodologies, ensuring that businesses attract and retain the best fit for their needs.
• Informed Decision-making: The strategy illuminates operational and HR paths, offering clarity and direction. This, in turn, aids in making informed decisions about training, development, and other HR initiatives.
• Boosted Employee Engagement: A clear talent strategy often translates into employees understanding their role, significance, and career trajectory within the organization, leading to increased engagement and reduced turnover.
• Competitive Edge: In today's dynamic business environment, having the right talent in place can be a significant differentiator. A robust talent strategy equips businesses with the talent arsenal to innovate, adapt, and lead in their respective markets.
  
  
  

Key stages to developing a Talent Strategy

A talent strategy informs numerous pieces of both operational and HR strategies by clarifying the staff and contractor capabilities that are most crucial to the achievement of business objectives, as well as how those roles will be filled in the future. There are five primary stages involved in developing a sound strategy:

1. Evaluate key business strategies: Reviewing the company’s strategic plan reveals future tactical changes that yield insights into key capabilities needed to meet the sought-after future state.
   
   
2. Identify the capabilities needed to achieve business strategies: Conduct a business objectives-to-supporting capabilities assessment to identify the capabilities needed to perform the workflows and produce the outputs necessary for the successful implementation of each targeted business strategy.
   
   
3. Categorize each capability for its value and timeframe to the effort: Evaluating capabilities based on the extent to which the capability is strategically important or differentiating to the company and its primary business objectives, and the length of time that the capability will be needed to complete or achieve the objective.
   
   
4. Review and choose the most appropriate talent options: Selecting the most appropriate options for staffing a capability relates to the decision(s) about which resources to use when filling them. Resource options include but are not limited to full-time employees (FTEs), part-time employees, contracting companies, independent contractors (including freelancers or gig workers), and crowdsourced solutions. 
   
   
5. Select the specific talent strategies to employ for each capability: Talent strategies must be identified that provide operational guidance to those who will be executing the subsequent plans. Those strategies are illustrated through the "6Bs" model used to close talent gaps (Buy, Build, Borrow, Bind, Bot, Bounce).
   
   

The specific steps, best practices, and tools for effectively deploying this process are included in "Developing a Winning Talent Strategy to Identify Key Capabilities and the Most Appropriate Workforce Mix". This Supplemental Guide is freely open to all Wowledge members.

How companies at different levels of sophistication leverage a Talent Strategy

At the core level, Talent Strategy predominantly involves matching current job roles with available skills, ensuring immediate needs are met. Transitioning to the advanced level, organizations take a more holistic approach, integrating skills assessments, predictive analytics, succession planning, and aligning talent plans with long-term business strategies. Companies at the emerging level push boundaries further, incorporating futuristic trends, leveraging advanced AI and data analytics for talent forecasting, and ensuring adaptability to fluid business landscapes, often venturing beyond traditional talent pools and exploring diverse, global, and alternative workforces. In essence, as companies progress, their Talent Strategy evolves from a reactive stance to a deeply proactive, innovative, and expansive approach.

Understanding the roles typically involved in developing a Talent Strategy

Crafting a comprehensive Talent Strategy doesn't simply emerge from a vacuum. Instead, it's a collaborative effort involving multiple roles, each bringing its expertise to the table to address the multifaceted talent needs of a business. It requires the engagement of operations leaders, line managers, and HR/talent experts to bring the strategy to fruition.

CEO or Business Leaders: Provide overarching business goals and future direction. They ensure alignment between business objectives and the talent strategy, bringing future business directions and plans to the forefront for conversion into talent needs.

CHRO or HR Leader(s): Give insights into the current HR landscape, capabilities, and existing talent pools. They are responsible for the overall talent strategy and weigh heavily on the choosing of the workforce mix and resourcing.

Workforce Planning Specialists: Conduct analyses and assessments that project future staffing and skills needs.  Those projections are then provided to both HR and operations managers for their planning and budgeting.

Talent Development Leads: Assess existing internal talent competencies, skills, and training programs. They design targeted talent development plans for talent segments that need to be grown internally.

Talent Acquisition Managers: Analyze recruitment trends, challenges, and external talent availability. They create strategies for external recruitment and talent acquisition.

Vendor Management or Outsourcing Leads: Evaluate the potential and constraints of contracted or outsourced talent. They propose sources and outlets that are suitable for talent borrowing or outsourcing.

Analytics Specialists: Measure employee satisfaction, engagement levels, and potential attrition risks. They develop comprehensive strategies for employee retention.

Talent Management or Succession Planning Experts: Review leadership pipelines, potential future leaders, and existing gaps. They outline plans for accelerating leadership pathways for high-potential employees.

Key trends in Talent Strategy

The sphere of talent strategy has seen a dynamic evolution over the years, adapting to changing business needs, global circumstances, new ways of working and workforce groups, as well as advancements in technology. The "6Bs" model — Build, Buy, Borrow, Bind, Boost, and Bounce — has also evolved over the years and further refined how organizations approach talent management, particularly in the recent past.

• Increased Emphasis on Building: With the rapid change in required skills due to technological advancements and "skills obsolescence", organizations are investing more in upskilling and reskilling their workforce. This focus on "building" ensures that internal talent is continuously nurtured and developed to meet future demands.
• Strategic Buying: "Buying" talent is not just about filling a vacancy. There has been a shift towards strategic recruitment, where organizations are identifying and bringing in talent that aligns with future business strategies, not just current needs and is more strongly connected with desired cultural capabilities.
• Flexible Borrowing: With the gig economy booming and remote work becoming more mainstream, companies are more open to "borrowing" talent, be it through freelance contracts, outsourcing, or short-term project-based hires.
• Innovative Binding Techniques: Employee retention strategies have revolutionized with the advent of remote work, increased emphasis on mental health, and the desire for work-life balance. "Binding" now often includes offering flexible hours, wellness programs, and career mobility and growth opportunities.
• Boosting Leadership Development: Recognizing and "boosting" potential leaders from within has become critical. Organizations increasingly focus on the early identification of high-potential employees and offering them accelerated career paths.
• Bounce as a Strategy Component: Although not always seen positively, the strategy of letting go or "bouncing" employees is sometimes essential, especially in scenarios of organizational restructuring or strategic pivots. The approach towards this has become more humane, with companies providing outplacement support and skill-transition programs.
• Data-Driven Decisions: "Big Data" and artificial intelligence (AI) are increasingly used in talent strategy decisions, offering predictive insights that help in everything from talent acquisition to future skill requirements to understanding attrition risks.
• Diversity, Equity, and Inclusion (DEI): DEI initiatives have taken center stage. Organizations are making genuine efforts to ensure their talent strategies are inclusive and provide equal opportunities to all, reflecting the diverse world we live in and the make-up of workforces globally.
• Holistic Well-being: Beyond just professional growth, companies are emphasizing the holistic well-being of their employees, understanding that a physically, psychologically, and well-balanced employee is more productive and engaged.
• Integration with Business Strategy: Talent Strategy has become integral to business strategy, with HR leaders often being part of strategic business discussions to ensure talent readiness for future business goals.

As businesses continue to evolve and the world sees more socio-economic and technological changes, talent strategy will further refine itself, ensuring organizations are always prepared to meet their objectives through the right talent approaches.

Talent Strategy example

Multiple options may be chosen to close the identified gap in workers needed in a complete talent strategy. An example of a full Talent Strategy exercise for an illustrative business goal is shown below:

Considerations and lessons learned in Talent Strategy

When developing a Talent Strategy, several critical aspects come into play. Foremost, alignment with organizational goals is essential; the strategy must not only address immediate needs but also anticipate future business objectives and the evolving landscape of the relevant geography(s), marketplace(s), and industry. Understanding the skills and capabilities currently within the organization versus those needed in the future is crucial, paving the way for decisions on whether to develop internal talent or seek expertise externally.

The flexibility of the strategy is another vital aspect, allowing for adaptability to unforeseen changes or shifts in the market. Moreover, a successful talent strategy recognizes the importance of an inclusive and diverse workforce, ensuring varied perspectives and enhancing innovation. Integrating technology, especially in data analytics, can provide valuable insights and aid in making informed decisions. Lastly, fostering a culture that values continuous learning, well-being, and engagement will enhance the effectiveness of any talent strategy, ensuring longevity and resilience in an ever-changing corporate world.

Talent Strategy FAQs

What other terms are related to Talent Strategy?

Various terms are sometimes used to refer to a talent strategy, highlighting specific aspects or nuances of the broader concept. Nonetheless, these concepts achieve different outcomes or specialized objectives of their corresponding strategy. Some of these terms include:

• HR Strategy: Focuses on defining how to organize and operate the HR function, as well as determining what processes, policies, and services will be part of it at any given stage.
• Talent Management Strategy: A comprehensive effort aimed at prioritizing improvement initiatives that encompass the full spectrum of programs and processes in attracting, developing, and retaining talent.
• Human Capital Strategy: This term emphasizes the perspective of employees as valuable assets that contribute to an organization's competitive advantage.
• People Strategy: A more human-centered term that places importance on the holistic development and well-being of the workforce.
• Talent Acquisition Strategy: Primarily zeros in on the procedures related to recruiting, hiring, and onboarding new talent.
• Workforce Planning: A forward-looking approach that focuses on ensuring the organization has the right people, in the right volume, in the right roles, both now and in the future.
• Strategic Human Resource Management: An umbrella term that represents a multidimensional approach that emphasizes the strategic aspect of aligning human resources initiatives with the broader business objectives, marring both strategy and operations, focusing on aligning long-term business goals with the management and optimization of the workforce.
  
  

What are the uses and implications of generative AI on Talent Strategy?

The introduction of generative Artificial Intelligence (AI) technologies into the realm of Talent Strategy holds numerous implications, both promising and challenging. Considering each one requires due diligence into available technologies and their pros and cons.

• Enhanced Talent Sourcing: Generative AI can analyze vast amounts of data to identify ideal candidate profiles, enhancing precision in talent sourcing and potentially discovering overlooked talents in unconventional areas.
• Tailored Learning & Development: Generative AI can recommend personalized training modules and paths based on individual learning styles, career aspirations, and skills gaps, thereby maximizing employee growth and development.
• Objective Decision-making: By minimizing human biases, Generative AI can increase objectivity to recruitment, performance assessments, and promotions, ensuring a more equitable talent strategy. That said, evaluation of the impact of such technologies for unforeseen biases is essential to their implementation and use.
• Predictive Analysis: Through pattern recognition, Generative AI can predict talent trends, turnover rates, and even the future potential of employees, aiding in proactive talent management.
• Automated Routine Tasks: Generative AI can manage and automate routine HR tasks, from screening resumes to scheduling interviews, freeing HR professionals to focus on more strategic aspects of the workforce's and manager's needs.
• Enhanced Employee Experience: With AI's ability to generate content, tailored employee onboarding experiences, feedback mechanisms, and career-pathing guides can be created, enhancing overall employee satisfaction.
• Challenges in Ethics and Bias: Like all AI models, Generative AI is as good as the data it's trained on. If historical data is biased, the AI might reinforce existing biases, leading to skewed or unfair talent decisions.
• Data Privacy Concerns: With Generative AI analyzing extensive employee data, concerns related to data privacy, consent, and security become paramount.
• Human-Machine Collaboration: Generative AI might not replace but will redefine roles within HR, leading to a more collaborative approach between humans and machines. HR professionals must upskill, understand AI outputs, and integrate them with human judgment.
• Evolution of Job Roles: As Generative AI takes on more tasks, the nature of jobs will evolve. Strategic thinking, emotional intelligence, and other uniquely human traits will become even more valued, possibly leading to a shift in talent priorities.

Incorporating generative AI into Talent Strategy, therefore, requires a balance. While its capabilities can revolutionize many facets of talent management, the human element – with its intuitive understanding, empathy, and ethical considerations – remains irreplaceable. Organizations will need to navigate this balance to harness the potential of AI in their talent strategies.

Enabling practices and resources

Developing a Winning Talent Strategy to Identify Key Capabilities and the Most Appropriate Workforce Mix.

A talent strategy defines the talent needs and associated objectives necessary to meet top business goals. It is both an integral part of the HR strategic plan and a direct informer of the talent management strategy and planning process.

Core HR Strategy Practices to Define a Foundational Direction for the HR Function.

An HR Strategy defines the process of identifying business-based human resource (HR) tactics that will constitute a comprehensive multi-year approach to the management of the HR function's structure, governance, programs, policies, and practices.

Establishing a Core Talent Management Strategy to Set Priorities and a Strategic Roadmap.

As a company defines its business strategy, each function must align its objectives and actions to support its strategic goals. Talent management strategy is a key process that the HR function follows to accomplish this directive by identifying priorities and setting up plans to advance talent management practices.

Generating a Critical Talent Plan to Close Projected Gaps.

A critical talent plan defines the specialized and concentrated efforts that will be undertaken for those roles deemed to be of the greatest importance to meeting the organization’s strategic objectives.

The Talent Gap Analysis Goal ID Tool: Capture Critical Role Staffing Challenges and “6Bs” Strategic Talent Management Responses.

This tool incorporates the multi-source staffing strategy outlined by Dave Ulrich and others that references the “Buy, Build, Borrow, Bind, Bot, and Bounce” options for proactively filling, retaining, and managing critical skill workers as available resources within the organization.