Talent relationship management: definition, process, and benefits

The Spanish soccer team FC Barcelona has a renowned youth academy, La Masia, which has produced some of the world’s best soccer players, including Lionel Messi and Andres Iniesta. The academy focuses on developing players’ soccer skills, building relationships with players, and providing them with a supportive environment where they can thrive.

In basketball, football, soccer, and similar sports, coaches and managers work to identify talented players and build strong relationships with them, both on and off the field. Coaches and managers work to develop relationships with young players at a very early age, often starting in youth leagues. They then work to develop those players over time, providing them with training and support and building relationships with them that can last for many years.

These are some great examples of how talent relationship management can be used to build successful teams and develop talented individuals over time.

Talent relationship management (TRM) is a formal practice focused on building and maintaining relationships with internal and external talent. Organizations can attract, develop, and retain the best talent using tools and strategies including candidate relationship management, employee engagement programs, and succession planning. The goal of TRM is to create a talent pipeline that meets the needs of the business, both now and in the future.

The main difference between internal talent relationship management and external TRM is the focus of their talent management efforts.

Internal TRM focuses on managing and developing the talent already employed within the organization. This includes identifying high-potential employees, providing training and development opportunities, and creating career advancement paths within the organization. Internal TRM is focused on retaining and developing the organization’s existing workforce.

On the other hand, external TRM focuses on building and maintaining relationships with potential future employees outside of the organization. This includes employer branding, talent acquisition, and creating a positive candidate experience during the hiring process. External TRM focuses on attracting top talent and building a pipeline of potential employees.

While internal and external talent relationship management focus on different areas of talent management, there are some similarities between them:

Both aim to attract and retain talented individuals: While internal TRM focuses on retaining existing employees, external TRM aims to attract potential candidates.

Both require effective communication and relationship-building skills: Whether building relationships with current employees or potential candidates, effective communication and relationship-building skills are crucial for internal and external TRM success.

Both require a deep understanding of the organization’s culture and values: To manage internal talent or attract external talent effectively, it’s important to have a clear understanding of the organization’s culture and values and to ensure that these are communicated effectively to potential candidates.

Both can significantly impact an organization’s success: Effective talent management, whether focused on internal or external talent, can lead to increased employee satisfaction, improved performance, and, ultimately, greater success for the organization as a whole.

Before we start with the talent relationship management process, let’s first understand what happens when you skip one of the steps. Despite being aware of the changing market and the need to pivot, Blockbuster ultimately failed to execute its ideas and make the necessary changes to stay competitive. Though they had talented and innovative employees and ample financial resources, the company struggled to make the right choices and implement effective strategies. Why?

Blockbuster board member and activist investor Carl Icahn strongly opposed the company’s move into the online rental market, advocating for preserving Blockbuster’s brick-and-mortar roots. This led to the removal of John Antioco, the CEO who had steered the company since 1997. In his place, Jim Keyes was appointed in 2007.

Like Icahn, Keyes was committed to maintaining Blockbuster’s physical presence. However, this strategy ultimately proved to be a misstep in light of the growing trend towards digital streaming and online rentals. This example highlights the impact of missing a critical step: identifying talent and implementing effective talent relationship management strategies to ensure those individuals can contribute to the company’s success.

We will start with the first step of talent relationship management, which is to identify the organization’s future goals and needs, then match them with the right talent.

Top proven benefit: According to a study by the Society for Human Resource Management, organizations that align their talent strategy with their business strategy are more likely to outperform their competition in key revenue growth and profitability areas. In fact, 73% of high-performing organizations report that their talent strategy is aligned with their business strategy, compared to only 42% of low-performing organizations.

Identifying talent needs that match the organization’s future goals is a crucial step in talent relationship management (TRM). HR leaders can achieve this by analyzing their employees’ skills and capabilities, projecting the skills and competencies required in the future, and identifying gaps. This involves conducting a comprehensive workforce analysis to determine the talent required to achieve future business objectives.

HR leaders can use workforce analytics to gain insights into their current workforce’s capabilities and assess whether their organization has the right mix of skills, knowledge, and experience to meet future needs. Workforce analytics can help HR leaders identify potential skills gaps, anticipate changes in employee demographics, track retirement trends, forecast future talent demands, analyze market trends, study the competition, and consult with other leaders within the organization to ensure that the talent needs identified align with the overall business strategy.

Top proven benefit: According to a report by LinkedIn, 70% of the global workforce comprises passive talent: people who aren’t actively seeking new jobs but are open to new opportunities. Additionally, a study by SHRM found that the cost of a bad hire can range from 50% to 150% of their annual salary, underscoring the importance of attracting and engaging the right talent from the outset.

Attracting and engaging talent is a crucial aspect of talent relationship management. HR leaders must identify the right channels to attract talent and communicate their organization’s value proposition. One way to attract talent is through job postings on popular job boards, social media platforms, and career websites. Another way is through employee referral programs, where current employees can refer their contacts for open positions.

HR leaders must ensure their employer brand is strong and visible to engage talent. They should highlight the organization’s ethics, culture, values, and career growth opportunities to attract top talent. The job description and salary details should be clear and transparent, detailing the role’s responsibilities and expectations. HR leaders can also engage talent by providing a positive candidate experience, such as by providing timely communication and feedback.

Top proven benefit: According to a LinkedIn report, companies prioritizing candidate relationship management can reduce their cost per hire by over 50%. Additionally, companies with strong talent relationship management practices experience 28% less turnover, which can result in significant cost savings associated with recruitment, training, and lost productivity.

To nurture relationships with candidates and employees, HR leaders must focus on building and maintaining open lines of communication. This involves personalized engagement, regular feedback, and a willingness to listen and respond to the needs and concerns of each individual.

By leveraging employee surveys, performance data, and other feedback mechanisms, HR leaders can gain insight into what employees and candidates are looking for in their careers and how they can be better supported and engaged.

Personalized engagement is critical in building strong relationships with employees and candidates. This involves providing opportunities for learning and development as well as offering flexible work arrangements and recognition for achievements. HR leaders can also use technology to support personalized engagement through online training and development programs, employee portals, and social media platforms.

Top proven benefit: According to a report by Deloitte, companies that invest in employee training and development have 218% higher income per employee than companies that don’t.

To develop talent, HR leaders can create customized learning and development plans tailored to each employee’s needs and goals. This can involve providing on-the-job training, coaching, mentoring, and opportunities for job shadowing or cross-functional assignments. HR leaders can also provide access to online training resources and encourage employees to attend industry conferences and seminars to stay up to date on the latest trends and developments.

To effectively develop talent, HR leaders must ensure that their programs align with the organization’s overall strategy and goals. They should regularly assess the effectiveness of their programs and make adjustments as needed to ensure that they meet the organization’s and employees’ needs. By doing so, organizations can help create a culture of learning and development that supports their long-term success.