What Is A Talent Management Strategy? Talent Management Strategy In A Nutshell

  • A talent management strategy helps an organization manage its current and potential talent.
  • A talent management strategy should incorporate the following principles: detailed job descriptions, employee-organization fit, mentoring, recognition, and continuous improvement.
  • A robust talent management strategy helps attract and retain talent and improve organizational performance. The strategy achieves this by improving competitiveness, driving innovation, forming productive teams, and increasing the staff retention rate.

Understanding talent management strategies

To better understand a talent management strategy, it may be helpful to first define talent management. 

Talent management describes a suite of human resource processes that attract, recruit, develop, engage, and retain high-performing employees. Since business performance and profitability are associated with productive and engaged individuals, good talent management is a critical component of organizational longevity.

With all of that said, a talent management strategy is simply a broad plan of action to optimize the performance of employees. The plan may include action steps to:

  • Train those who lack skills in certain areas.
  • Engage employees and measure engagement using questionnaires such as the Utrecht Work Engagement Scale (UWES) or GALLUP scale. 
  • Bring employees up to an adequate standard more quickly. This is known as optimizing the time to productivity.
  • Recognize and reward high performers.
  • Identify skill or resource gaps early in the strategy, and
  • Standardize and schedule regular performance reviews to check in with employees and determine whether they need additional support.

Each plan works under the basic assumption that well-resourced employees tend to perform better in their roles. 

Talent management strategy principles

Numerous talent strategy frameworks have been developed over the years. Below are a few principles which should be common to each:

  • Detailed job descriptions – many businesses make the mistake of using very general job descriptions during the recruitment process. Without a detailed job description, the candidate and indeed the organization itself are confused about what is required. This leads to a raft of irrelevant applications which cost time and money to sort through. At the very least, a description should include job title, location, duties, required skills, tools and equipment used, and salary.
  • Employee-organization fit – where possible, it is important to ascertain whether the candidate has the same values as the organization. Total overlap is uncommon, but an employee who cannot identify with company culture will likely be unhappy and unproductive – no matter how talented they are. 
  • Mentoring – effective talent management strategies must also contain a mentoring component. Constructive feedback helps employees realize their full potential and prepares them for inevitable setbacks. 
  • Recognition – to motivate, engage, and manage talent, they should be duly rewarded and recognized. This goes beyond financial rewards, with many organizations now rewarding employees in a way that is meaningful and relevant to them as individuals.
  • Continuous improvement – this helps the employee ensure their skills are updated, upgraded, or upscaled as necessary. More broadly speaking, talent management strategies with continuous improvement help the organization remain agile and responsive to changing trends and market conditions.

The benefits of a robust talent management strategy

In a three-year study conducted by McKinsey & Company, it was discovered that talent management was effective to very effective at attracting and retaining talent and improving performance.

Here is how this occurs within an organization:

  1. Improved performance – three of the key practices for effective talent management also happen to support superior organizational performance. These include the rapid deployment of talent to strategic priorities, positive employee experience, and a human resource team that understands the strategy and broader organizational priorities.
  2. Improved competitiveness – organizations with the ability to identify, recruit, and develop talented individuals are more robust. What’s more, they are better able to navigate change and manage risk.
  3. Innovation – while opportunities for innovation always exist, only the most talented employees will be able to develop innovative products that are also commercially viable.
  4. Productive teams – talent management strategies also facilitate the development of productive teams. While every organisation must employee talented individuals, teams of talented individuals ultimately drive the company forward. Here, the whole is very much greater than the sum of the individual parts.
  5. Retention rate – when employees feel recognized and celebrated for their specific talents, they feel valued and tend not to seek opportunities elsewhere. This improves the company retention rate and since the hiring of new employees is expensive, it also improves the bottom line.

Key Highlights:

  • Talent Management Strategy Overview: A talent management strategy is a comprehensive plan that helps organizations effectively manage both their current and potential talent. It involves attracting, recruiting, developing, engaging, and retaining high-performing employees.
  • Core Principles of Talent Management Strategy:
    • Detailed Job Descriptions: Clear and detailed job descriptions are essential for attracting suitable candidates and avoiding confusion during the recruitment process.
    • Employee-Organization Fit: Ensuring alignment between employee values and company culture enhances satisfaction and productivity.
    • Mentoring: Effective talent management includes providing mentorship and constructive feedback to help employees reach their full potential.
    • Recognition: Beyond financial rewards, meaningful recognition motivates and engages talent.
    • Continuous Improvement: Encouraging ongoing skill enhancement keeps employees updated and adaptable to changing trends.
  • Benefits of a Robust Talent Management Strategy:
    • Improved Performance: Effective talent management practices, such as deploying talent strategically and fostering a positive employee experience, contribute to enhanced organizational performance.
    • Enhanced Competitiveness: Organizations that can identify, recruit, and develop talented individuals are better equipped to navigate change and manage risks.
    • Innovation: Talented employees are more likely to develop innovative and commercially viable products.
    • Productive Teams: Talent management strategies facilitate the development of high-performing teams, where collective achievements surpass individual contributions.
    • Retention Rate: Recognizing and valuing employees’ talents fosters loyalty and reduces turnover, resulting in cost savings associated with hiring and training new employees.
  • Talent Management Strategy Frameworks: Various frameworks exist for talent management strategy, but common principles include aligning employees’ skills and values with organizational needs, fostering a culture of learning and growth, and providing clear pathways for advancement.
  • Empirical Evidence: Research by McKinsey & Company over three years demonstrated that effective talent management strategies contribute to talent attraction, retention, and improved organizational performance.

Types of Organizational Structures

Organizational Structures

Siloed Organizational Structures


In a functional organizational structure, groups and teams are organized based on function. Therefore, this organization follows a top-down structure, where most decision flows from top management to bottom. Thus, the bottom of the organization mostly follows the strategy detailed by the top of the organization.



Open Organizational Structures




In a flat organizational structure, there is little to no middle management between employees and executives. Therefore it reduces the space between employees and executives to enable an effective communication flow within the organization, thus being faster and leaner.

Connected Business Frameworks

Portfolio Management

Project portfolio management (PPM) is a systematic approach to selecting and managing a collection of projects aligned with organizational objectives. That is a business process of managing multiple projects which can be identified, prioritized, and managed within the organization. PPM helps organizations optimize their investments by allocating resources efficiently across all initiatives.

Kotter’s 8-Step Change Model

Harvard Business School professor Dr. John Kotter has been a thought-leader on organizational change, and he developed Kotter’s 8-step change model, which helps business managers deal with organizational change. Kotter created the 8-step model to drive organizational transformation.

Nadler-Tushman Congruence Model

The Nadler-Tushman Congruence Model was created by David Nadler and Michael Tushman at Columbia University. The Nadler-Tushman Congruence Model is a diagnostic tool that identifies problem areas within a company. In the context of business, congruence occurs when the goals of different people or interest groups coincide.

McKinsey’s Seven Degrees of Freedom

McKinsey’s Seven Degrees of Freedom for Growth is a strategy tool. Developed by partners at McKinsey and Company, the tool helps businesses understand which opportunities will contribute to expansion, and therefore it helps to prioritize those initiatives.

Mintzberg’s 5Ps

Mintzberg’s 5Ps of Strategy is a strategy development model that examines five different perspectives (plan, ploy, pattern, position, perspective) to develop a successful business strategy. A sixth perspective has been developed over the years, called Practice, which was created to help businesses execute their strategies.

COSO Framework

The COSO framework is a means of designing, implementing, and evaluating control within an organization. The COSO framework’s five components are control environment, risk assessment, control activities, information and communication, and monitoring activities. As a fraud risk management tool, businesses can design, implement, and evaluate internal control procedures.

TOWS Matrix

The TOWS Matrix is an acronym for Threats, Opportunities, Weaknesses, and Strengths. The matrix is a variation on the SWOT Analysis, and it seeks to address criticisms of the SWOT Analysis regarding its inability to show relationships between the various categories.

Lewin’s Change Management

Lewin’s change management model helps businesses manage the uncertainty and resistance associated with change. Kurt Lewin, one of the first academics to focus his research on group dynamics, developed a three-stage model. He proposed that the behavior of individuals happened as a function of group behavior.

Organizational Structure Case Studies

Airbnb Organizational Structure

Airbnb follows a holacracy model, or a sort of flat organizational structure, where teams are organized for projects, to move quickly and iterate fast, thus keeping a lean and flexible approach. Airbnb also moved to a hybrid model where employees can work from anywhere and meet on a quarterly basis to plan ahead, and connect to each other.

eBay Organizational Structure

eBay was until recently a multi-divisional (M-form) organization with semi-autonomous units grouped according to the services they provided. Today, eBay has a single division called Marketplace, which includes eBay and its international iterations.

IBM Organizational Structure

IBM has an organizational structure characterized by product-based divisions, enabling its strategy to develop innovative and competitive products in multiple markets. IBM is also characterized by function-based segments that support product development and innovation for each product-based division, which include Global Markets, Integrated Supply Chain, Research, Development, and Intellectual Property.

Sony Organizational Structure

Sony has a matrix organizational structure primarily based on function-based groups and product/business divisions. The structure also incorporates geographical divisions. In 2021, Sony announced the overhauling of its organizational structure, changing its name from Sony Corporation to Sony Group Corporation to better identify itself as the headquarters of the Sony group of companies skewing the company toward product divisions.

Facebook Organizational Structure

Facebook is characterized by a multi-faceted matrix organizational structure. The company utilizes a flat organizational structure in combination with corporate function-based teams and product-based or geographic divisions. The flat organization structure is organized around the leadership of Mark Zuckerberg, and the key executives around him. On the other hand, the function-based teams based on the main corporate functions (like HR, product management, investor relations, and so on).

Google Organizational Structure

Google (Alphabet) has a cross-functional (team-based) organizational structure known as a matrix structure with some degree of flatness. Over the years, as the company scaled and it became a tech giant, its organizational structure is morphing more into a centralized organization.

Tesla Organizational Structure

Tesla is characterized by a functional organizational structure with aspects of a hierarchical structure. Tesla does employ functional centers that cover all business activities, including finance, sales, marketing, technology, engineering, design, and the offices of the CEO and chairperson. Tesla’s headquarters in Austin, Texas, decide the strategic direction of the company, with international operations given little autonomy.

McDonald’s Organizational Structure

McDonald’s has a divisional organizational structure where each division – based on geographical location – is assigned operational responsibilities and strategic objectives. The main geographical divisions are the US, internationally operated markets, and international developmental licensed markets. And on the other hand, the hierarchical leadership structure is organized around regional and functional divisions.

Walmart Organizational Structure

Walmart has a hybrid hierarchical-functional organizational structure, otherwise referred to as a matrix structure that combines multiple approaches. On the one hand, Walmart follows a hierarchical structure, where the current CEO Doug McMillon is the only employee without a direct superior, and directives are sent from top-level management. On the other hand, the function-based structure of Walmart is used to categorize employees according to their particular skills and experience.

Microsoft Organizational Structure

Microsoft has a product-type divisional organizational structure based on functions and engineering groups. As the company scaled over time it also became more hierarchical, however still keeping its hybrid approach between functions, engineering groups, and management.

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