The Growing Need for a Skills-Based Talent Management Strategy

Aug 10 2022
10 min read
The Growing Need for a Skills-Based Talent Management Strategy

In today’s era of skills-based talent management, it’s not “what do you do?” anymore. Today, it’s “what skills do you have?” that truly matters to an organization.

Changes in technology, the Great Resignation, and the worldwide skills shortage have made us all aware of this mindset switch, where hierarchy position no longer automatically comes before professional abilities. Instead, companies should hire and nurture their talent based on the skills required for success. For companies engaged in a talent management program, this means a fundamental shift in approach.

What Is Talent Management?

Believe it or not, the word “talent” has generated lots of controversy in the HR sphere over the years. 

Talent once meant a person who leads the pack and was based on the idea that 80% of work gets done by 20% of the employees. But time has discounted this attitude. Today, concepts like the growth mindset are more prominent, helmed on the belief that “talent” lies within us all and consists of a person’s innate abilities. It’s up to good leaders and HR professionals to discover the talents that each employee has and develop them.  

With this in mind, current definitions of talent management are much broader than they used to be. Maximizing the capabilities that all people bring to an organization, talent management includes activities such as:

  • Hiring
  • Role assignment
  • Training
  • Assessment
  • Learning and development
  • Promotion
  • Engagement

Talent Management vs. Talent Development

Talent development covers the processes that nurture an employee as they proceed up or across the organizational hierarchy. A talent development program will include areas such as career and leadership development, succession planning, and onboarding. Talent management encompasses and extends beyond talent development, taking into account workforce planning, systems of recognition, feedback mechanisms, DEI initiatives, and more.  

Why is Talent Management Essential?

Talented people often know that they are valuable and have lots of options open to them. Ironically, companies that use learning and development programs are enhancing the skills that make an employee all the more attractive in the job market. As a result, even under good conditions, talented employees can be tempted to move on. So, it’s not enough to hire and develop great workers. Organizations must go one step further with a holistic process that continuously identifies, tracks, develops, and – most important for employee retentionrewards good performance.   

The Skills-Based Approach

Traditionally, employees were hired based on experience in a particular role, which implied certain skills. For example, a marketing manager would have had a position in a marketing department for a desired number of years, doing a job that involved a certain set of activities. But skills-based organizations turn this idea around – they first look at a person’s skills, and then assign them a role. In a case like this, a person with great creative and communication skills might be offered a spot on the marketing team – or maybe a job involving UI/UX. 

It is HR’s job to map out the needs of the organization and allocate workers accordingly, with employees now capable of moving between roles according to associated skills. 

The Talent Management Process

The talent management process extends to key points in the employee lifecycle, as shown below. With an emphasis on skills, the talent management process should pay extra attention to what skills the candidate brings to the company, and how those can be expanded over time. 

One of the ‘secrets’ of good talent management is an effective and thorough hiring practice that brings the most appropriate people into the organization. HR should try to constantly improve their talent management process with a critical eye toward previous methods. 

The basic steps of the talent management process are: 


During the planning stage, HR defines the required backgrounds and skills for which it will recruit. When there is a vacancy, HR can simply apply the hiring strategy used to attract the former employee. However, a vacancy can also be an opportunity for a skills gap analysis, leading to a revised role description and list of skills. 


Getting the word out about job opportunities is the next step. The common route involves composing an ad that lists the skills and background formulated in the planning stage and giving it to the recruitment firm. However, HR should consider alternative hiring sources such as internal mobility, social networking, referrals, and new external recruiters who might be more connected to certain talent pools. 


Resumé evaluations, testing, and interviews form the next phase of the talent management process. If your organization has DEI targets, this can be a good time to apply them. The final selection decision should involve the various stakeholders in HR and managerial roles, and even input from potential coworkers, who might notice some pros/cons about the candidate based on their experience.


Very few employees arrive on their first day fully prepared. To acclimatize them, an onboarding process is required, where they learn not only about what their role encompasses and what they’ll be doing on a day-to-day basis, but also about the organization as a whole and the importance of its culture. Yet this is only the beginning. With the current ‘skills crisis’ in mind, it’s vital to build a learning and development strategy that constantly revamps your company’s skill inventory and delivers essential L&D initiatives. 


The HR and L&D departments also need to work together as part of a retention program. To keep talented workers taking on greater responsibilities and giving them a sense of upward mobility, they’ll need to frequently upgrade their skills. And to make them feel valued by the organization, you should employ retention concepts such as awards, recognition, promotions, salary and benefit increases, WFH opportunities, and so on.  


Even if employees quit, they can still be a valuable source of information. HR should hold exit interviews with any employee that leaves to determine if the departure could have been prevented and apply lessons learned to current employees. 

Talent Management Models

There are several models associated with talent management, such as Josh Bersin’s integrated talent management and high-impact talent management concepts. One of the most commonly used models is the nine-box, based on McKinsey’s model for business unit evaluation. 

The nine-box grid, as shown below, illustrates how employees are rated in terms of their performance in the job so far, and their potential to make the jump to the next hierarchical level:

Low performer 
High potential
Moderate performer 
High potential
High performer 
High potential
Low performer
Moderate potential
Moderate performer 
Moderate potential
High performer 
Moderate potential
Low performer 
Low potential
Moderate performer 
Low potential
High performer 
Low potential

Each grading gets a name, with the highest rating called “stars” and the lowest “bad hires”. A manager can simply put an X on the box that they feel applies to an employee, or evaluate the employee in cooperation with other managers and HR people. HR can also interpret the data through standard performance reviews.

The goal of the nine-box is to direct employees towards certain talent management objectives. Stars, for example, can be evaluated for senior leadership positions and provided with leadership development courses, while bad hires can be coached towards doing better or referred to L&D for refresher training. 

The nine-box is popular for a few reasons. It is simple and easier to understand than a verbal assessment. Some companies also convert the text score into a number that can be fed into HR software for performance evaluation. Clear definitions of performance and potential should be agreed upon before using this methodology as they are necessary to avoid bias.    

Talent Management Tools 

Using technology for a skills-based talent management initiative can work wonders. Talent management solutions are available for the entire process, or for individual elements. For example:

Packages such as SAP SuccessFactors assist in running a wide range of talent management activities including HR, payroll, time tracking, and benefits administration, as well as onboarding, compensation, and performance management. Each component provides analytics for HR to derive data-driven insights. 

Software such as Recruitee allows companies to build customized recruiting sites, along with templates based on standardized hiring techniques; this also enables employee branding and can be integrated with HR technology stacks. 

Platforms like GrowthSpace enable granular L&D programs, through technologies such as NLP, which allow a detailed analysis of skill requirements. The platform then identifies top-rated experts with instructional experience in precise areas to match employees with the perfect coach or mentor. 

Talent Management Strategies

Of course, every company has its own take on talent management, as demonstrated by the different strategies used in real-world cases. To give you a better sense, here are some of the most notable talent management strategy examples:


Starbucks puts its talent management focus on its baristas, offering them L&D programs on customer-facing communication, technical aspects of the job, and expertise in the realm of coffee. The Seattle-based company also delivers outstanding benefits to its staff, such as savings plans, free access to healthcare and alternative medicine, and even an adoption assistance program. Both part-time and full-time workers are eligible for all the benefits as an expression of valuing the skills of all types of employees. 


Google shows how serious they are about hiring the best possible talent by requiring a minimum of four interviews for candidates. They employ a huge recruiting staff, who seek candidates demonstrating both long-term dedication and the ability for high performance–an idea that relates to the nine-box model described above.

The company’s employees enjoy a considerable number of benefits, including continuous professional development programs, DEI initiatives, free food, gyms, massages, recreation rooms, swimming pools, and even ‘nap pods’.


The food industry giant has made its mark in the talent management field with considerable DEI programs that ensure access to a diverse range of viewpoints and talent. This includes a commitment to pay equity, the hiring of veterans, and even supplier diversity. PepsiCo also maintains an extensive L&D setup through concepts like ‘Pep U’, which offers extensive opportunities for both professional and personal growth.

Tapping into the Talent of Growthspace

It’s not always enough to simply understand which skills your organization needs. It can be a massive challenge to develop specific skills in specific people, and then back that up with effective programming and evaluation. 

That’s why Growthspace has built a scalable, technology-based talent management solution. Our platform provides the exact skills an employee needs, personalized and measurable for effective outcomes. Companies around the globe use Growthspace to tune the talents of their people.


What is skills-based talent management?

Skills-based talent management redefines the concept of a job and how that job holder is managed. A skills-based role is defined as a set of skills applied to a company objective. Similarly, managing the employee is more about providing them with the skills they need to grow as a professional, instead of focusing on moving them up the corporate ladder. 

How do I develop a talent management framework for my organization?

The framework should consist of the talent management process as described above, combined with one of the many models that HR practitioners use. The model lets you know who to develop, and the process describes how you should develop them. Implementing talent management requires buy-in from top executives so that all of the necessary resources are made available. In the case of a skills-based approach, HR should build L&D capabilities; for larger companies, this can mean a dedicated learning and development team.  

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