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How to win the war of talent with talent management


The battle for skilled workers is here to stay. The skilled labor shortage, as we are already experiencing today, is just the beginning of a long chain of challenges emanating from demographic change. Accordingly, the focus is shifting: Whereas in the days of industrialization, the new machines were the most valuable asset of companies, today the focus is clearly on the resource "people". What's more, access to individual talent will be able to determine the success or failure of companies. Now, forward-thinking talent management is needed to stay ahead in the "war of talents."


What is (digital) talent management?

Talent management defines itself as an essential component of human resource management and combines all strategic measures that ensure the staffing of specialist and management positions. Talent management ensures that relevant positions are filled with the right people in a timely manner and over the long term. The term finds its origin in Ed Michael's book "The War of Talents" (1997), in which he shows why companies that recognize the resource "people" as their most valuable asset and promote talent will not only win the recruiting battle, but also the battle for long-term economic success.

The rising skilled labor shortage, lack of corporate successors, skill gaps and the (un)usual challenges of the current generational shift make it abundantly clear that today - almost 30 years after the book was published - companies are more than ever dependent on prioritizing holistic HR strategies even before growth. Talent management - whether analog or digital - is always based on three pillars:


Finding talents

Promote and develop talents

Talent retention


Why talent management is critical to winning the War of Talents

30 years after the publication of "The War of Talents," the original labor market challenges have evolved into a serious problem:

Skilled labor shortage

The boomer generation is gradually entering retirement age. The younger generations simply offer too few qualified workers to fill the gap. According to the Skilled Workers Report of the German Federal Employment Agency, positions for skilled workers already remained unfilled for an average of 129 days in 2019, and positions for specialists* 126 days.

Skill Gaps

As long-time employees disappear, so do important knowledge carriers. In addition, changes in the market and technological possibilities demand entirely new leadership and technology competencies, which - due to the increasing fast pace of change - must also be continually adapted and "grow along" in order to keep companies competitive.

Generation change with new demands

Generations Y and Z make completely different demands on their jobs than Generation X did. Jobs without development potential become a pass-through item. In addition, Generation Z is well aware of the new labor market situation. Companies have to offer more than just work in order to score points with them. Under such circumstances, it is obvious how difficult and therefore cost-intensive it is to recruit new qualified employees. Once they have been won over, it is all the more important to retain them.


The Tangible Tasks of Talent Management

  • Strategically counteracts the consequences of skilled labor shortage

  • builds and maintains a talent pool

  • establishes the company as an attractive employer brand in cooperation with marketing representatives 

  • Maintains the company's competitiveness and productivity, and optimally increases them

  • strategically averts the impending dangers of demographic change 

  • brings about the necessary changes in the corporate culture to adapt it to the values and needs of new generations

  • reduces key positions to the necessary minimum

  • promotes specialists and managers in order to retain them in the company for as long as possible and thus counteract fluctuation

  • looks ahead for suitable company successors and trains them accordingly (or has them trained)

However, the ambitious goals of talent management can only be achieved in cooperation with the executives and the talents themselves. Therefore, holistic talent management also means that managers ensure that talents can contribute their competencies, take on responsibility and develop themselves further. Talents must feel so involved and motivated that they take the initiative in shaping the company.


The Talent Management Model

Finding talent

To find suitable talent, it is important to look both outward and inward. Talents are not only hiding outside the companies, but are often already on board, but are misjudged due to a lack of promotion. That's why regular potential analyses among employees are just as profitable as in classic recruiting. With this in mind, it is also worth taking a look at current employer branding: Who are the marketing measures aimed at? Are they exclusively directed outward, or are there also marketing measures aimed at the existing workforce?

Promote and develop talents

To sustainably promote and develop talent, it now takes more than just irregular training sessions: Talent development takes place on a permanent basis - for example, through accompanying e-learning, individual coaching or - if necessary - analog or blended learning. A positive learning and error culture form the basis. The following applies: the more individualized the support, the more effective it is.

Talent retention

Talent retention is considered the supreme discipline of talent management. This is because while training and development can still be implemented in the relatively short term, retaining employees requires conditions that are far more difficult to influence: A positive culture of learning and making mistakes, a positive working atmosphere, and the greatest possible alignment of personal and corporate goals. Additional incentives such as rewards and promotions also help, of course, but should only serve as a "cherry on top," as they are no substitute for a positive work climate under any circumstances, especially for the generations coming up now.


Recruiting Strategies

Strategy 1: Hire only top candiates


  • immediately deployable with highest level of expertise
  • faster growth
  • lower investment in education and training


  • more expensive recruiting process and higher salaries
  • longer recruiting period
  • may be more difficult to retain
  • may be more challenging to manage a team of top candidates

Strategy 2: Hire promising professionals or career changers


  • shorter recruiting process (ideal if a position needs to be filled quickly)
  • sometimes lower salaries
  • great development potential and may be easier to retain


  • higher investment in education and training 
  • lower growth in the company
  • longer periods of time until a maximum level of competence is reached
  • risk that employees cannot handle the tasks after all

Of course, both strategies can be combined to minimize as many of the mentioned disadvantages as possible in their entirety. Which strategy is the better one (strategy 1, strategy 2 or mixed form) always depends, of course, on the circumstances in the company and on the position to be filled.


Applying talent management: 6 use cases

Digital On and Off Boarding

Supply your new employees not only with the necessary information, but also bring them closer to your company culture. Nice elements such as virtual profiles help them get to know their colleagues even before they start. A digital implementation saves many valuable resources in the long run and gives new employees the freedom to familiarize themselves with the new company even before their first day.

At least as important, but often forgotten, is off-boarding when employees leave the company: A large number of large companies already offer former employees individual, time-limited coaching programs to find strengths, weaknesses, interests and potential and to be able to confidently start a new application process. Such a farewell will be remembered much more positively and can sometimes lead to much more positive word of mouth despite a termination.

Employee Engagement

Introduce a positive feedback and error culture and find out what makes your employees tick and what potential for improvement they see.

Referral Programs

Talent knows talent. Build a program where talent can refer their friends and acquaintances for open positions and receive a reward if successfully hired.

Accompanying digital training

E-learning offers the opportunity to train employees sustainably and, above all, prophylactically, and in doing so offers a multitude of freedoms that our new work habits alone demand (keyword: New Work, Remote Work). Constant access to knowledge ensures that employees can provide themselves with the necessary knowledge in a self-directed manner at the moment of need. Extensive customization options of professional softwares also make it possible to create individual learning experiences that precisely match the individual knowledge levels and needs of your talent. 

Make sure that professional development opportunities interface with the talent's personal interests as much as possible. Perhaps course offerings such as language courses or soft skill training can be integrated that only indirectly serve company goals?

Social Media Engagement

Involve your employees in your social media channels - e.g. through takeovers or by incentivizing them to make their own posts. No opinion leader is more authentic than the employees themselves.

Knowledge Management

Counter skill gaps with smart knowledge management. Again, e-learning offers sustainable ways to make knowledge permanently accessible - even when older knowledge workers eventually leave the company. Look for ways to preserve knowledge while making it easily accessible.


The bottom line.

Talent management is not covered by the mere existence of an HR department. Rather, talent management requires a comprehensive strategy that takes into account not only the challenges of the present, but also the foreseeable challenges of the future. Hand in hand with a holistic, positive learning culture, however, you will always succeed in finding talent and retaining it for the long term.

Magda Lehnert | Blogger
Magda Lehnert

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