Why is People Management More Important Than Talent Management?

We are in the midst of what’s become known as the Great Resignation, with more Americans quitting their jobs than ever before. In November 2021 alone, a record-breaking 4.5 million people quit their jobs. 

It’s a phenomenon that’s causing department leaders across organizations to reconsider how they manage their employees. To get people to stay—and to attract more high-caliber employees—leaders must start to focus on people management, rather than talent management. 

But what exactly does that mean? 

In the typical corporate environment, it’s not uncommon for leaders and human resources to refer to the workforce as “talent.” But most of those individuals would rather be thought about as simply “people.” In other words, employees don’t want to be defined by their skills and ability to drive results alone. Companies need to think of their employees as whole people and invest the necessary resources to support them and make employee experience a priority.

Below, we dive deeper into talent management vs. people management and tips for improving people management in your company.

Investing in Employee Engagement

The modern workplace is complex, with many employees working remotely and juggling multiple systems in an increasingly competitive global economy. This can easily lead to overwhelmed employees. According to the latest Gallup report on employee engagement, 15% of employees are actively disengaged, which means they report “miserable” work experiences.

Often, employee engagement is directly tied to management. It’s up to leaders to create an environment where employees feel empowered, capable, and included in the overall business mission.

Think of it this way: the company and the employee are engaged in a voluntary relationship. When it becomes disadvantageous to one or both parties, either has the option of ending the relationship. The role of company leaders is to ensure that the relationship remains positive for as long as possible. They can do this by evaluating their management approach and making it more people-centered.

What Is Talent Management?

Talent management is the process of attracting, selecting, and retaining employees. Talent management is typically, as its name suggests, highly focused on talent. In other words, the leaders involved in talent management are primarily concerned with an individual’s skills, performance, and potential to continue to rise within a current role.

This focus on performance lasts throughout the employee’s tenure with the company. In the beginning, leaders focus on finding “top talent.” Leaders then encourage performance with training programs and incentives based on the employee’s results, essentially aiming to mold each employee into an answer to the business’s needs.

Components of talent management include:

• Recruitment and talent acquisition
• Performance management
• Career development
• Compensation management
• Succession planning

What Is People Management?

People management, on the other hand, is more focused on the employee as a whole person. In people management, leaders focus more on making sure their employees are happy and engaged. This may involve making lateral job transitions or finding new roles or assignments that leverage each employee’s unique skills and strengths. 

People management is less focused on a linear ascent up the career ladder; instead, leaders create a learning environment so their employees can continuously develop their skills and find their unique path within the company. 

Components of people management include:

• Training and development
• Understanding your team and their skills and strengths
• Promoting collaboration
• Conflict resolution and problem-solving 

How is Talent Management Different Than People Management?

When comparing talent management vs. people management, there are a few important differences. Talent management tends to put the focus on performance, with the goal of identifying and retaining people who can contribute to the success of your company and incentivizing them to perform at a high level. Essentially, talent management views employees in narrow terms—specifically, how they can benefit and add value to the organization.

While people management doesn’t ignore performance, it takes a broader approach. It’s not just about molding an employee into what’s best for the company, but rather, doing what’s best for each individual and the organization. People management is designed to empower employees and improve performance not only with incentives, but with coaching, collaboration, and effective communication. Ultimately, the goal of people management is to create an environment where individual employees want to contribute to the company’s mission. 

Why Should Company Leaders Care More About People Management?

People management is all about engaging your employees and empowering them to succeed. As a result, effective people management leads to:

• High productivity: People management can foster a sense of belonging and higher employee engagement—and engaged employees tend to outperform their less engaged peers. 
• Effective communication: People management is all about communication—providing feedback, discussing opinions and ideas, empowering and encouraging.
• Strong collaboration: Managers and employees work together to identify the employee’s strengths and potential roles. The employee is involved in the management process—not just the target of it.
• Reduced employee turnover: When employees feel happy, engaged, and fulfilled in their role, they are less likely to look for a job elsewhere.
• Ongoing professional development: People management promotes a culture of continuous learning, so employees are empowered to do their jobs more effectively.
• A culture of knowledge sharing: When you prioritize and encourage collaboration and continuous learning, knowledge sharing naturally follows.

How To Improve People Management In Your Organization

Ready to shift from a talent management approach to a people management strategy? These tips can help you cultivate the right culture. 

Nurture a Learning Culture

To find and nurture each employee’s unique strengths and talents, you must establish a learning culture. Your employees should have access to company knowledge, product information, training materials, and FAQs, so they are empowered to expand their expertise and find their path within the business.

Knowledge sharing can also promote collaboration and communication between employees, teams, and entire departments.

Practice Constant Feedback

A people management culture must be collaborative, open, and honest. It’s critical to provide constant feedback—and be open to it yourself. By encouraging your employees to give you feedback, you can better understand what is and isn’t working for each individual. This will allow you to more effectively determine how to move forward, whether your employees need more training, different types of assignments, or a new incentive or type of motivation.

Constant feedback will also allow you to become a better manager—and that’s just as important as developing your employees.

Create a Culture of Psychological Safety

To encourage collaboration and feedback, employees must feel that they can share ideas and input without fear of negative repercussions. This is known as psychological safety.

Often, managers must lead by example to create a culture of psychological safety and encourage knowledge sharing. For example, by gracefully providing or reacting to feedback, you can demonstrate that the rest of your team is free to do the same. 

As a leader, it’s also your responsibility to provide opportunities for idea sharing without negative consequences. This could be as simple as holding a brainstorming session where no idea is allowed to be shot down. Or, you might ask everyone to reflect on lessons learned after a big project or sales pitch and publish them to your knowledge management platform, where everyone else can access and learn from them.

Remote People Management Tips

Today’s work environment looks much different than it did just a few years ago. With many companies offering remote or hybrid work environments, you must be able to not only manage your people well—but to do it remotely.

• Over-communicate: In an office, it’s easy to drop by someone’s desk or office to ask a quick question or get clarification on an issue. When working remotely, it’s not as simple. Managers should err on the side of over-communicating to make sure employees know exactly what’s happening and have the opportunity to ask questions if needed. 
• Be flexible: Allowing employees to work remotely requires more flexibility on your end. People face all sorts of challenges in a remote work environment—from barking dogs to delivery drivers knocking at the front door. To build a people-first culture, you need to be understanding and flexible, so you can help your employees succeed in that remote environment. 
• Give people access to resources on demand: Especially for remote employees who may be working across different time zones, it’s essential to give your team the ability to access resources at any time. With a knowledge management platform, for example, employees can access training recordings, documents, FAQs, product manuals, and more at their convenience.

There’s nothing wrong with wanting to hire top performers—but it’s how you treat those people in the long term that differentiates between talent management and people management. By treating your employees as people rather than simply a company asset, you can enhance employee engagement, boost productivity, and improve employee retention through the Great Resignation and beyond.

This blog post was originally published in August 2015. It was updated and expanded in February 2022 to reflect new information and best practices.