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How to Build High-Performance Teams With Talent Optimization

Talent optimization puts the right people in the right roles to achieve business goals. Learn how to boost performance & revenue with talent optimization.


By ActivTrak

Blocks that say talent optimization.

Did you know nearly 50% of employees are currently considering leaving their jobs? More than 44 million workers resigned in 2023, and 3.4 million quit in the first month of 2024 alone. They're dissatisfied, disengaged and seeking opportunities elsewhere. 

And yet.

In the midst of this “great reshuffle,” many organizations are holding on to top performers — and maintaining sustainable growth. 

So, how do they do it? It comes down to two words: Talent optimization.

What is talent optimization?

Talent optimization is a four-part practice for ensuring you always have the right people in the right roles, with skills and capabilities that align to overall business goals. It goes beyond hiring to optimize your entire workforce by continually developing and retaining top talent. Examples of talent optimization activities include training programs, mentorship opportunities, and career development paths designed to ensure employees continuously contribute to company success.

Why is talent optimization important?

While talent recruitment focuses on finding the best person for each role, talent optimization ensures team members get sharper and more collaborative the longer they’re with a company. It’s how successful HR leaders motivate and inspire people to positively impact business results. 

According to numerous studies, it works. McKinsey found companies that focus on people’s performance are 4.2 times more likely to outperform peers. They also average 30% higher revenue growth and 5% lower attrition. Additional research from Deloitte shows organizations that take a skills-based approach to talent strategy are 63% more likely to achieve business results than those that don’t and are 57% more likely to anticipate and respond to change effectively.

Talent optimization also creates a positive work culture where employees feel valued. By helping people get better at their work and offering clarity on career paths, you’ll reap dividends in innovation, collaboration, commitment and engagement.

The 4 phases of talent optimization

To master talent optimization, start by focusing on four key areas.

1. Diagnose

Diagnostics are the first and most important component of talent optimization. You can’t improve what you don’t measure, and your workforce activity holds a treasure trove of insights. If you’re not already collecting and analyzing people data, now’s the time to start. This will allow you to proactively diagnose skills gaps and uncover new opportunities to support employees.

2. Design

In the design phase, you decide what to do based on diagnostics — with the goal of creating a talent optimization strategy that positions people to do their best work. Workload distribution, training and development programs and wellbeing initiatives may come into play. But if your data takes you in a different direction, explore other options. Designing a strong people strategy is about finding what works best for your workforce.

3. Hire

Building high-performing teams is the next critical component. Nearly three in four employers are impacted by poor hires, and each one can cost your practice $17,000 in lost productivity. In contrast, hiring the right people for the right roles sets teams up for success from the start. Clear job requirements, accurate role alignment and thorough onboarding all set the stage for long-term talent optimization.

4. Inspire

While diagnostics, design and smart hiring are all critical to a successful people strategy, your efforts don’t end there. Successful organizations continually look for new ways to inspire employees to learn and grow. Motivate them with rewards and recognition. Offer flexible work arrangements to help them focus and innovate. Better yet, provide personal dashboards to help employees understand which activities truly boost performance. These and other business strategies work together to create a culture where productivity flourishes.

How to create and implement a talent optimization strategy

Talent optimization protects your organization against market shifts, economic downturns and many other issues — as long as you do it right. The key is to build a strategy that puts equal emphasis on recruitment and retention by following these four steps.

1. Collect data

The first step is to collect people data for diagnostics. Workforce analytics software makes this easy to do. Monitoring workforce metrics related to productivity, process, performance and work-life balance empowers you to identify specific areas for improvement.

2. Revamp your hiring process

Next, use your data to optimize your talent acquisition strategy. But don’t just focus on hiring great people right now. To position your workforce for long-term success, think long-term. Start with capacity planning to rightsize teams and maximize your current headcount investments first. Then use predictive workforce analytics to get ahead of skills shortages, find the right people and onboard them quickly and efficiently.

3. Create a learning and development plan

Your next job is to put your people analytics to work to close any skills gaps. Since you’ve already hired the best person for each role, it’s now time to support professional growth with upskilling and reskilling. Investing in career development ensures you have the right capabilities in place as the business scales and your needs change. This step also does wonders for employee engagement. In fact, an astounding  94% of workers say they’d stay longer at a company if it invests in helping them learn.

4. Evaluate and adjust

Like any workforce strategy, talent optimization is an ongoing process. Analyze your people data monthly or quarterly to uncover new opportunities and adjust as needed. Or automate the process with executive dashboards designed to provide actionable recommendations. 

Develop a strong talent optimization strategy with ActivTrak

Ready to optimize your talent with actionable insights and data-driven decision-making? ActivTrak's workforce analytics platform harnesses the power of productivity and engagement metrics to help you diagnose, design, hire and inspire like never before. Request a demo to see how 9,500 customers use ActivTrak to boost business performance daily.

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