Talent segmentation is the creation of “levels” or “segments” of jobs within a company that have different principles, requirements, rewards, and talent management strategies applied to them. For venture capital firms in particular, a one-size-fits-all approach to talent management may hamper recruiting efforts as the company grows and transitions. Talent segmentation allows the resources of the firm to be distributed in the way that produces the biggest profit margin, and the firm runs better as a result.
How Talent Segmentation Impacts Recruiting
The best talent management practices are aligned with the overall strategy of the company or firm, and talent segmentation is no exception. Knowing the profit model and goals, both short and long term, will help those tasked with hiring to use talent segmentation practices to maximize profitability.
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One key factor to consider is how different segments of talent within the organization add value to the overall firm. A business model that is sales-driven will have different recruiting and hiring practices from one that is more customer service oriented.
Talent segmentation offers a firm the opportunity to concentrate its recruiting on the segments of talent that provide the most value and can generate the most profits. Sales-driven firms, for example, can offer more competitive pay, benefits, and/or reward structures to their sales teams without having to offer those same opportunities to other divisions of the business.
Embracing Talent Segmentation
VC firms that resist talent segmentation may not realize that they already practice it when pain points and external marketing conditions dictate the need to deviate from a one-company approach. It is natural for companies to concentrate their resources where they are most needed, but talent segmentation is a more proactive way of doing so.
Instead of reacting to market conditions or pain points, talent segmentation gives VC firms the chance to plan for their needs ahead of time and adapt their recruiting practices to better fit their profit models.
The Risk of Over-Segmentation
Although talent segmentation is a positive practice that helps organizations become more profitable and run better, over-segmentation can cause some problems for firms at times. Segmenting talent is more complex and difficult to administer than a one-company approach, and going too far in that direction can lead to an overly complicated talent management strategy that may make it harder to hire effectively.
Finding a balance between a one-company approach and a segmented one will yield the best results and lead to a recruiting approach that can be sustained over the long term without becoming too complex. In the highly competitive business environment of VC firms, using every advantage becomes not just a good business strategy, but an absolute necessity for survival.
Because of the relative complexity of talent segmentation, having a system that can track recruiting efforts can be a tremendous help to VC firms. ThriveTRM can help with segmented talent management strategies and keep leadership on the same page as those strategies are implemented in hiring practices. Discover solutions for VC / PE firms that can help reach your goals today.