There are many definitions of the term ‘talent’. From our research, we’ve developed a working definition for both ‘talent’ and ‘talent management’:

• Talent refers to individuals who can make a significant difference to organisational performance, either through their immediate contribution or by reaching their highest levels of potential.

• Talent management is the systematic attraction, identification, development, engagement, retention, and deployment of those individuals who are of particular value to an organisation due to their high potential or because they fulfil critical roles.

Many organisations are broadening their definitions, looking at the ‘talents’ of all their staff and working on ways to develop their strengths. At its broadest, the term ‘talent’ may be used to include an organisation’s whole workforce.

The interpretations emphasise that it’s not enough to just focus on attracting talented individuals. Managing, developing, and retaining them as part of a planned talent strategy is equally important.

Talent management has evolved from being associated solely with recruitment into an essential management practice. Our 2020 Resourcing and talent planning survey report recommends:

• Taking a strategic approach to workforce planning informed by data and evidence
• Increasing efforts to develop and update internal skills focusing on internal mobility
• Increasing focus on flexibility and work-life balance by explicitly offering flexible working arrangements  
• Ensuring more diversity when recruiting through rigorous, and consistent procedures and by training all hiring managers
• Assessing your internal capability and resource around recruitment technology to ensure it meets the needs of your organisation and provides a fair and inclusive candidate experience. 
• Taking a comprehensive, data-based approach to improving all your resourcing decisions

There are compelling benefits in taking a strategic approach to managing talent. In the future, work will present many new challenges. As automation and AI replace more routine roles, the labour market for highly-skilled people tightens, and more flexible and hybrid ways of working emerge, organisations will need to focus on developing rather than buying-in their people.

A tailored, organisation-wide talent management strategy provides a focus for investment in people. It can also contribute to other strategic objectives, including:

• Creating meaningful work and growth opportunities for staff.
• Building a high-performance workplace.
• Contributing to inclusion and diversity.
• Encouraging continuous learning.
• Adding value to the ‘employee value proposition‘.
• Accessing people analytics for better business decision making.
• Increasing productivity.

A clear organisation-wide strategy will allow the talent management strategy to align closely with business objectives.

Creating a talent management strategy starts with workforce planning to determine future workforce needs. It looks at the workforce supply and demand, current demographics, predictions for skill shortages or surpluses, the labour market and workplace trends. CIPD members can find more on workforce planning in our Workforce planning practice guide.

The workforce plan will help prioritise talent management activities and typically include:

• Recruitment (talent acquisition).
• Building talent 'pools'.
• Succession planning.
• Life-long learning.
• Leadership development.
• Career management.
• Deployment.
• Performance management.
• Employee engagement.
• Employee retention.

Lastly, it’s important to analyse the return on investment – evaluating the results of the talent management process in terms of business outputs, succession pools, staff turnover and productivity, compared with its costs.

Inclusive versus exclusive approaches

Some organisations use an exclusive focus, in which talent management focuses specifically on key or high-potential individuals. Recently, organisations have been adopting a more inclusive approach through a ‘whole workforce’ focus. Often, a blended approach is used in practice, by working to engage and develop all employees, while focussing on a particular core group.

Regardless of the approach, it’s crucial to be fair and consistent. For example, not ‘joining-up’ talent management programmes with diversity policies and activities can mean an organisation fails to benefit from accessing and developing talent from the widest possible pool.

Involving the right people

It’s important to include the right stakeholders. Senior leaders and managers need to be actively involved in the whole process and make it a top priority.

Participants

Selecting participants for formal talent schemes (leadership programmes) is key. Our research shows that structured selection processes increase the perceived value of talent programmes and participants’ motivation to perform. For those not selected, the negative effects of being ‘passed over’ are not as harmful, particularly if individuals are given sensitive, practical feedback and opportunities for personal development.

Once candidates have completed a talent programme, it's important to maintain an ongoing dialogue, for example through ongoing networking opportunities or more structured meetings.

Managers

Visible senior-level support is a must. A ‘talent panel’ is a useful way to keep directors and senior management involved. Line managers are responsible for managing individuals’ performance and for identifying and developing talent in their own areas, but they should also be encouraged to see talent as organisation-wide rather than a local resource.

People teams

People professionals have an important role to play in providing guidance and support when developing approaches to talent management that fits the organisation’s needs. HR can also play a critical role in facilitating talent pools and programmes and in maintaining their momentum.

If organisations choose to implement formal selection processes for talent pools, HR teams also have a major role in ensuring the selection criteria are applied consistently and include a learning strategy for those not accepted onto a programme.

There are six main areas of the talent management loop: attraction, identification, development, engagement, retention and deployment.

Attracting talent

The ability to attract external talent depends upon how potential applicants view the organisation, the industry or sector in which it operates and whether they share the organisation’s values. Creating an attractive employer brand and employee value proposition is an important factor in recruiting external talent.

Identifying talent

Business critical roles must be identified first – these are leadership and specialist roles that, if unfilled for any length of time, could leave the organisation vulnerable. The process of succession planning helps many organisations prepare potential leaders to fill key positions from within.

The next step is identifying talented individuals within the organisation. This is often based on past performance and future potential, with a view to developing ‘talent pools’ of individuals who could step into business critical roles when they arise. A robust performance management process is a way to identify talent early.

Developing talent

Talent development should be linked to other learning and development initiatives. Find out more on learning and development strategies that reflect business objectives.

Participants on talent management programmes tend to value coaching and mentoring, and networking particularly highly, especially with senior people in the organisation.

Secondment is the temporary ‘loan’ of an employee to another part of the organisation. Secondments offer valuable career development opportunities and are increasingly used as part of talent management programmes. They also help organisations to expand capability, skills and knowledge across the business.

Engaging talent

Employees who have good quality jobs, some autonomy in how they work, see a clear link between their role and organisation objectives, and are well-managed, will not only be happier, healthier and more fulfilled, but are also more likely to perform well. This mutual gains view of motivation and people management lies at the heart of employee engagement.

Retaining talent

Investing in development activities will reduce employee turnover and improve talent retention. Reward and recognition can also be retention tools. The reward strategy should offer a good mix of rewards. It might include incentives and acknowledging an individual’s value to the organisation.

Deploying talent

Deployment is using the workforce in the most effective and efficient way. Organisations must understand where their skills gaps lie to plan the training required and deploy identified talent with job rotations, skill enhancement opportunities, additional qualifications, leading on special projects, and secondments to aid progression and growth.

Evaluating talent management is difficult, but necessary to ensure that the investment is justified. It needs both quantitative and qualitative data that is valid, reliable and robust. 

There’s more in our factsheets on people analytics and workforce reporting. Our report, Managing the value of your talent: a framework for human capital measurement, part of the Valuing your Talent research programme, offers a diagnostic tool to assess how an organisation’s human capital is measured.

Ultimately, organisational success is the most effective evaluation of talent management.

Books and reports

CAMPBELL, V. and HIRSH, W. (2014) Talent management: a four-step approach. Brighton: Institute for Employment Studies.

COLLINGS, D.G., MELLAHI, K. and CASCIO, W.F. (eds.) (2019) The Oxford handbook of talent management. Oxford: OUP. 

FROST, S. and KALMAN, D. (2016) Inclusive talent management: how business can thrive in an age of diversity. London: Kogan Page.

HIRSH, W. (2015) HR essentials: effective talent and succession management: a framework for thinking about your own approach. Brighton: Institute for Employment Studies.

TAYLOR, S. (2021) Resourcing and talent management: the theory and practice of recruiting and developing a workforce. 8th ed. London: CIPD Kogan Page.

TURNER, P. and KALMAN, D. (2014) Make your people before you make your products: using talent management to achieve competitive advantage in global organizations. Chichester: Wiley.

Visit the CIPD and Kogan Page Bookshop to see all our priced publications currently in print.

Journal articles

BASKA, M. (2020) Covid renewing employers’ focus on internal talent pools, research finds.People Management (online) 20 November.

COLLINGS, D. (2018) Talent management: dispelling some myths. Human Resources. May. pp44-46

GLAISTER, A., KARACAY, G., DEMIRBAG, M. and TATOGLU, E. (2018) HRM and performance: the role of talent management as a transmission mechanism in an emerging market context. Human Resource Management Journal. Vol 28, No 1, January. pp148-166. Reviewed in In a Nutshell, no 75.

HIRSCH, W. (2018) Talent management that fits. HR Magazine. June. pp42-44.

MAYO, A. (2018) Applying HR analytics to talent management. Strategic HR Review. Vol 17, No 5. pp247-254.

ROPER, J. (2015) What do we mean when we talk about talent? Human Resources. June. pp26-31.

SWAILES, S. (2020) Responsible talent management: towards guiding principles. Journal of Organizational Effectiveness: People and Performance. Vol.7, No 2. pp221-236.

CIPD members can use our online journals to find articles from over 300 journal titles relevant to HR.

Members and People Management subscribers can see articles on the People Management website.