Talent management

There are many definitions of the term ‘talent’. We have developed a research-based 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 potential.
• Talent management is the systematic attraction, identification, development, engagement, retention, and deployment of those individuals who are valuable to an organisation, because of their potential or the critical role they have. 

Many organisations are broadening their definitions to include all employees. Everyone has skills and strengths that can be developed and can benefit the organisation.

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

The CIPD and Omni RMS 2024 Resourcing and talent planning report recommends:

• Taking a strategic approach to workforce planning informed by data and evidence.
• Removing barriers to work through more inclusive recruitment practices. 
• Creating strategic in-house talent development and L&D programmes to upskill existing employees in priority areas.

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 some roles and evolve others, the need to upskill and re-skill people increases. 

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.
•    Strengthening the ‘employee value proposition‘.
•    Accessing people analytics for better business decision making. 
•    Increasing productivity.

An effective talent management strategy needs to align to the organisational strategy. 

When planning a talent management strategy, it's important to determine future workforce needs. Thus, workforce planning is a pre-requisite to talent management. Workforce planning looks at workforce supply and demand, now and in the future, as well as the labour market and workplace trends. CIPD members can find out more in our strategic workforce planning guide.

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

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

It’s also important to analyse the return on investment. You can do this by considering the cost of your talent management processes and looking at the outputs. These can be business outputs, succession pools, staff turnover and productivity.

Inclusive versus exclusive approaches

Some organisations focus on key or high-potential individuals in their talent management approach. Others adopt a more inclusive approach focusing on the ‘whole workforce’. Often, organisations use a blended approach: they engage and develop all employees, but prioritise a core group.

Regardless of the approach, it’s crucial to be fair and consistent. For example, aligning talent management programmes with diversity initiatives will ensure that organisations can access more diverse talent. 

Involving the right people

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

Participants

Our research shows the importance of structured selection processes when identifying candidates for formal talent schemes, such as leadership programmes. They increase the perceived value of talent programmes and participants’ motivation to perform. They also have less harmful consequences for those not selected. This is especially true if feedback and alternative opportunities for personal development are available for non-successful candidates.

It's important to follow up talent programmes with opportunities to network or more structured meetings with senior members of the organisation. These will allow participants to build on their new knowledge and skills to progress in their career within the organisation.

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 individuals’ performance and for identifying and developing talent in their own areas. They should also be encouraged to see talent as organisation-wide rather than a local resource.

People teams

People professionals need to provide guidance and support when developing talent management approaches for the organisation. They also play a critical role in facilitating talent pools and programmes and in maintaining their momentum.

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 the public image of an organisation and its values. An attractive employer brand and employee value proposition are important to recruit new talent. 

Identifying talent

Business critical roles must be identified first. These are usually leadership and specialist roles that can make organisations vulnerable if left vacant for too long. Succession planning helps 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. This will identify and develop ‘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 (L&D) initiatives. Find out more on learning and development strategies that align with business objectives.

L&D initiatives supporting talent development can include coaching, mentoring and networking. Participants on talent management programmes will value building relationships with senior members in the organisation through these means. 

A secondment (the temporary ‘loan’ of an employee to another part of the organisation), can also be a valuable development opportunity. It helps organisations expand capability, skills and knowledge across the business.

Engaging talent

Employees who have good quality jobs, autonomy, clarity of expectations, and are well-managed, are usually happier, healthier and more fulfilled. They 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 identify skills gaps in their workforce. They can then plan any required training and development. This will enable them to deploy talent through job rotations, skill enhancement opportunities, formal learning, project work and secondments. 

It's necessary to evaluate talent management to make sure that any investment is justified. The evaluation needs to be based on quantitative and qualitative data that is valid, reliable and robust. 

There’s more in our factsheets on people analytics and workforce reporting. Our Valuing your talent research programme provides a framework and further resources. These include a diagnostic tool to assess how organisations measure human capital. 

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

Books and reports

Alder, M. and Dinnen, M. (2022) Digital talent: find, recruit and retain the people your business needs in a world of digital transformation. London: Kogan Page.

Collings, D.G., Mellahi, K. and Cascio, W.F. (eds.) (2019) The Oxford handbook of talent management. Oxford: OUP. 

Culshaw, T. (2022) Talent intelligence: using business and people data to drive organizational performance. London: Kogan Page. 

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

Garg, A., Ahluwalia, K. and Levit, A. (2023) Deep talent: how to transform your organization and empower your employees through AI. London: Kogan Page.

Poczkowski, A., Mis, A. and Pauli, U. (2022) Talent management in small and medium enterprises: context, practices and outcomes. New York: Routledge.

Saling, K. (2024) Data-driven talent management: using analytics to improve employee experience. London: Kogan Page. 

Schlosser, F. and McPhee, D.M. (eds.) (2022) Global talent management during times of uncertainty. Bingley: Emerald Publishing.

Taylor, S. (2024) Resourcing and talent management: the theory and practice of recruiting and developing a workforce. 9th ed. London: CIPD Kogan Page.

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

Journal articles

Bonneton, D., Schworm, S.K., Festing, M. and Muratbekova-Touron, M. (2022) Do global talent management programs help to retain talent? A career-related framework. International journal of human resource management. Vol 33, No 2. pp.203-238. 

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

Dries, N. and Kase, R. (2023) Do employees find inclusive talent management fairer? It depends. Contrasting self-interest and principle. Human resource management journal. Vol.33, No 3, July. pp702-727.

Kral, P., Richterova, M. and Kralova, V. (2022) Why does talent leave organizations? Talent retention of trainee program graduates. Proceedings of the European Conference on Management, Leadership and Governance. pp.229-237.

Kravariti, F., Tasoulis, K., Scullion, H. and Alali, M.K. (2023) Talent management and performance in the public sector: the role of organisational and line managerial support for development. International journal of human resource management. Vol 34, No 9, May. pp1782-1807.

Kumar, S. (2022) The impact of talent management practices on employee turnover and retention intentions. Global business and organizational excellence. Vol 41, No 2, January/February. pp.21-34. 

Murphy, A., Gaytan, J. and Endres, A. (2022) Effective talent management practices of small- and medium-sized businesses. International journal of applied management and technology. Vol 22, No 1. pp.1-18.

Oppong, N.Y. (2023) The seven myths of global talent management: a reflection. Social sciences and humanities open. Vol 8, No 1, January.

Skuza, A., Woldu, H.B. and Alborz, S. (2022) Who is talent? Implications of talent definitions for talent management practice. Economics & Business Review. Vol 8, No 4, December. pp136-162.

Tusquellas, N., Palau, R. and Santiago, R. (2024) Analysis of the potential of artificial intelligence for professional development and talent management: a systematic literature review. International journal of information management data insights. Vol 4, No 2, November. Article 100288.

Ulrich, D., Church, A.H., Eichinger, B. and Pearman, R.R. (2023) Why talent management and succession bench building aren’t working today: at least not as well as they could! Workforce solutions review. Fourth quarter. pp33-37.

Wiblen, S. and Marler, J.H. (2021) Digitalised talent management and automated talent decisions: the implications for HR professionals. International journal of human resource management. Vol 32, No 12. pp.2592-2621.

Winsor, J. and Paik, J.H. (2024) Do you need an external talent cloud? Harvard Business Review. Vol 102, No 1, January/February. pp108-117.

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.