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A guide to understanding talent management

AI & Future of work | 6 Min Read

A guide to understanding talent management


Talent management is the process of leading potential and current employees toward high performance and career development. The HR strategies, framework, and commitment towards attracting, motivating, developing, and retaining talent are all forms of the talent management process. 

HR managers should develop cost-effective, efficient, robust, and scalable strategies to attract the best candidates. The existing employees should be encouraged to thrive with proactive learning and development (L&D) programs.

Some critical aspects of talent management are: 

  • Attracting top talent 
  • Choosing the right talent 
  • Developing talent 
  • Retaining talent 
  • Motivating employees 
  • Nurturing talent 
  • Implementing compensation plans and performance appraisal systems
  • Creating high-performance workforce 


Importance of talent management

The World Economic Forum’s Future of Jobs Report 2023 projected that of 673 million jobs, 69 million job roles may emerge and experience growth, while 83 million may experience a decline.

Talent management is imperative to motivate employees and empower them to stay longer with the organization. Every organization must optimize its strategy to manage talent based on its business objectives.

Some of the benefits of an effective talent management system are:

  • Improved business performance through strategic talent allocation and positive employee experience.
  • Increased innovation to harness new tools for problem-solving
  • Enhanced recruitment efficiency
  • Talented product teams
  • Reduced employee turnover
  • Stronger employer branding
  • Seamless employee onboarding
  • Alignment of employees' career paths with organizational strategies


Differences in talent development and talent management

Talent development and talent management are often utilized synonymously. However, these are two different disciplines where talent development is focused on building employee competencies and skills and talent management is focused on comprehensive employee productivity, performance, development, etc. This indicates that the talent management strategy of a business encompasses the talent development strategy.

Hiring managers use a well-designed talent development process to ensure organizational efficiency and productivity, simplifying talent management.


Talent management strategy

Talent management strategy implements workplace cultural changes to improve employee productivity and engagement. The environment must cultivate growth and focus on improving employees’ workplace experience.

Some of the critical aspects of strategic talent management are:


Infographic 1


Talent management process

HR leaders must invest in employee experience to foster a high-performance culture. For this, employees need clearly defined goals, a roadmap to achieve these goals, and continuous nurturing during their journey.

The talent management process is a manifestation of the employee strategy. And the integrated and iterative process involves the following steps:


The first and foremost step of the talent management process is analyzing the organization’s current and future talent needs. This involves identifying key roles and skills required to achieve business objectives, as well as forecasting future talent requirements based on growth plans and industry trends.

Talent acquisition:

Once the talent needs are identified, the organization focuses on attracting and recruiting the right candidates. This may involve developing compelling employer branding strategies, creating job descriptions, advertising positions, sourcing candidates through various channels, conducting interviews, and selecting the best fit for the organization.


Once candidates are hired, effective onboarding is crucial to their success. Onboarding involves providing new employees with the necessary tools, resources, and information. It includes orientation programs, introductions to the company culture, training on policies and procedures, and clarifying performance expectations.

Performance management:

Performance management is an ongoing process that involves setting clear goals and expectations for employees, regularly providing feedback and coaching, conducting performance evaluations, and recognizing and rewarding high performers. This process helps identify areas for improvement, align individual goals with organizational objectives, and ensure continuous growth and development.

Learning and development:

Organizations invest in developing their employees’ skills and competencies to maximize their potential. This may include offering training programs, mentoring, coaching, job rotations, and opportunities for acquiring new knowledge. Learning and development initiatives should be tailored to individual needs and career aspirations, helping improve employee engagement and retention.

Succession planning:

Succession planning involves identifying and developing internal talent for future leadership positions within the organization. It aims to ensure a smooth transition when key employees retire or move to other roles. Succession planning includes assessing and developing high-potential employees, creating development plans, and providing opportunities for growth and advancement.

Talent retention:

Retaining top talent is critical for organizational success. Talent retention strategies involve creating a positive work environment, offering competitive compensation and benefits, providing opportunities for career advancement, recognizing and rewarding achievements, and promoting work-life balance. Regular feedback, career discussions, and employee engagement initiatives also play a crucial role in retaining talent.

Talent analytics:

Talent management processes are supported by data-driven insights. Talent analytics involves gathering and analyzing data related to employee performance, skills, engagement, and career development. This information helps identify trends, strengths, and areas for improvement, enabling organizations to make informed decisions and optimize their talent management strategies.

Continuous improvement:

Talent management is an ongoing process that requires regular evaluation and refinement. Organizations should continuously monitor and assess the effectiveness of their talent management practices and adjust as needed. Feedback from employees, managers, and other stakeholders is invaluable in implementing necessary changes.


Best practices for talent management

HR leaders must refine their job and skills architecture to build an agile workforce. This means actively converting insights into strategies for more engaged employees.

Some of the best practices for building the right strategy for talent management are:

  • Identify and prioritize organizational goals and objectives.
  • Conduct political, economic, social, and technological (PEST) or strengths, weaknesses, opportunities, and threats (SWOT) analysis to identify potential challenges.
  • Find solutions to mitigate talent risks.
  • Create a plan to fill the talent gap.
  • Develop employee skills to meet company needs.
  • Recruit employees that strengthen the brand.
  • Communicate with employees to refine their career goals.
  • Measure talent performance through regular assessment.


How does performance management help in talent management?

Performance management is the process of assessing the current progress of employees. It contains tasks like goal setting, work planning, work progress review, monitoring, feedback, communication, and continuous training. This process helps evaluate employee efficiency and skills according to the job positions. As a result, this information aids talent management aimed at high-performing successors and efficient employees.

The objective of including a performance management cycle in talent management is:

  • Driving employee growth and ensuring optimum work standards.
  • Supporting skill and knowledge development by allowing employees to identify strengths and weaknesses.
  • Motivating the workforce with appropriate reward and recognition processes.
  • Ensuring a two-way communication process between employees and leadership to clear roles, responsibilities, and expectations.
  • Identifying factors reducing performance and resolving challenges via continuous development interventions.
  • Promoting talent development and personal employee growth to ensure employee engagement and satisfaction.


The role of 360-degree feedback in talent management

The 360-Degree Feedback Tool provides comprehensive insights related to employee performance, as expressed by customers, managers, peers, and other stakeholders. During talent management, this process identifies employees relevant for lateral and vertical hiring. It allows an understanding of skills gaps, performance lags, and other challenges that employees might be facing at the workplace.

Some benefits of using a 360-degree feedback system during talent management are:

  • Highlights skills and performance gaps in employees
  • Improves internal workforce communication
  • Ensures employee training to drive customer success

The principles of using 360-degree feedback during talent management are:

  • The workforce is assessed based on feedback from the manager, peers, immediate subordinates, and customers. As a result, it allows the evaluation of candidates’ behavior and personality during crucial business circumstances.
  • The consolidated feedback provides reliable and objective insights into candidates’ fitment for appraisal or promotion.
  • The multi-rater approach is multi-dimensional. Thus, it helps in employee goal-setting and resource management.
  • The subjective aspects of the workforce in leadership qualities, teamwork, emotional regulation, etc., are highlighted.

Mercer | Mettl’s 360-Degree Feedback is a multi-rater assessment that collects employees’ ratings from peers, direct reports, managers, and clients. The assessment aids the hiring manager’s decisions in high-potential identification, succession planning, leadership development, training needs identification and performance appraisals.


How Mercer | Mettl can help

Mercer | Mettl offers a suite of customized and pre-built assessment solutions for talent management. These assessments are designed to ensure a smooth candidate journey during hiring, onboarding, L&D, and appraisals.

A few assessments from the suite for talent management are:

  • Psychometric assessments help measure candidates objectively for their personality traits, ability, aptitude, and behavior. These assessments allow for gauging cultural and technical candidate fitment for client-facing and critical business roles.
  • Coding tests are customized according to business requirements. These assessments help evaluate potential candidates based on their skills in front-end development, database development, backend development, data science, full-stack development, etc.
  • Behavioral assessments allow hiring managers to measure candidates’ behavior in the workplace environment. These tests help evaluate leadership potential and candidates’ emotional stability in challenging situations.



Strategic workforce planning, attracting top talent, fostering growth through learning and development, and retaining your best performers help build a thriving, high-performing team. With data-driven insights, proven strategies, and a relentless commitment to continuous improvement, this guide empowers businesses to shape a talent management framework that propels organizations toward unprecedented success.





What are the five stages of talent management models?

What is a talent management strategy?

What are the four key steps of a talent management process?

What are the key elements of a talent management strategy?

Originally published July 12 2023, Updated July 25 2023

Written by

Vaishali has been working as a content creator at Mercer | Mettl since 2022. Her deep understanding and hands-on experience in curating content for education and B2B companies help her find innovative solutions for key business content requirements. She uses her expertise, creative writing style, and industry knowledge to improve brand communications.

About This Topic

Talent acquisition is all about strategizing for sourcing, hiring, and retaining the talent an organization needs. This blog offers more insights on the topic.

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