Organizations cannot afford to overlook the process of talent management. Yet, only a third of critical roles are backed by succession plans, and only 26% of employees say they received feedback over the past year. There’s clearly still much room for companies to improve their approach to talent management.
This article examines the talent management process and its importance, talent management best practices, practical examples, and a 12-step guide to an efficient talent management process.
Contents
What is the talent management process?
The importance of talent management
The talent management process in 12 steps
Talent management process vs life cycle vs strategy
3 real-life talent management examples
What is the talent management process?
Talent management guides the full employee journey — from how you attract people to how you develop, reward, promote, and eventually, offboard them. Core practices include hiring and selection, learning and development (L&D), engagement and culture building, performance and rewards, and succession planning.
In most companies, “talent” covers all employees. Many also run a separate high-potential program for a small group with the capacity to grow faster into critical roles. For organizations, setting up a clear talent management planning process is what makes this consistent and scalable.
The importance of talent management
Talent management done right has several advantages, including the following:
Happier employees
When employees feel heard, challenged, and trained (among other things), they’re far more likely to feel satisfied with their jobs and their company. As a result, they’ll be more engaged, more productive, and happier overall.
Lower turnover
Optimizing the entire talent management cycle for your organization should minimize its employee turnover rate. When you hire the right people and provide them with the learning and development opportunities they seek, your employees are less likely to leave the organization prematurely.
Employer branding
A well-developed integrated talent management process positively impacts your employer brand, which also benefits your recruitment and retention efforts. For example, being known in the industry for an extensive L&D program could give your company a significant advantage over its competitors among candidates seeking career development.
The talent management process in 12 steps
Below is a practical, 12-step flow you can tailor to suit your organization’s specific needs, with each step including a clear goal:
Step 1: Workforce planning and skills forecasting
Tie your talent plan to strategic workforce planning through the Buy, Build, Borrow, Bot framework. Decide when to buy (recruit externally), build (develop staff), borrow (work with freelancers, contractors, or other contingent workers), or bot (automate with AI) to meet current and future goals.
→ Goal: Connect strategic workforce planning with talent actions, so you have the right skills at the right time and at the right cost.
Step 2: Establish an employer branding strategy
A strong employer brand supports every downstream step, attracting, engaging, and retaining talent. Organizations with a well-developed employer branding strategy rate their ability to enhance engagement and employee retention at 71% and 67%, respectively, while less-branded organizations rate this ability at 37% and 22%.
→ Goal: Become — and remain — a great place to work, so attracting and keeping talent gets easier over time.
Step 3: Determine essential job criteria
Whenever you create a new job or open up an existing one, you need to define (or redefine) what the job entails. Each time a role opens, run a quick job analysis. Define outcomes, responsibilities, and must-have skills. Use this to write the job description and design your selection process.
→ Goal: Pin down the key capabilities that can best predict success in each role.
Learn to develop and implement a strong talent management process
To create and roll out an efficient talent management process, you must align it with business goals, map critical skills, standardize hiring, run continuous feedback, target L&D and build succession.
✅ Develop a strategic talent management framework to create clarity
✅ Build holistic talent profiles to support succession planning
✅ Foster a positive experience throughout the employee life cycle
✅ Master modern mobility practices to engage and retain top talent
🎓 Future-proof your HR career with a flexible, online Talent Management & Succession Planning Certificate Program.
Step 4: Source and attract talent
Don’t just post and pray — source talent proactively. Use a combination of active and passive candidate sourcing to keep an opt-in talent pool warm. Attracting qualified people and selecting the best candidates for your company is a key HR competency that can help you build a valuable talent pool.
→ Goal: Reach out to relevant employee groups to attract the most suitable candidates for each job.
Step 5: Select suitable talent
Once you have enough interested and qualified applicants, you need to make a selection. Choose methods with proven predictive value, such as structured interviews, work samples, cognitive ability tests, and validated assessments. Then, use data to compare candidates objectively and without bias.
→ Goal: Use relevant instruments to help you make a data-driven selection of who will perform best in the roles they’ve applied for.
Step 6: Work out compensation
Once you’ve hired someone, you need to focus on retaining them. Make sure the organization offers employees a competitive compensation package with benefits people value (e.g., time off, remote work, health, and wellbeing). Additionally, use performance-based pay carefully where impact is measurable (e.g., sales).
→ Goal: Retain people and reward performance without creating unreasonable incentives.
Step 7: Drive engagement and a positive culture
Prioritize a high-performance, people-first culture that drives employee engagement. At the same time, engagement should be measured regularly and the results acted on. According to Gallup, employees who feel strongly connected to culture are 4.3 times more likely to be engaged and 47% less likely to be job hunting.
→ Goal: Create conditions that enable employees to do their best work for the business.
Step 8: Ensure employee retention
Address preventable reasons for people leaving (e.g., career stagnation, work-life balance, manager issues). Preventable causes have driven 63% of exits, but predictive analytics can flag flight risks early. For instance, Hilton reported a 25% satisfaction lift after using AI-driven insights to tailor its retention strategies.
→ Goal: Retain high-performing employees to ensure business continuity and reduce avoidable employee churn.
Step 9: Refine performance management
Performance management is a critical part of the talent management process. Switch from annual reviews to continuous performance management. In fact, according to Betterworks, companies using this approach report better results, including better performance and retention and greater focus on priorities.
→ Goal: Improve performance across the board with regular, forward-looking feedback and conversations.
Step 10: Prioritize learning and development
Learning and development (L&D) shares a purpose with performance management: to continuously improve employees’ performance by boosting their skills, competencies, and knowledge. Align L&D with role requirements and strategy, focus on skill gaps tied to performance and career paths, and measure impact on behavior and results.
→ Goal: Equip people with the skills, knowledge, and competencies to perform at a higher level.
Step 11: Develop a promotion and succession planning process
Top performers tend to get new challenges and responsibilities to keep them engaged. This is where promotions and succession planning come in — promoting the people to add even more value is a key step in talent management. Additionally, build bench strength for critical roles by selecting, developing, and tracking successors.
→ Goal: Put the best people in higher-impact roles and ensure leadership continuity.
Step 12: Set up a robust exit protocol
Exits can be desirable or undesirable. The former involves staff who leave due to underperformance or poor culture fit, while the latter involves staff whose departure is a loss to the company. Regardless of the type of exit, you must conduct structured exit interviews to spot patterns and fix root causes in hiring, management, or culture.
→ Goal: Turn every departure into input that strengthens the talent system.
Talent management process vs. life cycle. vs strategy
While some may use the terms ‘talent management process’, ‘talent life cycle‘ (or ‘talent management life cycle’), and ‘talent management strategy‘ interchangeably, they are not the same. The table below provides a comparison:
Definition
A set of ordered actions HR runs to attract and hire candidates, and develop and retain employees.
The entire process of recruiting and retaining the right individuals, nurturing their growth, and enabling them to reach their full potential.
A company’s action plan to optimize employee performance to achieve business goals and organizational success.
Key focus
Executing repeatable HR workflows well and consistently.
Orchestrating a seamless end-to-end employee experience across stages.
Prioritizing talent bets that drive business outcomes.
Example
A standardized hiring process with structured interviews, a 30-60-90 onboarding plan, quarterly performance check-ins, and an annual calibration cycle.
Mapping and improving stages like attract → recruit → onboard → develop → engage → advance → offboard, with feedback loops at each stage.
A two-year plan to build AI skills in product and ops, including workforce planning, build-vs-buy decisions, critical role pipelines, budgets, KPIs (e.g., time to productivity, internal mobility rate).
3 real-life talent management examples
Talent management initiatives vary according to each organization’s size, business goals, and priorities. Let’s look at a few real-life examples:
Example 1: European Central Bank (ECB)
In response to several staff surveys, the ECB introduced a job swaps portal to strengthen staff adaptability through internal mobility (among other channels), as this is essential to maintain the ECB’s resilience. Within six months, 131 of the institution’s 5,000-plus employees had expressed interest in swapping jobs with a colleague, and over 1,500 were considered ‘active’ on the ECB’s broader career portal.
Example 2: Mastercard
Mastercard wanted to scale its ability to empower employees to participate in projects across its priority areas. As such, it rolled out its agile workforce OS, Unlocked, to empower everyone in the organization to expand their horizons and maximize the value they added to the business. Some of the results included:
- ~90% of the workforce registered on the platform
- ~$55 million productivity gained
- ~31,740 workdays saved in one year.
Example 3: Novartis
Swiss multinational pharmaceutical company Novartis decided to transition to a skills-based operating and planning model to equip its people with the ability needed to stay ahead of medical innovation. To enable its staff to acquire new skills beyond those they needed for their initial job scope, Novartis launched a talent marketplace called Talent Match. As a result:
- The company mapped skills to 33,000 job codes across 105,000 employees
- Platform users were 73% less likely to leave the company and 51% more likely to be promoted
- The company experienced a 67% rise in cross-functional assignments.
To sum up
Strong talent management is no longer optional. With succession covering only a third of critical roles and just 26% of employees receiving feedback, most organizations have clear gaps. The upside is obvious: better hiring, stronger culture, higher performance, and lower churn when you treat talent as an end-to-end system instead of a set of disconnected activities.
Start small and move fast. Audit your 12 steps, fix the weakest links first, and measure the impact. Establish a simple, continuous performance rhythm, refresh your employee value proposition (EVP), close priority skills gaps, and name successors for critical roles. Feed insights from exits and engagement data back into hiring, development, and rewards. Do this consistently, and talent will become a competitive advantage, not a risk.
