The 5 steps of the talent management process are identifying talent needs, hiring the right people, onboarding effectively, developing and retaining employees, and planning succession. Together, these steps create a structured framework for attracting, developing, and keeping high-performing talent in your organization.
The Talent Management Process at a Glance
- Step 1: Identify current and future skills gaps
- Step 2: Hire for capability and culture fit
- Step 3: Onboard and transition effectively
- Step 4: Develop and retain high performers
- Step 5: Plan succession strategically
Used by HR and L&D teams to create sustainable workforce performance.
This guide is from our new manager training guides, which provide useful guidance for managers.
What Is the Talent Management Process in HR?
In HR, the talent management process refers to the coordinated approach organizations use to identify skills gaps, recruit and onboard employees, develop their capabilities, and prepare future leaders so the business can perform sustainably over time.
Succession planning refers to evaluating and discovering those who have the potential to develop within your company into talented employees and future leaders or managers.
Talent Management process involves not just talented individuals but the company culture and goals, how the person integrates with other employees, and how they perform.
This is a process that is ongoing for a company and, when done correctly, it can provide great benefits as we will discuss below.
What Are the 5 Steps of the Talent Management Process?
The five steps are identifying skills gaps, hiring the right people, onboarding and transitioning employees, developing and retaining talent, and planning succession.
There is a process and framework that you can use so that you have a clear strategy from an HR and management point of view, similar to broader human capital management (HCM) strategies that align people development with business goals.
There are 5 steps of talent management, and these are:
- Identifying – this involves working out what talent you need to fill skill gaps
- Hiring – Managing to find the right people with the right talent and to fit into your company culture
- Transitioning – Onboarding and helping the new employees adapt
- Retaining – Ensuring that the employee stays and develops within your company
- Succession – planning for helping talented staff who are already in the company to progress in the right way
This process, it should be noted, is an ongoing process and every stage needs to be evaluated often.
There is also no real starting point in the diagram above because you might, for example, want to start with succession planning, i.e., identifying the potential talent that already exists in your company before hiring from outside.
Before looking at each of these stages individually in more detail, it is worth first considering and understanding the Talent Management Integration.
How Does the Talent Management Framework Work?
The talent management framework works by aligning workforce planning, talent acquisition, onboarding, learning and development (L&D), performance management, and succession planning with organizational strategy and long-term business goals.
It supports the entire employee lifecycle, from attraction and recruitment through development, retention, and leadership transition.
It is also about:
- Company culture and goals – making sure that the talented individual understands, fits in with, and is able to work with the company culture and the company’s goals.
- Skills gaps – making sure that the right skills gaps are correctly identified, both in terms of present needs and future needs (based on the goals).
- Other employees – finding the right person also means ensuring that you choose someone in terms of team integration and the ability to work well with other employees.
- Talented individual – the talented individual also needs to be someone who will have the right motivation, be willing to adapt and learn further, and be open to leading others.
As you can see, talent management is almost like trying to balance lots of plates at the same time, in that there are many things to consider to really get the right person with the right skills and character.
Step 1: How Do You Identify Talent Needs and Skills Gaps?
The first step is to take a clear look at your current workforce — what skills you already have, where gaps exist, and what capabilities will be needed to support future business goals.
- First, identify any skills gaps that exist in your company that need to be filled.
- Also, identify positions for which you could benefit from talented leaders (allowing you to potentially develop into new product areas and services). So, in addition to what skills you need to fill now, what skills do you also need to meet the goals of the company (i.e., 5-year goal)?
Step 2: How Do You Hire the Right Talent?
At this stage, clarity matters most. Organizations need a well-defined role profile, a realistic view of the skills required, and a careful approach to assessing how each candidate will contribute to the wider team and culture.
However, you will also likely need to headhunt skilled people from outside your company, and this is a specialist area in its own right, which is why the recruitment industry is so profitable for some companies that specialize in it.
The usual routes, such as hiring a recruiter, using job sites, networking at trade events, and headhunting others, can all be explored in your recruitment drive.
I will not go into hiring practices here any further, but our guide on how to hire the right employees is worth a read.
Step 3: How Should You Onboard and Transition New Employees?
Onboarding works best when new employees are given clear expectations, introduced properly to the company culture, supported through their first 90 days, and guided step by step as they settle into their role.
In fact, no matter what the skill level of the person you are hiring, the first 90 days are essential for keeping that employee.
Hiring new employees and training them can be a high cost to you as a company, and, as we discuss in our guide to effective onboarding practices, successfully keeping new hires depends largely on how you integrate them in these first ninety days.
In a good talent management process and framework, you will need, in these first 90 days, to ensure that any new employee:
- Understands the company culture
- Has been introduced to the key people they need to meet
- If possible, is provided with a mentor whom they can refer to in the first 90 days to help them, if they need any advice or help with anything at all.
- Receives clear guidance on their role and expectations, and any hands-on training they need to get started
Step 4: How Do You Develop and Retain High Performers?
Managing to keep high-performing employees requires more than just paying them well and hoping they’ll stay. It means creating opportunities for their career development and progression, recognizing their contribution, and gradually involving them in higher-level decision-making.
Strong retention strategies are closely linked to employee engagement and performance management systems that recognize and develop high-potential employees (HiPos).
Well, not really, as it is essential also to help the talented employees you have hired or promoted to:
- further develop their skills to an even higher level (helping you as a company, but also showing the employee that you are willing to invest time and money in their development too)
- use these skills also to train and help others
And, as a company, you will need to ensure that you:
- have a clear career path that they can follow through the company
- consider having a rewards and incentive program
- begin to include them in the decision-making process in some way
Offering continuous opportunities for growth and development, and a clear career path to progress through the company, can be essential in keeping these talented individuals.
Measuring the impact of this development is equally important, which is why organizations focus on measuring training effectiveness and ROI to ensure learning translates into performance.
Step 5: What Is Succession Planning in Talent Management?
Rather than relying solely on external hiring, succession planning builds a pipeline of capable employees who can take on senior or specialist positions as the business evolves.
Succession planning works best when you identify capable people early and give them real opportunities to grow into bigger roles, rather than scrambling to replace leaders at the last minute.
In order to develop existing employees to the level involved with the talent management process, we need to have in place:
- A system for identifying talented staff
- Providing training and development for these staff
- Evaluating these staff
- Guiding these staff into key positions and keeping them
Why Is the Talent Management Process Important for Organizations?
The talent management process is important because it helps organizations attract high-performing employees, and in turn helps reduce turnover, improve workplace productivity, and helps you develop potential leads for the future.
Whether it is bringing in staff who are highly skilled and talented or having a great system in place to nurture and develop talent in-house, talent management is essential.
When it’s done well, talent management becomes part of how the whole organization manages its people and long-term growth.
A Real-World Business Example
Imagine that a freight forwarding company is expanding into the Asian market, and they have decided to use the 5-step talent management framework to identify leadership gaps, to ensure they have a suitable team to tackle this new market.
Rather than relying solely on external recruitment agencies, the HR team decided to assess future capability needs by identifying high-potential employees. They then worked to fill the leadership gaps.
Within two years, the company had built a strong leadership team who were experienced in the freight industry. Through having a solid team structure, they improved employee engagement and strengthened succession readiness across departments.
This is exactly the kind of structured thinking we build into our practical training materials for HR teams and managers.
Sports Industry Example
Many football (soccer) clubs have a great record of bringing young footballers through their academy set-up. AFC Ajax, for example, is renowned worldwide for its talent management setup and is a particularly good example.
Many sporting clubs invest heavily in identifying, developing, and progressing talent through structured academy systems.
In the end, they make and save huge sums of money by having highly talented players at their club, or alternatively, very talented players whom they sell at a great profit (normally for millions more than what it costs to develop the player).
Whatever business you are in, having a strong talent management system in place can provide you with a competitive advantage.
Talent Management Process FAQs
What are the 5 stages of the talent management process?
The 5 stages of the talent management process are identifying skills gaps, hiring the right people, onboarding and transitioning employees, developing and retaining high performers, and planning succession. Together, these stages create a structured approach to attracting, developing, and sustaining talent within an organization.
What is the point of talent management?
The purpose of talent management is to attract capable people to your business and then create the conditions that encourage them to stay and grow. It’s not just about hiring well; it’s about building a team that can develop over time and support the long-term goals of the company.
What is the difference between talent management and HR?
HR (Human Resources) is normally the department responsible for managing employees, including recruitment, policies, payroll, and employee relations. Talent management is a strategic process focused specifically on attracting, developing, and retaining high-performing employees. In many companies, the HR team leads talent management initiatives as part of its broader responsibilities.
How does talent management improve retention?
A well-run talent management process supports clear career progression, employee engagement initiatives, and leadership development opportunities. When employees see opportunities to grow and feel valued in their roles, they are far more likely to stay with the company.
What are high-potential employees (HiPos)?
The term HiPos refers to employees who are identified as meeting the needs of a company in terms of potential leaders and as an asset to the company.
