HR-Glossar
Talent Management (talent and succession management)
What talent management covers, how it becomes workable in a mid-sized business and where the classic approach regularly fails.
1. What is Talent Management (talent and succession management)?
Talent management covers the measures by which a business acquires, develops, deploys and retains the capabilities it will need. It connects recruiting, people development, succession planning and retention into one whole.
The term carries an ambiguity that leads to argument: who is a talent?
- On the narrow understanding, a selected group with high potential – the classic talent pools and development programmes. - On the broad understanding, all employees, because every role demands capabilities that can be developed.
The narrow understanding is easier to organise and regularly produces two problems: it demotivates those not selected, and it frequently misses in the selection, because potential is poorly measurable and assessments depend on visibility and closeness to the manager.
Note that selection decisions for programmes and pools are personnel decisions and therefore subject to the prohibition on discrimination in Section 7 AGG. In a mid-sized business the broad understanding is usually also the more workable one: where ten key roles exist, succession planning for those ten is more effective than a talent pool on a group template.
2. Origin and development
The term spread in the late 1990s with the image of a "war for talent". It arose in the context of large businesses with formal career paths and appraisal systems.
Criticism has grown since – not of the aim but of the execution: nine-box grids, potential assessments and talent pools have proved less accurate than hoped and have produced more effort than effect in many businesses. What remained is the core: knowing which capabilities will be needed in three years, and making sure they are there.
3. Core principles and how it works
Think from the need
Which capabilities will the business need in three years? Everything else follows from that.
Key roles first
Not all posts are equally critical. Succession planning begins with those whose absence hurts.
Develop rather than select
Potential is poorly measurable; capabilities can be built. The effort is better spent on development than on selection.
Leadership is the bottleneck
Development happens in the work, not in a seminar. Without managers who allocate tasks and give feedback, every programme runs empty.
Transparency about the criteria
Opaque selection does more damage than the programme creates benefit.
4. Who is Talent Management (talent and succession management) relevant for?
- Mid-sized businesses – succession planning is often existential for them.
- People development – they design the instruments and processes.
- Managers – they are the decisive level for development.
- Employees who want to develop – for them it is about transparency and access.
- Management – succession in key roles is a business risk.
5. How it differs from related terms
- Talent management and people development – development is one part; management connects it with acquisition, deployment and retention. - Talent management and succession planning – succession planning is the part with the highest risk and should come first. - Talent management and performance management – performance appraisal says something about the past, a potential assessment is meant to say something about the future. The two are regularly conflated. - Talent management and recruiting – recruiting brings people in; management makes sure something comes of it.
6. Variants and adaptations
- Succession planning for key roles – the most workable form in a mid-sized business. - A talent pool – a selected group with particular support; effective only with transparent criteria. - A competency model – a systematic description of the capabilities each role needs. - Development conversations – regular conversations about prospects, kept apart from the performance conversation. - Internal appointments first – the simplest and most effective building block.
7. Advantages and challenges
Advantages
- Key roles can be filled before they fall vacant
- Internal prospects do more for retention than any added benefit
- Capabilities arise in house where the market supplies nothing
- Knowledge stays when someone moves within the business
- Development conversations make expectations clear on both sides
Challenges
- Elaborate systems often produce more administration than effect
- Potential assessments are prone to visibility and proximity effects
- Narrow talent pools demotivate those not selected
- Development with no subsequent opportunity evaporates
- Without quality of leadership, every programme stays on paper
8. Best practices for implementation
Start with the key roles
Ten roles whose absence would hurt, and two conceivable successors for each. That is worth more than a competency model for everyone.
Separate performance from potential
Someone who is good today is not automatically suited for tomorrow – and the reverse.
Put development into the work
Projects, standing in for others, rotation. That works harder than seminars and costs less.
Disclose the criteria
Who is supported, by what standards, belongs said. Opacity produces rumour.
Prefer internal applications
That is the single most effective measure and costs nothing but consistency.
9. Tips for employers and employees
For employers
- **Succession for key roles first** – that is where the real risk lies
- **No group model in a mid-sized business** – the effort does not pay for itself
- **Hold managers to it** – development happens in the work
- **Select transparently** – an opaque talent pool does more harm than good
For employees
- **Say what you want to develop** – it is rarely guessed
- **Ask for concrete steps** – which task, by when, with what support
- **Follow internal vacancies** – moving within the business is often the fastest route
10. Conclusion
Talent management is at its core a simple question: which capabilities will the business need in three years, and will they be there? Answering it in a mid-sized business calls for no group model but for succession planning covering the roles whose absence would hurt, and development that happens in the work rather than in a seminar. That applies with particular force to a German subsidiary: where ten key roles exist, planning for those ten works, and a talent pool built on a group template does not.
Where the classic approach regularly fails is the selection: potential is poorly measurable, and opaque talent pools demotivate more people than they support. One legal point belongs with that: selection for pools and programmes is a personnel decision and subject to Section 7 AGG – a nine-box grid is not a neutral zone. An employer that develops rather than selects, and fills internally before externally, has done the most effective part.
Sources
- Section 7 AGG – Prohibition of discrimination (official English version) (opens in a new tab)
- People development and succession planning (opens in a new tab)
- HR management in practice (opens in a new tab)
Related terms
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