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What is talent development?

Talent development is the process by which organizations ensure their workforce possesses the right skill sets and abilities to execute their jobs today and be prepared for changes to those jobs in the future.

Organizations need to invest in talent development opportunities to make sure that their employees are learning what they need to succeed. Talent development, also known as employee development, includes learning experiences in hard skills, such as coding languages, marketing automation or understanding regulatory compliance. Talent development also covers soft skills such as leadership, working in a team or understanding how to spot a colleague who is struggling with work or mental health.

Organizations not only invest in strategic programs to support their employees but also look for learning opportunities wherever they occur. Organizations that embrace a holistic talent development strategy may offer incentives for employees to learn additional skills on their own time.

Common examples of these incentives are class stipends, paying for some or all of a continuing education or Masters’ program. Another incentive includes bringing in guest speakers to discuss non-core topics, for example, how athletes make decisions or how an entrepreneur grew a different type of business.

A comprehensive talent development strategy involves human resources teams coordinating with executive leadership to establish required core competencies for existing and incoming employees. It is ideal for organizations to establish this process as early in their history as possible and refine it as jobs and skills change. It should be a critical component of existing employee development cycles and part of the onboarding process for future hires.

Focusing on talent development enables organizations to build an agile, adaptive workforce that is prepared for how technology, virtual and hybrid work, and other future trends will impact their careers.


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Talent development versus talent management

Talent development and talent management are both important parts of overall employee relations. While some organizations may treat talent development as a sub-sect of talent management, others use the two topics to discuss different approaches.

Talent development identifies ways organizations can help employees learn new skills relevant to their career paths. Talent management focuses on a broader array of topics1(link resides outside ibm.com) related to human resources such as recruitment, onboarding, retention and salary and benefits.

Key components of a talent development program

While every organization’s talent development plan is different, some key components are shared by most. Most importantly, the organization will need a comprehensive training program, which engages employees in both practical and theoretical learning about the skills they need to either enhance or learn.

Leadership development

Organizations must always plan for leadership changes, whether executives and middle managers change jobs, move companies or retire. Succession planning is a key component of leadership development. In succession planning, organizations identify the top talent for whom they should create a pathway to future leadership. After they’ve identified these future leaders, they must train them to have the right leadership skills to manage and motivate people.

Employee engagement

Organizations create initiatives to empower and solicit feedback from employees. Organizations have learned over time that a key part of the employee experience is being able to share your feedback with senior leadership. Sharing feedback allows employees to express what parts of their job they like and in which areas they need help.


Organizations may find that their employees were trained to do tasks or jobs in a certain way. These employees may need to learn a new way of doing things while remaining in the same role. For instance, marketers who are used to building programs from scratch could benefit from learning and incorporating generative AI in future programs.

Customer service representatives had to learn how to use social media to deal with requests and complaints that began proliferating across those channels. Organizations should invest in reskilling employees to ensure they have the updated skills to address changes in the marketplace and advance their career paths.


This approach helps organizations address employees’ skills gaps in existing and incoming employees. It focuses on one particular job or task that will either be replaced by technology or will no longer be valued by that organization in the future.

For example, cashiers and other retail employees are at risk of displacement by self-checkout and other retail technology advancements. Organizations have the opportunity to upskill their employees to focus more on higher-level problem-solving and customer engagement. This training can allow them to keep their jobs even as more retailers opt for fewer cashiers and more self-checkout.

In corporate America, data entry professionals feel at risk of having their jobs taken by AI and machine learning. Organizations could upskill them to focus more on the insights that stem from the collected data and learn how to derive strategic next steps based on those actionable insights.


Identifying senior talent to guide team members or employees from different departments is a key component of any strategic talent development program. One way to promote efficient mentorship, especially from the leader’s perspective, is job shadowing. In this method, mentees follow mentors around as they do their jobs, allowing the senior leadership to work while teaching.

Talent development tools and approaches

Organizations are increasingly using technology and asynchronous learning methods to manage their employees’ on-the-job learning. Here are the various channels organizations can use to educate their employees through talent development programs.

In-person events

Often the best way to communicate the importance of learning a specific skill is to request employees take time away from their desks to attend a seminar or conference. Organizations should consider inviting guest lecturers to demonstrate their knowledge in person so attendees can easily ask questions and avoid distractions from computers and mobile devices.


Virtual recordings, which employees can either view live or on-demand, are an efficient way of one-to-many communications. Employees can watch and rewatch events when convenient, and skip to certain parts to focus on key takeaways.

Internal newsletters

Sending employees informative emails that they can read immediately or save for the weekend or other areas of free time is a great way to encourage continual learning. Organizations can use newsletters to highlight stats about their talent development program, for example, skills learned and classes completed. They can send reaffirming messages from the CEO or head of talent development, and offer in-depth articles about key skills.

Online courses

A core component of any learning development program is ensuring the organization can gauge how much knowledge the employees are retaining. Online courses can both serve as educational resources and diagnostic tools to determine whether each employee understands the material and is on their way to developing the skill.

Benefits of talent development

Organizations that deploy talent development programs will reap several key benefits.

  • Employee retention: Organizations that prioritize their employees’ development and show an interest in growing their employees’ skills are more likely to keep employees at their organization. A study found that a majority of employees who left their organizations could have been retained with the right incentives. Many such employees2(link resides outside ibm.com) cited a lack of development opportunities as a cause of leaving. A recent study found that companies that prioritized employee development in 2022 experienced increased employee retention rates of 58% and productivity rates of 28%3(link resides outside ibm.com), a win-win. When there are many open positions in the economy, some organizations have to offer expensive perks4(link resides outside ibm.com) to recruit new employees. This approach leads some HR organizations to believe that it can cost as much as four times5(link resides outside ibm.com) an employee’s annual strategy to recruit a replacement.

  • More productive employees: Less than 50% of employees6(link resides outside ibm.com) are currently happy with the number of opportunities for training afforded at their jobs. Employees want to learn new skills and improve their standing on the job. Talent development creates motivation for employees to stay engaged, demonstrating that the resources spent on their professional development went to good use. Another study found that companies with highly engaged employees are 23% more profitable and 18% more productive7(link resides outside ibm.com).

  • A company culture that embraces continuous learning: Talent development programs don’t necessarily begin and end with the official program created by the organization. They also inspire employees to either spend more time practicing their new skills or use their newfound passion for learning to pursue external personal goals in other areas of their lives. They also encourage employees to share their experiences with their colleagues, so the entire organization can learn. For example, if the organization or one of its competitors makes an error that affects its bottom line or reputation, the organization can bring together key leaders to debrief and discuss how the situation could have been handled better. This practice provides the organization with a potential future approach and also develops better critical thinking and leadership in the attending employees.

  • An expansion of the recruitment pool: A talent-development-led culture is more likely to look beyond the most popular universities and largest companies to engage in skill-based hiring. This approach values employees' existing skills and drive to learn more than their backgrounds or pedigree. The World Economic Forum predicts fifty percent of employees(link resides outside ibm.com) will need reskilling by 2025.

  • More productive employee performance reviews: Organizations that invest in talent development can see how adept their employees are at learning new skills, while also gauging their interest in growing throughout the organization. It can help identify high-performance and highly motivated individuals and put them on the appropriate path to promotion and eventual leadership opportunities.

  • Discovering hidden talents: By encouraging employees to learn new skills, organizations may identify employees who would excel in different and more challenging jobs. The employees would get a chance to work in a new field, reinvigorating their interest in the organization, while the employer would avoid a costly external recruiting process.
Challenges of talent development

Talent development is a valuable pursuit for organizations of all sizes, but it does introduce some challenges that need to be resolved.

  • Executive buy-in: Not every executive immediately understands the value of talent development. An executive may claim that an organization merely needs to hire employees with exactly the right skills for the job and let go of employees who no longer have the required skills. But that is costly, creates concern among existing employees and can eliminate continuity in the quality of work the organization produces. The right talent development strategy is worth the expense. HR professionals who need to convince their executives must speak in the executive’s language and discuss how the program will contribute to an organization’s ongoing success.

  • Increased budgets: It takes financial and employee resources to create comprehensive talent development programs, especially for large organizations with tens or hundreds of thousands of employees. That’s why it is critical to create a comprehensive strategy that maps out all requirements. Organizations must understand how much it costs, how to structure the learning process and how it affects the employees’ day jobs and working hours. Most importantly, the organization must determine which soft and hard metrics to track in order to demonstrate a positive return on investment. Soft metrics focus on the actual success of the program, such as training completion rates and skill proficiency. Hard metrics include organizational goals such as employee retention rates and new revenue or reduced costs credited to increased employee knowledge and skills.

  • Keeping agile: Talent development requires constant vigilance to ensure the program created is still valuable months and years later. Organizations looking to harness talent development must routinely reassess the curriculum and promote continuous learning so employees stay fully updated on recent trends. It also requires the organization to monitor which new skills will require training in the future.

  • Prioritization: Many organizations have too many employees to begin developing all of their talent at once. More often than not, they have to prioritize which learners go through their programs first, which can in turn create tension between employees. Organizations can solve this issue by communicating how they are approaching talent development initiatives, who they are including and the reasons behind these choices. This helps ensure that there is as fair and equal access to training as possible.
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All links reside outside ibm.com

1 What is talent management, McKinsey, 22, May 2023

2 Taking a skills-based approach to building the future workforce, McKinsey, 15, November 2022

3 2023 HR trends: a look ahead, HR Digest, 9, January 2023

4 Tripled salaries, big bonuses, on-the-spot offers: Recruiters are going to extreme lengths to hire, CNBC, 25, April 2022

The real costs of recruitment, Society for Human Resources Management, 11, April 2022

How Americans view their jobs, Pew Research Center, 30, March 2023

7 The benefits of employee engagement, Gallup, 7, January 2023 

These are the top 10 job skills of tomorrow–and how long it takes to learn them, World Economic Forum, 21, October 2020