Understanding talent management vs talent development: Strategies for organizational success

When it comes to the ongoing war for talent, executives who understand the importance of talent management vs talent development will be better positioned to succeed and grow.

Every organization is searching for talented employees, but they’re increasingly difficult to find. Organizations have been competing heavily for talent, with the Society for Human Resource Management reporting in early 2025 that there’s less than one unemployed person for every job opening.

“All indications are it’s not going to get any better,” says Eileen Stephens, a Vistage speaker and executive advisor at Culture Index in Charlotte, North Carolina. “To beat the competition, we have to be different than the competition.”

Many organizations are working to improve their interactions with talent to be different. A 2025 Mercer report on global talent trends reports that improving people’s managerial skills is the No. 1 priority for organizations worldwide, held by 66%.

Organizations also want to enhance the employee experience to attract top talent (58%), design talent processes around skills (53%), and improve workforce planning to better buy, build or borrow talent strategies (48%).

Essentially, organizations see the talent shortage and their shortfalls in finding talent and are hungry to improve. First, defining talent management and development is essential to ensure both are done well.

Differentiating talent management vs talent development

Talent management can be defined as the overarching process of attracting, developing and retaining employees. When an organization focuses on talent management, it works to meet its immediate need for talent and manage that talent.

On the other hand, talent development means nurturing and developing employees’ skills for their long-term success and the organization’s growth. It can mean offering learning or training opportunities, fostering improvements to the company culture or finding a career path that helps talent feel satisfied at work.

Focusing on talent development means assisting employees to become better versions of themselves to nurture the growth of the business.

“The first thing you want to do is make sure that your supervisors and your managers know how to develop people versus just manage them,” says Dr. Bill Crawford, a psychologist, Vistage speaker, and owner of Crawford Performance Solutions in Houston. “A lot of managers get promoted to leadership positions because they’re good at managing processes, and they often try to manage people the way they manage processes. That doesn’t work — people do not like being managed. They like to be supported, acknowledged and given opportunities to grow.”

Stephens says talent development means working to develop talented employees rather than telling them what to do. Not developing top talent makes them more likely to leave, and they’re most likely to go to a direct competitor. Talent development allows organizations to create a strong culture that employees don’t want to leave.

When a company has both strong talent management and talent development, it creates a strong pipeline of talented employees inside and outside the company. The organization’s needs are being met, and so are the needs of employees, who, in turn, tell other potential employees about their experience.

Strength in both areas also helps retention. In research, Crawford has seen that people often leave companies over poor relationships with managers; focusing on talent management helps stop that problem before it starts.

Strength in management and development likely means a cultural shift that starts with the owners and executives. Often, Stephens says, this means first getting the company’s vision and values out of the top executive’s head and out to employees. She says people follow authentic leaders, but leaders’ directives must be clear.

Crawford adds that although CEOs once focused their company’s core values on the customer (more sales-based values), the best values for talent development prioritize employees. For example, values based on respect, passion and compassion will permeate the talent pool and seep into customer interactions.

“Executives, owners, and CEOs need to be aware that this is not just an HR function,” Stephens says. “Finding the right talent is a culture that starts at the top. Executives should think about questions like, ‘Who is our top talent?’, ‘How do we develop them?’ and ‘What do they want?’ If a company helps them get there, employees will become very loyal to the organization.”

Strategies for effective talent management

From the potential employee’s point of view, the talent management process starts with recruiting, often when they are looking for a job.

This means posting a job description at most organizations, replete with multiple job tasks and little else. However, Stephens says that a description should be an internal document meant to define the role they’re hiring for, while a job advertisement should be just that: an advertisement for a job meant to entice readers.

“In an advertisement, you’re talking about how this person is wired,” Stephens says. “If you’re looking for a sales rep, you want to describe that person. Something like: ‘Our ideal sales representative is somebody who hates to lose, enjoys a lot of freedom, and wants to be paid for their results.’ These words attract the type of person you are looking for.”

Writing a job ad in this way will draw the eyes of job seekers and attract passive talent. People will read the ad, think of a friend or relative, and say, “This sounds a lot like you,” Stephens says.

A job ad of this kind earns a candidate’s attention, which is essential when ads typically only get a short glance. Ads like this also find talent for who they are rather than what skill set they have. Stephens says employees can build skills over time, but traits come from their personality.

Interviews are also an essential part of talent management. For organizations that want to attract A-players, Stephens suggests having the interview be an equal exchange, not meant to win them over or watch them win the organization over, but a fair meeting between two equal sides.

For companies that have worked hard on culture, Crawford says that interviews can be an opportunity to show off the company and see if the recruit is a good fit within the culture. He says organizations should consider interviewing for specific criteria, laying out the company’s core values.

“You set out an expectation that this isn’t just about punching a clock and getting results; it’s about how you engage people,” Crawford says. “One of the criteria for the job might be working with people in a way where they love working with you.”

Once hired, organizations must also give frequent feedback to employees. Both Crawford and Stephens say that an annual or biannual review isn’t enough — it must be more often, as issues can arise as months pass. Managers want to catch the problems before they fester. Stephens says that each role should have a quantifiable definition of success, as every employee seeks to know that they’re doing a good job objectively.

Managers must consider how to give feedback to employees to guide their development. “Constructive criticism” is an oxymoron, Crawford says, as criticism tends to be destructive for all but the most confident people. Instead, Crawford suggests using constructive feedback.

To give constructive feedback, Crawford suggests first accessing an image of the person receiving feedback at their best. Managers should find out what’s important to the employee, striving to see the situation from their point of view before digging into problem-solving. Talking through the problem before searching for a solution can help managers slow down and get both parties on the same side.

“Executives are problem solvers and generally don’t have a lot of time; they often go to problem-solving too soon,” Crawford says. “If you go to problem-solving before someone has shifted from the problem brain to the solution brain, they’re not going to hear your solution, even if it’s a great solution.”

Stephens suggests laying out career tracks for employees to follow to ensure talent engagement. These tracks don’t have to lead toward management, she says, as some people want to chase a skill set rather than money or management. Career tracks can help an organization determine who within its ranks intends to be its future managers versus who wants to refine an unmatched technical skill set.

“Sometimes, people don’t know what they’re capable of,” Stephens says. “Sometimes, you have a diamond in the rough that’s simply sitting in the wrong seat. When you put them in the right seat, they become the rock star.”

Strategies for effective talent development

One of the most important things an organization can do to develop its talent is to allow them to explore their capabilities. This might mean training, coaching, mentoring, a clear career path, or simply allowing them to explore new areas of interest within the company.

Stephens serves as a consultant for Culture Index, which helps measure traits in people and provides insight into what they’re driving toward. Some people may be more driven toward working on the big picture, others quality work and others want to work on relationships. Often, people work in roles that don’t align with their drive.

“Whatever they’re driven towards, when you’re playing to that, they’re much happier,” Stephens says. “They become your top performers.”

While working with a client, Stephens saw in her psychometric research that one employee was mentally checking out of their role, likely looking for employment elsewhere. However, she and the organization noticed that this was a talented employee. They spoke with the employees, worked with them, and got them on a different path. Within 3 years, that employee went from being a purchasing agent to president of the company.

“We tend to see people as, ‘That’s what that person does, that’s who they are,’” Stephens says. “But what they do and who they are is not always the same thing.”

Crawford says continued education and personal growth are often hard to do solely within the company, which is why he loves the idea of Vistage’s Emerging Leader and Advancing Leader programs and the Key Executive Program. Crawford often speaks with these groups, where he finds appreciative, engaged employees who enjoy the training. But he says they also clearly enjoy that their company thinks highly enough of them to invest in them.

“Most business leaders don’t have time or the expertise for mentorship and coaching,” Crawford says. “Having a program through Vistage that exposes them to programs on emotional intelligence, communication, and personal accountability and communication over a two-year program is vital.”

Crawford says any training, mentorship or coaching option allows employees to work toward self-improvement. It also helps employees feel acknowledged, appreciated and valued. By developing employees, companies create a more skilled pool of talent within their ranks, which supports the company’s mission and vision while improving its culture.

Maintaining the culture

When an organization has well-maintained talent management and talent development, Crawford says that companies become places where employees look forward to coming to work. Employees who feel valued stay longer, produce better results and help the company’s revenue grow.

Many talent management and development improvements will get baked into the organization, but both Crawford and Stephens say that it’s essential to keep checking in.

“Make sure that the people you want to attract and keep are feeling what you want them to feel,” Crawford says. “Often, they are the best source for how this works. That’s why staying connected with them and getting their feedback regularly is a really good idea.”

Stephens says this must go beyond direct line managers and to the top of the company. Executives should meet with employees at a couple of levels to hear about what they want, what desires they have at work, and what it’s like to work at the company.

“Executives always have to be intent on asking the right questions,” Stephens says. “If you see a department with a lot of turnover, ask, ‘Why is that?’ Keep figuring out what’s going on, not just what you think. And always remember the goals of the culture.”

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