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The paper aims to clarify the relationship between problem-solving skills and socialization of first-year university students and propose talent management strategies for university management, course instructors and administrators. Thus, this paper identifies three student clusters among the first-year bachelor students. This paper aims to propose a talent management framework and makes recommendations for course instructors and administrators.

In this paper, a Simulated Work Experience is applied to collect data on problem-solving skills and demographics of first-year business students. Based on the anonymous competency and demographic data of 546 students, 3 clusters were identified with a hierarchical K-means clustering method and linked with talent management and curriculum design strategies.

The paper provides empirical insights about how the demographic background of the first-year students affects the students' problem-solving skills. This paper identifies three clusters – laggers, unpolished diamonds and drivers – and proposes a talent management framework to support the students' personal and professional development. The proposed talent management framework is based on the direction of upskilling and type of talent management incentives and outlines four distinct categories: extracurricular reward, tutoring and catching up, perform-or-punish and up-or-out systems. This paper makes suggestions to course administrators and instructors how to incorporate talent management and competency mapping aspects into the curriculum and syllabus design activities.

The research is limited to problem-solving skills and focused only on first-year business students.

The paper includes practical implications for business school management, course administrators and instructors about competency mapping, talent management strategies, curriculum and syllabus design.

The research is based on the competency mapping of 546 first-year students at Budapest Business School. The data were collected via a Simulated Work Experience, where the students were participating in a virtual business project.