Due to the current shift on the labour market towards skilled employees and the fact that there is a lack of them, skilled employees have the option to choose from a variety of job offers. McKinsey developed the term “War for Talents” in order to reflect the current situation. The concept of talent management is consequently becoming more popular, SMEs in Europe are also affected by this as they are the largest group of employers. In Austria, SMEs make up 99.6% of all existing companies. In the literature, talent management in SMEs in the European context has not been properly dealt with until now, therefore this master thesis aims to investigate, how SMEs could design their talent management and which talent management measures are appropriate for them. Firstly, the term talent and talent management are examined in order to create a definition incorporating different views and followed by a detailed explanation of the talent management process. Furthermore, the status quo of talent management in SMEs is discussed. The link to the empirical part of the thesis is an interview with an expert, who explains the concept of talent management as well as the situation in SMEs from a professional point of view. The case study in a SME, where talent management exists, forms the main part of the thesis. The management as well as the employees were interviewed and, consequently, the talent management of the company was examined from both sides in order to create best practice models for similar situations. The relevance of a companys internal definition of talent management, as well as the importance of a transparent and traceable system which is created after defined criteria, are highlighted. It became clear that a distinct documentation of the measures, the already obtained knowledge and skills as well as the costs of each measure have to be documented in detail. In terms of the target group it is recommended to choose a broad approach to address anybody who has potential. Several explicit measures that are suitable for SMEs are explained. The case study shows also that a mixture of stimulation, the success of each person, the social experience within the company, transparent career paths and a competitive payment is a good strategy.