Ensuring sufficient qualified and experienced managers is difficult for public sector healthcare organisations in Australia, with a limited labour market and competition with the private sector for talented staff. Although both competency-based management and talent management have received empirical support in association with individual and organisational performance, there have been few studies exploring these concepts in the public healthcare sector. This study addresses this gap by exploring the perceived differences in demonstration of core competencies between average and higher-performing managers in public sector healthcare organisations.Mixed methods were used to define and measure a set of competencies for health service managers. In addition, supervisors of managers were asked to identify the differences in competence between the average and high-performing managers reporting to them.Supervisors could clearly distinguish between average and higher-performing managers and identified related competencies.The consistent pattern of competence among community health and hospital public sector managers demonstrated by this study could be used to develop a strategic approach to talent management for the public healthcare sector in Australia.Although there are validated competency frameworks for health service managers, they are rarely used in practice in Australia.This paper illustrates the perceived differences in competencies between top and average health services managers using a validated framework.The public health sector could work together to provide a more effective and efficient approach to talent management for public hospitals and community health services.