Talent management

Talent management refers to the anticipation of required human capital for an organization and the planning to meet those needs.[1] The field increased in popularity after McKinsey's 1997 research[2] and the 2001 book on The War for Talent.[3] Talent management in this context does not refer to the management of entertainers.

Talent management is the science of using strategic human resource planning to improve business value and to make it possible for companies and organizations to reach their goals. Everything done to recruit, retain, develop, reward and make people perform forms a part of talent management as well as strategic workforce planning. A talent-management strategy should link to business strategy to function more appropriately.


The term was coined by McKinsey & Company following a 1997 study.[2] The following year in 1998 "talent management" was entered in a paper. Written by Elizabeth G. Chambers, Mark Foulon, Helen Handfiled-Jones, Steven M. Hankin, and Eduard G. Micheals III. However, the connection between human resource development and organizational effectiveness has been established since the 1970s.[4]

The profession that supports talent management became increasingly formalized in the early 2000s. While some authors defined the field as including nearly everything associated with human resources, the NTMN defined the boundaries of the field through surveys of those in corporate talent management departments in 2009–2011. Those surveys indicated that activities within talent management included succession planning, assessment, development and high potential management. Activities such as performance management and talent acquisition (recruiting) were less frequently included in the remit of corporate talent management practitioners. Compensation was not a function associated with talent management. Lastly, the strategy of using talent management help organizations with workforce during WWII.


A talent management system is suggested to be used in business strategy and implemented in daily processes throughout the company as a whole. It cannot be left solely to the human resources department to attract and retain employees, but rather be practiced in all levels of an organization. The business strategy must include responsibilities for line managers to develop the skills of their immediate subordinates. Divisions within the company should be openly sharing information with other departments in order for employees to gain knowledge of the overall organizational objectives. The issue with many companies and the military today is that their organizations put tremendous effort into attracting employees to their company, but spend little time into retaining and developing talent.

The talent management strategy may be supported by technology such as HRIS (HR Information Systems) or HRMS (HR Management Systems).

Talent management

Talent management is an organization's ability to recruit, retain, and produce the most talented employees available in the job market. Talent consistently uncovers benefits in these critical economic areas: revenue, customer satisfaction, quality, productivity, cost, cycle time, and market capitalization. Having good talent management is when one has good skills, knowledge, cognitive abilities, and the potential to do well. Talent management is also an important and necessary skill for people in the workforce to acquire. Finding good and talented people is not a hard thing to do, but making sure that they want to stay working for the same business is the challenge. If someone has so much talent and they are good at what they do, businesses will want them to stay and work there forever. However, most of those people are either satisfied with the job they have, or they go out and look for better opportunities.


From a talent management standpoint, employee evaluations concern two major areas of measurement: performance and potential. Current employee performance within a specific job has always been a standard evaluation measurement tool of the profitability of an employee. However, talent management also seeks to focus on an employee’s potential, meaning an employee’s future performance, if given the proper development of skills and increased responsibility. There is significant evidence that investing in your employees will result in a strong perspective ROI from a talent evaluation perspective.



This term "talent management" is usually associated with competency-based management. Talent management decisions are often driven by a set of organizational core competencies as well as position-specific competencies. The competency set may include knowledge, skills, experience, and personal traits (demonstrated through defined behaviors). Older competency models might also contain attributes that rarely predict success (e.g. education, tenure, and diversity factors that are illegal to consider in relation to job performance in many countries and unethical within organizations). New techniques involve creating a competency architecture for the organization that includes a competency dictionary to hold the competencies in order to build job descriptions. Companies like Southwest Airlines, Microsoft and General Electric all use talent management.

Talent marketplace

A talent marketplace is an employee training and development strategy that is set in place within an organization. It is found to be most beneficial for companies where the most productive employees can pick and choose the projects and assignments that are ideal for the specific employee. An ideal setting is where productivity is employee-centric and tasks are described as “judgement-based work,” for example, in a law firm. The point of activating a talent marketplace within a department is to harness and link individuals’ particular skills (project management or extensive knowledge in a particular field) with the task at hand. Examples of companies that implement the talent marketplace strategy are American Express and IBM.[6]

Current applications

In adverse economic conditions, many companies feel the need to cut expenses. This should be the ideal environment to execute a talent management system as a means of optimizing the performance of each employee and the organization. Selection offers are large return on investments. Job analysis and assessment validation help enhance the predictive power of selection tools. Data points such as cost-per-placement or average time to recruit are critical in predictive analytics for talent management. These evaluation methods use historical data to provide insight. However, within many companies the concept of human capital management has just begun to develop. With more companies in the process of deepening their global footprints,[7] more questions have been asked about new strategies and products, but very few on the kind of leadership structure [8][9] that will bring them success in their globalization process.[10][11] “In fact, only 5 percent of organizations say they have a clear talent management strategy and operational programs in place today.”[12]

See also


  1. Carpenter, Mason, Talya Bauer, and Berrin Erdogan. Management and Organizational Behavior. 1. 1. Flatworld Knowledge, 409. Print.
  2. The War for Talent, McKinsey Quarterly
  3. Michaels, Ed; Handfield-Jones, Helen; Axelrod, Beth (2001). The War for Talent. Harvard Business Press. ISBN 9781578514595.
  4. Schein, Edgar. Increasing Organizational Effectiveness through Better Human Resources Planning and Development. Sloan Management Review, 1977, 19:1 p. 1.
  5. https://www.paddlehr.com/blog/2019/10/09/employee-engagement-survey
  6. Making a Market in Talent Archived 2011-07-27 at the Wayback Machine
  7. Arp, Frithjof (2014). "Emerging giants, aspiring multinationals and foreign executives: Leapfrogging, capability building, and competing with developed country multinationals". Human Resource Management. 53 (6): 851–876. doi:10.1002/hrm.21610.
  8. Arp, Frithjof (2013). "Typologies: What types of foreign executives are appointed by local organisations and what types of organisations appoint them?". German Journal of Human Resource Management. 27 (3): 167–194. doi:10.1177/239700221302700302.
  9. Arp, Frithjof; Hutchings, Kate; Smith, Wendy A. (2013). "Foreign executives in local organisations: An exploration of differences to other types of expatriates". Journal of Global Mobility. 1 (3): 312–335. doi:10.1108/JGM-01-2013-0006.
  10. "What does globalisation mean for your leadership culture? - YSC". Archived from the original on 2016-08-18. Retrieved 2 December 2016.
  11. Arp, Frithjof (2012). "For success in a cross-cultural environment, choose foreign executives wisely". Global Business and Organizational Excellence. 32 (1): 40–50. doi:10.1002/joe.21462.
  12. "Talent Management:State of the Industry". Retrieved 2 December 2016.
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