Role of Talent Management in building Sustainable Competitive advantage to an organization

19/12/2021 0 By indiafreenotes

Organizations work towards the achievement of their mission and strategic objectives. This requires a thorough understanding of the resources required for achieving the same. Resources here imply financial and non-financial both and they are equally important and interdependent.

Technically these resources have been divided into two, non-contingent and differentiating capabilities. Whereas non contingent capabilities are basics that enable an organization to compete and exist in the marketplace, differentiating capabilities are those that differentiate an organization from that of the other and offer competitive advantage. Effective marketing management, for example can be one of non-contingent capabilities. Similarly, many HR processes aspire to develop non contingent capabilities but they often fail to align with the strategy and offer competitive advantage. Most of these processes end up developing people in similar areas and similar capacities as their rival firms but this fails to provide any competitive advantage.

For organizations to develop competitive advantage through HR processes it is very important to define strategic differentiating capabilities and then develop a process for identifying and developing the same. This empowers the HR people to create an impact on the organizational strategy and also provides a link between talent management and strategy.

For HR to prove that talent management can be of strategic importance to organizations, the critical relationship between the two must be proven. Talent management specially needs to be projected as a differentiating strategic capability that can offer real and substantial competitive advantage.

According to research conducted by various bodies it was found out that creation of differentiating strategic capabilities signifies the relationship between business strategy and human resources. Human resources, it was deduced are the primary sources of strategic advantage. The research study was primarily based on Resource based view (RBV) of an organization. This view has gained significant ground among HR practitioners as basis of models for formation and structure of resources.

Unlike other non-contingent capabilities that can be developed easily and cannot contribute to a large extent towards the development of a sustainable competitive advantage, differentiating strategic capability such as strategic HR through talent management can. However, for human resources to qualify as potential sources of competitive advantage they should fulfil the following criteria:

  • Strategic Value: The resource has to contribute substantially and add value in his/her area of expertise.
  • Rare: Unique in terms of skills, knowledge and abilities in order to qualify as rare.
  • Appropriable: The extent to which the resource is owned by the firm.
  • Inimitable: Such that the resource cannot be replaced even after the competitors having spotted the same.
  • Cannot be Substituted: This means that the resource cannot be substituted by the rival firms and that there is no match for the talent.

There are not many things in the business environment that can fulfill all the above criteria and offer unique competitive advantage except human resources and that is under the jurisdiction of talent management. There is also a need to understand the strategic intent of the organization before defining strategic capabilities.


  1. Adopt a growth mindset. A scalable and expanding customer and values-driven mindset is a living, breathing thing. It begins with the existing leadership of the organization and permeates throughout the organization, its functions, and its stakeholders. It is not only led but managed and habitually normal; it is culture. This mindset connects the organization to the people who matter.
  2. Have organizational character. Reference and align the corporate vision, values and mission. Know and understand the current/future state of the organization and industry. Integrate strategy and aspirations for any innovation, disruption and digital strategies. Be prepared and flexible as the progression of transformation takes place and begins to thrive.
  3. Have ethics. Good business practices create good business value.
  4. Embrace technology. Digital, automation and self-service technologies are creating change in talent management services.
  5. Rethink the HR lifecycle. Address the future of automation and technology, analytics, service models, governance, etc. to ensure it is affording the organization value now and in the future. The future of talent management strategies are flexible, people-oriented and reliable.
  6. Champion the strategy. Existing leadership teams should collaborate to prioritize, support and lead the success of the organization’s talent management strategy.
  7. Assess and redesign talent management programs to support all levels of leadership in the organization. Keep them people-centric through experiential learning to ensure they are ready to lead. These programs should support and measure cultural diversity, creativity and legacy, leadership and team excellence, brand equity, employee engagement and productivity, and revenue prosperity.
  8. Conduct assessments. Align talent to future value. Develop individual career frameworks and leadership plans for effective insight, growth and success.
  9. Develop your workforce. With scarcity in talent and the ever-growing desire for job security, it is critical organizations provide professional development programs to up-skill and reskill their workforce. Enabling the workforce to thrive ensures positive and lasting employee experience and engagement, resulting in positive productivity and profitability.
  10. Create a brain trust. Develop an internal and external data source that attracts social interaction from employees, stakeholders and suppliers. Utilize the data to analyze, validate and identify innovation, disruption and key business information to support leadership decisions and corporate strategy.
  11. Redefine metrics. Redefine traditional performance management to a coaching culture. Align metrics to mirror the organization’s mission, vision, strategic initiatives, transformational goals and milestones, all while streamlining incentives and rewards accordingly.