Talent Management Meaning, History, Scope, Need

19/12/2021 2 By indiafreenotes

Talent Management (TM) refers to the anticipation of required human capital for an organization and the planning to meet those needs. The field has been growing in significance and gaining interest among practitioners as well as in the scholarly debate over the past 10 years, particularly after McKinsey’s 1997 research and the 2001 book on The War for Talent. 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 and to local context to function more appropriately.


Attract, develop, motivate and retain: This is not a comprehensive list. Talent management touches on all key HR areas, from hiring to employee onboarding and from performance management to retention.

  • The full scope of HR processes:

Talent management is about a set of HR processes that integrate with each other. This means that talent management activities are larger than the sum of the individual parts. This also means that a talent management strategy is required to capitalize on its full potential. More about this later.

  • High-performing employees:

The purpose of talent management is to increase performance. It aims to motivate, engage, and retain employees to make them perform better. This is why the importance of talent management is so significant. When it’s done right, companies can build a sustainable competitive advantage and outperform their competition through an integrated system of talent management practices that are hard to copy and/or imitate.


  • Employer reputation:

Reputation is related to employee branding. However, reputation is more affected by external media the company has less control over. An example of reputation gone wrong is the banking sector in recent years, especially after the 2008 financial crisis.

  • Employer branding:

Having a strong brand attracts even the best candidates.

  • Candidate experience:

The experience of the candidate influences the employer brand.

  • Referrals:

Talent knows talent. Referral programs are effective as they help to pick up candidates that onboard quicker and perform better. We listed 7 employee referral programs examples you can take a look at to get inspired.

  • Onboarding:

Getting people up to speed as quickly as possible helps to make them more productive and increases employee retention.

  • Selection:

Spotting and selecting the best is a critical part of talent management.

  • Inboarding:

Yes, you read it right. When people are promoted internally, they also need support to achieve maximum productivity. This is called inboarding.

  • Engagement:

Engaged employees are motivated, perform well, and are more likely to stay.

  • Retention:

Retention strategies help to keep the best people on board. An example is succession planning.

  • Succession planning:

You want to be able to fill crucial top positions whenever they become vacant. Having a talent pipeline that ensures succession planning is a key element in this.

  • Learning and Development:

This is not only a common talent management practice, it’s also a Human Resource best practice. Educating employees helps increase performance and retention. After all, once you’ve recruited the best people, you want to make sure they remain the frontrunners in the field, right?

  • Performance management:

An essential part of managing talent is tracking and improving their performance.

  • HR analytics:

As we’ve said before, by leveraging data you can ensure that you’re hitting the right KPIs that have an impact on business outcomes.


The precursor to “Talent management” seen extensively in firms during the latter part of the 20th century was centered around internal talent development. An overemphasis was placed on the training and evaluation of managerial positions creating an excess supply of middle-management talent. Poor business forecasting of economic downturn in the 1970s combined with no-layoff policies for white-collar workers resulted in corporate bloat. Recession throughout the 1980s saw large increases in unemployment as firms restructured, placing less importance on internal development. As a result the hiring of outside talent largely replaced the internal development schemes seen in businesses earlier in the century and by the late 1990s had reached its limit. Firms found they were both attracting and losing experienced employees at the same rate and needed to explore new ways of retaining and nurturing incumbent employees.

The term was coined by McKinsey & Company following a 1997 study. 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.

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.


India is one of the rapidly emerging markets in South East Asia. Recently companies in India have started to focus on their talent management programs. There are two classes of labour in India; skilled and unskilled, and it pays a lot to be skilled in India. Minimum wage of an unskilled labour lies somewhere in between US$1,400 to $1,500 per annum, which is very low by international standards. But if you are equipped with tertiary skills you can easily make a good living. This difference in the wages can be comprehended with the help of a simple economics’ concept of supply in demand. High skilled workers are a scarce resource everywhere and therefore they are valued more, which explains the higher wages.

Even with the higher wages, a job-hopping attitude is clearly visible in the Indian workforce, especially the millennial. A survey found out that 54% of the Indians consider leaving their current job because of the lack of growth opportunities. This percentage rises even more when the sample is taken from age-bracket of 16–24-year-olds. The talented and ambitious youth of the country, greatly values the skill development opportunities provided by their employers.

  • Talent Acquisition:

All organizations today want the sun and the moon and the stars but often land up only reaching the tree tops. Business firms are looking for employees who have excellent functional skills, social skills and strategic skills but, it is almost impossible to find one candidate who has best of all skills. Hence organizations make do with what they get. Identifying and acquiring talented workforce is one of the most important stages of talent management as they say, “Well begun is half well completed.”

  • Talent Development:

Once you have hired the right set of employees into the organization, it is imperative to develop them in the areas that are important to the organization. Some competencies are stable whereas some are dynamic competencies. The stable competencies include the enduring characteristics of individuals which remain more or less the same over time and the dynamic competencies include knowledge and skills that are continuously changing.

Talent development primarily aims to develop the dynamic competencies of individuals through interventions such as formal training programmes, coaching and mentoring by senior leaders of the organization, job rotations, on the job learning, special assignments, action learning, committee work, stretch assignments, developmental assignments, job shadowing, etc.

  • Talent Engagement:

Hiring and developing talent does not ensure that we have engaged employees. Having employees who go out of their way to help others, having employees who do not restrict their work tasks to their job descriptions and having employees who are more willing to work on holidays or extra time is a blessing in today’s competitive environment. These things will happen only and only if the employees are truly engaged with the organization.

Having engaged employees is truly an asset to the company and a success story towards talent management. With organizational citizenship, behaviour is often used as a parameter to gauge employee engagement, what is often overlooked as a factor has increased engagement in mentoring the employees. Mentoring is when senior and more experienced individuals in the organization take keen interest in the personal and professional development of junior and less experienced individuals in the same organization.

  • Talent Retention:

Hiring the right talent, investing in further developing them and engaging them is a futile effort if it does not lead to talent retention. All the hard work and efforts of the HR team go in vain when employees want to exit early from the organization. Not all exits are bad but when employees want a separation without having contributed enough, is where the problem lies. Some companies especially in the Information

Technology sector are trying to remedy this situation by asking employees to sign a bond. A bond that is a contract between the employer and the employee that makes them agree to terms and condi­tions stating that they will not leave the organization for a minimum period of xyz years as decided by the company. In case they violate this clause of the Memorandum of Understanding, there is a huge monetary fine associated with the same.


No process or organization is any good without the right talent managing it. The right people can create the right design, the right processes and adopt the right technology to propel any organization in the desired direction. Talent management is all about having the right person at the right place at the right time for the optimum time and at the right price. Organizations have now realized that people could be that crucial differentiating edge for them in the increasingly competitive marketplace.

There are various reasons for which a company would need talent management as summarized below:

  1. To align the workforce with the business needs:

Talent management is about identifying the right talent for the right role. It implies fitment of right set of skills to the right set of job requirements. This alignment of skills to job tasks ensures synergy between the staffing process and the business demands.

  1. To engage the workforce for establishing and sustaining highest level of productivity:

An engaged workforce leads to a productive workforce. Establishing and sustaining highest level of productivity implies a lot of things including creating and maintaining a talent culture. This culture creates an enabling environment for employees to learn, grow and excel at their work. We propose an EVOSKILLS model to create and sustain a talent culture in an organization that will enable highest level of productivity.

  1. Effective talent management helps in increasing the employee satisfaction:

Employee satisfaction can be understood as cognitive, emotive and social comfort that is achieved by working in an organization which has fair policies that respect employee sentiment. Developing fair transparent and just employee related policies and ensuring their smooth execution is very much an integral part of talent management.

All the great places to work that have achieved the Great Place to Work title by employee votes are places that guarantee employee satisfaction through effective talent management processes.

  1. To effectively develop leaders in the organization who can use their expertise to help in the growth of the company:

Talent management includes talent development. Developing talent does not only mean developing technical skills and functional skills of employees, it also includes developing behavioural skills of employees including those of the leaders. Many organizations have tie-ups with leading B-schools of the world to help the organizational leaders develop the right set of competencies through different educational programmes. In turn, these leaders are expected to serve the company for a minimum specified period of time, especially if the educational programme is sponsored by the organization, partly or fully.

  1. To effectively balance diversity in workforce enabling highest possible employee engagement:

Workforce diversity is a challenging theme. Organizations are today spending on diversity training among other things on a high priority basis. If not dealt with elegance and dignity, it can backfire big time. People want to know how much you can before they care how much you know. Employees belonging to different age groups, gender, race, community, linguistic groups and religions, all expect and rightly so to be treated fairly to say the least. Beyond the fairness paradigm is the legitimacy and access paradigm that claims to use diverse backgrounds of employees for business gain.