Talent Management: Definitions and Perspectives

What is talent management?

It is difficult to identify the precise meaning of “talent management” (TM) because of the confusion regarding definitions and terms and the many assumptions made by authors who write about TM. The terms “talent management”, “talent strategy”, “succession management”, and “human resource planning” are often used interchangeably.

There appears to be three distinct strains of thought regarding TM. The first defines talent management as a collection of typical human resource department practices, functions, activities or specialist areas such as recruiting, selection, development, and career and succession management. Managing talent, in this school of thought, requires doing what HR has always done but doing it faster (via the internet or outsourcing) or across the enterprise (rather than within a department or function). A characteristic view of this school of thought would state:

“A company’s traditional department-oriented staffing and recruiting process needs to be converted to an enterprise wide human talent attraction and retention effort”.

While many advocates of this perspective view TM quite broadly there is a tendency for practitioners who focus primarily on sub-disciplines or specialist areas within HR to narrow the definition of TM. For instance, recruiters have a tendency to discuss talent management in terms of sourcing the best candidates possible, training and development advocates encourage “growing talent” through the use of training/leader development programs, compensation experts tend to emphasize the use of compensation and performance management processes, while leadership-focused writers stress succession planning and leader development.

A second perspective on talent management focuses primarily on the concept of talent pools. TM, to this school, is a set of processes designed to ensure an adequate flow of employees into jobs throughout the organisation. These approaches are often quite close to what is typically known as succession planning/management or human resource planning but can also include typical HR practices and processes such as recruiting and selection.

Central to these approaches is projecting employee/staffing needs and managing the progression of employees through positions, quite often via the use of enterprise-wide software systems. In these cases the focus is generally more internal than external. A perspective typical of this approach would state “The first step in talent management is to gain a solid understanding of the internal workforce”. It may surprise many Human Resource practitioners that the problem of ensuring an adequate flow of talent into positions while optimizing organizational resources has long been a topic of interest to researchers in industrial engineering and industrial management. Commonly known as “manpower” or “workforce” planning, these approaches generally involve modelling organisational staffing/career flows by coding levels of hierarchy, rules for entering and exiting a position, and parameters such as costs, anticipated tenure, and supply and demand. The progression of people through positions due to growth, attrition, and other factors programmed into the model has been used to simulate a variety of organisations and staffing planning problems. Enterprise talent management systems that catalogue workforce skills and the demand and supply of employees have the advantage of considering more jobs simultaneously than most manpower models, but perform essentially the same task.

A third perspective on TM focuses on talent generically; that is, without regard for organisational boundaries or specific positions. Within this perspective two general views on talent emerge. The first regards talent (which typically means high performing and high potential talent) as an unqualified good and a resource to be managed primarily according to performance levels. That is, highly competent performers are to be sought, hired, and differentially rewarded regardless of their specific role or, in some cases, the organisation’s specific needs. Thus, in contrast with the second perspective outlined above, organisations are encouraged to manage performance pools of talent generally rather than succession pools for specific jobs. Advocates of this approach classify employees by performance level (e.g., “A”, “B”, and “C” levels to denote top, competent, and bottom performers, respectively) and either encourage rigorously terminating “C” players or “top grading” the organisation via exclusively hiring “A” players. For example, top grading is defined as “packing entire companies with A players – high performers, from senior management to minimum wage employees – those in the top 10% of talent for their pay”.

The second perspective of generic talent regards it as an undifferentiated good and emerges from the both the humanistic and demographic perspectives. Talent is critical because it is the role of a strong HR function to manage everyone to high performance or because demographic and business trends make talent in general more valuable

So, how does one define strategic talent management in a way that encompasses all of these schools of thought?

For me, Talent management can be defined as activities and processes that involve the systematic identification of key positions which differentially contribute to the organisation’s sustainable competitive advantage, the development of a talent pool of high potential and high performing incumbents to fill these roles, and the development of a differentiated human resource architecture to facilitate filling these positions with competent incumbents and to ensure their continued commitment to the organisation.

In this regard, it is important to note that key positions are not necessarily restricted to the top management team (TMT) but also include key positions at levels lower than the TMT and may vary between operating units and indeed over time.