The Importance Of Talent Management

INTRODUCTION

Talent management is the planning and management of the human capital needs of an organization based on the anticipated requirements. It involves recruiting, retaining, developing and rewarding talent [1]. In today’s competitive knowledge-based world, the quality of a company’s workforce is increasingly determining success in the industry. Talent management was analogized to “a war for talent” by Mckinsey & Company in a 1997 research. This war is expected to continue in the years to come, as the demand for highly skilled people exceeds the supply.

As we have progressed from the Industrial Age to the Information Age, the value of intangible assets has surpassed that of tangible assets (Fig. 1a, 1b). Fig. 1(a): Intangible value as a % of total market capitalization in 1975 [4] Fig. 1(b): Intangible value as a % of total market capitalization in 2005 [4]

It is talent that reinforces a company’s intangible assets – intellectual capital, innovative ideas, goodwill and winning brands. The potential for value creation goes beyond individual performance development. Companies that understand the strategic importance of talent management stand to gain very large rewards [2]. A talent practices survey by Mercer in 2014 found that companies with effective talent management systems reported substantial improvement in performance. 60% reported significant improvement in Business performance, 63% in employee retention and 58% in employee engagement [3].

In today’s world,