Job Market Trends and Talent Management Strategies for a Successful Career

Table of Contents

1. Redundant Manpower
2. Emerging Job Opportunities
3. The Future of Work: Trends 2023 (Gartner Predictions)
4. Job Market Trends and Challenges 2023
5. Emerging careers in 21st Century
6. Talent Management
7. Talent Management: Evolution

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1. Redundant Manpower

Redundancy is the process whereby employers have to let go of one or more employees due to circumstances unrelated to job performance or behaviour. The erstwhile job the employee used to carry out does not exist anymore due to a variety of reasons (listed below). In other words, the job has become redundant, not the employee. Redundancy, thus, leads to a surplus of labour which occurs when the number of employees required to carry out work of a particular unit has ceased or diminished or is expected to be reduced permanently or temporarily. In such a situation, the employer is forced to reduce the size of the workforce due to a variety of reasons: (also look at the write-up on downsizing in Chapter 4 on Downsizing).

• • Economic recession: There is no demand for your products. The chances of reviving the business look grim. You do not have the courage and conviction to put more money into the business. Then you have to trim the workforce, whether the said employees are top performers or not.
  • Termination of business: Another reason for redundancy could be when you decide to close your business because you want to try another venture, retire or move on to a new job. You want to get out of the business at any cost.
  • Termination of job title: If your business no longer needs a particular job title, this could lead to redundancy. For example, if your company moves to an electronic phone system, the role of a receptionist may become redundant.
  • Limited funding: If your business has limited or no funding for a project, this might be a cause for redundancy. Keeping employees when there’s no work for them could cause a loss in profits.
  • Relocation of business: If you decide to move your business to a new location or another region, state or even country, this could cause redundancy because there may not be enough money to help every employee relocate. Your company may also need to downsize in order to get established in a new location.

1.1 Retrenchment

An employee is said to be retrenched when his or her job becomes redundant and the employer either cannot offer the employee any alternative position or any alternative position offered by the employer cannot be accepted by the employee. Retrenchment is the permanent termination of an employee’s services due to economic reasons (such as surplus staff, poor demand for products, general economic slow down, etc.) It should be noted here that termination of services on disciplinary grounds, illness, retirement, winding up of a business does not constitute retrenchment. In respect of organisations employing 100 or more persons, the Industrial Disputes Act, 1947, makes it obligatory for the employer to give advance notice or pay equivalent wages before the actual lay off date. To claim 50 per cent of basic wages plus dearness allowances, the workman (who is not a casual worker, whose name appears on pay roll, who has completed 12 months of continuous service) must present himself on each working day at the appointed time inside the factory/office premises during the lay off period. If necessary, he might be asked to report a second time during the same day. While laying off workman, the employer is expected to follow the first-in-last-out principle. He should give preference to such workmen if he advertises for re-employment against future openings. The employer has to give three months’ notice before retrenching the worker and get prior approval from the government as well.

1.2 Lay off

A layoff is a temporary removal of an employee from the payroll of an organisation due to reasons beyond the control of an employer. Global competition, reductions in product demand, changing technologies that reduce the need for workers, and mergers and acquisitions are the primary factors behind most layoffs. The services of the employees are not utilized during the layoff periods. If the layoff is for a temporary period (sometimes it could the indefinite) the employee is likely to be called back to join the ranks once again. The employer-employee relationship, therefore, does not come to an end but is merely suspended during the period of layoff. The purpose of layoff is to trim the extra fat and make the organisation lean and competitive.

1.3 Discharge and Dismissal

Dismissal is the termination of the services of an employee as a punitive measure for some misconduct. Discharge also means termination of the services of an employee, but not necessarily as a punishment. A discharge does not arise from a single, irrational act. There could be many reasons for it such as: inebriation, alcoholism, deliberate violation of rules, carelessness, insubordination, physical disability, dishonesty, violent/aggressive acts, inefficiency, unauthorized absence from duty for a long time etc. Discharge/dismissal is a drastic measure seriously impairing the earnings potential and the image of an employee. It should be used sparingly, in exceptional cases where the employee has demonstrated continued inefficiency, gross insubordination or continued violating rules even after several warnings. Before discharging the employee, advance notice of the impending danger must be given and the reasons of discharge must be stated clearly. The employee should be given the opportunity to defend himself. If the grounds under which an employee has been discharged are not strong enough, there should be a provision for reviewing the case. In any case, the punishment should not be out of proportion to the offence.

1.4 Redundancy, Layoffs & Downsizing: Differences

Layoffs typically occur when an employer can no longer provide work for their employees. Layoffs can either be permanent or temporary depending on the state of the company. Similarly, redundancies can also occur as a result of a lack of work, but they can also occur due to other situational factors such as business termination or relocation. Downsizing is when a company reduces its size. It is the planned elimination of positions or jobs in an organisation. It is a way of reorganizing a company’s internal operations aimed at reducing unwanted hands and improving profitability. In most cases downsizing takes place in response to an economic downturn or in case of mergers/acquisitions or when the company wants to focus on improving the bottom-line. In this way, downsizing is similar to redundancy, but with downsizing, sometimes employers offer employees the option to transfer to another company location

1.5 How to evaluate potentially redundant roles?

Redundancy is a sensitive issue. It needs to be handled carefully without rubbing people on the wrong side. You need to put the finger on the problem causing trouble in a balanced and rational manner—without getting trapped by emotions (and also rubbing people on the wrong side)

• • Key Roles: Identify the key roles that are irreplaceable. Discussions with departmental heads would eliminate lot of confusion in this regard.
  • Key People: Also find out the key persons who are good at multi-tasking. See whether they can handle additional responsibilities without making a hue and cry.
  • Lop off positions with limited potential: Review the structure of your organization to determine which roles present the least potential benefit to your company going forward. This can help you determine which roles are redundant.
  • Look at the employment record of each employee: Once you’ve narrowed down the scope of your search, you can evaluate each employee in the redundant roles. Review their qualifications, job performance and overall contributions to the company. If one employee performs at a more consistent rate than the others, they might be a better candidate to remain at the company.
  • Evaluate the relocation option: If your purpose for finding redundancies is to improve productivity rather than prevent a loss in profit, you could create new positions or move employees to other roles to better benefit your company. For example, if you found multiple redundant marketing specialists but still want to keep them in your company, you could offer them positions in customer service, sales or another marketing role that needs support.

1.6 Dealing with imbalances in labour supply

New technologies have made it possible for fewer people to do more work than before. Companies have realized the importance of replace people with machines—known as automation—long ago. The physical work is cut into pieces and converted into digital commands now-a-days, thanks to the introduction of computer information technology in manufacturing processes. As a result of this, many jobs are disappearing faster than one can even imagine. Coupled with the need to go lean and clean, most companies are showing the door to people who fail to acquire new skills quickly. Downsizing—the process by which an organisation lays off managers and workers to reduce costs—has become the order of the day. In a tough competitive scenario, companies are forced to adjust the number of employees needed to work in newly designed technological work spots—which is therefore known as rightsizing. The way the work is being handed, thus, has undergone a radical transformation over the years. We are no longer talking about job losses due to economic downturns. We are talking about lean and fit organisations that are able to run the race with competition and emerge as winners.

1.7 How companies should deal with imbalances in labour supply?

1.8 Best practices for handling

• • Talk to affected people: Consult with other company officials. Communicate the hopeless situation confronting the company clearly .Hold a company meeting to address the situation. Employees do not want to be kept in the dark on issues affecting their livelihood.
  • Meet the victim(s): Meet with each redundancy candidate individually. Offer outplacement assistance. To the affected people. Outplacement is an employer-sponsored benefit typically provided as part of a severance package to help terminated and laid off workers move on to another job or career
  • Entice volunteers: Provide compensation to volunteers. Go beyond the rule book so that the victims are able to stand on their feet without much of a problem in a terribly competitive job market. If the severance package is attractive, you can expect a smooth transition.
  • Improve operational efficiencies: See whether the overstaffing burden could be eased through tight monetary controls with a vigorous focus on improving internal efficiencies.

2. Emerging Job Opportunities

2.1 The war for talent

Job markets look for talent. Talent is, of course, scarce. Companies need to go that extra mile in order to attract talent. They should be ready to pay that extra premium in order to reach out to the right candidate. As we all know, people with right kind of knowledge, skills and experience will always be in short supply. Unless you put that extra effort and ornament the job offers with fancy stock option schemes, incentives and benefits—you will be left behind in the race. The war for talent has begun long ago and it continues forever. Companies are undertaking digital business transformations that are changing their products and services, operations and internal capabilities. Automation and artificial intelligence are rapidly putting large labor market segments at risk of redundancy or profound change. These trends are radically changing work and employment expectations.

2.2 AI is changing the job market scenario

Artificial intelligence (AI) technology is reshaping the world of work. Automation is revolutionizing business models, tools, tasks and delivery modes. With the emerging popularity of Large language models (LLMs), it’s more than essential nowadays to consider getting into the world of automation as a specialist. Workers can already see the transformation happening, as artificial intelligence (AI), robotics and other digital innovations are being used increasingly in the workplace. The likely effects of automation are mixed. On the one hand, some jobs are at risk of being fully or partially automated and/or replaced by robots and AI. On the other hand, these changes could increase efficiency and access to services. Employers and workers require the necessary digital and soft skills to take advantage of the new opportunities they are expected to face. Gartner research found that three-quarters of jobs had more than 40% of their required skills change between 2016 and 2019, indicating that static roles are no longer an effective way for organizations to think about building the future workplace. Organizations have multiple options for roles impacted by artificial intelligence beyond simply eliminating them. Based on a role’s risk of AI impact and the proportion of digital dexterity skills, HR leadership can choose to focus, acquire, broaden, redeploy or downsize the role

2.3 Skill requirements in the new age

The challenges of upskilling and reskilling could be imminent for many individuals, businesses and governments. The dignity, well-being and self-fulfilment of individuals as well as the prosperity of society could depend on it. Within this context, impactful public policies for workers’ inclusiveness are important. In this vein, the involvement of a wide range of stakeholders, including workers, companies, public authorities, education institutions, training providers and social partners can be crucial. Companies need to find answers to the following questions in order to move ahead with confidence in a VUCA (volatile, uncertain, complex and ambiguous) environment

• • What future skills will my organization need?
  • What can I do to protect my organization today and tomorrow?
  • What soft skills, hard skills, digital skills or other skills will my company no longer need in five to 10 years?
  • When should my organization choose upskilling and reskilling vs. hiring to close skill gaps?

Strategically, organisations that compete in the global markets must redesign roles based on potential AI impact and better build the future workforce.

2.4 How to fill the skill gaps?

The World Economic Forum (2020) estimates that 70% of employers will offer upskilling and/or reskilling by 2025. What we know for certain is that doing nothing is not an option – waiting to develop your approach to skills only puts your organization farther behind. Now is the time to act: to use a skill based approach in your talent strategy(how you source, hire, onboard, engage, and retain talent)It’s the time to invest in your talent engine to build talent pipelines (A talent pipeline is a pool of candidates who are ready to fill a position. These can be employees who are prospects for advancement or external candidates partially or fully prequalified to take an opening)that are robust, and provide available talent sufficient to do the work that lies ahead. To this end, companies should determine what work is to be done, and what is needed to deliver that work. If you can’t fill open roles with the one-job, one-hire approach, you have to think of other ways to get the work done – in this talent economy, becoming a skills-centric talent-first organization is pretty much non-negotiable. Getting the work done becomes a process of deconstructing jobs in favour of identifying the work, then determining what skills are needed

3. The Future of Work: Trends 2023 (Gartner Predictions)

The last several years will continue to have a lasting impact on the future of work in terms of technological, generational, and social shifts. HR leaders are facing historic challenges with a competitive talent landscape and an exhausted workforce, along with pressure to control costs. At the same time, this environment presents an exciting opportunity for chief human resource officers (CHROs) to lead talent into the future and position their organizations as employers of choice. As workplace volatility continues in 2023, Gartner, Inc. has revealed its top nine workplace predictions that HR leaders must address this year and beyond to successfully navigate today’s labor market and continue to drive business outcomes.

3.1 Quiet Hiring

In 2023, labour markets are going to be highly competitive. Progressive HR leaders will turn to quiet hiring to acquire new skills and capabilities without acquiring new full-time employees. This will manifest in a few key ways:

• • A focus on internal talent mobility to ensure employees address the priorities that matter most without changes in headcount
  • Stretch and upskilling opportunities for existing employees while meeting evolving organizational needs
  • Alternate approaches, such as leveraging alumni networks and gig workers, to flexibly bring in talent only as needed. (A gig economy is a labor market that relies heavily on temporary and part-time positions filled by independent contractors and freelancers rather than full-time permanent employees. Gig workers gain flexibility and independence but little or no job security)

3.2 Hybrid flexibility

Smart companies are doing everything possible to ensure flexibility to workforce –in terms of giving more control over their schedules, more paid leave more stability in work schedules etc. hybrid work is going to be the order of the day going forward. (Hybrid work isa flexible work model that supports a blend of in-office, remote, and on-the-goworkers. It offers employees the autonomy to choose to work wherever and however they are most productive). Against this background, HR managers may find it difficult, of course, to strike a fine balance between organisational demands and employee expectations. It is not easy in actual practice implementing corporate strategy on behalf of corporate leaders and offer a sense of purpose, flexibility, and career opportunities that their employees expect.

3.3 Non-Linear Career Paths

In the past, a “career path” usually referred to the somewhat linear process of working for many years in the same organization and waiting for the inevitable promotions that came with experience. People quietly worked their way up the ranks with the most talented and cunning gained coveted positions in the C-suite, board and senior management. However, that’s all changing. Modern career paths are far more circuitous, with people moving across both jobs, roles, and industries in search of better opportunities. The 21st-century career path is anything but a straight line to success. The path in most cases is non-linear. Non-linear careers may begin in one direction, then transition to a different path, sometimes more than once. These shifts typically happen as people make discoveries about themselves and gain new insights about their preferences. They can also happen as unexpected opportunities present themselves. A linear career would bethe typical career path where there is focus on constantly moving up in power and status over time. However, that is not always possible as sometimes linear types can become stuck in a certain position and not progress further. While many people may stick to a single career, taking steps up the career ladder, more and more people are finding themselves in a different situation. In contrast to vertical career paths, today’s career paths look more like jungle gyms than ladders owing to a rapidly changing job market and emerging technologies. Now a days, organizations are being forced to expand anddiversify their talent pipelines due to employees increasingly charting non-linear career paths. These organizations are also faced with an inability to meet talent needs through traditional sourcing methods and candidate pools. To fill critical roles in 2023, organizations will need to become more comfortable assessing candidates solely on their ability to perform in the role, rather than their credentials and prior experience. It’s more urgent than ever to rethink outdated assumptions about qualifications.

Organizations will take several approaches to do this, such as relaxing formal education and experience requirements in job postings and reaching out directly to internal or external candidates from non-traditional backgrounds.

3.4 Employee turnover & freelancing

Employee turnover is significant in sectors where people possess transferable skills that are in great demand. There is now way to arrest this trend, since employees want to have control over their jobs as well as lives—apart from enjoying their life. As a result, the so-called free lancing has become quite popular in high tech industries and it is booming for a variety of reasons. The so-called “gig” economy – one in which workers sell companies their labor on a per-job basis – is growing at double-digit rates. Although there is some bad press about some aspects of the gig economy the reason it’s growing so fast is that it’s a win-win for both employers and workers. Workers get to enjoy flexible hours, be their own boss, and only take on the jobs they want. And employers don’t have to go to the trouble of hiring people, with all the associated costs and regulations. Firms can get the talented people they need as and when they need them and don’t have to pay people to sit idly when they’re not required.

3.5 Diversity, equity and inclusion (DEI) efforts

Unless organisations step up DEI efforts ensuring equity, and justice to all, it is not easy to secure employee loyalty and commitment organisational goals.

3.6 Ethical use of Employee data

Organizations are increasingly using emerging technologies – artificial intelligence (AI) assistants, wearables, etc. – to collect more data on employees’ health, family situations, living conditions and mental health in order to respond more effectively to their needs. However, using these technologies has the potential to create a looming privacy crisis. Progressive organizations will use 2023 to create an employee data bill of rights that prioritizes transparency around how they collect, use and store employee data, and which allows employees to opt out of practices they find objectionable.

3.7 Use of AI in hiring processes

With more organizations leveraging AI in recruiting, the ethical implications of these practices have become more urgent. For example, a new law in New York City went into effect on January 1 that limits employers’ use of AI recruiting tools and requires organizations to undergo annual bias audits and publicly disclose their hiring metrics. Organizations that use AI and machine learning in their hiring processes, as well as the vendors they rely on for these services, will face pressure to get ahead of new regulations and be more transparent about how they are using AI – and give employees and candidates the choice to opt out from AI-led processes.

3.8 Focus on social skills

The social isolation brought about by the pandemic has hit young people hard. A large majority of employees feel that the pandemic made pursuing their educational or career goals more difficult. They also feel that their education has not prepared them to enter the workforce. Gen Z (Gen Z isthe name given to the current generation –people born between 1997 and 2012–of young people by many demographic researchers)has missed out on developing soft skills, such as negotiating, networking, speaking confidently in front of crowds, and developing the social stamina and attentiveness required to work long hours, in an in-person environment. This lack of experience and preparedness may negatively impact organizations, especially as they aim to hire cheap talent in a tight labor market. But it’s not just Gen Z — everyone’s social skills have eroded since 2020. Burnout, exhaustion and career insecurity — all heightened during the pandemic — negatively impact performance. Organizations will need to redefine professionalism for their entire workforce to address this challenge.

Organizations face historic challenges with a competitive talent landscape, an exhausted workforce, and pressure to control costs. In 2023, executives must get savvy to snag in-demand talent, focus on employee mental health and confront data ethics in new HR technology. The high-impact trends presented above, create an exciting opportunity for organizations to differentiate themselves as employers of choice.

4. Job Market Trends and Challenges 2023

The technology-driven world in which we live is a world filled with promise but also challenges. Cars that drive themselves, machines that read X-rays, and algorithms that respond to customer-service inquiries are all manifestations of powerful new forms of automation. Yet even as these technologies increase productivity and improve our lives, their use will substitute for some work activities humans currently perform—a development that has sparked much public concern.

4.1 Automation vs. Job Markets

It is estimated that about 60 per cent of occupations currently carried out by humans could be fully automated, implying substantial workplace transformations and changes for all workers.(McKinsey estimates that between 400 million and 800 million individuals could be displaced by automation and need to find new jobs by 2030)While technical feasibility of automation is important, it is not the only factor that will influence the pace and extent of automation adoption. Other factors include the cost of developing and deploying automation solutions for specific uses in the workplace, the labor-market dynamics (including quality and quantity of labor and associated wages), the benefits of automation beyond labor substitution, and regulatory and social acceptance. Activities most susceptible to automation include physical ones in predictable environments, such as operating machinery and preparing fast food. Collecting and processing data are two other categories of activities that increasingly can be done better and faster with machines. This could displace large amounts of labor—for instance, in mortgage origination, paralegal work, accounting, and back-office transaction processing. It is important to note, however, that even when some tasks are automated, employment in those occupations may not decline but rather workers may perform new tasks. Automation will have a lesser effect on jobs that involve managing people, applying expertise, and social interactions, where machines are unable to match human performance for now. Jobs in unpredictable environments—occupations such as gardeners, plumbers, or providers of child- and eldercare—will also generally see less automation by 2030, because they are technically difficult to automate and often command relatively lower wages, which makes automation a less attractive business proposition

4.2 Where employment growth can happen?

Workers displaced by automation are easily identified, while new jobs that are created indirectly from technology are less visible and spread across different sectors and geographies.

• • Consumption related: McKinsey estimates that global consumption could grow by $23 trillion between 2015 and 2030 and most of this will come from the consuming classes in emerging economies. The effects of these new consumers will be felt not just in the countries where the income is generated but also in economies that export to these countries. Globally, it is estimated that 250 million to 280 million new jobs could be created from the impact of rising incomes on consumer goods alone, with up to an additional 50 million to 85 million jobs generated from higher health and education spending.
  • Ageing population: As people begin to age (300 million more crossing the age of 65 by 2030) their spending patterns also undergo a dramatic change with a pronounced increase in spending on healthcare and other personal services. This will create significant new demand for a range of occupations, including doctors, nurses, and health technicians but also home-health aides, personal-care aides, and nursing assistants in many countries. Globally, it is estimated that healthcare and related jobs from aging could grow by 50 million to 85 million by 2030.
  • Technology Jobs: Jobs related to developing and deploying new technologies may also grow. Overall spending on technology could increase by more than 50 percent between 2015 and 2030. About half would be on information-technology services. The number of people employed in these occupations is small compared to those in healthcare or construction, but they are high-wage occupations. By 2030, McKinsey estimates that this trend could create 20 million to 50 million jobs globally.
  • Infrastructure and real estate jobs: Accelerated investments in real estate and infrastructure projects could create new demand for engineers, electricians, carpenters, construction workers etc to the tune of 80 to 200 million jobs globally, going forward.
  • Jobs in the energy sector: investments in renewable energy such as wind and solar; energy-efficiency technologies; and adaptation and mitigation of climate change may create new demand for workers in a range of occupations, including manufacturing, construction, and installation. These investments could create up to ten million new jobs in the trendline scenario and up to ten million additional jobs globally in the step-up scenario.
  • Other services: The last trend is in respect of unpaid domestic work. McKinsey estimates that this could create 50 million to 90 million jobs globally, mainly in occupations such as childcare, early-childhood education, cleaning, cooking, and gardening. When we look at the net changes in job growth across all countries, the categories with the highest percentage job growth net of automation include the following: healthcare providers, professionals such as engineers, scientists, accountants, and analysts, IT professionals and other technology specialists, managers and executives, whose work cannot easily be replaced by machines, educators, especially in emerging economies with young populations, “creatives,” a small but growing category of artists, performers, and entertainers who will be in demand as rising incomes create more demand for leisure and recreation, builders and related professions, particularly in the scenario that involves higher investments in infrastructure and buildings, and manual and service jobs in unpredictable environments, such as home-health aides and gardeners

4.3 Will there be enough work in the future?

Today there is a growing concern about whether there will be enough jobs for workers, given potential automation.Historical research indicates that such fears may be unfounded: over time, labor markets adjust to changes in demand for workers from technological disruptions of various kinds. History shows that technology has created large employment and sector shifts but also creates new jobs. If history is any guide, it is expected that 8 to 9 percent of 2030 labor demand will be in new types of occupations that have not existed before. Both analyses lead to a compelling conclusion that, with sufficient economic growth, innovation, and investment, there can be enough new job creation to offset the impact of automation,

4.4 How to manage the workforce transitions in future?

Workers impacted by automation need to be taken care of through renewed focus on training and skill upgradation. Providing job retraining and enabling individuals to learn marketable new skills throughout their lifetime will be a critical challenge. Robust economic growth must also be maintained to support new job creation. Greater fluidity will be needed in the labor market to manage the difficult transitions. Digital talent platforms can foster fluidity, by matching workers and companies seeking their skills and by providing a plethora of new work opportunities for those open to taking them. Income support and other forms of transition assistance to help displaced workers find gainful employment will be essential. Beyond retraining, a range of policies can help, including unemployment insurance, public assistance in finding work, and portable benefits that follow workers between jobs.(McKinsey report 2017-18; Gartner research 2022)

Businesses will be on the front lines of the workplace as it changes. This will require them to both retool their business processes and revaluate their talent strategies and workforce needs, carefully considering which individuals are needed, which can be redeployed to other jobs, and where new talent may be required. Many companies are finding it is in their self-interest—as well as part of their societal responsibility—to train and prepare workers for a new world of work. Individuals, too, will need to be prepared for a rapidly evolving future of work. Acquiring new skills that are in demand and resetting intuition about the world of work will be critical for their own well-being. There will be demand for human labor, but workers everywhere will need to rethink traditional notions of where they work, how they work, and what talents and capabilities they bring to that work.

5. Emerging careers in 21st Century

6. Talent Management

In a globalized, networked world, products can be quickly duplicated and services cheaply emulated. However, the cumulative talent of people proves to be outstanding and irreplaceable asset because employee capabilities cannot be acquired overnight nor copied easily. Experienced people are technologically literate, globally astute and operationally agile. They have excellent knowledge of products, markets, technologies and competitors. When they leave, the whole organization suffers. Managing talent or human capital, therefore, has become the biggest challenge confronting organizations in 21st century.

6.1 How do you define ‘talent’?

In the context of the workplace the term talent generally refers to an employee who significantly contributes to the organization´s performance. According to Avedon and Scholes (2010) the term talent means those individuals or groups that are strategically important to the purposes and goals of the organization. “Specifically, talent refers to those individuals and groups with strategic competencies that enable a company to achieve its short and long term goals.” (Avedon and Scholes, 2010, p. 75). The Chartered Institute of Personnel and Development (CIPD) sees talents as those who can make the greatest difference to the organization´s performance, either through their immediate contribution or in the longer term by demonstrating the highest levels of potential (CIPD-Centred Institute of Personnel and Development, 2007). According to Silzer and Dower (2010) talent in organizations refers to:

• • individual skills and abilities (talents) and what the person is capable of doing or contributing to organization;
  • a specific person (he/she is talent) with specific skills and abilities in some areas;
  • a group (the talent) in an organization – a pool of employees who are exceptional in their skills and abilities.

The term human capital’ or talent refers to the economic value of employee skills, knowledge and capabilities. They may not be portrayed as assets in the company balance sheet, but they certainly occupy a place of pride and importance in building the image and reputation of a company. It is the employee who is the owner of human capital and not the company. When talent jumps out of a company, you are going to lose all the investments made in building a talented workforce in terms of training, development, innovation, execution capabilities etc. Adding insult to injury you do not get capable people who are prepared to run in sync with organizational needs. To compete effectively, you need to run the show taking care of employee needs, aspirations and expectations.

7. Talent Management: Evolution

Talent management has experienced a dramatic development, from the 1980s through 1990s up to these days. It has always reflected the reality according to the parameters stated in the following Table:

Changes in the business environment call for the need to respond to them adequately and flexibly. As for organizations this new reality creates the necessity to deal with the fight for talents and also the inevitability to re-evaluate their existing procedures and practices in the field of talent management and to choose the ones that best reflect the changed reality. Excellent talent management is becoming the decisive competitive advantage. The fight for talents must be won.

7.1 What is talent management?

Talent management is a niche in human resource management that is responsible for re-inventing how employees are engaged, trained, and motivated to be their best selves in the organization. This not only brings out the highest levels of potential but also assures them that their talents are being valued, nurtured, and appreciated in the organization. For many employees, this turns out to be the reason they cherish working with the organization. From an organization’s perspective, talent management is an opportunity to innovate in the people space to gain a competitive edge. Every firm’s product and services are only as good as their people, and its people are only as good as how well their talent and potential are managed. Talent management is a business strategy that aligns the workforce with the organization’s goals and values. It includes aligning the right person with the proper role and tools.

7.2 Talent management vs. Human Resource Management: Key Differences

• • Human resources management focuses on all employees, while talent management focuses on “key employees” or “talent” or “top talent”. Top talent can be defined as a person “who routinely exceeds expectations while exhibiting the right behaviours and is agile in the learning approach.
  • Where hiring, training and retention before were centralized in the HR department, with talent management many of these duties are federated to the front-line managers actually leading the employees in question. In this way, the whole organization is responsible for and has a share in these activities.
  • HR is more administrative-focused, dealing with pay, vacation days, benefits, and complaints. While talent management is almost singularly focused on helping and improving the top talent in the organization. Think professional development vs. tracking attendance.
  • Talent management is strategic, often manifesting as a company-wide long-term plan closely associated with overall business goals, while HR management is more tactical, dealing with the day-today management of people.

Talent management may be defined as

“the process of managing the supply and capabilities of the workforce to meet the demand for talent throughout the organization to achieve optimal business performance and in direct alignment with organizational goals.” It is the “systemic, planned effort to attract, retain, develop and motivate highly skilled employees and managers.”

7.3 What the experts say?

Talent management is defined as a systematic and dynamic process of discovering, developing and sustaining talent. It is a systematic attraction, identification, development, engagement, retention and deployment of those individuals with high potential who are of particular value to an organization (CIPD, 2006)

• It is an integrated set of HR practices or functions, such as recruitment or international recruiting, selection, development and performance appraisal aimed at increasing the capacity of organization (SHRM, 2006; Fegley 2006; Mercer 2005).
• Talent management is a constant process that involves attracting and retaining high-quality employees, developing their skills, and continuously motivating them to improve their performance. (www.vvalamis.com)
• Talent management is how employers recruit and develop a workforce that is as productive as possible and likely to stay with their organization long term. When implemented strategically, this process can help improve the overall performance of the business and ensure that it remains competitive. Put simply, talent management means investing in an organization’s most important resource – its people. To this end, employers may recruit candidates with highly desirable skillsets, provide ongoing learning and development opportunities, and reward valued team members and encourage them to advance within the organization.