2.1 The emergence of TM
In recent years, talent management (TM) has become a phrase that is readily circulating in many organizations. However, this phrase did not appear on the HR scene until the late 1990s, when McKinsey & Company consultants first coined the term in their report The War for Talent (1997). Therefore, the review of the literature concerning the development of TM cannot miss out the earliest discussion from this landmark study, which exposed the ‘war for talent’ as a strategic business challenge and a critical driver of corporate performance. TM is argued to be critical to every company’s success, and the only remaining competitive edge for organizations is in their human resources. The greatest focus and largest impact on the organization is in the identification, development and redeployment of talented employees, as they constitute a smaller group, are easier to measure, and are critical to the organization’s success.
Since then, TM has come to be seen as a key theme driving HRM throughout many organizations. The term TM has become increasingly common in the academic and business world. According to Oakes (2006), if TM is going to take off, corporate receptivity will work as a catalyst during the process. For example, one CIPD study reveals that there is a high level of belief in the contribution of TM. Over 90% of the respondents agree that TM activities can positively affect an organization’s bottom line, and more than half of the respondents have already undertaken TM activities (Clake and Winkler, 2006). In addition, one IOMA (Institute of Management and Administration) survey indicates that nearly three-quarters of the respondents identified TM as at the top of their HR critical issues (Sandler, 2006).
Overall, more and more people are coming to see talent as the major source of competitive advantage and scarcest resource in the knowledge-based global marketplace. The management of senior managers and ‘high-potential’ people who are identified as strategic human resources and seen as critical to the company’s survival, has been gradually recognized as a key role for the corporate HR function, especially in the international firm (Sisson and Scullion, 1985; Marginson et al., 1988, 1993; Hendry, 1990; Scullion and Starkey, 2000). As the knowledge economy continues to develop, the value of outstanding talent will continue to be recognized (Martin, 2008).
The growing interest in TM is the result of dramatic changes in terms of demography, economy, technology, and so on. Those changes have made the management of a talented workforce, which is more mobile, informed and in higher demand than ever before, become the focus of current HR issues, and helped fasten the pace of research into TM and the adoption of TM among organizations. Some of the key changes in context are discussed below:
First of all, due to demographic shifts, organizations across the globe face an immense and potentially long-term struggle to fill job vacancies with sufficiently skilled employees. Of paramount importance when discussing changing demographic patterns is the dwindling number of talented workforce due to the current ageing trends and the shrinkage of the number of skilled employees. The impact of labour and talent shortages has been felt globally. For instance, the Bureau of Labour Statistics expects a labour shortage of 10 million workers in 2008 (U.S. Department of labour, Bureau of Labour Statistics, 2003); in Europe, in order to maintain the current workforce, the birth rate required is 2.1 children per mother, while the current rate is only 1.2 on average (Whiteford, 2004). Some developing countries are also suffering the pain of talent shortage. For example, in China, the working population will begin to dwindle in just 10 years (Jackson & Howe, 2004). Therefore, Hewitt (2001) argues that the major social crises of the twenty-first century will be the by-product of labour...
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