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The shifting boundaries of talent management

Article  in  Human Resource Management · March 2021

DOI: 10.1002/hrm.22050

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S P E C I A L I S S U E A R T I C L E

The shifting boundaries of talent management

The effective management of talent is one of the great challenges of

our time, particularly in light of the COVID-19 pandemic that has

resulted in significant changes in how and where we work and that

are likely to endure over time across the globe (Caligiuri, De Cieri,

Minbaeva, Verbeke, & Zimmermann, 2020; Collings, Nyberg,

McMackin, & Wright, in press). In the global context, Collings, Mellahi,

and Cascio (2019) defined talent management as the (a) systematic

identification of pivotal positions that differentially contribute to an

organization's sustainable competitive advantage on a global scale,

(b) development of a talent pool of high-potential and high-performing

incumbents who reflect the global scope of the MNE to fill these

roles, and (c) establishment of a differentiated HR architecture to fill

these roles with the best available incumbents to ensure their contin-

ued commitment to the MNE.

It has been over two decades since a group of McKinsey consul-

tants (see Michaels, Handfield-Jones, & Axelrod, 2001) heralded the

War for Talent, which marked the emergence of talent management as

a distinct area of focus for organizational leaders and human resource

professionals alike. However, the earliest roots of talent management

can be traced to the 1960s and 1970s, when the need for a deeper,

more comprehensive understanding of cross-cultural issues, expatriate

management, and the effectiveness of differentiated management prac-

tices were first mentioned in the academic literature (Cascio &

Boudreau, 2016). The majority of academic interest in the topic, how-

ever, has been more recent, particularly over the past decade (Al Ariss,

Cascio, & Paauwe, 2014; Collings, Mellahi, & Cascio, 2017; Collings,

Scullion, & Vaiman, 2015; Gallardo-Gallardo, Nijs, Dries, & Gallo, 2015;

McDonnell, Collings, Mellahi, & Schuler, 2017). To a large extent, this

interest may be explained by the widening gap between job demands

and the skills available in the labor market. The phenomenon of talent

management also remains a key area of interest for practitioners, with

many struggling to deliver on the talent agenda in their own firms

(Charan, Barton, & Carey, 2018; PWC, 2019).

To be sure, the landscape has shifted significantly since the late

1990s, when McKinsey consultants began their research that led to

their conclusion of an ongoing “War for Talent.” However, many of

the same challenges they identified have reemerged after the

2007–2009 recession, including tight labor markets, more complex

talent demands in terms of global business acumen, more complex

technology and organizational structures, and increasing job mobility.

According to a recent survey conducted for the Society for Human

Resource Management's Global Mobility and Immigration Sympo-

sium (2020), 85% of respondents believe that global talent is needed

to meet business needs, 40% of HR professionals struggle to find can-

didates to staff their global teams, and 75% say foreign-born workers

drive growth and innovation. However, additional complexity comes

from four key factors that will fundamentally change the dynamics of

contemporary talent management.

It is difficult to begin any discussion on the future of talent man-

agement without considering the impact of COVID-19.1 Although at

the time of writing (October 2020) it has been only 7 months since

the World Health Organization declared a global pandemic, the impact

of the pandemic on work and employment in general has been

unprecedented in modern times (Caligiuri et al., 2020; Collings &

McMackin, 2020; Kniffin et al., 2020). There is little doubt that many

of these changes, such as reshaping world trade (Schlesinger, 2020),

will endure. The impact on talent management will be significant as

well. While a thorough review of all current and potential impacts is

beyond the scope of the current article, we highlight some examples

of how the pandemic will likely affect the context of talent manage-

ment. A first key impact is a shift in where work is done, with a signifi-

cant increase in the extent of working from home (WFH), initially as a

means of protecting employee wellbeing—physical, emotional, and

financial. For example, Bank of America's, 2020 workplace benefits

report (Bank of America, 2020) reveals that 62% of employers feel

extreme responsibility for their employees' financial wellness, up from

13% in 2013. Fully 83% of employers believe that financial wellness

tools lead to greater productivity. It looks highly likely that many

employers will reevaluate their polices on WFH long-term, resulting in

a larger percentage of employees spending at least some of their time

WFH. As a senior executive at KPMG recently noted: “Companies

worldwide enabled remote workforces nearly overnight, and what

started as an extraordinary pilot is now considered permanent in

many organizations' operating models” (Huffman, 2020).

From a talent perspective, this creates opportunities in terms of

more flexible working arrangements and the potential to access more

geographically diverse talent pools. Staffing firm Robert Half, for

instance, reported that 53% of senior managers hired new full-time or

temporary staff remotely during the pandemic. Of those, 75% con-

ducted remote interviews and onboarding sessions, 61% advertised

fully remote jobs, and 60% expanded their search geographically to

access a wider pool of potential talent (Robert Half, 2020). A key chal-

lenge will be creating opportunities for collaboration and connection

in spatially distributed workforces (Caligiuri et al., 2020; Kniffin

et al., 2020). Ensuring that employees who are located remotely are

not disadvantaged in selection for talent programs is another issue

organizations will need to resolve in the future. For example, Bloom,

Liang, Roberts, and Ying's (2015) research on Chinese call centers indi-

cates that those who work remotely are less likely to be selected for

promotion compared to colleagues who are based in the office.

DOI: 10.1002/hrm.22050

Hum Resour Manage. 2021;60:253–257. wileyonlinelibrary.com/journal/hrm © 2020 Wiley Periodicals LLC. 253

The pandemic has also challenged organizations to reorient their

key talent-development programs (Collings & McMackin, 2020). For

example, these programs have typically emphasized face-to-face net-

working as a core element of the curriculum. This has been shelved in

the short-term as delivery shifted to a virtual format. That shift, how-

ever, has resulted in more cohorts, as programs that were traditionally

delivered regionally are now delivered on a more global basis. Other

organizations have embraced the crisis as an opportunity to use key

projects emerging from the crisis as learning opportunities for top tal-

ent (Collings & McMackin, 2020). Yet another challenge, given the

lethal threat that COVID-19 presents, is succession planning

(Cascio, 2020). If leaders get sick or become incapacitated, successors

need to be found across all aspects of operations on what is likely

short notice. This suggests that succession planning must go much

broader and deeper than the C-Suite in order to respond to possible

disruptions. So also must cross-training, particularly in manufacturing

operations (Wayland, 2020).

Current limitations on international travel also raise challenges for

talent-development programs that link international experience to

career progress for top talent (Caligiuri et al., 2020). The impact of

COVID-19 on talent management extends far beyond these few

examples and is likely to reveal itself over the coming years in ways

we cannot yet imagine.

Second, consider the current challenging political climate. In addi-

tion to tighter border controls wrought by COVID-19, which have sig-

nificantly restricted global talent flows, governments in major

economies are reevaluating their approaches towards incoming talent.

For example, a central issue in the Brexit negotiations in the UK cen-

ters on the right of EU citizens, who had enjoyed the freedom to

move and work anywhere in the EU, to continue to work in Britain.

Similarly, in the United States, the government's approach to immi-

grant workers is making it more difficult even for skilled talent to

secure the H-1B visas or green cards to work there legally

(Hackman, 2020). Such trends affect talent availability in these key

economies. One striking example of the implications of this disruption

to traditional talent management strategies is Microsoft's decision to

set up a new facility in Vancouver, Canada, to circumvent the risk and

challenges arising from relocating talent to the United States (Horak,

Farndale, Brannen, & Collings, 2017). However, such challenges also

potentially affect the willingness of foreign workers to remain in coun-

tries that make work-eligibility difficult, resulting in a potential push of

this talent out of those locations. Talent competitors from other

nations, particularly emerging economies, see demanding immigration

policies in developed nations as an opportunity to actively promote

policies to attract the talent diaspora back to their native lands. That

is a pull factor on talent mobility, with the potential to ease tight labor

markets that firms in those locations face for certain skills (Vaiman,

Sparrow, Schuler, & Collings, 2018a, 2018b). How these macro-level

trends affect talent management at the firm level will continue to

merit further study.

A third key trend is the emergence of the platform economy2 and

the increasing attraction to employers and individuals of the gig econ-

omy. Indeed, a growing number of workers are operating outside the

traditional confines of regular, full-time employment. They may be

“free agents” or “e-lancers” (i.e., freelancers in the digital world) who

work for themselves, or they may be employees of an organization a

firm is allied with (e.g., in a joint venture), employees of an outsourcing

or temporary-help firm, or even volunteers (Cascio &

Boudreau, 2017). Freelancers are a growing segment of the

U.S. workforce, and by some estimates now make up 35% of it

(Maurer, 2018; Pofeldt, 2016). In some industries, that percentage is

even larger. For example, 90% of the hands-on crew in an offshore

oil-exploration project work as contractors rather than employees of

the oil company (Barrett & Elgin, 2015).

This has led some to argue that we are moving “beyond employ-

ment” (Boudreau, Jesuthasan, & Creelman, 2015), reflecting a view

that in the future leadership will be increasingly premised on how best

to complete work rather than on how best to manage employees'

careers (Cascio & Boudreau, 2016). While this may not happen imme-

diately, the changes may not be as dramatic as suggested, and some

industries may be relatively unaffected, Boudreau and his colleagues

make a compelling case for this vision. More broadly, we are certainly

witnessing an increasing percentage of workers who are choosing to

spend at least some of their working time in the gig economy.

Although many of these individuals are operating at the lower end of

it, where precarious work is the norm and their power and choice are

limited, it is evident that there is a significant cohort of workers who

perform much higher-end gig work in areas such as engineering, infor-

mation technology, creative activities, finance, accounting, medicine,

and law. These individuals are often exceptionally skilled and offer the

potential to bring much value to employers from a talent perceptive.

Thus, there is no doubt they represent a growing segment of the

workforce that requires careful attention to talent management. How-

ever, almost all present legislation, HR systems, and talent programs

are designed based on a traditional employment model (Cascio &

Boudreau, 2016). It will also be interesting to see how the COVID-19

pandemic contributes to the growth and evolution of the platform

economy.

A final trend we point to is the continual advance in technology

and its impact on work, jobs, and careers. There is little reservation

that technology in general, and automation in particular, will have pro-

found impacts on how work gets done. Although it will make some

roles obsolete, new jobs requiring higher-level skills will continue to

emerge, especially those created by automation (Cascio &

Montealegre, 2016; World Economic Forum, 2018). According to the

McKinsey Global Institute, 30 to 40% of workers in developed coun-

tries may need to move into new occupations or upgrade their skill

sets significantly by 2030 as their job roles become automated

(Hancock, Lazaroff-Puck, & Rutherford, 2020). There is no doubt that

the COVID-19 pandemic has accelerated these trends. By one esti-

mate, U.S. e-commerce penetration has achieved 10 years of growth

in just 90 days in the first quarter of 2020 (McKinsey, 2020). In a simi-

larly significant trend, the UK healthcare system held as few as 7% of

all appointment in person during the pandemic, compared to 99% in

2019 (Agrawal, Lacroix, & Reich, 2020). At the same time, however,

telemedicine is growing rapidly (Fouquet, 2020). Skilled workers in

254 VAIMAN ET AL.

short supply will become even scarcer. This is a precarious situation,

because companies that fail to address their current talent needs may

not be able to achieve their future digital aspirations. At the same

time, senior managers have a great opportunity to collaborate with

employees to create a prosperous, fulfilling future, as they work

through employee transitions.

From a talent perspective, the pandemic and wider automation

trends are likely to create questions around the relative balance

between technology and human capital in generating value. It is also

likely to add increased importance to identifying pivotal roles that add

the greatest value by increasing the number or quality of people per-

forming them. Indeed, roles that have been critical in the past may be

overtaken by technology, forcing organizations to reevaluate their tal-

ent strategies. To illustrate, the foreign affiliates of the world's multi-

national companies account for only about 9% of the global output of

manufactured goods, with a great deal of economic activity happening

within national borders or regional zones (Rees, 2020). In the newest

era of evolving global systems, however, Levinson (2020) argues that

factory production and foreign investment are less important than the

transmission of services—banking, engineering, information technol-

ogy, auditing, and idea production (creative activities). Companies dis-

tribute their freshest knowledge and ideas across technical centers

positioned throughout the world, and rely on licensing arrangements

and contracts with global suppliers. In this emerging global system,

information and ideas are keys because every country, company, and

individual rely more heavily on borderless knowledge. Artificial intelli-

gence and robotics have increasingly taken over such tasks as book-

keeping, clerical work, and repetitive production jobs in manufactur-

ing. In the creative economy, the most important asset is intangible. It

is the intellectual capital that resides in people (Montealegre &

Cascio, in press). When assets were physical things like coal mines,

shareholders truly owned them. But when the most vital assets are

people, there can be no true ownership. Today, therefore, the wise

management of talent is just as important as the shrewd ownership of

assets. The best that corporations can do is to create an environment

that makes the best people want to stay (Dougherty & Wilson, 2018).

It is likely that technology will disrupt entire professions significantly

(see Susskind & Susskind, 2015), and therein lies the challenge of

managing talent—domestic or global—effectively.

There are, of course, other pressing contextual issues that are

likely to force us to significantly reframe our understanding of talent

management in the future. The papers in