Talent Management and Sustained Competitive Advantage

Introduction

The nature of talent management in an organization is acknowledged as a predictor of the organization’s sustainable competitive advantage. For practitioners and organizations, the imperative is to find out how to go about making talent management a source of sustainable competitive advantage. There is no shortage of studies on the importance of talent management in organizational performance (Kabwe & Okorie, 2019; Mellahi & Collings, 2010; Skuza et al., 2013) and its criticality in developing an organization’s sustainable competitive advantage (Ali, 2017, 2019; Fareed et al., 2016; Farndale et al., 2010; Latukha, 2015; Sikora et al., 2016). People, particularly in the knowledge economy era, are ever more viewed as the key catalyzing factor for competitive advantage in organizations; their capabilities impel success or failure for the organization. Therefore, it is imperative for organizations to develop a talent strategy that focuses on identifying the most critical features of the right talent that would enable the business success of that organization and ensure that resources are prioritized towards maximizing the effectiveness of that talent. This requires organizational leadership to understand where the organization is and where it is looking to be, where and how it competes for marketplace success and the required organizational capabilities that would be instrumental to that success.

Particular attention must be paid to the socio-technological trends that are shaping talent management practices in progressive organizations. These include hybridization of work, internal talent mobility imperatives, informal learning platforms, social learning, the “gig” workforce, multi-generational workforces, new employee experience necessities, deep adoption of data analytics capabilities, mainstreaming of diversity, equity, and inclusion issues, etc. These factors and more should be considered in framing the talent management efforts in contemporary organizations.

While focusing on the human capital (knowledge, skills, abilities, creativity, experience, resilience, etc.) that talent exerts in an organization’s productive processes, attention must also be paid to the social capital of that talent. The justification for this comes from the Social Capital theory, which posits that good social relationships are resources that can lead to the development and accretion of human capital. This should be factored into the management of a firm’s talent if an optimal output is to be obtained from talent’s contribution to the organization’s sustainable competitive advantage. Consequently, organizations cannot rely on securing smart talent alone for their competitive advantage; they also must ensure that such talent is relationally positioned to work cooperatively with other employees for superior results. This holds true in formal and informal labor markets as well as micro and macro-organizational settings (Ali, 2017, 2019).

Social capital would require such talent to have emotional intelligence and social intelligence skills. Emotional Intelligence as defined by the American Psychological Association is “a type of intelligence that involves the ability to process emotional information and use it in reasoning and other cognitive activities.” It comprises attributes of self-awareness, self-management, social awareness, and relationship management. The American Psychological Association defines Social Intelligence as “the ability to understand people and effectively relate to them.” It comprises attributes such as verbal and conversational abilities, understanding of norms of social interaction, listening abilities, self-efficacy, and impression management. Two forms of social capital are predominant in organizational literature: bonding and bridging social capital. “Bonding social capital brings together similar people (i.e., strong ties), and captures an individual’s close network, in which existing skills and expertise are known. As such, individuals interact with others with whom they can identify easily. Bridging social capital provides connections between people with significant dissimilarities (i.e., weak ties), for example, in terms of beliefs and background” (Yoganathan et al., 2021, p. 51). A good social and harmonious relationship between employee and employer, as well as among employees, is imperative for employees’ higher-level performance, motivation, happiness, and satisfaction (Hans, 2021).