how economic changes affect the talent management

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  • 7/30/2019 How Economic Changes Affect the Talent Management

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    How Economic Changes affect the Talent Management?While there are an innumerable number of economic impacts on talent management practices, the

    three most relevant long-term trends are noted below:

    Knowledge Economy Globalization Skills Gaps and Structural Unemployment

    Knowledge Economy:

    The Knowledge Age moved the basis of economic value from goods to intellectual assets, information,

    and the talent that develops them. It is now widely acknowledged that intangible assets, which largely

    consist of know-how, unique intellectual property, and patent rights drive over 80 percent of the

    valuations of publicly traded companies.

    In todays economy, talent is the most strategic asset and people are the greatest creator of value.

    While this trend will continue into the future, there is a key extension of this trend that will dramatically

    impact talent management and future company valuations: the blurring of external and internal talent.

    The blurring of internal and external talent started as soon as people could participate in chat rooms and

    external email exchanges while at work. For the past few decades, these activities were largely ad hoc

    and employee driven. This is changing.

    More traditional uses of outside talent are also increasing dramatically. The use of contingent workers is

    way up and will increase even more in the future. In fact, 35 percent of employers plan to increase their

    use of contingent workers by 50 percent or more. Labor law firm Littler Mendelson believes thatcontingency could eventually represent 50 percent of our workforce. In 2003, contingent workers

    represented just 13 percent of the workforce. (ref:http://www.workforce.com/section/recruiting-

    staffing/feature/special-report-contingent-staffingthe-futurecontingent/index.html)

    Leading edge organizations have formalized and operationalized efforts to tap into the talent and

    intellectual capital of not only employees, but also of customers, partners, and the public at large into an

    extended electronic community.

    This increasing dependence on knowledge workers has put more pressure on organizations to improve

    their talent management processes and the technology to support them. The blurring of the line

    between employees within the organization and those without is also driving talent management

    changes, particularly around sourcing, strategic workforce planning, and employee engagement. Given

    these changes, executives in leading companies are increasingly focused on talent management issues,

    recognizing that talent, wherever it comes from, is their only sustainable competitive advantage

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