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 that contingency 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/recruitingstaffing/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