With factors like the rise of outsourcing and internet job searches, the world is a different place than it was in the 1950s. The talent management models of that era no longer work, and so employers have moved from a model of planning to a model of shopping for talent. The fundamental challenge employers face in the modern competitive business environment is managing uncertainty.
Earlier the companies that used to give internal management training to their employees helping them to move corporate ladder faster started hiring executives from outside the company to obtain new competencies to respond to new markets.
Talent Management arrangements ran into trouble because of the long lead time inherent in a system of internal development. The number of managers who were ready for director positions, for example, was set in motion by hiring and development decisions made ten years or more before, based on forecasts of much higher demand. The organizations were not in a position to think about the future of these employees. The immediate concern was not the cost of excess employees but the consequences for their motivation when there were not enough promotion opportunities.
There are various reasons that are responsible for this failure:
a. The failure of Forecasting
b. Changes in the nature of competition
c. Changes in the Boundaries of the firm
d. The rise in outsourcing
Greater use of outside hiring was both a cause and a consequence of the decline of the traditional model of talent management. Outside hiring reduced the need for internal development and caused retention problems that made it too expensive to justify internal development. Once the internal development were gone, companies had no choice except to hire from the outside.
