War for talent

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The war for talent is a term coined by Steven Hankin of McKinsey & Company in 1997, and a book by Ed Michaels, Helen Handfield-Jones, and Beth Axelrod, Harvard Business Press, 2001 ISBN 978-1-57851-459-5. The war for talent refers to an increasingly competitive landscape for recruiting and retaining talented employees. In the book, Michaels, et al., describe not a set of superior Human Resources processes, but a mindset that emphasizes the importance of talent to the success of organizations.


The war for talent is intensified by demographic shifts (primarily in the United States and Europe). This is characterized by increasing demand along with decreasing supply (demographically). There are simply fewer post-baby-boom workers to replace the baby-boom retirement in the US and Europe (though this is not the case in most of East Asia, Southeast Asia, Central Asia, Central America, South America, or the Middle East; Eastern Europe also tends to have similar demographics, namely an aging and/or shrinking labor force).

Knowledge work[edit]

While talent is vague or ill-defined, the underlying assumption is that for knowledge-intensive industries, the knowledge worker (a term coined by Peter Drucker) is the key competitive resource (see the Resource-based view of the firm). Knowledge-based theories of organizations consistently place knowledge workers as a primary, competitive resource.

Definition of talent[edit]

Talent is never explicitly defined in the book, though the Preface notes, "A certain part of talent elude description: You simply know it when you see it." (p. xii) After several further caveats, the authors go on: "We can say, however, that managerial talent is some combination of a sharp strategic mind, leadership ability, emotional maturity, communications skills, the ability to attract and inspire other talented people, entrepreneurial instincts, functional skills, and the ability to deliver results." (p. xiii) The authors offer no outside support for this assertion.

A 2006 article in The Economist, which mentions the book, notes that, "companies do not even know how to define “talent”, let alone how to manage it. Some use it to mean people like Aldous Huxley's alphas in “Brave New World”—those at the top of the bell curve. Others employ it as a synonym for the entire workforce, a definition so broad as to be meaningless."[1]

Relevance during economic downturn[edit]

The 'War for talent is seen by various sources as becoming irrelevant during economic downturns. However, there have been highly visible talent poaching[2][3] by solvent firms of others who have economic hardship (e.g., JP Morgan was raided by a European firm in March, 2009).

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