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Talent management refers to the anticipation of required human capital the organization needs at the time then setting a plan to meet those needs. The field dramatically increased in popularity after McKinsey's research and subsequent book on The War for Talent. Talent management in this context does not refer to the management of entertainers.
Talent Management is the science of using strategic HR to improve business value and make it possible for companies and organisations to reach their goals. Everything that is done to recruit, retain, develop, reward and make people perform is part of Talent Management as well as strategic workforce planning. A talent management strategy needs to be linked to the business strategy to make sense.
The term was coined by McKinsey & Company following a 1997 study. It was later the title of a book by Ed Michaels, Helen Handfield-Jones, and Beth Axelrod however the connection between human resource development and organizational effectiveness has been established since the 1970s.
The profession that supports talent management became increasingly formalized in the early 2000s. While some authors defined the field as including nearly everything associated with human resources, the NTMN defined the boundaries of the field through surveys of those in corporate talent management departments in 2009 - 2011. Those surveys indicated that activities within talent management included succession planning, assessment, development and high potential management. Activities such as performance management and talent acquisition (recruiting) were less frequently included in the remit of corporate talent management practitioners. Compensation was not a function associated with talent management.
The issue with many companies today is that their organizations put tremendous effort into attracting employees to their company, but spend little time into retaining and developing talent[need quotation to verify]. A talent management system must be worked into the business strategy and implemented in daily processes throughout the company as a whole. It cannot be left solely to the human resources department to attract and retain employees, but rather must be practiced at all levels of the organization. The business strategy must include responsibilities for line managers to develop the skills of their immediate subordinates. Divisions within the company should be openly sharing information with other departments in order for employees to gain knowledge of the overall organizational objectives.
Talent Management 
Companies that engage in talent management are strategic and deliberate in how they source, attract, select, train, develop, retain, promote, and move employees through the organization. Research done on the value of such systems implemented within companies consistently uncovers benefits in these critical economic areas: revenue, customer satisfaction, quality, productivity, cost, cycle time, and market capitalization. The mindset of this more personal human resources approach seeks not only to hire the most qualified and valuable employees but also to put a strong emphasis on retention.
From a talent management standpoint, employee evaluations concern two major areas of measurement: performance and potential. Current employee performance within a specific job has always been a standard evaluation measurement tool of the profitability of an employee. However, talent management also seeks to focus on an employee’s potential, meaning an employee’s future performance, if given the proper development of skills and increased responsibility.
Competencies and Talent Management 
This term "talent management" is usually associated with competency-based management. Talent management decisions are often driven by a set of organizational core competencies as well as position-specific competencies. The competency set may include knowledge, skills, experience, and personal traits (demonstrated through defined behaviors). Older competency models might also contain attributes that rarely predict success (e.g. education, tenure, and diversity factors that are illegal to consider in relation to job performance in many countries, and unethical within organizations). New techniques involve creating a Competency architecture for the organization that includes a Competency dictionary to hold the competencies in order to build job descriptions.
Talent marketplace 
A talent marketplace is an employee training and development strategy that is set in place within an organization. It is found to be most beneficial for companies where the most productive employees can pick and choose the projects and assignments that are most ideal for the specific employee. An ideal setting is where productivity is employee centric and tasks are described as “judgment-based work,” for example, in a law firm. The point of activating a talent marketplace within a department is to harness and link individuals’ particular skills (project management or extensive knowledge in a particular field) with the task at hand. Examples of companies that implement the talent marketplace strategy are American Express and IBM.
Current Application of Talent Management 
In current economic conditions, many companies have felt the need to cut expenses. This should be the ideal environment to execute a talent management system as a means of optimizing the performance of each employee and the organization. Selection offers are large return on investments. Job analysis and assessment validation help enhance the predictive power of selection tools. However, within many companies the concept of human capital management has just begun to develop. With more companies in the process of deepening their global footprints, more questions have been asked about new strategies and products, but very few on the kind of leadership structure that will bring them success in their globalization process. “In fact, only 5 percent of organizations say they have a clear talent management strategy and operational programs in place today.”
- Carpenter, Mason, Talya Bauer, and Berrin Erdogan. Management and Organizational Behavior. 1. 1. Flatworld Knowledge , 409. Print.
- The War for Talent
- Schein, Edgar. Increasing Organizational Effectiveness through Better Human Resources Planning and Development. Sloan Management Review, 1977, 19:1 p. 1.
- The People Problem in Talent Management
- The Financial Value of Talent Management
- Talent Management: How to Invest in your Workforce
- Making a Market in Talent
- What Does Globalization Mean for Your Leadership Culture
- Talent Management: State of the Industry