Guest opinion: Talent management. By Duncan Brown, assistant director general, the Chartered Institute of Personnel and Development

The merit of talent management is a hotly-contested debate but does it really lead to an over-emphasis on external recruitment and can individual stars prove to be counterproductive?

Psychologist Carl Jung observed that "great talents are the most lovely and the most dangerous fruits on the tree of humanity: they hang upon slender twigs that are easily snapped off".

Talent management has rapidly moved up HR and corporate agendas. In a Conference Board study CEO challenges: perspective and analysis, published earlier this year, recruiting and retaining talent was the top priority for European chief executives. Furthermore, over 80% of employers reported recruitment and retention problems in the Chartered Institute of Personnel and Development’s (CIPD) latest annual Learning and development survey.

Chris Bones, principal of Henley Management College, believes shifting demographics make improved talent management essential to a rise in the UK’s national competitiveness, while Michigan professor Dave Ulrich describes it as "a critical capability of HR".

The CIPD recently launched a research project on the subject. Our survey found [that only] 38% of employers have a talent management strategy, although the majority are undertaking activities under this heading. The most popular measures include succession planning, high potential and graduate development, and executive coaching and development.

But not everyone is a fan. Stanford professor Jeffrey Pfeffer believes "fighting the war for talent is hazardous to your organisation’s health", leading to an over-emphasis on external recruitment and individual stars, which can demotivate employees. The New Yorker’s Malcolm Gladwell, meanwhile, cites Enron as the most highly talent-focused company.

In The Mismanagement of Talent, Philip Brown and Anthony Hesketh argue that education policies and firms’ graduate recruitment techniques are leading to credential inflation. This is reinforcing traditional class advantages and defeating attempts to embrace the true diversity necessary to meet future labour needs.

The CIPD’s research is at an early stage but we have found many examples of real progress. Some common dilemmas are evident: between the relative focus on "the best" and "the rest"; between the emphasis on internal development and external recruitment; and on the ownership of the process. But amid the approaches, some common indicators of success are emerging.

Firstly, there needs to be a strategy to direct and co-ordinate activities, and ensure they deliver measurable benefits to the business. At insurance company Axa, a talent review highlighted an over-reliance on external recruitment and led to a formal framework for managing talent across the organisation with a series of development programmes. While at Royal Bank of Scotland (RBS), a variety of success measures are used, including the ratio of internal to external appointments.

Secondly, there needs to be an integrated approach involving all aspects of people management. Liz Spencer, international rewards director at Cadbury Schweppes, describes its vision as "to ensure we can recruit, retain, develop and reward a diverse and high calibre cadre of talent who make a significant difference to the business". Diversity is a key area of attention, with 23% of international assignees already being female, and greater [reward] being devoted to spousal assistance.

Thirdly, employers should look at robust and reliable methods for defining and assessing talent. Tim Richardson, head of leadership development and talent management at PricewaterhouseCoopers, told us how it uses key criteria and attributes globally to identify and develop talent. It has been running a future leaders’ programme for two years, and invites managers who show drive, a capacity to learn and flexibility, among other criteria, onto the programme.

At RBS, David May, head of executive development, says that talent "is not a badge". It is moving to a deeper approach away from succession planning to more simple, action-based dialogue, so all staff can understand their performance and potential.

So rather than adopting a more elitist North American approach, firms seem to be taking heed of John F. Kennedy’s advice that "all of us do not have equal talents, but all of us should have an equal opportunity to develop our talents"