Talent management is a human resources system used to hire, manage, train and compensate top talent. Such programs include strategic planning to align HR needs with the goals and vision of the organization, and ensure that top performers are recruited, developed and retained. While proactive planning is valuable, talent management does has some challenges to overcome.


The time, resources and financial costs to operate a talent management program can be high. This is a burden for small business that don't necessarily have the resources to implement such a system.

Many companies have one or more HR professionals spending much of their time to develop and implement talent management, but a business with few employees may find those labor hours best spent in other ways. Talent management programs also involve the use of software solutions to map out talent needs at all levels or departments, which can be expensive.

Worker Conflicts

Several workplace realities impede the impact of talent management. Many small businesses rely on part-time and temporary workers. Keeping them motivated while trying to focus on the long-term tenure of full-time, permanent employees is difficult. If your business relies on workers who you don't need or expect to be around for long, it may not be worth the effort to install a formal talent management program.

Multi-generational workplaces also present challenges. Companies of all sizes struggle to come up with effective recruiting strategies that don't discriminate by age, and offering rewards for workers at varying ages that may have different motivations can be difficult.

Leadership Limitations

A June 2008 "Bloomberg Businessweek" article pointed out that the leadership pipeline is often not full enough to carry out talent management. HR professionals often map out the leadership needs for the business and the skills required at each level. Small businesses may struggle to bring in and develop enough effective store managers or business unit leaders to complete with other small companies as well as larger competitors. To recruit more aggressively, including in other geographic areas, only adds to the costs of talent management.

HR and Management Conflicts

A core drawback of talent management for small companies is that the programs are often developed and coordinated by human resources professionals. Smaller companies may not have full HR staffs. Instead, managers often hire, train, motivate and fire their own workers while also performing critical business duties. This means managers don't have the time in many cases to implement talent management. Even companies that do have HR professionals often get frustrated at the difficulty of getting managers to concentrate on talent management needs instead of focusing entirely on other business concerns.