The Talent Equation: Big Data Lessons for Navigating the Skills Gap and Building a Competitive Workforce

Kirk Smith (Western Carolina University, Cullowhee, North Carolina, USA)

European Journal of Training and Development

ISSN: 2046-9012

Article publication date: 5 January 2015



Kirk Smith (2015), "The Talent Equation: Big Data Lessons for Navigating the Skills Gap and Building a Competitive Workforce", European Journal of Training and Development, Vol. 39 No. 1, pp. 79-82.



Emerald Group Publishing Limited

Copyright © 2015, Emerald Group Publishing Limited


The phrase “talent equation” hints immediately that this book is for those readers who want to know more about talent management and how it relates to today’s “big data” focus in the field of human resources (HR) in the USA. The book is a collaborative effort between a chief executive officer in the business world and two talent management scholars. It is appropriate for both practitioners and students in HR-related fields. It explores how to use evidence-based management within the HR concept of talent management by presenting current research to answer some of the questions in this relatively nascent category of HR. It then guides the reader to solutions to resolve common yet important issues.

The introduction neatly leads to the seven chapters by laying groundwork for the importance of big data and HR. Possibly no other function within organizations has access to more data than HR and, with human capital becoming a much larger part of an organization’s market value (Fitz-enz, 2009), possibly no other function can have more of an impact from the business decisions made with the data. In fact, some of the research presented in the book is sought to answer questions about various aspects of talent management having a direct impact on revenue and productivity.

Chapter 1 discusses the paradoxical skills gap in the USA, as many companies are still struggling to find employees with the proper skills, even in an economy that is still recovering from the great recession and with unemployment figures still well above full employment. Chapter 2 presents research suggesting that education level adds value to employers in several categories. Chapter 3 looks at employee tenure and what the implications are for the organization based upon employees’ length of service. Chapter 4 gets away from analytics and takes a more human element look at who should be responsible for skills training and the implications of those choices. Chapter 5 addresses the importance of employment branding versus market branding. Chapter 6 looks at the importance of digital technology for recruiting in today’s labor market. Finally, in Chapter 7, talent retention is addressed by looking at how leading companies retain core talent.

Book synopsis

This book helps to take HR into the contemporary world of business intelligence through talent management. It provides plenty of public and private research to make the case, including some research that contradicts what we see in the HR press, blogosphere and long-held beliefs. It takes a real evidence-based management approach instead of relying on hunches and intuition. Nowhere is talent management more visible and important than in professional sports, and the interest in this subject has no doubt been exacerbated in the USA by the book and movie Moneyball. It shows how a middle-market baseball team used analytics to discover metrics that were better predictors of success than more traditional metrics and how team used that information to acquire undervalued talent. Teams have became perennial title contenders with a much smaller than average payroll than other contending teams. The authors of The Talent Equation use research and anecdotal evidence from talent management professionals to highlight the potential of large-scale data analysis in HR. Each chapter attempts to answer questions by presenting evidence in the context of specific talent management challenges.

Chapter 1 answers questions about recent changes in and the future of the US labor market. In the aftermath of the great recession, with unemployment still above normal, it would seem that companies would be in a better position to acquire top talent. The number of job openings has increased dramatically since the summer of 2009, but unemployment remains high and companies complain of not being able to fill important positions quickly enough, if at all. Although there may be several reasons for this, the authors focus on a cause that has recently received a lot of attention in the press. That is, there is a “mismatch” between the skills employers need and skills the unemployed applicants possess – a skills gap. Research points to several causes for the skills gap, but one thing that stands out is that many of the jobs requiring top skills have a multiplier effect of providing a multiple of jobs in these communities to support the higher paying jobs.

Chapter 2 explores the questions of how the education level of employees in core functions affects organizational performance and the return on investment of bachelor’s and master’s degrees in certain fields. By presenting research, the authors show that having employees with bachelor’s degrees in management, sales and customer service jobs can have a positive effect on revenue potential. Research also suggests that despite dramatic increases in higher education tuition, the increased earnings potential of college graduates is greater than the costs.

Chapter 3 addresses the question of whether tenure affects market value for organizations and whether that is the case for all job functions. The research presented here suggests tenure level of employees has a positive effect on market value for jobs in customer service and information technology (IT). However, there was no correlation for positions in sales, manufacturing and management and market value.

In Chapter 4, the primary question was whether it is better to wait and hire a candidate who already has the skills or to train someone who is mostly qualified. The evidence seems to support the notion that employers need to play a bigger part in training employees despite the fear by many executives of “trainee flight” – the fear that after spending resources to train employees, they will leave and take their newfound skills to a competitor. Recent research, however, suggests that providing training and other learning opportunities tends to improve retention within organizations.

Chapter 5 looks at whether a positive experience in the recruiting process can improve the bottom-line. The chapter begins with the premise that employment or recruiting branding is not the same as a market brand. A company may have an excellent market brand but that does not always equate to candidates having a positive view of working there. Even if the two brands are interdependent, you have to build an employment brand separate from the market branding perception. The research presented shows that a negative candidate experience can have a negative impact on a company’s products and services and vice versa.

In Chapter 6, the authors look at how changes in the human capital technology market have improved the process of recruiting. In general, IT has helped enhance the role of HR. The authors describe it this way. “Increasingly, HR is not a group of transactional workers, but a dynamic, strategic operation that can significantly affect business outcomes (p. 140)”. In other words, because of technology, HR has become less transactional and more of a strategic consultant by automating many of the transactional chores. Nowhere is this more evident than in recruiting, according to the authors. One area where HR is lagging though is mobile technology. With 20 per cent of all Internet traffic expected to be through mobile devices by 2016 (Nielson Press Room, 2012), more companies should be adding mobile recruiting capabilities according to the authors.

Employee retention, often cited as the most important job of HR, is the subject of Chapter 7. It deals with the questions of why employees remain loyal to a company and how companies are rebuilding their employment brands. Although a lot of hiring managers will say that higher pay is the reason for most voluntary turnover, the most convincing research suggests otherwise. The authors argue it is more about psychology than economics. It is more about the construct of job satisfaction and its constituent components including their relationship with their boss, the lack of advancement opportunities, an overworked/work-life balance and unhappiness with organizational culture in addition to the ubiquitous low pay. In terms of successful retention strategies, the authors cite recent research that shows the top five initiatives companies are deploying to improve retention of top talent. In descending order of frequency, they are:

  • increase recognition;

  • flexible work schedule;

  • ask employees about what changes they want to see and put feedback into action;

  • increased training/learning opportunities; and

  • increased salaries.


The talent equation: Big data lessons for navigating the skills gap and building a competitive workforce was an enjoyable read for me. Although my primary professional interests lie at the same nexus as this book – the intersection of talent management and data analytics, especially to make good business decisions, I think anyone with either a practitioner or scholarly based interest in talent management would benefit from reading this book. Practitioners, especially, will come away with actionable ideas to implement within their organizations.

The authors make convincing arguments through the use of current research, real-life examples, and anecdotal evidence from practitioners. From a visual perspective, they did a good job of varying the graphics between tables, line graphs and bar graphs to give the eyes some diversity. Some of the research outcomes could be better explained by going into greater detail. For example, in Chapter 3 (pp. 70-71), it is not very clear what is meant by “value added”. Although formulaically explained in a footnote that value added is defined as (total sales-cost of materials) divided by number of employees, it was not clear to me whether the dollar amounts mentioned were the mean amount of all companies in the research, the median, cumulative or something else. I could have looked at the cited reference, but I would have preferred to have it explained in the book. However, the overall benefits of the book far outweigh one nitpicking issue.


Fitz-enz, J. (2009), The ROI of Human Capital: Measuring the Economic Value of Employee Performance , AMACOM, New York, NY.

Nielson Press Room (2012), “Watching TV? Don’t forget your smartphone, tablet”, available at:’t-forget-yoursmartphone-tablet/

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