Human Resource Management, July–August 2009, Vol. 48, No. 4, Pp. 661–664

© 2009 Wiley Periodicals, Inc.

Published online in Wiley InterScience (www.interscience.wiley.com).

DOI: 10.1002/hrm.20308

I started reading through this book as a diversion from my military duties over-seeing a large training and life support contract on an Iraqi army base. “An age of uncertainty, indeed!” I mused. As I

became engrossed, the manager in me began applying the author’s concepts to the unique challenges of the company I observed execut-ing the contract. It truly did have a talent on demand model. It was a Darwinian organiza-tion that would employ, terminate, and sub-contract very quickly to meet the changing needs of the customer, the United States gov-ernment. As Cappelli points out, however, there were considerable costs associated with focusing primarily on the “buy” side of the maker or buy talent decision.

I fi nished reading the book while work-ing as part of a fairly mature Talent Manage-ment team providing internal consulting services to a Fortune 50 home improvement retailer in the safer confi nes of the Unit-ed States. I still fi nd many illustrations of Cappelli’s ideas within this very different organizational structure. In his thought-provoking book, Cappelli argues that many current practices in talent management were built for a business environment that no longer exists. He goes on to present a vari-ety of hiring approaches that borrow heavily from supply chain management and other business functions, which he suggests better fi t the current business environment. These

techniques serve as the base for recommen-dations about making the “make versus buy” talent decision, improving the accuracy and fl exibility of talent forecasts, and getting the most out of talent investments.

Cappelli maps out the evolution of talent management practices in the fi rst half of the 20th century, showing how they developed as effective tools for the business climate of the time. He also carefully illustrates the dis-connect between those practices and the cur-rent business environment. Devoting more than a third of his text to this rationale build-ing, Cappelli strengthens the reader’s sense of history in talent management practices. For example, General Electric’s early career model, which relied on extensive planning and development for managerial and execu-tive talent, was a response to a pressing need for managerial talent in a stable business en-vironment where one could forecast talent needs far into the future and build develop-ment programs to “make” the talent. This was a time when one could “build” the or-ganization man and reasonably expect that he would not walk away for opportunities elsewhere.

Having illustrated that talent manage-ment practices in many organizations have not kept pace with the changing nature of business, Cappelli presents the concept of talent on demand as better suited to the current business environment. Instead of

BOOK REVIEW

D A N A L . T U C K E RPeter Cappelli. (2008). Talent on Demand: Managing Talent in an Age of

Uncertainty. Boston: Harvard Business School Press. 304 pages.

662 HUMAN RESOURCE MANAGEMENT, JULY–AUGUST 2009

Human Resource Management DOI: 10.1002/hrm

framing the talent discussion as “make or buy,” he asks, “What is the proper proportion of make versus buy” to help meet objectives, based on the costs of talent undersupply and oversupply? Invoking operations language, he illustrates many instances in which make versus buy considerations led to mismatch problems.

Cappelli also fl eshes out some of the challenges that organizations face in accu-rately forecasting specifi c talent demands and uses apt terms from the supply chain lexicon, such as bullwhip effect, bottlenecks, and queuing problems, to describe talent plan-ning problems and solutions. The solutions he proposes are HR versions of supply chain responses, including increasing capacity at the bottleneck, reducing capacity before or after the bottleneck, and shortening overall cycle time.

Although Cappelli acknowledges that it is often easier to calculate the costs on the “buy” side of the question, he discusses some of the issues relevant to considering the in-vestments made on the “make” side. He also provides a useful menu of approaches to lower development costs, such as delayed differentiation of training and transferring those costs to employees, and considers ef-forts to optimize the return on talent invest-ments by improving selection processes and using a variety of retention practices. One of the more interesting retention efforts he dis-cusses is the creation of internal job boards or markets to match talent to jobs—a quasi-market approach.

Readiness of the HR Community to Embrace the Model

In reading Talent on Demand, I thought about my experiences with various or-ganizations. How forward-thinking were they in their talent management practices? What shifts in their thinking would they need to make, and what challenges would they encounter if they decided to buy into a talent on demand approach? Many HR professionals either are intimidated by or lack the background in strongly quantita-tive approaches. Alternately, many feel

that they deal primarily in intangibles that are not readily quantifiable, so the use of many operations approaches may be a bit of a stretch for them. Existing litera-ture suggests that there is much room to develop greater sophistication in HR mea-surement and analytic approaches (e.g., Becker, Huselid, and Ulrich, 2001; Fitz-Enz, 2002; Boudreau and Ramstad, 2007). Delving into the reasons behind this gap in our competencies or perceptions is be-yond the scope of this review, but the gap may be an obstacle to fully realizing the paradigm shift that Cappelli advocates. Still, many of the concepts he proposes are very simple and do not require substantial mathematical ability.

A second challenge I perceive is that many HR professionals see themselves as “people persons” and might interpret the talent on demand model as an affront to their sensibilities. Arguments about phi-losophies and systems that dehumanize or mechanistically represent human beings are nothing new. Although one may argue that humans are not machines, a mecha-nistic model that improves talent manage-ment outcomes could easily be interpreted as more humane, reducing uncertainty not only for the employer, but also for the employee.

People as Inventory

The Darwinian model of my contractors and the supply chain, operations, and fi-nance approaches espoused in some of the examples provided within Cappelli’s book gave me pause. Taking the analogy too literally, we can make the mistake of treat-ing people exactly the way we treat our physical inventory, thereby contributing to employee–employer detachment. Today’s sophisticated workers are aware of chang-ing workplace dynamics and have minds of their own. They recognize that at-will employment cuts both ways, and this un-derstanding decreases their willingness to make individual sacrifices for the organi-zation’s benefit. Cappelli clearly describes the withering ties between employers and

BOOK REVIEW 663

Human Resource Management DOI: 10.1002/hrm

employees as he traces the evolving nature of the workplace. A number of examples of how this may play out come to mind. Employees may choose not to give advance notice of a change in employment, leav-ing an unanticipated gap not addressed by replacement planning. They feel that they are their own best career managers and decide to do such managing on the clock. They take on no personal developmental costs without clear transferability to other employment opportunities. Cappelli notes that not all the implications for employees and society have been fully addressed in Talent on Demand, and companies will need to recognize the risks associated with changes in the employee–employer relationship.

Borrowing From Other Disciplines and the HR Identity

As I read, I thought about the similarities and dissimilarities between HR and other business functions from which it might draw management techniques. When do the analogies become less accurate, or even counterproductive, in our efforts to opti-mize our use of human capital? Is it really a paradigm shift if we borrow concepts and techniques from other disciplines? Or would we be better served by developing a model for human capital that is entirely unique, such as Boudreau and Ramstad’s call for a decision science in human capital that is “all our own” (2007)? Is it possible not to borrow from other disciplines to at least a small degree? Using other disci-plines’ language and approaches may lead HR to think about and do things differ-ently, but it may not be helping HR define itself in its own right. One advantage of borrowing the language and techniques from operations and other functions is that it may foster acceptance of HR initia-tives that leverage the shared language and techniques. A frequent criticism is that HR does not speak business language. Apply-ing Cappelli’s framework may demonstrate otherwise, potentially increasing HR’s cred-ibility and influence.

Developmental Assignments and Changing HR

If we accept Cappelli’s premise that the application of supply chain and other business principles is a useful approach to getting more out of our talent investments, there are clear implications for HR profes-sionals’ development. At a minimum, if HR professionals are to take advantage of what other business disciplines have to offer, they need to develop a basic understand-ing of them. They may even need to delve deeper and consider cross-functional as-signments to understand fully how to work with colleagues from other disciplines. Likewise, the value of bringing talent into HR from these other fields becomes more apparent. These ideas, however, are noth-ing new. HR has always been a better business partner when its staff members understand the businesses they serve, as well as general business principles. Perhaps what is becoming more apparent, however, is that this diversity of thought and experi-ence is critical to helping HR make larger strategic shifts rather than merely fine-tun-ing its efficiency.

Employees’ Perspective

Employees who read Talent on Demand will realize that they need to develop the talents and skills that are most in demand, and to keep them updated to ensure that they are always valued. If employees know that they are the right “supply” for an employer’s demands, they can do very well in this model.

Talent on Demand provides an intriguing and useful conceptual framework for talent management while offering a historical con-text for today’s business environment and talent practices and facilitating communi-cation with business partners in a language they can more fully appreciate and under-stand. In the end, it shows that HR’s identity can emerge stronger and more well-defi ned as it leverages practical lessons and princi-ples from supply chain and other business disciplines.

664 HUMAN RESOURCE MANAGEMENT, JULY–AUGUST 2009

Human Resource Management DOI: 10.1002/hrm

Dana L. Tucker, MBA, Ph.D., is a senior talent management consultant for Lowe’s Companies, Inc. His current work areas include change management, performance management, and talent strategy. He also serves as a major in the U.S. Army Reserve and holds an adjunct appointment in psychology, teaching psychological testing and assessment for The University of Maryland, University College.

References

Becker, B., Huselid, M., & Ulrich, D. (2001). The HR scorecard. Boston: Harvard Business School Press.

Boudreau, J., & Ramstad, P. (2007). Beyond HR. Boston: Harvard Business School Press.

Fitz-Enz, J. (2002). How to measure human resources management (3rd ed.). New York: McGraw-Hill.