Talent Management in the Age of AI: Vital or Obsolete?

By Angela Lane & Sergey Gorbatov

AI is transforming work and business at an extraordinary speed. It promises to automate not only manual tasks but also decisions, problem-solving, interactions, and even creative processes. When talent is scarce (and most will agree it is),  this must be good news. But it raises a provocative question: If AI can alleviate talent scarcity, will talent management remain relevant?

Our answer is yes — though the reasons may evolve. 

How We Got Here

Talent management emerged as a distinct discipline in the 1990s, shaped by global skills shortages and accelerating business change. The term gained prominence following a 1997 McKinsey & Company study on the shortage of skilled managerial and executive talent. That same year, McKinsey’s Steven Hankin coined the phrase “War for Talent,” distilling the lessons of the previous decade: in an increasingly knowledge-driven, innovation-focused world, skilled human capital was the ultimate scarce resource.

This required a new, strategic understanding of talent:

• Talent is shaped by the skills, behaviours, and roles demanded by business strategy.

• It is dynamic, changing as business needs and individual circumstances change.

• Not all roles or individuals create equal value, so strategic investments are focused where they yield the greatest return.

As economies became more knowledge-based and globalised, organisations recognised that their most valuable — and hardest to replace — asset was their people. Companies expanded operations worldwide, creating demand for leaders able to operate across geographies, cultures, and markets. The shift from industrial production to knowledge work elevated intellectual capital as a primary source of competitive advantage. A looming shortage of experienced workers, particularly as Baby Boomers neared retirement, heightened the need for succession planning and leadership pipelines. According to ManpowerGroup, globally, 77% of employers can’t find the talent they need - the highest level in 17 years. The “war for talent” ushered in an era of intense competition to attract, develop, and retain high performers.

Competition for labour underscored the need for a systematic approach to putting the right people in the right roles. Initially focused on a narrow band of high-potential individuals, talent management has since evolved into a more holistic discipline, aiming to drive performance through people at every level.

Talent management has matured into the discipline of identifying, developing, and retaining individuals whose capabilities, performance, or potential make a disproportionate contribution to business success. By definition, it is a strategic practice. This practice is also based on a hard truth: talent is scarce.

The AI Disruption: Bending the Supply Curve

AI now promises to remove tasks from jobs — not only repetitive work but increasingly, activities involving decisions and actions. Today’s agentic tools can generate text, write software, analyse data, draft legal documents, and produce creative content. They can take actions as well as make recommendations.

It is plausible that talent scarcity — at least in aggregate — could ease. Automation of routine knowledge work will displace some roles entirely. In other cases, digital productivity gains will enable fewer people to produce more output, potentially reducing competition for certain categories of talent.

The Spectrum of Talent Scarcity

Disruption is certain; the degree is not. AI-driven productivity may stimulate economic growth, create entirely new roles, and demand new skills and capabilities. Combined with ongoing demographic shifts that are reducing the workforce, these forces may keep talent scarce.

Another, very real possibility is that talent shortages ease, giving organisations greater choice and less competitive pressure.

The question then becomes: in this environment, what is the role of talent management?

The Future of Talent Management

Even in a high-AI world, we see three domains where human capability will remain scarce — and where talent management will remain critical:

1. Technology leadership and stewardship – Designing, governing, and ethically deploying AI.

2. Human-centric services – Nursing, caregiving, hospitality, and customer-facing roles requiring physical presence and interpersonal skills.

3. Complex judgment work – Strategy, creativity, critical thinking, and emotional intelligence.

An organisation's position in relation to these needs will depend on its industry, geography, and strategic priorities.  The proportion of the workforce in these roles may shift, but the demand for the humans who excel in them will persist.

Conclusion: The Enduring Role of Talent Management

Technology is advancing so quickly that predictions risk becoming obsolete as soon as they are made. Yet one forecast feels safe: there will always be a role for talent management.

Whether in times of labour abundance or scarcity, competitive advantage will hinge on how leaders identify, develop, and deploy the people whose contributions matter most. Because Talent is not only about outsized performance. It's about setting the vision, raising the standard, and shaping the culture. Talent management may adapt — shifting from acquisition to reskilling, from managing scarcity to optimising abundance — but it will remain a core leadership discipline.

The “War for Talent” may change battlefields, but it is not ending.

This article represents the opinions of the authors, and not the views of the many incredible organisations with which we are associated.