From Strategy to Results: the Critical Role of Talent Capital in Driving Organizational Performance

Abstract Book of the 7th International Conference on Research in Human Resource Management

Year: 2025

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From Strategy to Results: the Critical Role of Talent Capital in Driving Organizational Performance

Helena Kesic Kojan, Darko Tipuric

ABSTRACT:

In today’s volatile global market, while Talent Management Strategy (TMS) is widely viewed as a source of competitive advantage, the mechanisms by which formal HR systems translate into superior firm outcomes remain ambiguously defined in the literature. This study addresses the strategic ‘black box’ by empirically investigating the relationship between formalized TMS, the accumulation of Talent Capital (TC), and Organizational Performance (OP). Using survey data from 64 HR Directors in large private Croatian firms, we employed robust regression analysis to test the direct and mediated pathways. The results demonstrate a strong positive association between TMS and the development of TC, and between TC and OP. Crucially, the multivariate analysis reveals that only Talent Capital is a significant positive predictor of Organizational Performance, accounting for 34% of its variance, while the formalized TMS itself shows no direct effect. These findings clarify the essential mediating role of Talent Capital, extending current Strategic HRM models by positing that the depth and quality of human capability—not merely the presence of formal processes—is the true engine of organizational success. Practically, this mandates a shift in organizational focus from the procedural formalization of talent management to its outcomes: tangible capability development, alignment, and strategic retention.

Keywords: Competitive Advantage, Human Capital, Mediation, Strategic Hrm, Talent Management