The Talent Delusion

  • Markets do not discover talent; they manufacture it after success has already occurred
  • What looks like ability is usually accumulated position, timing, and sponsorship
  • Hiring, promotion, and performance metrics legitimise inequality more than they predict value
  • “Talent” functions as an ideology, turning structural advantage into moral entitlement
  • So, the real question isn’t “how do we find more talent?” - it’s “what do we fail to fix when we associate outcomes with ‘talent’?”

The Talent Delusion
- Why Markets Reward Position, Not Ability -

Do we mistake position for talent? If we do, it isn’t a philosophical error - it’s a strategic one.

Labour markets like to market themselves as merit machines: compete for ability, reward performance, elevate the exceptional. In that story, inequality is an audit trail - proof that winners earned their place. It is comforting because it turns messy outcomes into clean explanations. And it becomes operational doctrine: in hiring, pay, promotion, investment, and policy. Assumed, not tested.

But once you manage as if talent is a reliable signal, you start compounding a specific kind of error: confusing advantage with aptitude. The “merit” story stops being neutral. It becomes a risk multiplier.

The deeper problem is not that meritocracy is poorly executed. It is that “talent” is not a stable object markets can consistently identify, measure, and reward. What organisations call talent is often a retrospective label - applied after outcomes are visible - to explain and legitimise who got money, status, and authority. Success produces the label; the label explains the success. Circular, but effective.

In practice, what gets rewarded is positional advantage: early access to opportunity, institutional prestige, proximity to decision-makers, sponsorship by incumbents, favourable timing, and the compounding effect of being selected once and therefore selected again. Over time, these advantages become indistinguishable from “ability” on CVs, in performance reviews, and inside leadership narratives.

Markets do not just misallocate talent. They manufacture it - by converting structural advantage into a personal attribute. Talent is not discovered; it is named.

That distinction matters because it changes the solution set. If inequality is framed as a measurement problem, the response is technical: better assessments, broader pipelines, sharper metrics, improved DEI. Useful, but limited - they refine the story while preserving its function.

If talent is largely a post-hoc fiction, the implications cut deeper. Many practices used to justify pay gaps, succession decisions, leadership concentration, and cultural hierarchy are not evidence-based mechanisms for value creation. They are rationalisations of position and power.

For boards, executives, and investors, seeing this clearly is not academic - it is strategic. It forces a harder question than “How do we find better talent?”: What if the concept itself is obscuring what drives success?
 
In this Commentary

This Commentary challenges the core assumption of modern meritocracy: that markets identify and reward ability. It argues that ‘talent’ is not a measurable, portable quality but a retrospective story used to legitimise unequal outcomes. Drawing on economic and organisational research, the Commentary shows how position, timing, and institutional and social advantage are converted into moralised narratives of merit - and why this matters for leaders, boards, and capital allocation.
 
Beyond Meritocracy: Why Talent Cannot Do the Work Assigned to It

Most critiques of meritocracy accept the existence of talent while questioning whether it is rewarded. Inequalities in education, discrimination in hiring, and inherited advantage are said to distort otherwise legitimate selection processes. The underlying premise remains that individuals possess stable, generalisable abilities, and that labour markets can, in principle, identify and compensate these differences.

We reject this premise and suggest that talent fails as a market concept along three dimensions: observability, transportability, and predictiveness.

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Talent Is Not Observable
Labour markets cannot directly observe ability. What they observe are outputs - sales figures, publications, leadership evaluations, performance ratings - that are contingent on context and on imperfect performance measurement. Organisational sociology and personnel economics have long shown that individual performance is sensitive to team composition, managerial practices, task allocation and internal job design/assignment, resource availability and environmental constraint.

Empirical evidence confirms this instability. Meta-analyses of performance appraisal systems demonstrate significant measurement error and low inter-rater reliability, even within the same organisation. When results change depending on the situation, it is no longer credible to claim they are driven by some fixed, “built-in” trait of the individuals involved.

Talent Is Not Transportable
Labour markets assume that ability travels with individuals - that a high performer in one organisation will perform similarly in another. Yet studies of worker mobility show large performance regressions following job transitions, particularly when individuals move between firms with different structures or cultures.

The “portable skills” narrative obscures the extent to which performance is system dependent. What appears as individual brilliance often reflects complementary assets: strong teams, established routines, reputational spillovers, and institutional support. Remove these, and “talent” frequently evaporates.

Talent Is Not Predictive
Perhaps most damaging to the talent narrative is the weak predictive power of selection systems. Decades of research on hiring methods show that commonly used tools - unstructured interviews, résumé screening, reference checks - have low validity for predicting future job performance.

Even structured interviews and cognitive tests, often cited as best practice, offer only modest predictive power and deteriorate over longer horizons. Algorithmic hiring tools, despite their sophistication, largely optimise historical proxies such as education, tenure, and prior employers, inheriting the biases embedded in past decisions.

In short, labour markets lack reliable mechanisms for identifying future excellence. The belief that firms can detect talent ex ante is sustained more by confidence than by evidence.
  
The Machinery of Merit: How Organisations Manufacture Talent

If talent is not “found,” why does it feel so real? Because organisations do not simply spot ability - they create the appearance of it. Through hiring, promotions, titles, pay, and praise, they turn early advantage into recognised status, and then present that status as proof of underlying ability.
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Hiring Systems and Positional Sorting
Hiring decisions rarely operate on raw assessments of capability. Instead, they rely on proxies that signal prior access to opportunity: elite education, prestigious employers, uninterrupted career trajectories. These signals correlate weakly with underlying ability but strongly with socioeconomic background.

Algorithmic hiring systems amplify this effect. By training on historical data, they optimise for characteristics associated with past success - success that reflected earlier selection biases. As a result, algorithmic screening often increases efficiency while entrenching inequality, presenting positional advantage as objective assessment.
Selection thus becomes self-validating. Candidates chosen through these processes are labelled “high quality” by virtue of having been chosen. The act of selection itself becomes evidence of talent.

Performance Metrics and Cumulative Advantage
Performance metrics are commonly treated as neutral indicators of value creation. In practice, they capture what is measurable, not necessarily what is valuable. Research in organisational behaviour shows that metrics reward visibility, alignment with managerial priorities, and role design as much as effort or skill.

Early success - often driven by luck or favourable assignment - generates reputational capital that improves access to resources and high-impact projects. This dynamic, described by Merton (1968) as the “Matthew Effect”, produces cumulative advantage: small initial differences compound into large disparities over time.

Performance metrics, then, are often less a neutral measure of “ability” and more a mechanism that sorts people into winners and losers. What we later call “talent” is frequently not the original driver of success, but the story we tell after the system has rewarded some and sidelined others.
 
Promotion and the Aesthetics of Potential

Promotion decisions often hinge less on measurable output than on judgments of “potential”, “leadership presence”, and “cultural fit”. These signals are inherently subjective - and, crucially, relational: they are formed and validated through visibility, advocacy, and internal networks. As a result, sponsorship by senior figures can be a decisive driver of advancement, predicting progression even after accounting for objective performance.

Once promoted, individuals are retrospectively reclassified as ‘talented’. Those passed over are redefined as less capable, even when performance differences are marginal. Thus, promotion systems do not reveal talent; they confer legitimacy on those already favoured by organisational power structures.
 
Talent as Ideology: The Moral Work It Performs

If “talent” is empirically fragile, why does it carry such authority? Because it does moral work. It converts unequal outcomes into deserved rewards.

Labour markets generate hierarchy under uncertainty: individual contribution is hard to isolate, and outcomes are shaped by timing, luck, networks, and institutional context. When causality is noisy, inequality still needs a story. Talent supplies it - retroactively translating contingent advantage into personal merit and recasting structural and stochastic forces as individual virtue.

This is the same legitimising move as “efficiency” in monopoly debates or “deservingness” in welfare policy. Talent naturalises hierarchy, makes inequality feel fair, and does it in the language of neutrality and progress.

Its grip does not depend on truth; it depends on usefulness. For organisations, it depoliticises selection and reward. For elites, it reframes privilege as achievement.

You see this most clearly at the point of selection. Hiring - human or algorithmic - must turn messy signals into crisp decisions. “Talent” is the compression algorithm. AI screening often intensifies, rather than fixes, the problem: correlations become “predictions of quality”, regularities get rebranded as latent traits, and historically contingent patterns acquire a sheen of objectivity. The result is not a more accurate measure of talent - it is a more authoritative story about it.
 
Moving Past the Meritocracy Critique

Much contemporary criticism of meritocracy focuses on its moral and social consequences: arrogance among those who succeed, humiliation among those who do not, and the erosion of shared civic bonds. Thinkers such as Michael Sandel argue that meritocratic narratives obscure the role of luck while encouraging hubris among “winners” and resentment among “losers.”
We build on this critique but depart from it in a crucial respect. The central problem is not that meritocracy produces objectionable attitudes or corrosive social dynamics. It is that merit - when operationalised as talent - lacks ontological coherence. Even a procedurally fair system could not reliably identify talent, because there is no stable, context-independent property to be identified.
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Diversification Is a Trap
This shift in framing changes what reform looks like. Calls for fairer hiring practices, broader access, or more sophisticated metrics assume that talent exists as a latent attribute awaiting better discovery. However, if talent is a retrospective construct - assembled after the fact from outcomes and institutional validation - then such reforms address surface inequities while leaving the underlying fiction intact. They improve the optics of selection without resolving its conceptual foundations.
 
A Global, Structural Phenomenon

The dynamics described here are not culturally idiosyncratic nor confined to any single institutional setting. Across advanced economies - liberal, coordinated, and state-led alike - the same patterns recur, credential inflation, elite reproduction, and retrospective narratives of talent. These dynamics surface not only in private firms but also in public institutions and academia, spanning contexts with different regulatory regimes, welfare systems, and professional cultures.

Healthcare and life sciences organisations offer a clear illustration. In pharmaceutical R&D, academic medicine, MedTechs, and biotech start-ups, hiring and promotion are governed by credentialing, peer review, and evidence-based evaluation. Yet advancement is routinely justified through post hoc attributions of “scientific talent,” “clinical judgement,” or “innovative capacity,” even where outcomes depend on team composition, institutional infrastructure, regulatory timing, and access to capital or patient populations. Success is retrospectively individualised, while failure is depersonalised or attributed to exogenous risk - reproducing hierarchy without requiring a stable or measurable account of individual contribution.

This convergence points to a structural rather than cultural explanation. Wherever labour markets allocate rewards under conditions of uncertainty, and wherever unequal outcomes demand moral and institutional justification, talent emerges as a convenient fiction. Its substantive content varies - coded as “excellence,” “leadership,” or “translational impact” - but its function remains constant. Talent provides a portable language through which contingent advantage is stabilised, hierarchy rendered legitimate, and selection practices insulated from political contestation.

Seen in this light, the global spread of talent discourse is not evidence of its empirical validity, but of its adaptability. It travels easily across borders and sectors because it resolves a shared problem faced by modern healthcare and life sciences systems: how to organise high-stakes expertise, distribute prestige and reward, and sustain inequality at scale while preserving the appearance of scientific and moral fairness.
 
What Would Replace Talent?

Rejecting talent does not entail rejecting evaluation, differentiation, or standards. Organisations must still allocate roles, responsibilities, and rewards. The challenge is not whether to evaluate, but how to do so without relying on fictive moral narratives that repackage uncertainty and contingency as individual virtue.

From Individual Excellence to Systemic Contribution
One alternative is to shift evaluation away from individuals and toward systems of work. A substantial body of organisational research shows that outcomes are better explained by collective processes - coordination, learning, communication, and resilience - than by stable individual traits. As demonstrated in Leading Teams, team design and organisational context account for more variance in performance than the personal qualities of team members. Rewarding systemic contribution reframes performance as emergent rather than intrinsic, recognising that value is produced through interaction, infrastructure, and institutional support rather than isolated excellence.

From Selection to Allocation
A second shift is from selection to allocation. Rather than claiming to identify the “best” candidates, ex ante, organisations can treat hiring and promotion as provisional placements under uncertainty. Structured experimentation - through role rotation, probationary assignments, and feedback-driven reassignment - acknowledges that fit and effectiveness are discovered over time. This approach replaces the fiction of predictive certainty with mechanisms for learning and adjustment, making error correction a feature of the system rather than a moral failure of individuals.

From Moral Narratives to Institutional Accountability
Finally, inequality itself should be justified institutionally rather than morally. Pay differentials, authority, and hierarchy should be defended in terms of functional necessity - coordination costs, responsibility, or scarcity - rather than superior worth. This shift would require greater transparency about how rewards are set and a willingness to revise structures that fail to deliver collective value. Inequality becomes a contingent organisational choice, open to evaluation and reform, rather than a naturalised outcome of individual merit.

Taken together, these shifts do not abolish judgement; they relocate it. Evaluation moves from character to contribution, from prediction to learning, and from moral status to institutional design.
 
Takeaways

We do confuse title with talent - and this confusion is not harmless; it is strategic risk. “Markets reward talent” works as a comforting story: it reassures winners, disciplines everyone else, and makes inequality feel deserved. But talent, as markets use it, cannot bear that load: it is not cleanly observable, reliably portable, or consistently predictive. More often it is assembled after the fact - manufactured through visibility, sponsorship, and narrative control - then retrofitted into a morality tale called “merit”. So, when markets do not reward “true” talent, that is not a glitch in a fair system; it is the system doing what it is built to do: allocate under uncertainty while supplying moral cover. Dropping the fiction would not erase hierarchy - it would remove inequality’s moral alibi, forcing disparities to be justified by function, responsibility, risk, and collective value rather than implied virtue. That is a harder argument. It is also the accountable one - and it is why this is the confusion worth confronting.

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