External knowledge and performance of offshore IT service providers in India: the mediating role of talent management

The global shortage of IT professionals has been identified as one of the most serious threats against the continued growth of offshore IT service providers (OSPs). As a result, talent management has become a key competitive strategy for OSPs. However, how talent management contributes towards the performance of OSPs remains poorly understood in relation to its interaction with knowledge. To examine this issue, we draw on a sample of 68 OSPs in India to test the effects of talent management and external knowledge on performance. The results confirmthat both external knowledge and talent management are positively related to firmperformance and that the latter has strong mediating effects on the relationship between external knowledge and firm performance. The results suggest that OSPs should consider talent management as a mechanism through which knowledge resources can be exploited to enhance firm performance. The managerial implications and limitations of the findings are also discussed. © 2012 Australian Human Resources Institute.