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Article

Investigating the Effect of Talent Management Practices on Sustainable Competitive Advantage in Private-Sector Organizations

by
Razaz Waheeb Attar
1,*,
Amal Alanazi
2 and
Amal Hassan Alhazmi
1
1
Management Department, College of Business Administration, Princess Nourah bint Abdulrahman University, P.O. Box 84428, Riyadh 11671, Saudi Arabia
2
Applied College Administrative, Princess Nourah bint Abdulrahman University, P.O. Box 84428, Riyadh 11671, Saudi Arabia
*
Author to whom correspondence should be addressed.
Sustainability 2025, 17(21), 9909; https://doi.org/10.3390/su17219909 (registering DOI)
Submission received: 23 September 2025 / Revised: 18 October 2025 / Accepted: 27 October 2025 / Published: 6 November 2025
(This article belongs to the Special Issue Advancing Management Practices Through Digital Marketing and Sustainable Innovation)
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Review Reports Versions Notes

Abstract

Talent management is an important strategic tool to improve sustainable organization performance and competitiveness in the contemporary business environment. Even though there are increasingly more studies around this topic in the world, studies in the context of Saudi Arabia, and more specifically in the private sector, are still scarce, forming the research gap that this study aims to fill. The study is designed to explore the effect of human resource practices on employee innovation, organization resilience, and sustainable competitive advantage in the Saudi private-sector organizations based on the Resource-Based Variability (RBV) theory as a theoretical perspective. Data were gathered from 366 structured questionnaires, and the hypotheses were tested by employing the relevant statistical tools. The results supported the first hypothesis (H1), showing that there is a positive influence of the practices of talent management on the innovation of the employees, and the second hypothesis (H2) showing the correlation between these practices and organizational resilience. The third hypothesis (H3) showed that talent management practices are significant in the attainment of a sustainable competitive advantage. The findings affirm that the adoption of sound approaches for the attraction, development, and retention of talent has a part in the consolidation of innovation, resilience, and the accomplishment of competitive advantage. The most important theoretical and applied implications of the study are discussed at the end, along with the limitations of the study and suggestions for future research.

1. Introduction

Talent management has gained significant importance in private-sector organizations across the globe over the past few years. This focus and significance are driven by diverse factors, such as globalization, transforming workplace environments, knowledge-driven competition, and demographics [1]. These changes have highlighted the critical requirement for organizations to plan and formulate their talent pools to ensure competitiveness in the business arena [2]. The concept of talent has evolved significantly over time. In ancient times, talent was considered a rare innate gift associated with genius and inspiration. With the Industrial Revolution in the nineteenth century, the focus shifted to mental abilities and practical skills as factors for increasing productivity [3]. In the twentieth century, talent emerged as a strategic asset for organizations, with the concept of talent management emerging to attract and develop talent and link it to competitive advantage [4]. With globalization and the digital economy, the concept expanded to include creativity, emotional intelligence, and digital skills. Following the COVID-19 pandemic, the focus has shifted to digital resilience and strategic adaptation to enhance organizational sustainability [5]. In this context, organization’s capability to hire and sustain an experienced workforce individual is a crucial competitive advantage, regardless of whether the situation is stable or uncertain. This demand for employees to retain competitive skills and further improve them has grown due to increased competition in the workplace and a shortage of talented workforce individuals [2]. As a result, talent management practices have become an issue as a strategic tool to share organizational values and show how an organization is different from the competition. It is remarkable how the copper talent is one of the most important engines of sustainable competitive advantage in today’s private-sector organizations. The change to the knowledge-based economy has led to increased attention on attracting skilled employees [2]. Especially in Saudi private-sector organizations [2], the importance of attracting and retaining skilled employees has become important. Securing top talent is considered to be a crucial factor in achieving the best possible outcome. A strong talent management system helps create a successful organization by implementing strategies at different levels. The ability to effectively hire, retain, and engage talent at all tiers has a significant impact on sustainable competitive advantages and contributes to the effective promotion of entrepreneurship [6]. Talent management practices promote entrepreneurial companies to hire multi-skilled employees and so encourage them to invest in developing and perfecting their skills [7]. From this point of view, talent management is part of the provision of qualified human capital to support the success of entrepreneurial projects and motivate the adoption of innovative strategies to manage and motivate the workforce [8]. Previous studies [7,9,10] have confirmed that the investment in talented employees is crucial to achieve long-term competitive sustainability. Modern organizations that employ effective talent management practices assess how effectively they match the practices to their strategic goals. Conversely, keeping the best-skilled talent employees is one of the challenges facing human resource departments in the present competitive business environment. With the shift from the industrial to the digital age, human capital has become a vital element in reshaping organizations worldwide and making them competitive [11].
Resource-based review supports the current research with theoretical justification. The concept of relevancy suggests that certain organizations have an ability to sustain the competitive advantage throughout time, so that they can generate more performance and profit than the competitors on a regular basis [7,12]. According to the appropriate theory, this advantage resulted from the unique assets and capabilities of our firm. These findings underscore the importance of aligning talent management with organizational goals to enhance long-term competitive sustainability and stimulate employee innovation [7,13,14]. However, despite the recognition of talent management’s strategic role, many organizations—particularly in public contexts—still lack a deep understanding of its impact on innovation, resilience, and sustainable competitive advantage. In Saudi Arabia, which is experiencing significant economic growth and attracting major international investments [7,15], there is a growing need for studies that analyze in-depth the extent to which private-sector organizations are focusing on talent management practices [16]. Accordingly, this research aims to fill a clear gap in the literature by exploring the impact of talent management practices on innovation, organizational resilience, and sustainable competitive advantage in the Saudi private sector, particularly in the post-COVID-19 era, which has highlighted the global problem of employee retention [6,17]. The study findings are expected to provide practical insights for managers, policymakers, and researchers on the strategic role of talent management in building sustainable competitive advantage in a highly changing business environment [18].

2. Review of Literature

2.1. Resource-Based Review

Resource-based review provides theoretical support for current research. The relevant concept aims to explain why certain organizations can maintain a competitive edge over time, enabling them to generate higher performance and profits than their competitors consistently [2]. According to the relevant theory, this advantage emanated from our firm’s distinct assets and capabilities [18]. The resource-based view describes competitive advantage as an organization’s ability to embrace strategies that create value in ways that are not being focused on or used by any of its potential competitors [19]. This perspective assumes that competition includes both existing and emerging competitors. Considering the relevance and importance of resource-based review to the current research, Talent match management is deemed a prominent factor, suggesting that Saudi private-sector organizations can achieve long-lasting competitive advantages by effectively using practical and unique resources [20]. These resources are scaled employees with expertise and experience provided by their organizations to ensure maximum benefit from them. The relevant proposition also implies that these employees are not merely considered the source of financial gains for their organizations but are equally focused on their career progression, training, and skills development as their valuable assets. It is argued that for a resource to work as a source of sustainable competitive advantage, it must add value to the organization and be rare, difficult to imitate, and irreplaceable. By focusing on talent management strategies, it is assumed that private-sector organizations in the Kingdom of Saudi Arabia are using their strategic management policies to ensure that their talent possesses rare skills among their organizations’ workforce [21]. According to Bhandari et al. (2023), when management empowers employees with trust and challenging tasks, employees respond with higher motivation, commitment, and performance [22]. This approach highlights that an organization’s distinct competitive position comes from its market activities and its unique collection of workforce resources, which are complex, dynamic, and intangible. Hence, this study also highlights and proposes the distinguished position of the workforce of Hindu Saudi private-sector organizations that enjoy strategic talent management policies that benefit them and their organizations. Figure 1 shows the explanatory framework of the current study.

2.2. Talent Management and Employee Innovation

Traditional sources of competitiveness, including technology and quality, have become easier for competitors to replicate in today’s world [23]. While replicating certain competitiveness processes has become straightforward, talent management still needs to be utilized, particularly for organizations in the private sector. In today’s technologically competitive and advanced environment, organizations confront gigantic challenges in adapting to market changes and collecting top talent. Existing research on talent management and employee innovation has widely examined the innovation capabilities of managers and employees, comparing them in different contexts [24]. Notably, innovation plays a crucial role in securing skilled talent and incorporating advanced technologies, such as chat ports, artificial intelligence, social media, teleconferencing, big data, and others. These tools significantly influence organizational growth by attracting skilled professionals. Talent management practices such as development, career planning, and training equip employees with the required skills and knowledge to turn ideas into practical outcomes [7]. In addition, talent management strategies can help organizations address obstacles to innovation, such as bureaucratic policies, hierarchical structures, effective leadership, and poor communication. Organizations create environments where innovation thrives by overcoming these challenges. Talent management and innovation are thus interconnected, and prioritizing both is essential for maintaining a competitive advantage. Traditional sources of competitiveness, including technology and quality, have become easier for competitors to replicate in today’s world [7,25,26]. Consequently, there is an increased demand for a knowledgeable and skilled force capable of adapting to innovation and fulfilling market and customer demands. While replicating certain competitiveness processes has become straightforward, talent management remains an underutilized yet practical opportunity, particularly for organizations in the private sector [27,28].
H1. 
Talent management positively affects employee innovation in Saudi private-sector organizations.

2.3. Talent Management and Organizational Agility

Talent management plays a pivotal role in enhancing organizational resilience by enabling organizations to quickly adapt to changing business environments. Practices such as recruitment, continuous development, and retention contribute to building a workforce capable of responding effectively to challenges and developments [29]. Recent literature indicates that organizations that integrate talent strategies into their organizational plans are more capable of embracing innovation and making flexible strategic decisions [29,30]. In the Saudi context, linking talent management to organizational resilience has become a strategic requirement to keep pace with the economic transformations of Vision 2030. Research shows that agile organizations outperform others over time, consistently retaining above-average performance [31]. Organizations that are high performers in any given year may experience fluctuations in their success. A key component of an agile organization is effective talent management. It is critical for an organization’s ability to adapt and evolve in response to environmental changes [32].
During change implementation, concerns arise regarding whether the workforce possesses the skills necessary to support the organization’s objectives, as some existing skills may become irrelevant [2]. Therefore, organizations need to develop and flexibly implement new strategies to effectively support their talent, enhancing organizational resilience [31]. Agile talent management practices differ from traditional talent management practices; while the latter focus on reducing labor turnover costs and training employees for established roles, they suffer from limitations, most notably high replacement costs and slow adaptation. In contrast, agile talent practices support strategic change, motivate employees to acquire new skills, and help them adapt to changing organizational conditions [33]. Talent management strategies must also align with the nature of the organization and the pace of change; organizations with slow change may adopt a long-term career approach [34] while organizations with rapid change require short-term approaches that allow for flexible and rapid workforce adjustments [35].
H2. 
Talent management positively affects organizational agility in Saudi private-sector organizations.

2.4. Talent Management and Sustainable Competitive Advantage

Literature confirms that competitive advantage stems from internal resources that are difficult to imitate, such as human, structural, and relational capital [36]. Aina & Atan (2020) suggest that sustainable advantage is achieved through three main approaches: differentiation, focus, and cost leadership [37,38,39,40]. Reducing costs provides a price advantage, while differentiation and focus arise from offering unique products and services that meet customer needs. It has been demonstrated that successfully seizing opportunities, reducing costs, and addressing threats enhances competitive advantage [41], while Alkhnbashi et al. (2024) demonstrated that having the right talent is a critical component of building it [42]. Recent literature suggests that sustainable competitive advantage is not only about acquiring talent, but also about implementing effective strategies that foster adaptability, innovation, and long-term success [43]. According to Alves et al. (2020), retaining a skilled workforce is a priority to ensure continuity [44]. Thus, employee expertise, networks, and capabilities are organizations’ greatest assets in a knowledge-based economy, underscoring the essential link between talent management and sustainable competitive advantage.
H3. 
Talent management positively affects sustainable competitive advantage in Saudi private-sector organizations.

3. Methodology

3.1. Study Design and Research Instrument

This research involves a quantitative design as the data was based on the quantification of each study variable, further measured by a set of questionnaire items. This design was selected as the aim was to obtain data in a brief period with greater generalizability of results. The researcher designed and used a structured questionnaire for data collection, designed on a five-point Likert scale [45,46,47,48]. Questionnaire items originally belonged to existing studies; however, some primary formatting was performed to match the current study’s problem and objectives [49]. Table 1 summarizes the questionnaire items and sources related to each variable. Once data was collected, it was evaluated and coded for further analysis using Smart-PLS for Structural Equation Modeling (SEM).

3.2. Sampling Approaches

The research population included employees of private-sector organizations in the Kingdom of Saudi Arabia. In line with research design requirements and implementation capabilities, the study was narrowed to a single organization to extract in-depth and applicable insights. Within this framework, one of the largest oil and mineral companies in Saudi Arabia was selected as one of the most prominent and influential private-sector organizations in the national economy, and employees are most familiar with talent management practices in the Saudi energy sector. This choice was justified due to the difficulty of accessing a random sample from all private-sector organizations and the researchers’ desire to collect in-depth data from a leading organization. According to recent reports, this company employs approximately 73,000 employees [24], providing a suitable population size for a large and reliable research sample. This organization is one of the largest energy and chemical companies globally, playing a pivotal role in supporting economic and social development in the Kingdom. A convenience sample was selected, comprising employees from Saudi Aramco. However, limiting the sample to a single company is a methodological limitation, requiring caution when generalizing the results to other sectors or companies. The study relied on the Lyman formula [53] to determine the sample size. This formula indicated that a sample size of 397 respondents was appropriate for the needs of the current study. Data were collected from 14 September 2024 to 9 November 2024, through in-person visits to the organization’s headquarters in Dhahran, Saudi Arabia. Convenience sampling was used, as recommended by Stratton (2021) [54], with an emphasis on selecting individuals familiar with the organization’s talent management practices [55]. The researchers obtained formal prior permission from the organization’s management before commencing the data collection process, and all participants were assured that they had obtained informed consent confirming that the data would be used exclusively for academic research purposes without any commercial exploitation [20,56]. After completing data collection, the entered questionnaires were carefully reviewed, and 31 incomplete or incorrect questionnaires were excluded, bringing the final response rate to 90.6%, which is above the minimum acceptable rate of 60% [37,57]. The questionnaire’s validity was verified through expert review and exploratory factor analysis (EFA) to ensure that the items fit the theoretical dimensions. Internal reliability was also verified using Cronbach’s alpha coefficient, with all dimensions exceeding the reference value (0.70). During the analysis, items with low factor loadings (less than 0.50) were removed to enhance construct validity, a procedure followed in quantitative studies to ensure that the items accurately measure the targeted variables. Confirmatory factor analysis (CFA) was also used to verify model fit, and the indices (CFI, RMSEA) showed acceptable standard values [58].

3.3. Common Method Bias (CMB)

The common method bias is a common issue in survey-based studies, adversely affecting the validity of study instruments and results. Thus, determining CMB in the current study revealed a 23.4% variance (less than 50%), suggesting that CMB is under control in the current study [59].

4. Data Analysis and Findings

Data analysis in the current research is based on two primary approaches. First, descriptives are used to measure the demographics of study respondents. Second, inferential statistics, mainly structural equation modeling, are employed to test the measurement model and structural relationships between study variables.

4.1. Respondents’ Demographics

Demographic analysis results showed that 78% of respondents were male, compared to 21% female (Table 2). In terms of age group, participants aged 31–40 constituted the largest proportion (48%), followed by those aged 41–50 (35%), those aged 20–30 (11%), and those aged 51 and above (5%). In terms of work experience, 47% of respondents had between two and five years of experience, 20% had 11 years or more, 17% had one year or less, and approximately 15% had between six and ten years of experience. Regarding nationality, the results showed that 62% of respondents were from GCC countries, 27% were from other nationalities (Iranian, Pakistani, Indian, European, etc.), while UAE nationals constituted only 9% of the sample.

4.2. Structural Equation Modeling (SEM)

Once the respondents’ demographics were calculated, the next step involved structural equation modeling to determine the validity, reliability, and overall status of the structural model proposed in this research study. First, the reliability and validity of the research tool, also known as measurement model analysis, were evaluated. In this regard, confirmatory factor analysis (CFA) was conducted to examine the study tool’s convergent validity and construct reliability. The results of CFA are represented in Table 3 below. CFA indicated an overall satisfactory result regarding the reliability and validity of the research tool. First, it was found that most of the loading values of measurement tool items exceeded the threshold value (0.5). In addition, the average variance extracted values (AVE) also surpassed the threshold of 0.5 (talent management practices 0.578, employee innovation 0.531, organizational agility 0.564, and sustainable competitive advantage 0.598). Regarding the construct reliability, results indicated the Cronbach alpha values exceeded the threshold of 0.7 (talent management practices 0.817, employee innovation 0.823, organizational agility 0.704, and sustainable competitive advantage 0.770). Also, the composite reliability values exceeded the threshold of 0.7 (talent management practices 0.810, employee innovation 0.814, organizational agility 0.705, sustainable competitive advantage 0.795). The results of the CFA and SEM analyses indicate that talent management practices had a positive impact on sustainable competitive advantage. However, the strength of this impact was weaker compared with the impact of both innovation and organizational agility. This can be explained by the fact that talent management often acts as an enabler that creates the internal environment and enhances individual capabilities, but it does not automatically translate into direct competitive outcomes. The true impact of these practices becomes apparent when they translate into innovative behaviors or flexible organizational responses, which are clearly reflected in competitive performance.
As two items (INN1 and AG2) had loading values of less than 0.5, they were eliminated to avert potential effects on the final structural model. Once the items were removed, the goodness-of-fit was tested to ensure the suitability of the measurement model for the structural model analysis. Table 3 provides a summary of the goodness-of-fit analysis. Results showed that both saturated and estimated models showed an acceptable fit to the data. The standardized root mean square values (0.045 and 0.048) indicated a small difference between observed and predicted covariance metrics. The low d_ULS (0.95 and 1.02) and d_G (0.80 and 0.85) values indicated a small difference between observed and model-implied structures. The chi-square values (120.5 and 130.2) are within the acceptable ranges for moderate sample sizes. Finally, non-fit index values (0.95 and 0.92) implied that the models elucidated the data well compared to a null model, with the saturated model performing better. These results suggested a good fit for the current model.
On the other hand, innovation and organizational agility represent tangible and measurable outcomes, observable in the form of new products, operational improvements, or rapid adaptation to changes in the business environment. Therefore, their direct impact on competitive advantage is clearer and stronger. This finding supports previous studies such as [15,29], which confirmed that talent management gains its strategic value by enhancing innovation and agility, while its direct impact on performance remains limited if not coupled with supportive organizational practices. Therefore, it can be argued that sustainable competitive advantage is not achieved simply by implementing talent management practices but rather by integrating these practices into a comprehensive strategy that stimulates innovation and builds high organizational agility. This reinforces the need for organizational decision-makers to view talent management not as an end in itself, but rather as a means of generating sustainable competitive capabilities.
The discriminant validity of measurement tools is also assessed to ensure the extent to which the study variables are uncorrelated, which is a primary requirement in structural equation modeling. First, the results of the Hetreotrait-Monotrait ratio indicated that all the relevant values remained below the threshold of 0.85 (see Table 4). Regarding the Fornell-Larcker criterion, results revealed that all the square roots of AVE are not only higher than the other correlation values but also, each of them is uncorrelated (See Table 5). These results indicate that discriminant validity does exist in the research tool.
Before conducting the path analysis, the independent variable’s predictive potential and effect size (talent management practices) on the dependent variables (employee innovation, organizational agility, and sustainable competitive advantage) were tested (Table 6). Table 7 represents the summary of R-squared and effect size estimations. Results revealed that the independent variable causes a 32% variance in employee innovation, a 15% in organizational agility, and a 33% in sustainable competitive advantage. These results indicated a moderate predictive power of the independent variable in the current study. Further, the effect size results indicated that employing innovation (0.477), organizational agility (0.418), and sustainable competitive advantage (0.613) all demonstrated a large effect size, suggesting a strong effect of the independent variable in the current research study.
The results of hypotheses testing showed significant positive effects of talent management practices on all the study variables (employee innovation, organizational agility, and sustainable competitive advantage). Regarding the first hypothesis, path analysis showed that talent management practices positively affect employee innovation with a path coefficient value of 0.568 and a significance value of 0.000 (t = 13.579). The proposed effect of talent management practices on organizational agility is further tested by path analysis. Results indicated that with the beta coefficient value of 0.391 and significance value of 0.000 (t = 11.197), the second hypothesis of the grant research study is also accepted. Finally, the third study hypothesis also remained accepted as the beta coefficient was 0.112, and the significance value was 0.000 (t = 19.529). Notably, the path between talent management practices and employee innovation remained the strongest. Followed by the path between talent management practices and organizational agility, the path between talent management practices and sustainable competitive advantage remained the weakest among all. Table 8 represents the results of path analysis in the current study, while Figure 2 illustrates the results of path analysis.

5. Discussion

Within the context of resource theory, the purpose of this study was to relate the talent management practices to the critical factors of private-sector organizations in the Kingdom of Saudi Arabia, which are employee innovation, organizational flexibility, and sustainable competitive advantage. The theory shows that investing in high-quality human resources can have a direct effect on organizational innovation, improve organizations’ ability to adapt to changing business environment, and is able to acquire an advantage that is hard to be imitated by the competitors. The study also revealed that organizations that practice clear talent management strategies such as talent acquisition, skills assessment, continuous development, and effective workforce management, have greater potential in building a positive image as an attractive employer [48]. This understanding is reinforced by recent studies, which confirm that talent management is not a human resources tool but a strategic approach for achieving competitive sustainability by reducing the administrative burden and improving employee involvement in innovation. In addition, the existing literature [13,48,60,61] and resource-based theory suggest that organizational resources are not only tangible assets (equipment, raw materials, factories) but also intangible organizational assets. The most important of these assets are human capital, both on the individual level and on the collective level, including personal competences, cooperation, creativity, innovation, inter-relationship within teams, the organization’s culture, and so forth. Within this context, this study aimed to shed light on the position of talent management from the perspective of the employees, relying on resource-based theory. This new method has helped highlight the importance of employees, not just the shareholders, as an important factor in securing and strengthening competitive advantage. However, the talent management practices are still playing a significant role in developing the knowledge of individual employees and developing employee capabilities, which is beneficial for the overall performance of the organization [62].
Considering the data, study respondents agreed that their organization provides effective training and programs to enhance their skills. Talent management also contributes to providing a supportive environment for new ideas, which enhances institutional entrepreneurship. Entrepreneurship depends on the presence of talents capable of innovation and achieving strategic goals effectively. In addition, the recruitment process ensures the selection of highly skilled individuals based on strategies to retain top talent through competitive benefits. These results also indicated a consensus that talent management practices in their respective organizations are consistent with long-term strategic goals, providing robust personal growth opportunities to the workforce individuals. Consistent with these responses [56] also considers talent management as a crucial management function to ensure that the organization has the required individuals to meet the overall organizational goals. The critical considerations include upgrading, skilling, and reskilling the existing team members while recruiting suitable talent to retain readiness for future challenges.
Regarding the first study hypothesis, the gathered data indicated a robust consensus from the study respondents. In other words, respondents agreed that their organization focuses on processing employee innovation and their contributions with high esteem. Accordingly, their organizations have stated and developed working strategies for employee innovation, indicating developed structural mechanisms for enhancing workforce innovation. Study respondents opined that their organizations motivate employee innovation as one of the critical factors in sustaining a competitive edge by creating a vision and intent for employee innovation. In line with the current research study results, existing literature [13,36,63] shows a positive and significant relationship between talent management and employee innovation. For example, studies have shown that talent management positively affects product and process innovation across different industries, including banking and education. In this context, a study in the Jordanian banking sector [64] highlighted their talent management practices in significantly improved innovation at both managerial and employee levels. In addition, another study in higher education institutions [18] revealed how talent management dimensions, including development, talent attraction, and retention, contribute to promoting innovation within departments and facilities. Overall, current research findings and cited literature support focusing on talent management as an important aspect, particularly in Saudi private-sector organizations.
H2 received statistical and significant support, indicating a tangible positive impact of talent management practices on enhancing organizational resilience in these organizations. The data revealed that respondents believe their organizations are able to quickly adapt to changes in the competitive environment, and that their workforce responds effectively to anticipated challenges. They also confirmed that their organizations actively identify and seize new business opportunities, thanks to the existence of flexible organizational processes capable of accommodating innovation and change. Additionally, respondents indicated that their organizations foster a corporate culture that supports strategic decision-making and implementation. These findings are consistent with [65]’s emphasis on the need to expand the scope of assessment and implementation across talent management practices by designing more flexible and innovative strategies, moving away from traditional approaches that may slow adoption and increase resistance. It is also supported by other studies that recommend the need to develop flexible systems for immediate change [66], effective recruitment processes [15] incentive compensation systems [67], and organizational support systems [31,33,35,67] all of which contribute to enhancing organizational resilience [30].
Finally, results also supported the third study hypothesis. Respondents agreed that their organization sustained a distinct value proposition that competitors find hard to replicate. According to them, the expertise and skills of their organizational workforce potentially contribute to long-term competitive advantage. Respondents indicated that their organizations invest in the workforce to acquire this competitive advantage, which significantly enhances their market position. Accordingly, they agreed that their organizations are consistent with providing superior quality services and products compared to competitors by innovating strategies to retain a sustainable competitive advantage in the business industry. The study by [68] in Turkey further supports the current study results by arguing that organizations seek long-term sustainable competitive advantages by using strategically developed resources. The resource presents a similar notion-based theory that organizations acquire and retain competitive advantages by creating resources that are practical, rare, and challenging to imitate or replace [69]. A sustainable competitive advantage typically manifests itself in an organization’s ability to maintain its competitive edge over the long term, ensuring it remains ahead of its competitors. To achieve this goal, talent management practices—which include identifying, developing, engaging, managing, and retaining talent—emerge in importance. These practices contribute to improving the organization’s efficiency and effectiveness, enhancing its ability to successfully compete globally [11].

6. Practical Implications

The findings of the study revealed that the respondents concurred that their organization offers effective training and programs that help them to develop their competency skills, and talent management also helps in providing a nurturing environment for new ideas which boosts institutional entrepreneurship. Entrepreneurship requires the presence of talented people who are innovative and strategic thinkers. In addition, the recruitment process guarantees that the most skilled people are chosen, due to strategies that help retain the best people as they attract top talent through competitive benefits. The results also suggested that there is a general agreement that the talent management practices of the members of the organizations are aligned with the long-term strategic objectives, and that they offer strong development opportunities to the people of the organization. In line with these responses, [56] also sees talent management as one of the important management functions to ensure that the organization has the necessary population to achieve overall organizational objectives. The key points to consider are reskilling, skilling, and upgrading the current employees while hiring the right talent to stay prepared for the upcoming challenges.

6.1. Conclusions

This research aimed at emphasizing the effect of talent management practices in the enhancement of the effectiveness of organizations and the intrusion of a sustainable competitive advantage among the Saudi Arabian private-sector organizations. Results emphasized the importance of the employees as key contributors to organizational performance, indicating that sound talent management systems improve the work capabilities and ensure the effective alignment of goals, especially today when technologies are evolving. Global competition has been radically increased, and organizations focused on talent management practices are well prepared to win. It is also suggested that talent management practices are no longer a matter of human resource protection, but a strategic obligation of the organizational stakeholders. It affirms that organizations stay agile and innovative via improving the abilities of their employees, advancing innovation, and including a culture of adaptability. Ensuring that talent management practices are aligned with organizational goals helps in enhancing responsiveness to create a skilled workforce that is able to adopt and handle innovation and change. Organizations that use effective talent management practices gain a number of advantages by encouraging a skilled workforce that handles changing organizational needs and chores, thereby achieving a sustained competitive advantage, especially in an ever-evolving business environment. Therefore, considering their growing technological changes and competitive emphasis, Cobra Talent Management should stay our priority for organizations. This research made a message in investing in the employee as a long-term strategy to enhance market position and provide a better product and service. Organizations can differentiate themselves in the market by placing a focus on innovation and the agility of their employees, creating challenging values for competitors to imitate, and providing a supportive environment for new ideas, which improves institutional entrepreneurship. Hence, in the aspect of having employees who innovate and are agile, organizations will benefit from the relevance of talent management as an influential tool, mainly if they aim to be relevant and competitive, especially in an era where innovation and adaptability are crucial to success.

6.2. Study Limitations and Future Research

Despite this research being based on filling an important gap, it has some primary limitations. First, the study is based on private-sector organizations in the Kingdom of Saudi Arabia; the results cannot be generalized to public-sector organizations. Future researchers can conduct studies on private-sector organizations to analyze the effects of talent management practices and gain in-depth insights. The second limitation involves the generalizability of results in other regions, as this research is based in Saudi Arabia. Future researchers can replicate this research design and approaches to investigate the effects of talent management practices in their different regions to limit this. Finally, the third limitation involves using a single-method approach, a quantitative design, which also adds robust limitations to current research. Future studies can involve other methodologies, such as the mixed method approach, to acquire even deeper details.

Author Contributions

Conceptualization, A.A. and A.H.A.; Methodology, R.W.A.; Formal analysis, R.W.A.; Data curation, A.H.A.; Writing–review & editing, R.W.A., A.A. and A.H.A.; Visualization, A.A.; Supervision, A.H.A.; Project administration, R.W.A.; Funding acquisition, A.A. All authors have read and agreed to the published version of the manuscript.

Funding

This research was funded by the Deanship of Scientific Research and Libraries at Princess Nourah bint Abdulrahman University, through the Research Funding Program, Grant No. (FRP-1445-18).

Institutional Review Board Statement

IRB approval obtained by the Ethics Committee of Princess Nourah bint Abdulrahman University (HAP-01-R-059) on 18 February 2025.

Informed Consent Statement

Informed consent was obtained from all subjects involved in the study.

Data Availability Statement

The data presented in this study are available on request from the corresponding author.

Conflicts of Interest

The authors declare no conflicts of interest.

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Sustainability 17 09909 g001
Figure 1. Explanatory Framework.
Figure 1. Explanatory Framework.
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Figure 2. Results of Path Analysis.
Figure 2. Results of Path Analysis.
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Table 1. The Questionnaire Items and Sources.
Table 1. The Questionnaire Items and Sources.
VariablesItemsSources
Talent Management PracticesMy organization provides effective training and programs to improve employees’ skills.[40]
The recruitment process in my organization ensures the selection of highly skilled individuals.
My organization ensures strategies to retain top talent through competitive benefits.
My organization provides robust personal growth opportunities to the workforce.
Talent management practices in my organization are consistent with long-term strategic goals.
Employee InnovationMy organization focuses on process employee innovation and their contributions in high esteem.[26,50]
My organization has stated a working strategy for employee innovation.
My organization has developed structural mechanisms for improving employee innovation.
My organization encourages employee innovation as one crucial factor in sustaining competitive advantage.
My organization has created a vision/strategic intent for employee innovation.
Organizational AgilityMy organization quickly adapts to changes in a competitive environment.[33,51]
Employees in my organization respond effectively to the expected challenges.
My organization is actively identifying and seizing new business opportunities.
My organization has a flexible organizational process to embrace innovation and change.
My organization promotes a culture that promotes strategic decision-making and execution.
Sustainable Competitive AdvantageMy organization sustains a distinct value proposition that competitors need help to imitate.[52]
The expertise and skills of my organizational workforce potentially contribute to a long-term competitive edge.
Investments in the workforce significantly improve our market position over time.
My organization is consistent with providing superior quality services and products compared to competitors.
My organization uses potentially innovative strategies to retain a sustainable competitive advantage in the business industry.
Table 2. Demographics of Study Respondents.
Table 2. Demographics of Study Respondents.
VariablesConstructsN%
GenderFemale7721.4%
Male28378.6%
Age20–30 years4011.1%
31–40 years17348.1%
41–50 years12835.6%
51 years or above185.0%
Work Experience1 year or less6217.2%
2–5 years17047.2%
6–10 years5415.0%
11 years or above7420.6%
NationalityEmirati349.4%
Gulf22662.8%
Other10027.8%
Table 3. Confirmatory Factor Analysis.
Table 3. Confirmatory Factor Analysis.
VariablesItemsLoadsAVECACR
Talent Management PracticesTMP10.7760.5780.8170.810
TMP20.816
TMP30.775
TMP40.733
TMP50.651
Employee InnovationINN10.4620.5310.8230.814
INN20.787
INN30.731
INN40.793
INN50.833
Organizational AgilityAG10.6290.5640.7040.705
AG20.208
AG30.867
AG40.937
AG50.847
Sustainable Competitive AdvantageSCA10.8720.5980.7700.795
SCA20.840
SCA30.791
SCA40.783
SCA50.670
Table 4. Model Fit Analysis.
Table 4. Model Fit Analysis.
Saturated ModelEstimated Model
SRMR0.0450.048
d_ULS0.951.02
d_G0.800.85
Chi-square120.5130.2
NFI0.950.92
Table 5. Hetreotrait-Monotrait Ratio.
Table 5. Hetreotrait-Monotrait Ratio.
Employee InnovationOrganizational AgilitySustainable Competitive AdvantageTalent Management
Employee Innovation
Organizational Agility0.301
Sustainable Competitive Advantage0.1550.157
Talent Management0.5340.1850.130
Table 6. Fornell-Larcker Criterion.
Table 6. Fornell-Larcker Criterion.
Employee InnovationOrganizational AgilitySustainable Competitive AdvantageTalent Management
Employee Innovation0.729
Organizational Agility0.6510.405
Sustainable Competitive Advantage0.1250.0540.630
Talent Management0.5680.3910.1120.691
Table 7. R2 and Effect Size (f2) Estimation.
Table 7. R2 and Effect Size (f2) Estimation.
VariablesR2f2-Square
Employee Innovation0.3230.477
Organizational Agility0.1530.418
Sustainable Competitive Advantage0.0130.613
Table 8. Hypotheses Testing.
Table 8. Hypotheses Testing.
Relationshipsβt-Valuep-ValueDecision
Talent Management Practices → Employee Innovation0.56813.5790.000Accepted
Talent Management Practices → Organizational Agility0.39111.1970.000Accepted
Talent Management Practices → Sustainable Competitive Advantage0.11219.5290.000Accepted
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Attar, R.W.; Alanazi, A.; Alhazmi, A.H. Investigating the Effect of Talent Management Practices on Sustainable Competitive Advantage in Private-Sector Organizations. Sustainability 2025, 17, 9909. https://doi.org/10.3390/su17219909

AMA Style

Attar RW, Alanazi A, Alhazmi AH. Investigating the Effect of Talent Management Practices on Sustainable Competitive Advantage in Private-Sector Organizations. Sustainability. 2025; 17(21):9909. https://doi.org/10.3390/su17219909

Chicago/Turabian Style

Attar, Razaz Waheeb, Amal Alanazi, and Amal Hassan Alhazmi. 2025. "Investigating the Effect of Talent Management Practices on Sustainable Competitive Advantage in Private-Sector Organizations" Sustainability 17, no. 21: 9909. https://doi.org/10.3390/su17219909

APA Style

Attar, R. W., Alanazi, A., & Alhazmi, A. H. (2025). Investigating the Effect of Talent Management Practices on Sustainable Competitive Advantage in Private-Sector Organizations. Sustainability, 17(21), 9909. https://doi.org/10.3390/su17219909

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