Today it means: Human capital management of the entire employee lifecycle. Companies that are engaged in talent management are strategic and deliberate in how they source, attract, select, train, develop, promote, and move employees through the organization. This term also incorporates how companies drive performance at the individual level (performance management). Full definition →
This expression gained popularity in the late 1990's as technology companies engaged in a 'war for talent'. McKinsey and company coined the term 'war for talent' following a 1997 study and then it was the title of a book by Ed Michaels, Helen Handfield-Jones, and Beth Axelrod.
Etymology from Wiktionary, CC BY-SA 4.0.