integrating talent management best practices

1. 1
Integrating Talent Management Practices and
Measures
David C Forman
Chief Learning Officer, HCI

2. 2
Talent Management Aligned with Strategy
Talent Management Practices
HCS Certification Course, V.2.1, 2009

3. Workforce & Talent Solutions
© 2008 IBM Corporation
Better Talent Management can have a significant impact on
profit per employee
 “Most companies still earn profits per employee at
close to the same low levels earned in the 20th
century because they have not become very adept
at mobilizing the mind power of their workforces.
 As a comparison, the average top-30 company
increased profits per employee 70 percent
 The target should be to improve profits per
employee by 30 to 60 percent or more. “
“The opportunities to improve the performance of workers just from increased
efficiency alone are huge: Surveys show that a majority of workers in thinking-intensive
jobs in large companies feel they waste from half a day to two days out of every workweek...
The opportunities to improve the effectiveness of such workers are even larger. The
opportunities to mobilize the latent intangible assets (that is, knowledge, skills, relationships
and reputations) of a company’s workforce are vast.”
Net Income per Employee
Top 30
Companies
Next 30
Companies
$83,000
$53,000
Mobilizing Minds Lowell L. L Bryan and Claudia L. I. Joyce

4. 4
What Others are Saying…
 From 1998 to 2006, the stock of the companies identified in
Fortune’s “100 Best Places to Work for in America” list
outperformed that of the S&Ps 500 by more than 230%.
—Fortune, 2006
 Organizations that apply talent management practices
demonstrate higher financial performance compared to their
industry peers.
—IBM/HCI Research, 2008
 Companies with superior human capital practices can create
more than double the shareholder value than companies with
average human capital practices.
—Watson Wyatt Research, 2008
HCS Certification Course, V.2.1, 2009

5. 5
Talent Management and the Numbers
Cost of losing a talented
employee – $250K-$500K
Number of employees the
average manager’s actions
directly affect – 12
Rate of efficiency at
which most businesses
operate because of
poor engagement
levels– 30%
Cost of poor hire –
$300K - $500K
impact
Acquire
Engage
Develop
Deploy
Retain
Plan
Evaluate
Lead
Value of top performers – 2 to 3
times the performance of
average employees
Average time required for a
new manager to become
productive – 6 months
Percentage of a company’s
employees who are well suited for
their roles – 20%
70% of organizations have a weak
pipeline
Cost per day when operating without a
key player - $7,000
HCS Certification Course, V.2.1, 2009

6. 6 HCS Certification Course, V.2.1, 2009
Polling Question
What does it cost to lose a valued employee?
A. Half of the employee’s combined salary and benefits
B. Equal to the employees combined salary and
benefits
C. 1 ½ times
D. 3 times

7. 7 HCS Certification Course, V.2.1, 2009
Polling Question
What percentage of organizations have an adequate
pipeline for leadership and strategic positions?
A. 30%
B. 50%
C. 70%
D. 90%

8. 8 HCS Certification Course, V.2.1, 2009
Polling Questions
According to Gallup, how much does it cost an
organization to have an actively disengaged
employee?
A. $5000
B. $7500
C. $3400 for every $10,000 in salary
D. A bunch

9. 9
Especially Now…….
 Talent management is even more critical in an uncertain
economy—the luxury of missteps is gone—every talent decision
must be correct.
 The stakes are even higher when talent cannot be “bought” and
outside flexibility is reduced. Must look at the skills and
competencies needed to get the work done
 More emphasis on increasing productivity through engaging,
developing, deploying, recognizing and retaining the employees
that we have—greater capacity to execute strategy
 Doing “more with less” is the new standard
 Cross-training and accelerated development become major
initiatives
 There is a big cultural component to these changes
HCS Certification Course, V.2.1, 2009

10. 10
Jim Collins’ New Book about Organizations in
Turbulence (2009)
 The times from 1952 – 2000 are an aberration, not the norm
• Stability and prosperity co-existed for 50 years
• The Egyptian empire was perhaps similar
• The new norm is an unsettled world…so get used to it
 Three Critical Factors
• Have your moorings. Values and purpose are more vital than ever
• It is about the talent to get you through. When climbing a mountain,
a plan is nice but its all about the people with you
• Zoom out. Attend to micro issues but have a broader lens so that
the future is not compromised
HCS Certification Course, V.2.1, 2009

11. 11
The Impetus for TM in The Public Sector
 President’s Management Agenda: Human Capital Initiatives
 Hiring 200,000 more people to bring capability inside
 Best Places to Work lists in the government
 Chief Performance Officer
 New administration priorities: transparency and accountability
 The big issue is having the skills and competencies to deliver
on the mission—it is not just technical but also social, cultural
and emotional intelligence competencies

12. 12
The Value of Intangibles
HCS Certification Course, V.3.0, 2010

13. 13 HCS Certification Course, V.2.1, 2009
Southwest Airlines Success
 Clear, consistent strategy
 Operational factors
• No hubs, one airplane, Love field
 Good decisions
• 70% of fuel is hedged at $51 per barrel
 Talent strategy
• Modern organizations require leaders at all levels
“You have to treat your employees like customers. When you treat
them right, they will treat your outside customer right. This has been
a powerful competitive weapon for us.”
—Herb Kelleher

14. 14 HCS Certification Course, V.2.1, 2009
The New Metaphors
 Jim Collins in “Good to Great”
 The old adage “people are your most important
assets” turns out to be wrong. People are not your
most important asset, the right people are.”
 The metaphor of The Bus
 PepsiCo 5Rs
 Xerox and volunteer organizations

15. 15
The Result...Talent Management is Now Strategic
 Top-down urgency in both sectors
 Confluence of research and best practices to support
 Can’t succeed in the marketplace without first succeeding in the
workplace
 The economy values innovation, agility, collaboration across borders,
rapid response to change and differentiated strategy
 Greater visibility and accountability than ever before, especially with new
stakeholders
 Examples of new companies and organizations that are born “human-
capital centric” from the very start
 The flood of younger employees with different expectations
HCS Certification Course, V.2.1, 2009

16. 16
Talent Management Adoption Model
Line Managers to Talent Leaders, V.1, 2009

17. 17
The Steps in the Model
 Traditional organizations go through the steps
sequentially over a period of many years. These
organizations are known as “Talent Academies” because
this represents a significant core competency for them.
 Many new organizations are “born” to a talent-centric,
high performing culture. They carefully architect this
culture from the very beginning
 Different paths but the steps are necessary

18. 18
Step 1: Enterprise Leader’s Mindset
 McKinsey research has
established the importance
 Numerous “high profile”
CEOs have demonstrated
this behavior
 Rough benchmark is at least
20% of time is spent on
talent-related issues
 Monthly talent reviews with
business units are standard

19. 19
Step 2: Division Leader’s Talent Mindset
 The next leadership level in the organization, and active
champions step forward
 Talent laboratories begin to be established
 Recognition is provided and success is observed in
specific departments or groups
 Compelling cases are made to those leaders who can be
influenced

20. 20
Step 3: Process Building
 New infrastructure is needed to drive
talent practices
 Old processes are used to drive
operational consistency rather than
talent optimization
 Process building is the domain of
experts
 Examples: workforce planning,
competency development,
performance management, talent
reviews, leadership development,
internal mobility, and career
development

21. 21
Step 4: The Guiding Coalition
 Moving from the leadership level to more operational
ownership
 Not an HR activity, as the responsibility for talent must be
owned by the line and leaders at all levels
 The members of the coalition must be highly regarded by
both leadership and peers
 The coalition has real power to shape policies and
practices

22. 22
Step 5: The Manager as Talent Leader
 A huge adjustment and hurdle for
traditional organizations. Recognition
and incentives are misaligned
 The manager’s role is key in
engagement, productivity and retention
(Gallup, CLC, Towers-Perrin, Hewitt, etc)
 Traditional manager role and training is
aimed at efficiency and control, not
optimizing and leveraging talent
 Significant personal transitions must also
be overcome for managers to be talent
leaders

23. 23
Step 6: The Employee as Initiator of Talent and
Career Development
 Employees start to drive
conversations and action within
a structure
 Democratizing the process and
“personal brand building”
 Forces greater transparency
throughout the organization
 Emphasis from new generations

24. 24
Polling Question
Is talent viewed primarily as a cost or an asset in your
organization?
A. Cost
B. Equally a cost and an asset
C. Asset
D. Don’t know

25. 25
Polling Question
What stage in the model is your organization in?
A. Leaders mindsets
B. Process building
C. Guiding coalition
D. Manager as talent leader
E. Employees as initiators
F. Don’t know

26. 26
Talent Management Adoption Model
Line Managers to Talent Leaders, V.1, 2009

27. 27 HCS Certification Course, V.3.0, 2010
Metrics
 Easy and right
 Critical few and inconsequential many
 One time and ongoing
 Summary and segmented
 Visibility and action
“Just because something can be counted, it doesn’t mean that it counts.”
— Albert Einstein

28. 28
Top Five Overall Talent Metrics
 Segmented turnover data —Talent quotient as defined
by Hewitt, 2005
 Readiness levels for key positions
 Segmented engagement levels
 Number of strategic/critical jobs unfilled
 Percentage of inside vs. outside hires for leadership
and critical jobs
HCS Certification Course, V.3.0, 2010

29. 29
More Specific Contributing Measures
 Quality of incoming candidates
 Quality of hire
 Segmented turnover within first two years
 Time to proficiency in new job
 Depth of talent pools for key and feeder positions
 Number of people promoted outside of department
 Percentage of first choice hires accepting
HCS Certification Course, V.3.0, 2010

30. 30
More Contributing Metrics
 Percentage of employees participating in referral
programs
 Percentage of employees with an ILP
 Quality of hiring experience
 Number of past employees returning
 Number of internal employees applying for open
internal jobs
 Tangible indicators of knowledge sharing
 Internal participation in blogs, forums and wikis
HCS Certification Course, V.3.0, 2010

31. 31
A Look into the Future
 All companies registered in Denmark will be required to
include in their annual reports information about
customers, processes and human capital. A minimum of
five measures for each is required and comparisons with
the previous two years must be shown.
 Information for investors about intellectual capital both
current and future should occupy at least one third of the
report.
HCS Certification Course, V.3.0, 2010

32. 32
Talent Management Aligned with Strategy
Talent Management Practices
HCS Certification Course, V.2.1, 2009