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Plateau 2014 talent management
- 1. 1 Integrating Talent ManagementPractices and Measures David C Forman Chief Learning Officer, HCI
- 2. 2 Talent Management Alignedwith Strategy Talent Management Practices HCS Certification Course, V.2.1, 2009
- 3. Workforce & TalentSolutions © 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 areSaying… 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 andthe 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 CertificationCourse, 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 CertificationCourse, 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 CertificationCourse, 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……. Talentmanagement 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’ NewBook 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 forTM 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 ofIntangibles HCS Certification Course, V.3.0, 2010
- 13. 13 HCS CertificationCourse, 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 CertificationCourse, 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 Managementis 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 AdoptionModel Line Managers to Talent Leaders, V.1, 2009
- 17. 17 The Steps inthe 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: EnterpriseLeader’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: DivisionLeader’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: ProcessBuilding 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: TheGuiding 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: TheManager 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: TheEmployee 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 talentviewed 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 stagein 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 AdoptionModel Line Managers to Talent Leaders, V.1, 2009
- 27. 27 HCS CertificationCourse, 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 OverallTalent 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 ContributingMeasures 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 intothe 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 Alignedwith Strategy Talent Management Practices HCS Certification Course, V.2.1, 2009
Editor's Notes
- #2 Instructor Notes Purpose: To provide a brief introduction to the course and HCI; and enable participants to get to know each other Number of slides: 10 Time: 30 minutes Activities: Participants introduce each other Resources: A copy of the IBM-HCI research study. The two course books: Presentation Slides and Resource Guide Next: Proceed to the Context of Talent Management
- #3 This is a picture to remember and the central model within the course. It is a simple but very useful framework for an integrated and comprehensive view of talent management. It also serves as a visual table of contents for this course as we will consider each of the components of the talent employee lifecycle: workforce planning, talent acquisition, employee engagement, talent development and deployment, managing and leading talent, talent retention and evaluation and metrics. The inputs and outputs to the talent wheel are vital. All talent practices must be aligned with the strategy and direction of the organization or else they are useless. Strategy: 1) leads to human capital requirements that 2) dictates the best use of talent practices that 3) results in an engaged, productive and committed workforce that, in turn, 4) yields measurable outcomes and impacts. The key word here is alignment; all of these pieces must be synchronized and working together for the organization to be maximizing the potential energy of its talent. This horizontal alignment is not present in many organizations and this is why so few organizations are good at executing strategy. This visual can also be used as a diagnostic: how is alignment working in your organization? Are you performing all of these talent practices effectively? Is there a “seamless join” (in plumbing terms) among the various talent practices? Are measures, metrics and accountabilities in place to judge how effective the practice of talent management is?
- #5 The research data are clear: there is a direct relationship between talent practices and improved financial performance. The actual chain of relationships is that effective talent practices lead to stronger productivity that, in turn, results in better financial performance of the organization. In the last six to eight years, study after study has shown this relationship. It is important to state that this is a relationship—a correlation—and does not prove conclusively that strong talent practices cause (by themselves) better financial performance. It is more correct to say that because of all the corroborating correlational studies, talent practices appears to be one factor that relates to stronger financial performance. It is also a factor that can be improved and enhanced over time, whereas other contributors to financial success (such as the cost of raw materials or the market success of a product) may not be so malleable.
- #6 To summarize by the eight key talent practices, here are important metrics and indicators to remember: Plan: Cost per Day – $7000 a day for operating without a key player (Sullivan) Acquire- Cost of Poor Hire – $300K impact (Sullivan) Engage- Businesses operate at 30% effectiveness because of poor engagement Develop: 6.2 months for a manager to become productive in a new job (Watkins). Deploy: Only about 20% of employees are assigned to do what they do best at work (Buckingham) Lead: On average, a manager’s actions impact 12.4 people in a company (Watkins) Retain: Loss of talented engineer or leader ranges from 250k -500k Cisco loses $250K for each talented engineer it loses. Bristol Meyers Squibb loses $500K for each senior leader lost. Evaluate: Value of Top Performers – Two to four times the performance of average employees (Ulrich and Smallwood)
- #7 Instructor Notes Hold up the two books: The Presentation Guide and The Resource Guide. Explain that the Presentation Guide contains all the slides and further explanation and commentary. The Resource Guide contains the case studies, assessment and practical tools that will be used throughout the two days. Mention that many pas participants have asked for more practical tools, and this is why the Resource Guide was created. Encourage people to personalize the books and take notes inn them. Emphasize the criticality of having everyone participate. The class becomes incredible valuable when we learn from each other, so you are encourages to share your insights and questions. The content in this course is very current, with a number of references in 2008 and some in early 2009. The course evaluation and link to a fifty question, multiple choice test will be sent to you via e-mail subsequently to completing the course. It will arrive within a couple of days. The work product is a gap analysis of talent practices for your organization. A template will be provided, and this needs to be completed for the HCS designation to be awarded
- #8 Instructor Notes Hold up the two books: The Presentation Guide and The Resource Guide. Explain that the Presentation Guide contains all the slides and further explanation and commentary. The Resource Guide contains the case studies, assessment and practical tools that will be used throughout the two days. Mention that many pas participants have asked for more practical tools, and this is why the Resource Guide was created. Encourage people to personalize the books and take notes inn them. Emphasize the criticality of having everyone participate. The class becomes incredible valuable when we learn from each other, so you are encourages to share your insights and questions. The content in this course is very current, with a number of references in 2008 and some in early 2009. The course evaluation and link to a fifty question, multiple choice test will be sent to you via e-mail subsequently to completing the course. It will arrive within a couple of days. The work product is a gap analysis of talent practices for your organization. A template will be provided, and this needs to be completed for the HCS designation to be awarded
- #9 Instructor Notes Hold up the two books: The Presentation Guide and The Resource Guide. Explain that the Presentation Guide contains all the slides and further explanation and commentary. The Resource Guide contains the case studies, assessment and practical tools that will be used throughout the two days. Mention that many pas participants have asked for more practical tools, and this is why the Resource Guide was created. Encourage people to personalize the books and take notes inn them. Emphasize the criticality of having everyone participate. The class becomes incredible valuable when we learn from each other, so you are encourages to share your insights and questions. The content in this course is very current, with a number of references in 2008 and some in early 2009. The course evaluation and link to a fifty question, multiple choice test will be sent to you via e-mail subsequently to completing the course. It will arrive within a couple of days. The work product is a gap analysis of talent practices for your organization. A template will be provided, and this needs to be completed for the HCS designation to be awarded
- #10 The practice of talent management is probably more important today than it ever has been. The economy is in a downturn, resources are not plentiful and organizations in both the public and private sectors are being asked to “do more with less.” In all likelihood, organizations will be hiring less and having to increase productivity from their current employees. Reductions in force (RIF) will be more widespread than in previous years. Among various decision points are: Because hiring is restricted, how do we cross-train employees and accelerate their development in critical skills How should scarce financial resources be used best? If a RIF is directed, what positions and talent segments should be impacted? How can retirements be handled more strategically? How can talent pools be strengthened in a downturn? These are not easy decisions, but the decision science of talent management can help to make these choices as wise as possible.
- #11 Jim Collins is working on a new book about organizations in turbulent times from 9/11 through the present crisis. The Fortune Magazine of February 2009 had a three page interview with him and he relayed the key findings of his investigations so far. 1) He believes that the current tumult is the new reality. Organizations will always now have to deal with changing conditions, markets, threats and opportunities. The relatively stable and consistent times of the latter half of the twentieth century are gone and likely not to return. 2) There are three qualities of companies that thrive in chaotic times. The first is to have your moorings hold firm. Your values and what you stand for must endure in whole or large part. Without this beacon, companies quickly lose their way. The second is to have the right people on the bus in the right seats. Its about talent to weather the storm. The third is to zoom out to see the broader picture while still attending to the immediate details. By having this bigger view, quick decisions will not be made to restrain the organization’s ability to rebound. He uses the example of Hewlett-Packard as a company that was going through layoffs after WWII as some divisions were slowing down, but also hiring top scientists coming out of government labs that were closing down. This took foresight and courage, but was absolutely vital to the company’s later success.
- #13 The financial context during the last twenty to thirty years is important to consider. During this time, the market valuation of companies traded on the stock exchange has totally shifted around. In the 1980s, over 60% of a company’s total worth was based on its tangible assets-- equipment, technology, facilities, equipment and resources. These are the types of assets that companies in the Industrial Age primarily valued. Within a very short period of time in terms of business history, this equation has turned completely around: now, the intangible assets of a company comprise 65% to 85% of its total value. This is a huge shift in valuation. Examples of intangible assets are: brand relationships with customers, vendors and partners ability to innovate talent management practices and culture of the organization leadership Given this shift, the financial community and oversight committees are keenly interested in human capital management. If this represents 65% of a company’s value, then oversight committees want to know “how we are doing?” Are we good at intangibles or bad? Are we getting better or worse at talent management? These are no longer abstract or HR-specific questions, but rather questions being asked in board rooms all over the world.
- #14 Success stories are useful ways to examine the role that talent management can play in the growth and development of an organization. Southwest Airlines is the largest domestic air carrier in the United States. It is also the only one that is and has been consistently profitable for a number of years. Its success has been determined by a number of factors. 1) A clear and consistent strategy of democratizing the sky and travel for a low cost; 2) Some key operational choices early in the airline’s development that allowed it to prosper, even if against conventional wisdom: No hubs, one type of airplane and going into cheaper airports within big city regions. 3) Some good decisions that impact operations in a real-time manner—such as the hedge on fuel at $51 per barrel which helped them for several years but is now a drain as the price of oil has plummeted; and 4) their talent strategy that puts employees first. Southwest has built a powerful talent brand, and every year there are over 100,000 applicants for about 5000 jobs—so that its harder to get a job at Southwest than to get into Harvard. Others have tried to emulate the Southwest talent culture because of its role in the overall success of the airline. This story shows that there are several reasons for success—not just talent management; but that unlike gambles on the price of oil; talent is always a lever that can be developed and improved.
- #15 Jim Collins has written the biggest selling business book of all time in Good to Great.” It contains a number of powerful ideas and lessons, and several directly apply to talent management. First, he challenges the oft-quoted phrase that “people are our most important asset.” He states clearly that it is the “right people” who are your most important asset. It is not “all people” or even “the smartest people,” it’s the right people for the job. Second, he introduces the metaphor of the bus as a way to emphasize his views on “the right people.” He says that in order to execute strategy and get where you want to go, you need the right people on the bus, the wrong people off the bus, and then put the right people in the right seats. This is a succinct way to describe an important outcome of talent management practices. Another easy to remember way to think of talent management is the 5Rs that Pepsico and other companies espouse: we want the right people with the right skills doing the right job at the right time for the right cost. These are both good foundational pictures or acronyms to keep in mind while thinking about talent management.
- #16 The McDonald’s story is a very interesting one. It is about a great brand that lost its way as tastes change and the market evolves. Its own success was a big impediment initially. The company was also devastated by two CEOs having to leave office within six months for health reasons. But the seeds for its rebirth were planted and the right leader was elevated. The company has regained its mojo and its financial success. It now sells apple slices, varied salads, more chicken than hamburgers and its McCafe is targeting Starbucks for the new “third place” for gatherings after home and work. The transformation has been incredible. Jim Skinner has attributed this success to two factors: getting the right people in the right places; and a strong succession program for the future.
- #17 Another way to analyze a profession—especially a horizontal profession that supports the enterprise—is to segment the job into administrative, operational and strategic components. This can be done for IT, finance, marketing, and HR. Administrative jobs often can be outsourced or automated. If jobs are relatively simple, repeatable, and process-driven, they should be accomplished through the most efficient means possible. Operational jobs frequently require more complex skills and judgments, but may still be subject to greater efficiencies, including self-service centers, automation and partnering. Strategic value—the top of the pyramid—is where the partner and player roles are evidenced. This segment not only provides the greatest value to the organization, but it provides greater security to the individual. It behooves everyone to want to play at the top of the pyramid. Consultants can be used to strengthen strategic capability (the “Borrowing” of the 6Bs); but HR professionals should aspire to providing this level of value themselves.
- #18 This is the subject of this module and extremely important to the success of the human capital plan Stephen Covey talks about xQ or Execution Quotient as what is needed in organizations today. He says we don’t need many more smarts (IQ) but better implementation of what we have. It’s a nice play on an acronym to again highlight the criticality of implementation
- #19 This is the subject of this module and extremely important to the success of the human capital plan Stephen Covey talks about xQ or Execution Quotient as what is needed in organizations today. He says we don’t need many more smarts (IQ) but better implementation of what we have. It’s a nice play on an acronym to again highlight the criticality of implementation
- #20 This is the subject of this module and extremely important to the success of the human capital plan Stephen Covey talks about xQ or Execution Quotient as what is needed in organizations today. He says we don’t need many more smarts (IQ) but better implementation of what we have. It’s a nice play on an acronym to again highlight the criticality of implementation
- #21 This is the subject of this module and extremely important to the success of the human capital plan Stephen Covey talks about xQ or Execution Quotient as what is needed in organizations today. He says we don’t need many more smarts (IQ) but better implementation of what we have. It’s a nice play on an acronym to again highlight the criticality of implementation
- #22 This is the subject of this module and extremely important to the success of the human capital plan Stephen Covey talks about xQ or Execution Quotient as what is needed in organizations today. He says we don’t need many more smarts (IQ) but better implementation of what we have. It’s a nice play on an acronym to again highlight the criticality of implementation
- #23 This is the subject of this module and extremely important to the success of the human capital plan Stephen Covey talks about xQ or Execution Quotient as what is needed in organizations today. He says we don’t need many more smarts (IQ) but better implementation of what we have. It’s a nice play on an acronym to again highlight the criticality of implementation
- #24 This is the subject of this module and extremely important to the success of the human capital plan Stephen Covey talks about xQ or Execution Quotient as what is needed in organizations today. He says we don’t need many more smarts (IQ) but better implementation of what we have. It’s a nice play on an acronym to again highlight the criticality of implementation
- #25 This is the subject of this module and extremely important to the success of the human capital plan Stephen Covey talks about xQ or Execution Quotient as what is needed in organizations today. He says we don’t need many more smarts (IQ) but better implementation of what we have. It’s a nice play on an acronym to again highlight the criticality of implementation
- #26 This is the subject of this module and extremely important to the success of the human capital plan Stephen Covey talks about xQ or Execution Quotient as what is needed in organizations today. He says we don’t need many more smarts (IQ) but better implementation of what we have. It’s a nice play on an acronym to again highlight the criticality of implementation
- #27 Another way to analyze a profession—especially a horizontal profession that supports the enterprise—is to segment the job into administrative, operational and strategic components. This can be done for IT, finance, marketing, and HR. Administrative jobs often can be outsourced or automated. If jobs are relatively simple, repeatable, and process-driven, they should be accomplished through the most efficient means possible. Operational jobs frequently require more complex skills and judgments, but may still be subject to greater efficiencies, including self-service centers, automation and partnering. Strategic value—the top of the pyramid—is where the partner and player roles are evidenced. This segment not only provides the greatest value to the organization, but it provides greater security to the individual. It behooves everyone to want to play at the top of the pyramid. Consultants can be used to strengthen strategic capability (the “Borrowing” of the 6Bs); but HR professionals should aspire to providing this level of value themselves.
- #28 Metrics are easier to implement than accountabilities in the R-R-A-M framework, and they are often the precursors to holding people more accountable for Talent Age behaviors. But it is also easy to measure the wrong things, gather too much data and be swamped by “data paralysis” or have inflated expectations about finding the one great metric that will solve all problems. Metrics are really more about providing information so that more of right questions can be asked—not finding quick solutions to the first set of questions asked. The art of metrics is finding the critical few as opposed to the inconsequential many that could exist. By focusing on fewer rather than more metrics, the chances are greater that real action can occur. Gallup focused on only 12 questions; short term memory can process 5 to 7 items at once. Focusing on a few is better than being confused by the many. With metrics, it is also better to think about continuing to measure the same things over time so you can track trend data. Go beyond summary data to segment by location, department, talent level and manager. Make a commitment to do something with the data that have been gathered. If better decisions and actions cannot be made based on the data, then perhaps the data should not be gathered at all.
- #29 HCI has asked its members to identify the metrics that are most often tracked and reported. Reporting of human capital metrics to oversight committees such as Boards of Directors is now being done for more than 50% of organizations. The top five metrics tracked are: 1. Segmented turnover—not just a summary turnover figure 2. Readiness level for leadership and key positions 3. Segmented engagement levels 4. Number of strategic/critical jobs unfilled 5. Percentage of inside vs outside hires for leadership and critical jobs The Hewitt measure of the Talent Quotient, which they believe will be widely reported by organizations within two to three years, is a segmented turnover measure. It is a ratio of A talent level turnover versus total turnover. If you are losing more A level talent than employees in general, this is not a good sign. The ratio of internal to external hires for leadership and key positions varies depending on the health of the organization. For companies that are struggling, a greater percentage of outside hires is needed to infuse new talent and energy. If an organization is successful, then a ratio of about 75% to 25% internal to external is a good balance.
- #30 It is important to emphasize that the choice of which “metrics matter” is really based on the organization’s strategy and context. A list of metrics is not very useful. With that in mind, here are more metrics that some organizations have found useful to measure: Quality of incoming candidates. Good indicator of the organization’s ability to attract top talent. Quality of hire. Link to performance appraisals, turnover within the first two years and talent level. Segmented turnover within first two years. An indication that something is amiss in the brand, hiring process or on-boarding. Time to proficiency in new job. Key to early productivity and engagement. Depth of talent pools for key and feeder positions. Risk management factor. Number of people promoted outside of department. Important for breaking down silos and talent ownership attitudes. Percentage of first choice hires accepting. A low percentage points toward issues in the brand and hiring process.
- #31 Percentage of employees participating in referral programs. In general about 5% of employees participate in ERPs. Percentage of employees with an ILP. Shows the commitment to employee development at all levels of the organization. Quality of hiring experience. Measured by surveys to candidates and hiring managers. Number of past employees returning. The rebound or boomerang employee who can bring value to the organization. Keeping the alumni association within your organization’s orbit. Number of internal employees applying for open internal jobs. Internal talent marketplaces provide opportunity and freedom of movement to cut across silos. Tangible indicators of knowledge sharing across the enterprise. Examples might be the number of times the knowledge management or expertise locator system has been used or the incidence of knowledge nuggets and models from other source. One consulting firm encourages employees to internally patent material and if used in an engagement, the contributing employee receives “royalties.”
- #32 The tide for the importance of human capital management is not receding. The Talent Age is approaching fast. Strategic Human Capital Management is at the top of the President’s Management Agenda, companies are publishing addendums to their annual reports on the state of their human capital, and countries like Denmark are fully understanding the role that intangibles play in the valuation of organizations. Denmark’s policies do not dictate which five measures to use—that is up to the organization—but that human capital metrics are required and must be analyzed over a two-year period of time. Furthermore, this information cannot be relegated to a page or two in the annual report; it must comprise one-third of the report.
- #33 This is a picture to remember and the central model within the course. It is a simple but very useful framework for an integrated and comprehensive view of talent management. It also serves as a visual table of contents for this course as we will consider each of the components of the talent employee lifecycle: workforce planning, talent acquisition, employee engagement, talent development and deployment, managing and leading talent, talent retention and evaluation and metrics. The inputs and outputs to the talent wheel are vital. All talent practices must be aligned with the strategy and direction of the organization or else they are useless. Strategy: 1) leads to human capital requirements that 2) dictates the best use of talent practices that 3) results in an engaged, productive and committed workforce that, in turn, 4) yields measurable outcomes and impacts. The key word here is alignment; all of these pieces must be synchronized and working together for the organization to be maximizing the potential energy of its talent. This horizontal alignment is not present in many organizations and this is why so few organizations are good at executing strategy. This visual can also be used as a diagnostic: how is alignment working in your organization? Are you performing all of these talent practices effectively? Is there a “seamless join” (in plumbing terms) among the various talent practices? Are measures, metrics and accountabilities in place to judge how effective the practice of talent management is?