Not measuring up

2010

Companies that show a real commitment to implementing and measuring talent management initiatives tend to perform better in terms of revenue growth, market share and customer satisfaction than those that don't.

According to a study by the Seattle-based Institute for Corporate Productivity (i4cp), the effective measurement of human capital initiatives is a hallmark of top-performing organisations. In fact they are more than twice as likely to emphasize the measurement of talent management (37 per cent) than low-performing organisations (16 per cent).

But despite all the evidence for their effectiveness, i4cp found that only a quarter of the companies they surveyed have such systematic talent management practices in place.

"There's an old saying from Peter Drucker that what gets measured gets managed," said Kevin Oakes, CEO of i4cp.

"While talent management is one of the hottest topics in human capital, at the same time, it is one of the most mysterious. Companies understand the general concept and the benefits, but are struggling with implementation and execution. Effectively measuring components of talent management is an important step toward taking the mystery out of what works and what doesn't."

Exactly what to measure, though, can be open for debate. When gauging the success of talent management practices, i4cp found that high performers were more likely to use employee engagement as a measurement to a high or very high extent (52 per cent vs. low performers at 32 per cent), followed by measuring leadership success (48 per cent to 29 per cent) and management satisfaction (41 per cent to 27 per cent), among many other measurements.

In turn, more than half of these organisations said their talent management efforts are successful, while only a third of lower performing organisations reported the same.

But as a separate survey carried out in the UK by software provider Taleo has found, the key problem with talent management metrics isn't so much that HR professionals don't acknowledge their importance, it is that they simply do not have access to reliable information on crucial workforce issues.

For example, the UK Talent Intelligence Survey revealed that nine out of 10 of the senior level HR and line-of-business managers questioned want information on the competency gaps in their workforce but only half (55 per cent) have access to reliable data in this area.

Although most companies measure time to hire, only a third have access to reliable data on the quality of hire and just half know if they have the skills to execute their business strategy.

More worryingly still, almost six out of 10 (56 per cent) of businesses have no access to reliable data on the top performing employees that are not on any succession plans. And half have no insight into the number of new hires who leave the company voluntarily within the first year.

"Having accurate and accessible information on each employee within a business is a vital part of developing a talent strategy to support the business' wider goals," said Alice Snell, vice president, Taleo Research.

"But it is important to understand that this type of data cannot be collected as an afterthought or as a separate process. It must be captured as part of a business' on-going talent management processes."

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