Measuring The Business Impact of Talent Strategies: Research Bulletin - 2010
Measuring The Business Impact of Talent Strategies: Research Bulletin - 2010
Measuring The Business Impact of Talent Strategies: Research Bulletin - 2010
Measuring the
Business Impact of
Talent Strategies
About the Author Introduction
For the last few years, business leaders have been asking HR and
talent leaders to provide data that can help them make critical
decisions about their most valuable and costly resources – employees.
Based on Bersin & Associates research, more than 70 percent of
global organisations are still facing the same challenges with talent
management measurement. More than 87 percent of these global
Stacey Harris,
Principal Analyst organisations feel that the data needed to conduct any form of
workforce analysis is only somewhat accessible or not accessible at all.1
Who are my highest-performing Puma can now readily identify the talented
employees2 and are they at risk? individuals who are key to its future success and
groom employees for management positions
– providing them with targeted training and
support as they take on senior roles.
More than 1,000 The assessment was designed to ask 19 critical questions that focused
on business alignment, leadership, technology, process integration and
organisations in 20
measurement. Independently, organisations were able to identify the
different countries
strengths and weaknesses of their talent strategies, as compared with
took advantage
Bersin & Associates best-practice organisations.
of the online
Last year, we took the opportunity to aggregate the assessment findings
Talent Strategy
in a research bulletin called, Should Your Talent Management Strategy
Assessment tool.
Be Regionalised?3 Now, we have taken a deeper dive into this data
to look at the talent management measurement strategies of these
organisations and the best practices for measuring the business impact
of talent management strategies.
Employee engagement was clearly the most often tracked and used
KEY POINT
talent management measurement for the 1,000 global respondents of
the assessment. This measure is seen today as one of the key indicators
Companies
of the health and wellness of organisations by their HR functions, as
have identified
well as by business leaders and board members. Engagement metrics
engagement
are seen as a gauge to critical organisational issues, such as:
metrics as a key
component of
• Manager capabilities and opportunities for high performers;
ensuring that their • Validation for system and process improvement efforts; and,
workforces have
• Insights into how connected employees are to the company’s goals
the leadership,
and direction.
tools, resources
and motivators Companies (such as Phillips and WellPoint) have identified engagement
metrics as a key component of ensuring their workforces have the
necessary to meet
leadership, tools, resources and motivators necessary to meet the
the organisations’
organisations’ goals. Survey respondents felt that the employee
goals.
engagement metric was the top talent measurement of business impact
for their organisations.
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Employee engagement is not only the top metric viewed at the business
leader level, it was also identified by 57 percent of HR leaders as the
number one indicator of the business impact of talent management
strategies, as seen in Figure 3. Many organisations have done extensive
work in tying their employee engagement metrics to critical business
data. One example is a large global financial organisation that was able
to correlate critical goal attainment in both its corporate and financial
business units to employee engagement – and ultimately tied improved
BERSIN & ASSOCIATES, LLC
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Employee turnover / exit interview data is the second highest metric
OAKLAND, CA 94611
(510) 654-8500 used to gauge the impact of talent management strategies by the
[email protected] survey respondents, with more than 51 percent of them selecting it as a
WWW.BERSIN.COM top impact measurement.
Figure 4: Combining Turnover and Talent Management Metrics Leads to Actionable5 Data
High-Potential
= The need for high-potential development opportunities
Employees6
KEY POINT
Case in Point: Clipper Group
The Clipper Group’s
Clipper Group is a global shipping consortium headquartered in
strategy and efforts
Denmark, with operations throughout Europe, North America
have helped shift
and the Far East.
the focus of its HR
The group undertook a review of its HR function and its
strategies to value-
approach to talent management, following a decade of boom
creation within the
and corresponding growth in the workforce. The resulting
organisation – strategy aimed to streamline processes, improve efficiency,
which has led reduce operating costs and implement sound practices to attract
to proactive and retain talent – ensuring that Clipper Group could continue
management of to compete in the fast-paced global market, and respond rapidly
to changing client needs and economic conditions.
business units
experiencing Today, the company has integrated annual goal-setting and
higher-than-normal performance reviews in remuneration decisions. This has been a
significant change for the company that has resulted in the
staff turnover
and an overall
reduction
BERSIN of
& ASSOCIATES, LLC
5
“Actionable information” provides data that can be used to make specific business
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turnover five AVENUE
decisions. Actionable information is specific, consistent and credible.
percent. SUITE 417
OAKLAND, CA 94611 6
A “high-potential employee” is an employee who has been identified as having the
(510) 654-8500 potential, ability and aspiration for successive leadership positions within the company.
Often, these employees are provided with focused development as part of a succession plan
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and are referred to as “HiPos.”
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Metrics should only be used to make critical decisions and take action
upon if they are:
• Include the capability to drill deeply enough into the data to see
patterns based on demographics, such as talent segments, regions
or business units.
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Internal mobility, leadership capability and employee promotability are
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the next three most often utilised metrics, as seen in Figure 3. These
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OAKLAND, CA 94611
three metrics all deal with ensuring an organisation is prepared for the
(510) 654-8500 future. For most organisations, actions associated with these critical
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According to Bersin According to Bersin & Associates research7, organisations that have a
& Associates talent management strategy which includes effective development
research, planning activities clearly showed improved business metrics in areas,
organisations such as median revenue per employee and voluntary turnover rates –
over those organisations that lacked standard development planning
that have a talent
processes and measurement within their organisations’ talent strategies
management
strategy which Of the assessment respondents who were asked, “How does your
includes effective organisation ensure retention of high-performing and high-potential
interpretations
and metrics traditionally tracked at the enterprise level may need to be
viewed differently at a regional level. Metrics, such as diversity, talent
when viewed
mobility and engagement, could have very different interpretations
through cultural
when viewed through cultural norms, regional economic challenges
norms, regional
or even country-specific labour expectations. The ability to provide
economic regionalised and business-unit-specific views of talent management
challenges or measurement data is critical when sharing data with business leaders
BERSIN & ASSOCIATES, LLC who are making decisions that will affect workers around the globe.
even country-
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specific labour
SUITE 417 We looked at the data from the top five countries responding to our
expectations.
OAKLAND, CA 94611 survey (see Figure 5). There were some very distinct differences in how
(510) 654-8500
these regions approached measuring talent management that could be
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Top Talent
Region Top Talent Measurements Regional Insights
Challenges
Top Talent
Region Top Talent Measurements Regional Insights
Challenges
able to follow a have begun to implement more formal planning processes for
identifying current and future talent capability and capacity against
standard process
short-, medium- and long-term business requirements. Only 20 percent
for building
of the organisations felt that they had a robust planning process to
their talent
meet their current and future talent needs, as seen in Figure 7.
management
Utilising a governance model and annual talent planning, organisations
measurement
are able to follow a standard process for building their talent
strategies.
management measurement strategies. This process should help define
the goals, identify the tools and ensure measurement data is reported
in a format that aligns with the business needs.
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A N A LY S I S
Conclusion
BERSIN & ASSOCIATES, LLC • IMPACT® Conference: The Business Of Talent – Attendance at
6114 LA SALLE AVENUE special sessions of our annual, best-practices IMPACT® conference.
SUITE 417 • Workshops – Bersin & Associates analysts and advisors conduct
OAKLAND, CA 94611
onsite workshops on a wide range of topics to educate, inform and
(510) 654-8500
inspire HR and L&D professionals and leaders.
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WWW.BERSIN.COM For more information about our membership program, please visit us
at www.bersin.com/membership.