Post on 15-Apr-2017
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Integrating Talent Management Practices and Measures
David C FormanChief Learning Officer, HCI
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Talent Management Aligned with Strategy
Talent Management Practices
HCS Certification Course, V.2.1, 2009
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 30Companies
Next 30Companies
$83,000
$53,000
Mobilizing Minds Lowell L. L Bryan and Claudia L. I. Joyce
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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
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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 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 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 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
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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
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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
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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
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The Value of Intangibles
HCS Certification Course, V.3.0, 2010
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 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
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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
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Talent Management Adoption Model
Line Managers to Talent Leaders, V.1, 2009
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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
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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
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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
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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
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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
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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
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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
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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
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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
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Talent Management Adoption Model
Line Managers to Talent Leaders, V.1, 2009
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
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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
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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
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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
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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
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Talent Management Aligned with Strategy
Talent Management Practices
HCS Certification Course, V.2.1, 2009