Integrating Talent Management Practices and

Measures

David C Forman
Chief Learning Officer, HCI

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 Talent Management Aligned with Strategy

Talent Management Practices

2 HCS Certification Course, V.2.1, 2009

 Workforce & Talent Solutions

Better Talent Management can have a significant impact on

profit per employee
Net Income per Employee

$83,000
Most companies still earn profits per employee at
close to the same low levels earned in the 20th
$53,000
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.
Top 30 Next 30
Companies Companies

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 companys workforce are vast.

Mobilizing Minds Lowell L. L Bryan and Claudia L. I. Joyce

2008 IBM Corporation

 What Others are Saying
From 1998 to 2006, the stock of the companies identified in
Fortunes 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

4 HCS Certification Course, V.2.1, 2009

 Talent Management and the Numbers
70% of organizations have a weak
pipeline
Value of top performers 2 to 3
times the performance of average Cost per day when operating without a
employees Plan key player - $7,000

Evaluate Acquire Cost of poor hire

$300K - $500K
impact
Cost of losing a talented
employee $250K-$500K Retain Engage Rate of efficiency at
which most businesses
operate because of
poor engagement
levels 30%
Lead Develop

Deploy Average time required for a

Number of employees the
average managers actions new manager to become
directly affect 12 productive 6 months

Percentage of a companys
employees who are well suited for
their roles 20%
5 HCS Certification Course, V.2.1, 2009
 Polling Question
What does it cost to lose a valued employee?
A. Half of the employees combined salary and benefits
B. Equal to the employees combined salary and
benefits
C. 1 times
D. 3 times

6 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%

7 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

8 HCS Certification Course, V.2.1, 2009

 Especially Now.
Talent management is even more critical in an uncertain
economythe luxury of missteps is goneevery 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 havegreater 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
9 HCS Certification Course, V.2.1, 2009
 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 worldso 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

10 HCS Certification Course, V.2.1, 2009

 The Impetus for TM in The Public Sector
Presidents 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 missionit is not just technical but also social, cultural
and emotional intelligence competencies

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 The Value of Intangibles

12 HCS Certification Course, V.3.0, 2010

 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

13 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

14 HCS Certification Course, V.2.1, 2009

 The Result...Talent Management is Now Strategic

Top-down urgency in both sectors

Confluence of research and best practices to support
Cant 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

15 HCS Certification Course, V.2.1, 2009

 Talent Management Adoption Model

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Line Managers to Talent Leaders, V.1, 2009
 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 Leaders 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 Leaders 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 managers 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. Dont 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. Dont know

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 Talent Management Adoption Model

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Line Managers to Talent Leaders, V.1, 2009
 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 doesnt mean that it counts.

Albert Einstein

27 HCS Certification Course, V.3.0, 2010

 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

28 HCS Certification Course, V.3.0, 2010

 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

29 HCS Certification Course, V.3.0, 2010

 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
30 HCS Certification Course, V.3.0, 2010
 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.

31 HCS Certification Course, V.3.0, 2010

 Talent Management Aligned with Strategy

Talent Management Practices

32 HCS Certification Course, V.2.1, 2009