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Measurement: The Road Map to Recovery

Companies that create a talent culture based on measurement, focused on selecting the best, as well as the long-term development of their employees, will be the long-term winners.

January 10, 2010
Related Topics: Technology, Succession Planning

With economists declaring the recession has ended, employers and employees are looking toward a more hopeful future — perhaps through different lenses. Workers across industries and locations have felt the pinch of reduced hours, income and jobs in general, and many are itching for something better.

On the other side of the coin, many employers were forced to lay off staff to stay afloat, which put additional stress on those who remained, and companies know there’s dissatisfaction among the ranks. As the economy shows signs of strengthening, many organizations will need to staff up while trying to retain their current workforce. We saw similar conditions among the workforce in 2004 following the much smaller 2001 to 2003 economic slowdown, and we learned some lessons.

This scenario presents many challenges for talent leaders, who already have been under pressure to help business managers make smart talent decisions within a climate of flat or reduced HR budgets. But they can stem a probable tide of departures and lay a strategic foundation to acquire new talent by making an organizational commitment to create a workforce culture based on talent measurement, using objective insights to drive better hiring, development and promotion decisions.

Begin With the End in Mind

Strategic talent programs need to measure success and demonstrate value to the organization, proving their impact on business outcomes. Success measures must be considered and prepared for in the early stages of a program’s inception. What are the business goals? How will program impact be measured? What data is available, and is it linked to the talent program? Does the organization value those particular data points?

Jana Fallon, vice president of recruiting for Prudential, said she knows firsthand what it’s like to make tough decisions and manage staffing challenges through up and down cycles. She works with business leaders within her organization to set goals and relies on objective data to monitor and improve the overall function of her talent management programs. “Scientific measures guide our strategy and inform our tactics,” she explained.

“We are constantly finding new ways to measure, report and, most importantly, take action based on our customers’ — hiring managers and applicants — feedback. We have a responsibility to our people to systematically measure our contributions in order to tell the value story.”

Start by Creating a Strategic Talent Plan

Every organization should develop an accurate staffing model, identifying key skills and competencies that exist in current employees as well as those that may be required to support future business objectives. This allows companies to make informed talent decisions and react more quickly to changing circumstances.

Many of the most successful companies create talent dashboards to highlight areas of organizational strength using key competencies needed for the job, as measured by both assessments and performance ratings. Talent leaders can use objective data to engage in strategic conversations with business leaders about the strengths and areas needed for development within their departments. These conversations can lead to improvement through:

  • Targeted employee development plans to increase strength in key competency areas.  
  • Identification of critical skills and abilities that need to be brought in from outside the department or organization.
  • Insights into what skills might be required to support future business strategies.

Find Round Pegs for Round Holes

With high levels of unemployment, companies across the board have reported receiving higher numbers of applicants for every open position, but not necessarily better-qualified applicants. This has increased the need to incorporate tools within the hiring process that can be used to rapidly uncover applicants’ potential for success in an efficient and effective manner, processing candidates faster and generating more quality hires.

Combining online technology with assessments measuring critical competencies for particular jobs used early in the selection process has proven to be highly effective in the selection of candidates with the greatest potential for success. In fact, competency-based assessments combined with content designed to measure an applicant’s personality fit to the company’s culture can improve retention. If talent managers can identify candidates who show a preference for the work and the environment, and whose values align with those of the hiring organization, they are more likely to stay — and to perform.

At international beauty and personal care products retailer The Body Shop, the use of assessments has had exactly this impact. “We needed to provide consistency in the hiring process and find high-quality candidates who fit our culture,” said Al Kong, director of human resources for The Body Shop. “Retail assessments were implemented for our sales associate positions about two years ago, which realized productivity gains while unwanted turnover decreased. We now use the assessments for most of our customer-facing positions, including our store and district managers. Managers reported from the field that these hires are of a higher caliber and continue to meet goals.”

Similarly, the discipline and rigor companies use in measuring talent during the selection process should be applied to promotions. Organizations often use well-developed selection processes including assessments to select entry-level staff, but not to fill critical first-level leadership positions. However, first-level managers can be critical in influencing entry-level staff retention. Assessing individual contributors for the ability to manage, coach and develop others is critical to ensure their success as front-line leaders.

Strengthen What You’ve Got

Snagging top talent is all well and good, but talent management encompasses far more than finding the new and shiny. Developing existing employees, particularly when budgets are tight, is increasingly important. Experts in the field of industrial-organizational psychology, who have studied how people behave at work and in their jobs, have found that top-performing companies are often people-centric — employees feel they are valued contributors, and they are given a chance to develop new skills.

“Making employees feel valued and worthwhile vis-a-vis opportunities for continued learning and growth is a smart business strategy,” said Lillian Eby, professor of applied psychology at the University of Georgia. “Employee development not only helps employees continue to feel challenged and motivated at work — it can also help fill critical skill gaps that exist in the organization and allow for greater flexibility in meeting customer needs.”

Successful companies understand the value of structured, internal talent programs and link them to employee interests. “Creating internal job opportunities now can help us retain our top talent when the job market recovers,” said Fallon. “One aspect of a people-centric culture that we have focused on this year is ensuring our employees have direct access to our job opportunities across the company. We now match jobs and push out information to people to suggest new roles they may be interested in applying for. It is one way we can focus on our people, and it does not add to our budget or head count because it is a feature of embedded technology.”

Many leading companies also allow employees to identify their own competency development needs and link those to internal career paths and opportunities. By providing tools for employees to self-assess their skill levels and then choose from recommended training and development offerings — often self-paced and provided online — companies give employees access to, and responsibility for, self-development.

Similarly, companies do not need significant overhauls and major budget infusions to drive other impactful talent management programs. Effectively leveraging successful, informal initiatives can help retain talent, develop key competencies and meet strategic objectives. “There are many developmental activities that are low cost and potentially high return,” said Eby. Examples of informal talent programs with the potential for high impact include:

  • Mentoring programs, which provide employees with direct access to a leader or more experienced professional and can provide coaching opportunities and a voice within the organization.
  • Stretch assignments, which create hands-on opportunities to take on larger, more complex initiatives and the potential for greater visibility within the organization.
  • Job rotation experiences and cross-functional task force assignments, which provide opportunities to try new roles and develop new skills.

Get Back to the Value

Talent management leaders can make more of an impact on the organization when they present the results of programs implemented in an effectively communicated manner — not unlike a marketing campaign. One way to show the value of talent measurement is through a value road map, or four levels of value with more quantifiable impact demonstrated as one advances through the levels.

  • Level 1: Gather anecdotal feedback about a program from those impacted: applicants, employees and hiring managers.
  • Level 2: Show improved efficiency or cost savings that are direct tangible benefits of implementing new processes, such as moving a talent process online, which equals ease of access and less time spent, thus saving money.
  • Level 3: Utilize structured surveys to solicit responses from hiring managers on the customer service level of the HR team, quality of hire or an employee’s level of improvement in a development program.
  • Level 4: Implement more complex impact studies examining business metrics via employee performance, such as linking test scores to sales performance: Were high scorers on the assessment likely to stay longer and have higher sales numbers?

Economies cycle up and down, but a key lesson from this recent downturn is the need to adapt rapidly by having a strong understanding of existing talent. Best-in-class organizations consistently measure their talent at multiple stages throughout the employee life cycle, especially to support selection, promotion and development decisions — whether economic times are good or bad. Companies that promote a culture based on talent measurement and focus not only on selecting the best, but also on the long-term development of their employees will be the long-term winners.

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