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Dr John Sullivan
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How to tell if talent metrics actually work



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The hottest topic relating to how the talent management function operates is how to shift to a “metric based” decision-making model using advanced and predictive analytics

Metrics remains a hot internal topic mainly because most HR metric efforts are put together by an “ad hoc committee” of HR professionals that quite frankly, are merely learning as they go.

Other talent leaders take the easy way out and simply utilise the “standard metrics” that come automatically supplied as part of vendor software that they purchased.

Unfortunately, these vendor supplied metrics are not designed for day-to-day decision-making or predicting future problems. No one can prove that their metrics have actually improved talent decision-making, and certainly not talent results.

After 30 years of designing talent metrics, I have found that any effort is doomed to failure if it doesn’t start with what I call “design principles” to guide metric selection – or rules to follow when shifting to data-driven talent management.

The top 15 design principles for high impact metrics:

1. Make the business case for adopting a data based decision model

Begin the process by putting together a complete business case that demonstrates the negative business impacts and dollar costs as a result of having ineffective talent metrics.

In it, show the costs of relying on historical metrics and emotional decision-making in order to get support and funding for your new metrics initiative.

2. Show the positive impact of metrics after they are implemented

Show your managers that when the use of metrics for decision making significantly increases in a business unit or team, their revenue and business results will soon measurably increase.

Also be able to show that adopting talent metrics can start a “business turnaround” in a struggling business unit or team.

3. Convert talent metric results into dollars

You must make it a standard practice to convert talent management results into their dollar impact on organisational revenue and on other corporate strategic goals.

The language of business is “dollars”, so convert your talent results into a language that everyone understands.

You must make it a standard practice to convert talent management results into their dollar impact on organisational revenue and on other corporate strategic goals.

4. Shift to a data-driven decision-making approach for talent decisions

Set the goal to increase the percentage of talent decisions that are made based on data, rather than emotion, experience or intuition.

Raise the usage of metrics and the accuracy level of talent decisions, and measure the error rate of your talent decisions and attempt to get it down to the 6 Sigma level that is the target in other business processes.

5. Focus on forward-looking predictive metrics.

Forward-looking predictive metrics have twice the value to managers, because they provide enough warning so that upcoming problems can be mitigated.

Include risk analysis in your forward-looking metrics, so that decision-makers can see both the probability and the likely costs of not properly addressing an upcoming talent problem.

6. Show a visual trend line

A number or metric that reflects a single point in time may not drive action.

Add a visual trend line (graph line), so that everyone sees the historical direction, the current direction and the future duration of the metric.

7. Include the cost of delaying action

Because many will simply be satisfied with doing nothing, don’t forget to also calculate the dollar cost of delaying or doing nothing when you are facing a talent management problem.

Your metrics should show that acting quickly when a problem or opportunity is identified has a high economic value and delaying action can result in the negative business impacts going up exponentially.

8. Easy access to “real-time” metrics

Managers are the individuals that make most people management decisions. As a result, they must have direct access to “real-time” people management metrics, which cover what is happening today.

9. Make sure that your metrics are actually used for talent decisions

Talent management metrics need to drive action and change the way talent decisions are made. So first there must be evidence that talent metrics are seen and examined by decision-makers.

HR must also be able to show that its metrics are actually being used by managers for people management decision-making.

10. Metrics should reveal the causes of problems

If you want to actually improve results, you must include why things are happening.

For example, knowing that your turnover rate is 20% has little value and it won’t drive action because they don’t know the cause.

However, if you reveal that you know the reason why people are quitting (i.e. a lack of training), and that that reason is preventable in 90% of the cases, you can convince managers that you can actually reduce turnover.

If you want to actually improve results, you must include why things are happening.

11. Also include recommend actions for fixing the problem

You can better drive managers to act if you provide decision-makers with action suggestions or recommendations.

You will get a higher rate of acceptance to your recommendations if you include their probability of success and the “how-to” steps to implement them.

12. Split sample proof is the most convincing

The best way to convince cynical executives that a talent management program will work is to conduct a split sample.

I generally recommend that you start with jobs that are already measured and quantified and that show immediate results if something new works (i.e. sales or call center jobs).

Then you apply your new talent approach to half of the group and do nothing different in the other half, known as the control group.

13. Show a correlation between using a talent programme and improved business results

Use correlations and other statistical tools to prove how the usage of a talent management approach positively correlates with business success.

Also, always use statistical methods to identify the critical success factors that are required to make talent management programs successful.

 14. Calculate the improvement in revenue per employee

The single most important indicator of improved workforce productivity is showing the yearly improvement in the revenue per employee metric (corporate revenue divided by the number of FTE’s), or alternatively the ratio between labor costs and profit.

This ratio has great value because it can easily be compared between different companies.

15. Calculate the top employee performance differential

Show the percentage increase in performance between a top-performing versus an average employee.

Showing a large multiple helps to convince senior management to focus on top performers.

Called “the Michael Jordan of Hiring” by Fast Company magazine, Dr John Sullivan is an international author specialising in providing bold and high-impact strategic HR solutions to the world’s biggest organisation. He has written over 10 books, contributed articles to every major business magazine in the world and had a distinguished career in HR management culminating as the Chief Talent Officer of Agilent Technologies. Sullivan is a one of the headline speakers at Talent Management Asia 2015.

Held in Kuala Lumpur, Singapore and Hong Kong in mid-April, Talent Management Asia is Asia’s biggest conference on talent management and human capital strategy. The two-day annual event is focused on global best practice HR strategy, features an agenda dominated by pan-Asian case studies and leading global thought leader, and attracts a large audience of senior HR generalists & specialists as well as other C-level executives involved in their companies’ HR strategies.

TMA banner press release

To get a global and Pan-Asian regional view of talent management and to increase your knowledge and skills across the talent management spectrum – recruitment, training & development, compensation & benefits, succession planning, and leadership development – don’t miss Talent Management Asia in April.

To review the topics & agenda, check out the stellar speaker list and reserve your seat visit www.talentmanagement.asia before it’s sold out. For more information please contact Carlo Reston on +65 6423 0329 or carlor@humanresourcesonline.net.



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