The Top 10 Strategic Talent Areas … Where Most Firms Do Nothing

There s no better way to start out a new year than to take one or more strategic actions. On the surface, selecting a new strategic area may seem to be difficult because at established firms, it would seem as though all of the important talent management areas would have already been addressed (i.e. with a full-time leader, a written plan, a permanent team, a yearly budget, and a set of metrics for assessing its strategic impact). However, I have still been able to identify

10 potentially high business impact strategic areas in talent management where almost no firm has a permanent company-wide strategy, plan, and team. The fact that almost no firms do these things isn t because they lack a potential impact (most agree it could be high), so the lack of action must be because either no one has been trained in the area or because the strategic area is highly complex or highly political. Even if you don t have the bandwidth to take action in any of these areas, review the list to see if you see the potential for a high business impact. The Top

10 Strategic Talent Management Areas That Firms Ignore Here is a list of possible high impact areas where no more than a handful of firms have taken comprehensive action. Most are directly borrowed from the business side of the firm. They are presented with the highest impact areas appearing first. Measure and reward great people management -- research by both Google and Gallup have shown that, in most cases, an employee s manager is the single highest-impact factor on the hiring, retention, innovation, productivity and the development of employees. Managers also manage a firm s most expensive asset (on average 60% of all corporate variable costs are spent on labor). Yet one study showed that optimistically, only 39% of firms reward managers for great people management results. Measures and rewards are important because managers are laser focused on whatever is measured and rewarded. Although some people-management topics may be covered in the performance appraisal or 360 process, they receive no special weight or targeted bonus or reward. A lack of measures and rewards and the fact that senior managers don t see quarterly reports covering the ranked performance of individual managers directly reduces the amount of time that managers spend on talent management activities. It is ironic that managers are not measured or rewarded on great people management results even though talent management owns all of the key components related to measuring and rewarding (performance management, performance appraisal, promotion processes, competencies, and compensation and bonus systems). The key strategic action step is to develop a people management scorecard for each individual manager and reward them based on their performance against key people management standards (i.e. team productivity and innovation, developing team members, retaining key employees, increasing internal movement, the quality of new hires, and their employees satisfaction with transparency, feedback, and best-practice sharing). Formalize internal best-practice sharing in talent management talent management leaders spend a great deal of their time developing new programs in the search for the next big thing. While this is important, most talent management leaders fail to realize that they can have a much higher impact (with lower risk and at a reduced cost) if they simply focused on identifying and more widely spreading the best people-management practices that already exist within the firm. Most talent management functions simply have no formalized best-practice-sharing process that actually measures the time it takes for a new best practice to be shared throughout the organization. Rather than assuming that best practice sharing will occur naturally, a superior approach is one that proactively identifies the most effective practices, wherever they might be in the organization. Once identified, they are shared in such a manner that individual managers can easily understand the business impact of the practice, why it works, and who has successfully implemented it within the organization. Develop a workforce productivity improvement team there is no single more comprehensive and important measure of talent management success than the yearly rate of improvement in the productivity of your firm s workforce. Workforce productivity is merely an ROI calculation which compares the value of the output from your workforce (either the total revenue or the total value of the products and services that employees produce) with the cost of your workforce (total labor and talent management costs). Many talent management departments measure engagement (a precursor to productivity) but they don t measure actual workforce productivity, and even fewer take proactive actions to directly increase it. Increasing productivity requires talent management to identify low and high productivity areas, identify the barriers that restrict productivity, and then to proactively provide the consulting advice, best practices, and tools that have been proven to increase both individual employee and team productivity. In addition to workforce productivity, you should consider other measures of workforce effectiveness including innovation, customer service, and product quality. Develop a process for identifying and fixing bad managers in addition to rewarding managers for great people-management results, most organizations need to go an additional step to identify and fix bad managers. This is because there are so many bad managers (one study found that 40% were rated fair to terrible) and in addition, because bad managers can have such a dramatic and negative impact on key employee retention and your employer brand image. Yet only a handful of organizations have a formal program for continually identifying weak managers. Strategic actions would include implementing surveys and metrics to identify your weak managers and to provide your generalists with proven tools and approaches to improve an individual manager s people-management behaviors and results. Convert talent management metrics into their dollar impacts unfortunately, most traditional talent management metrics fail to impress executives because they are not expressed in the language of business: dollars. Saying we have a 12% turnover rate, a 54% engagement rate, or an 87-day time to fill generally won t impress senior managers because the metrics are not expressed in their dollar impact on corporate revenue. In contrast, stating that every percentage point increase in regrettable employee turnover costs us $7.2 million get an immediate reaction. Work with the CFO s office to credibly calculate the impacts but realize that other firms have found literally millions of dollars of business impact from: rapidly filling revenue generating positions, retaining top performers, increasing the quality of hire in key positions, increasing talent-management best-practice sharing, and rapidly redeploying talent internally. Develop a plan for handling a world of permanent VUCA uncertainty most business leaders have already accepted the fact that the business world will remain in turmoil for at least the next decade. This VUCA environment will require every business function to be adaptive and nimble. Unfortunately, few in talent management have accepted this reality of permanent uncertainty and volatility. But eventually all will be forced to restructure every talent management program so that each one has the capability of rapidly increasing labor capability in some business areas, while simultaneously cutting labor cos