How Do You Measure Talent Management

The success of talent management can be measured differently according to the goals of the organization. The right talent management metrics ensure that HR can use that data to make correct hiring decisions and evaluate talent performance in relation to business goals. This is where the opinions and the concerns of the business owners come in. Any metrics that determine the value of the results from talent management efforts will also have to be relevant to the overall corporate objectives that are being formulated in the board room. To measure talent management, the HR professional must become a strategic partner of the business owner or executive team. They must be able to move out of their own comfort zone and put on temporarily the hat of the CEO, and possibly even that of the CFO. Once they have that mindset, they can assess the efficiency of their own talent management efforts by asking the following tough business questions:

1)  Does this employee bring more in more money than what the company invests in them?

To put it on business terms, each employee must be seen as a resource in the organization that must bring in a return on investment or ROI. The company does continually spend on them, from the basic salary, other perks and benefits in the compensation package, training and education, devices and workspace allotted, insurance, and retirement plans, just to name a few. Performance evaluations do determine whether the employee is meeting their assigned target and is therefore being productive. However, one other way to see if the company is getting their money’s worth from that employee is to compare the total expenses spent on them with the actual profit that they are contributing to or turning in.

First, measure the exact amount that is being spent on that employee, based on the benefits mentioned above. Then, divide the company’s profits by the total cost of the workforce from salaries to benefits to other HR costs. The ratio between the actual spend per employee with that of the average profit per employee should be a minimum ratio of 0.2 to 1. Anything lower than that shows that the company is actually losing monies from that particular employee.

2)  Does this employee contribute to innovation, or have they stagnated and reached a dead end?

Companies continue to remain competitive only in so far as they remain agile, adapting to the needs of the business landscape. They just do not ride the current trends, but must also be able to break new ground, creating new technologies to capture untapped markets. Again, an organization’s ability to do so depends on the kind of workforce it has. Employees are either always seeking to develop themselves and improve their skills and knowledge, or they are stuck in a limbo performing the same old tasks that will over time make them obsolete.

The workforce today is expected to be innovative in addition to being productive. This is measured by looking at the percentage of the revenues from corporate innovations during the last 18 months. As a rule of thumb, the minimum percentage should be at 33 percent.

3) Does the overall quality of the workforce result in an attractive employer branding that in turn draws in high-quality candidates?

One of the most important measures of the effectiveness of your talent management is the strength of your employer brand. This is revealed in the number of applications and referrals you receive. Applications reflect the strength of your brand and referrals reinforce that strength through the workforce that recommends your company to their peers.

The important thing to remember about talent management, is that to get the best results, HR should be able to attract, develop, motivate, and retain high-performing employees. This means that HR should focus on driving company performance through its employees. To achieve it, proper talent management strategies should be implemented.

Creating the right talent management strategy can help you measure progress, create a focus, and help your company win against the competition.

Winning the war on talent is a big step for any company to be able to not only recruit top talent, but also to develop and prepare them for critical roles that they have to fulfill. Being able to measure your talent management program can help you create an employer brand that is focused on building a high-performance workplace, the encouragement of a learning organization, being identified as an employer of choice, and ensuring that the company gets its return on investments in training and development.