In that vein this is a guest post by Stanley Janas, Director of Human Resources at Halogen Software.
Why CEOs Should Care About Talent Management
At first look, talent management might seem like a responsibility that CEOs should relegate to HR and their lower level managers. After all, it's about hiring, setting individual employee goals, rating competencies and performance, assigning development plans, making compensation adjustment, etc. Not the critical stuff a time-crunched CEO should be focusing on.
But all kinds of research is showing that companies with mature, integrated talent management processes are outperforming the competition:
- The Hackett Group recently found that companies with more mature talent management capabilities have on average18% higher earnings, 54% greater net profit margins, and greater return on equity and assets than their counterparts without mature capabilities.
- The Aberdeen Group's latest research finds that companies who integrate their talent management processes see significantly greater performance gains, and can measure a correlation between their talent management efforts and business operational results.
- And IBM, HCI, IDC and others have shared similar findings.
Part of why this might be true is that good talent management lets you make the most of your employees by giving them the direction, feedback, development and rewards they need to excel. But good talent management processes also give you as a CEO important data and metrics about the health and strength of your workforce that make it easier to manage and make key decisions. Things like:
- Ratings on key competencies
- Goal alignment and progress on goals
- Employee turnover
- High potential and high performing employees
- Low performing employees
- Retention risks and trends
- Performance improvements related to training
- Areas of strength
- Skill gaps
- Employees with special skills/experience/expertise
- Succession candidates
The list goes on.
Armed with this kind of data, CEOs and their executive teams can make faster, better decisions about succession, readiness to tackle a new market, ability to support strategic initiatives, training investments, who to layoff in a downturn, etc. and in general, better manage their most strategic asset – their workforce.
But reaping the benefits requires organizational commitment, and ideally, that should start at the C-level.
What do you think? Are you giving talent management the attention it deserves?
Stanley is spot on. To validate it, our research shows that the CEO is rated just as highly as the Senior HR job role as most influential in setting talent management strategy (a 4.28 rating for the CEO as compared to a 4.24 rating for the senior HR executive - using a scale of 1 to 5, where "5" is most influential and "1" is least influential.
ReplyDeleteTalent management has truly become an organizational imperative - and responsibility. In fact, I know of several boardrooms where "employee engagement" is a primary discussion point. And to the topic of "engagement", our research shows that two of the most critical activities to ensure employee engagement demand direct involvement with line (or hiring) managers. Specifically, these include "the employee and manager setting performance goals and expectations", and "frequent (quarterly), informal meetings between managers and direct reports".
- Kevin Martin
Vice President and Principal Human Capital Analyst, Aberdeen Group