A recent study of 704 CEOs by the Conference Board as reported by the Wall Street Journal confirms what we’ve known for a while. CEO’s ranked “Talent” as the Number 2 Priority behind “Growth”. HR Professionals have known that talent management is important for quite some time. We have worked so hard to get our recruiting, learning, performance management, mobility, engagement, and other practices in order over the past 5 or more years. I think we’ll finally see that paying off.
But how will we know different investments in talent management are paying off? We have to tell our story in perspective of the Talent Management (TM) lifecycle. The Human Capital Impact Statement not only quantifies workforce productivity, it breaks down each area of the TM lifecycle and ties workforce measures to financial measures. By slicing the analysis in the TM components, leaders and investors can see the true value creation and cost savings at each step:
- Recruiting and Hiring
- Leadership and Management
- Performance and Engagement
- Turnover and Retention
It seems so simple. But there are also so many different measures that can be used at each step. How do you come up with one or two measures that link workforce to financial data? The secret is index measures. We’ve talked about a Talent Management Index in the past, and it is a measure included in the Human Capital Impact Statement. Another example includes the Employee Engagement Index. This leading index is used to weigh, combine, and evaluate employee engagement based on specific data points such as engagement scores, retention, performance, and other related measures. Combining this index metric with productivity valuations provides a financially grounded method for quantifying what some might consider a “fuzzy” talent area.
For more information on quantifying components of the talent management lifecycle, and measuring human capital as an organizations most valuable asset, please download our Human Capital Financial Statements whitepaper.