Your Opinion Counts - Hot Button HR Issues for 2010 February 5th, 2010

Sean Conrad

Earlier this week we released the results of a recent poll of human resources professionals’ opinions on controversial topics in business and talent management. The poll was conducted in conjunction with a panel webcast that took place last month with seven HR thought leaders as part of our HR Raging Debates Forum.

The results can be found on the latest update to Halogen’s Raging Debates Forum.

It was a great discussion, and the results show a collective view on topics including merit-based pay, social media in the workplace, EFCA complacency, and the future role of HR.

When succession planning was discussed with regards to whether employees should be notified of their place in a succession pool, a whopping 84% of respondents said yes. Panelist Kris Dunn, Vice President of People at Daxko and popular HR blogger at HR Capitalist, reinforced the importance of disclosure, saying, “There may be a lot of employee relations issues around disclosing but you have to do it… A big benefit of succession planning is retention, if people know they’re on the list.”

Another landslide was the issue of who should make decisions on executive compensation for companies that were bailed out (like GM). An overwhelming percentage of respondents - 65% — said the government should, since the debt isn’t repaid yet. Expert panellist Libby Sartain, HR Advisor and former CHRO of Yahoo! Inc and Southwest Airlines summed it up well; “Although I am not in favour of government bailing out businesses, once they do, they should be granted oversight.”

There were some other issues in which responses were more mixed, including how to manage generational differences and the use of stack ranking. I won’t go through all of them, because you can check them out for yourself, but I wanted to leave you with the very interesting responses about HR metrics. Since we were talking about the importance - and underuse - of benchmarking talent management earlier this week, I thought you’d like to see what respondents rated the #1 HR metric to report to the CEO. It broke out like this:

• ROI on talent management - 35%
• Employee engagement - 24%
• Retention - 17%
• There isn’t one - 24%

Let us know what your key metrics are, and where you stand on some of these hot button issues! Share your comments below.

Tags: employee engagement, Generation Y, HR, succession planning, talent management

Running the Numbers - Talent Management Really Does Pay Off February 3rd, 2010

Donna Ronayne

Companies with more mature talent management capabilities reap strong bottom-line benefits, including earnings that are 18 percent higher than typical Global 1000 companies, according to a new study from The Hackett Group Inc.

The study, which examined the performance at more than 60 companies over a three-year period, found that, in addition to higher earnings, leaders saw significantly improved net profit margin and greater return on equity and assets.

Obviously, I’m not surprised! But I am pleased to see quantifiable research being released that can back up what we’ve known all along… One of the biggest challenges we find with talent management users is the search for ROI. It’s not that there isn’t a return on talent management investments - it’s that the return is actually so intrinsic and so assumed, that many organizations don’t invest time to set metrics or measure outcomes for their systems. In many cases, they know how desperately their organization needs talent management tools, so they just set up their new systems and watch as anecdotal evidence to their success rolls in.

Works every time! But consider how much more strategic the HR team could be - quantifying operational impact at the boardroom level.

Just look at these Hackett Group findings:

From an operational standpoint, talent management maturity leaders outperformed typical companies across an array of efficiency and effectiveness metrics. Leaders showed superior ability to increase overall employee engagement, faster recruiting cycle time and greater linkage of talent management to business strategy. Their talent management professionals were also significantly more productive than those at typical companies.

These are measurable, attainable bottom-line goals. And if you knew that your key competitors were tracking these metrics, wouldn’t you want to make sure you were measuring - and raising - the bar too?

Here’s the core of the problem:

“It’s easy to find companies that feature talent management in their strategic plans and reports to shareholders. But truly, most do little more than pay it lip service. They stick to the basics because they don’t truly understand the impact of improving their talent management capabilities,” said Hackett HR advisory practice leader Stephen Joyce. “With this research, we’re clearly quantifying the price most companies pay for their lack of commitment. By ignoring the strategic value of talent management and failing to develop a comprehensive program that drives top performance in this area, companies are missing the opportunity for a triple payoff — an enhanced bottom line, better performance across the enterprise and improvements in specific talent management processes.”

So here’s a challenge for 2010 - if you know you need talent management, start setting up the processes. And don’t neglect measurement in your steps! If you are already employing talent management systems, take the time now to have a serious look at how you can apply business-level metrics to it, so you can track your progress and your investment.

But don’t just take my word for it, I’ll leave you with a final thought from Hackett Group:

“We’ve worked with companies to drive improvements in key talent management areas such as succession planning, recruitment, and learning and development, and seen them generate significant cost savings while also improving effectiveness. These companies were better able to attract high-quality staff, retain key talent and develop the skills they need to support strategic business goals, and the focus on people also has a measurable impact on business performance.”

Tags: HR, succession planning, talent management