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Why Talent Management Metrics Suck

Why Talent Management Metrics Suck

Mark Vickers | i4cp

June 03, 2010

Of these four outcomes, the most important is leadership success. That outcome, via a regression analysis, is linked with both talent management success and market-performance success. In other words, the more that organizations use the measurement of leadership success to gauge the quality of their talent management practices, the more likely they are to say they’re good at talent management and to have higher market performance.

We also asked participants about more specific types of workforce metrics; everything from internal placement rates to new hire separation rates. Virtually all respondents said their firms should be using these metrics to a higher extent than they actually do. There’s no mystery there, given the earlier finding that so few businesses excel in measuring talent management. But what was more interesting was that there are certain metrics that high-performers are a lot more likely to use than lower performers. “Quality of hire” is a case in point and “regrettable termination rate” is another. Based on the greater use of these qualitative measures, we contend that sophistication counts. Good metrics don’t just describe whether you are losing or gaining employees, but whether you are losing or gaining really good employees.

i4cp’s 4-Part Recommendation:

1. Start by analyzing your current set of workforce-related metrics. Is there an organizing principle behind them or are they all ad hoc? The more you can devise a set of metrics that lend support to one another and provide coherent pieces of a larger pictures, the more success you’re likely to have finding meaning in your metrics and understanding the story the metrics are telling.

2. Determine what you’re really trying to accomplish. It doesn’t have to be just one thing, but you should have specific goals in mind, such as making sure your organization has a strong leadership pipeline. In a larger organization, these goals can’t be effectively set up by just one person. They need to be decided in conjunction with an executive team that represents the needs of various parts of the organization. As part of i4cp’s ongoing research in this area, we interviewed Larry Israelite, Vice President of Human Resource Development at Liberty Mutual Group. He notes that in his organization, “The management team has agreed on the data dictionary. The team must agree to changes to people measurements, which ensure alignment and consistency.”

3. Put a plan in place to improve your metrics over time. Accurately calculating metrics such as quality of hire and regrettable termination rates is not a simple task, but it’s probably worth the time and trouble. When determining a method and process, test it with a pilot group before applying it to the whole organization. Present the metrics and processes for determining the measurements to managers so they will understand the purpose, provide feedback and eventually buy into the authenticity of the metrics. The last thing any company wants is to invest in producing good metrics that no one believes or will act on.

4. Know how to tell a story with the metrics. Human beings are wired for narratives and stories. Data-heavy reports, no matter how accurate, will do little to convince others of the legitimacy of your analysis. The numbers must tell a story that makes sense to others, and reports should make their conclusions and recommendations clear. It’s not enough to be correct; you must also be compelling.

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