The New Year is the perfect time to reexamine and refocus your talent efforts. The coming year will see a surge in economic growth, but it will occur in a business environment with continued volatility. Succeeding in this environment will require a new approach. So before all of the activity that accompanies any new year begins, take at least an afternoon off for some “strategic thinking and planning time.” In order to guide your thinking, I propose 10 talent resolutions or focus areas which are likely to have high strategic and business impacts.
10 Strategic Action Areas in Talent Management
The actions with the highest potential business impacts are listed first.
- Increase your measurable impacts on strategic goals – start by dropping the outdated “align with business goals” target. Instead work with the CFO’s office to identify, measure, and then strengthen the talent areas that have a direct link and a measurable impact on the corporate goals (these goals usually include increasing revenue, improving new product development, and increasing market share). The most impactful talent areas to focus on include improved hiring, retention, faster learning, and more precise internal movement into product, sales, and revenue-generating positions and teams.
- Increase workforce productivity — rather than an indirect approach, there needs to be a dedicated talent program that has a laser focus on increasing the productivity of your employees. Start with the simple workforce effectiveness measure of revenue per employee as your productivity success measure. Next, have the leader of the productivity function identify the factors that increase their productivity. The chief talent officer must then charge and hold every talent function leader accountable for changing and influencing the factors that inhibit or increase employee productivity. And finally compare your revenue per employee results at year end to those of your competitors (marketwatch.com is one of many sources that list revenue per employee on company profiles).
- Increase innovation – innovation may have up to a five times larger impact on corporate revenue than continuous improvement. Because of the higher impact, talent managers first need to identify the barriers to innovation, and after minimizing them, work to increase any additional factors that drive new innovation. Note that innovation efforts can’t just be focused on product development, because the entire organization must be innovating together at the same rate if you expect to dominate your competitors.
- Convert HR impacts to dollars – traditional HR metrics often have a minimal impact because they are reported using only HR terminology (e.g. annual turnover rate or quality of hire). However because the language of business is money, you must work with the CFO’s office to ensure that all HR results are accurately “converted” to their dollar impact on revenue (i.e. the 12 percent turnover reduced our revenue by $2.3 million).
- Adopt a data-driven retention approach – Retention will heat up and become the major talent issue for the next year. Unfortunately there is no evidence that most current retention efforts have any measurable impact on turnover. What is needed instead is a new data-driven retention approach that generates data to prove what works. This new retention approach should focus on high-impact individuals and jobs and also unambiguously prove to the CFO’s and the COO’s satisfaction that talent efforts measurably increase both retention and productivity, as measured in dollars.
- Rapid best-practice sharing — The one highest impact thing that HR can do to dramatically increase its business impacts is to develop an effective “best talent practice sharing process.” Of all strategic actions, this is the fastest, easiest, and cheapest way to dramatically improve people-management results and business impacts. Talent leaders must develop a process to continually identify, quickly share, and convince managers throughout the organization to adopt the most effective talent approaches throughout the organization.
- Prioritize – if you really want to increase your business impact, drop the all-too-common “everyone is equal” approach to HR. The more business-like approach is to instead prioritize and focus your limited resources on the jobs, employees, and business units that have the highest impact. HR must also prioritize its programs, tools, and budget to ensure that the most and the best resources are allocated to these higher impact areas.
- Increase learning speed – continual fast learning may be the most single important corporate competency (as Google has found). Unfortunately, most development functions don’t even measure organizational or employee learning speed. In order to ensure that your employees are always on the leading edge of knowledge, talent managers must first identify and then widely share the best ways to learn fast.
- Competitive advantage – talent leaders who realize that talent is a primary business advantage must take steps to assess and compare the talent management practices and results at your firm directly with your competitor firms. You must be able to prove to skeptical executives that everything your firm does in a side-by-side comparison in each talent area is clearly superior to the approaches and the results of each of your product and talent competitors.
- Alert managers about the future – most of HR relies exclusively on historical metrics, which tell you what happened last year. The time has come for talent managers to follow the lead of the rest of the organization with a shift to metrics that predict problems and opportunities months before they occur. Managers make significantly better talent decisions when they are provided with a combination of “real-time metrics” (what is happening today) and “predictive analytics” (what will likely happen soon).
Almost everyone that I advise in talent management strives to be more strategic. Unfortunately, “being strategic” is just mostly talk. Less than 1 percent of talent leaders have found the time to conduct a “strategic audit” to actually assess how strategic they have been during the last year. Talking strategically is not enough, because in order to be strategic, you must act forward-looking, produce measurable impacts on business goals, and provide a competitive advantage for your firm. If you are not sure whether you are meeting each of these three characteristics, I hope you find this list to be a helpful starting point.