Many HR executives want to know how to track their organization’s capability to manage talent. Below is an approach that I favor – including the top 12 categories and examples of metrics in each one.
Please note that this is aspirational (hence “Ultimate”), and may therefore help to guide strategies, structures, programs and tools needed to produce metrics like these.
Assumptions:
- It is best to get the overall picture at a glance but be able to drill down for more detail (example drill down nuggets are at the end of the post)
- Include a combination of long-term strategic information as well as tactical information for rapid deployment
- Clean, stable data are available for the metrics below (building an HR Analytics capability is another post)
- The Ultimate Talent Scorecard should lead you to naturally on root cause and systemic effects, and enable HR leaders to disentangle complex effects to reveal the underlying story of the data – pointing toward solutions and allowing evaluation of initiatives.
Metric Categories, Examples and Rationale
I tend to think of these as part of the workforce planning process. Start with strategy and existing vs. available budget, then look at current capabilities, projecting departures and needs, then look at tools to build or protect culture and capability.
Among the many pre-requisites for looking at this data – your HR team should have conducted an analytics of the Critical Talent Segments and talent should be assessed using a standard approach for potential, projections, and performance. Critical talent segments may be defined as a list of the job families deemed most vital for achieving strategy. You’ll need these metrics for the discussion with executives when you do your annual talent and workforce planning and develop your talent strategy. I recommend bringing to each of those meetings a point of view on which specific job families in that function are most vital, a linkage to strategic objectives, current depth and flight risks for those key jobs and top jobs, quality/skill level, and anticipated staffing needs/gaps.
- Sales per FTE: Revenue generated per full time employee (FTE) is useful for external comparisons, efficiency estimate and for financial modeling and headcount budgeting purposes. Include total headcount and changes at high level. Optional: Revenue and pay differentials by performance level and span of control.
- Capabilities: Includes ratings for key competencies across the enterprise (with drill downs): include scores from standardized employment tests, 360s (if available) and other ratings (e.g., most frequent competencies on IDPs) to get a flavor for what you have to deploy today and set priorities for workforce planning, training budgets and rotations. May be limited to certain populations depending on the organization.
- Flight Risk: Look at this by salary grade, department and location: allows projection of departures due to retirement eligibility (age, pension, etc.), past attrition rates by demographics of job incumbents, comp vs. market, and engagement scores/intent to leave. Allows for workforce planning, engagement initiatives, and leadership development
- Turnover: Overall attrition, by location, department and level. Employee departures are often the most damaging impact to an organization’s productivity. Includes hard costs when available and cut by potential and performance level to tell you if you’re cutting deadwood or bleeding internally. Disturbing findings are sometimes investigated with exit or stay interviews.
- Attraction: Includes Time to fill and Quality of Hire. Tells you how picky you are or, in combination with quality of hire, it tells you whether you have an employment branding issue/trouble attracting top talent. If Time to Fill is averaging >90 days you may have an issue (sourcing, comp), and if averaging <30 days you may have an issue (check on hiring standards). Quality of Hire is defined in terms of how long they stay and of those who do stay, how well they perform relative to incumbents (ratings/would hire again). This should be checked at 60 days, 6 months, 1 year and then annually. This metric will also tell you if you are gradually upgrading capability in that job.
- Engagement: Employee engagement is a quick sense of the morale and motivation of your workforce and acts as a leading indicator for many of these other metrics. An annual survey is a start but is usually insufficient to track rapidly changing work environments. Should be a reliable measure of the key components of job attitudes including job involvement, organizational commitment, perceived organizational support, and an employee’s job satisfaction with co-workers, leaders, job tasks, pay and advancement. Drill down to individual departments and leaders to see how this standardized score varies by geography. To add some qualitative data you can include five most common cultural descriptors in employee survey in word cloud format.
- Performance Management: Include both performance rating distributions, percent on improvement plans and percent current IDPs for promotables/high potentials. Optional if data are available: Performance gap between top and bottom quartile performers (to see if you need a forced distribution).
- Training: Average development hours per employee (does not include compliance training which is NOT motivational or skill building) and ROI per training dollar. The focus here is on ALL employees and how efficiently you’re allocating resources to maintain and build strategic skill sets.
- Talent Kinetics: Looks at movement of talent around the organization as a pre-requisite for development. Includes average TIP and time in level for high potentials, all employees by department to identify stagnation and under-utilized areas
- Bench Strength: Counts of employees by potential, including ready now for promotion to next level by salary grade provide good overview of bench strength. Include relocation on drill down for each individual. The focus here is on the promotable people and what you’re doing to develop your top talent.
- Succession @ the Top: Percent of senior jobs (executive level) with 2 Ready Now successors. Percent of executive openings filled by one of the 2 RN successors. Percent of senior jobs with a well-defined success profile (including critical experiences). The focus here is on the key senior jobs to provide business continuity to the organization. Optional: Percent of RN successors to executive jobs with an executive coach.
- Diversity: Elements of work life and inclusion are important to any workplace culture and be defined much more broadly than gender, ethnicity and other federally protected categories. This is important to track for both business and ethical reasons as you want to ensure you are getting maximum productivity out of your entire workforce. Can include subscale of engagement survey focused on diversity-friendly environment, corporate social responsibility, labor relations, etc. Break it down by gender, ethnicity, veteran status, national origin, generation, and whatever else makes sense for your organization (i.e., cut data where findings are likely to differ).
What to do about the metrics?
Interpreting them correctly is clearly essential to understanding the story of the data and taking the right actions to make good things happen. To understand the results and move the metrics in the right direction requires an HR leadership team with analytical skill (although plenty of consultants are more than willing to assist).Action planning will depend on the interpretation. For example, a flight risk issue that has lack of engagement as a root cause and an issue involving insufficient promotable bench both might have a leadership development solution. Or you might be taking longer to fill jobs in New York than in Texas so you decide to look at the relocation packages. The details of a solution might differ but you know who to put on the team, which employees to develop and approximate resource needs.
Notes from Graph (explaining the fictitious ratings)- Succession
- 90% of top jobs have 2 Ready Now Successors
- 50% of YTD executive fills from succession plan
- Bench Strength
- 30% short on expected need for mid-mgt next 2 yrs
- No IDPs in system for 25% of high potential leaders
- Training
- Averaging 50 hrs / employee per year
- Average skill increase per employee due to training = 12%
- Turnover
- Overall attrition = 4%
- High performer/High potential attrition = 3.2% vs. 4% overall
- Sales
- $409k/FTE = Mature in lifecycle, should be more efficient than avg
- Capabilities
- Skill gap on Innovation (3.1 vs. 3.5) and Strategic Thinking (2.8 vs. 3.4)
- Performance Management
- Pay differentiation is only 1.5x between top and bottom quartile performers
- Performance distribution does not match business performance on West Coast
- Flight Risk
- Millennial high potentials have lower engagement than average (55 vs. 68)
- High potentials paid below 50th percentile on average for their level
- Diversity
- Top 20 executive team net add of 3 women in last year
- Highest engagement scores for Hispanics in the industry
- Talent Kinetics
- Talent hoarding in Operations (avg Time in Position for high potentials = 4.5 yrs)
- Too much variance in potential ratings (SD = 3.8 on 1-5 scale), need calibration
- Engagement
- Overall trend up (65 to 68) vs. industry benchmark flat (64 vs. 64)
- Pacific Northwest has significantly lower scores (58 vs. 68 overall)
- Attraction
- Time to fill in Supply Chain averages 100 days vs. 45 overall
- Quality of hire weak – 68% would be rehired and attrition is >25% in last year
Thanks for reading – I hope you find it helpful.recruitplus.com - Succession
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