What is Talent Management?

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Talent Management is the process of improving how people are acquired, developed, deployed, motivated and retained. Among the traditional business functions that Talent Management includes are recruitment and selection, coaching and training, succession planning, and performance management, which includes motivational incentives, benefits and compensation.

The primary purpose of talent management is to maximize the total value of the organization’s Human Assets.  In order to evaluate the success of your talent management system you can track Revenue Per Employee, Cost Per Employee and Profit Per Employee.

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People are your organization’s most important asset. Without people, nothing gets done! There is a large competitive advantage to be gained by improving how your organization’s human assets are managed.

Talent management integrates a wide variety of scientific, business and accounting principles including:

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Talent Management Metrics

As with any other business function, you must track metrics in order to evaluate your strategy and make fact-based decisions. Three key talent management metrics to track are:

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Revenue Per Employee
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Cost Per Employee
resume omissions

Profit Per Employee

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  • Measuring human attributes,  talents, competencies and contributions.
  • Monitoring the asset value of employees.  Each employee has a unique profile of knowledge, skills, competencies, abilities, values, talents and motivations which result in specific performance outcomes (i.e. business contributions). The employee’s asset value can increase or decrease over time.
  • Recording and recognizing the employee’s key contributions and accomplishments.
  • Investing in the growth and development of the employee for strategic business purposes.  Estimating returns on those investments.
  • Retaining the employee to maximize ROI.

If you’re ready to start remember that we specialize in workforce planning and we’re here to help! Contact us with any questions you might have or let us know how we can assist you.

Take the first step towards developing your talent management system.  Learn about: Talent Management Strategy Step 1: Performance Plans.

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Making the Case for Human Capital Solutions

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It’s time for new management thinking when it comes to making decisions about people. Human Capital Management (HCM) solutions include recruitment strategy, hiring methods, training and coaching programs, incentive plans, and succession planning, promotion criteria, will determine your business outcomes. Throughout my 20 years working in human resource consulting, I have seen much more guesswork involved in HR decisions, than than data-driven, strategic, knowledge-based decisions! Why is that?

Prioritize Human Capital Solutions

Perhaps the most obvious reason that many companies struggle with underdeveloped human capital strategies is that they are not a priority for the current Senior Managers.  Companies spend a large share of their revenues (e.g. usually about 60%) on salaries and benefits. Despite this high spend, many managers can’t say what kind of return on investment they are getting from their human capital management strategies! We challenge you to name one other department in your company that can justify such a large spend without a very clear understanding of the potential utility of the spend and the ROI outcomes.

Your employees are your most valuable assets. Unlike technology assets, or market strategies, human assets cannot be copied by your competition. Therefore, it is sound business reasoning to regard your employees as a critical component of your competitive advantage, and as assets that should be invested in.

In many companies though, human capital strategy has found a way to fly below the radar. Again, why?

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The Human Capital Solutions are Here

The answer is simple: a lack of awareness or knowledge of the assessment tools and monitoring processes for Human Capital Management

As companies large and small scramble to embrace the advantages of the overwhelming amount of data available to them, it’s mind boggling to think that Human Capital Management would be an exception to use this available data.  While we have had many of these assessment tools for many years, including pre-employment screening and performance-based management systems, advances in technology now allow us to  monitor and gather our human capital data, analyze that data, and draw accurate conclusions that will positively impact the company’s bottom line.

Today’s technology makes collecting this data and applying it to business decisions much more efficient than ever before.

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Specializing in Human Capital Solutions and Systems

Small, medium, and large companies have all benefited from the Human Capital Management tools and systems we help develop with our clients. Contact us today to learn what tools will help you build a profitable human capital strategy!

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Human Capital Management Questions You could be Asking

Throughout my career, I have time and time again seen the need for companies and hiring managers to ask themselves these questions about their human capital management strategy. Take a moment to really consider your response to each of these questions, and challenge yourself to find any holes in your current reasoning.

  1. Should people assets be the first to get cut during a slow economy?
  2. Who currently owns and manages the workforce strategy function?
  3. What are the estimated dollar values of your company’s human assets?
  4. Where is the company’s directory of human assets?
  5. What is the Return on Investment in people at your company?

Human Capital Management (HCM) captures new value from workforce metrics.  Insights gained can be translated into lower costs and higher returns for owners and shareholders. Investments in people will allow senior managers to obtain a competitive advantage that other companies can’t copy.

Stop guessing, start knowing.

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3 Steps for a Complete Talent Management Strategy

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Talent management strategy has to be viewed systemically. There is no value in doing a great job recruiting and hiring top people if you can’t retain them. There is no value in training and coaching employees unless you know what talents and competencies are driving the high performance. It’s only by bringing all the pieces of talent management strategy together into a comprehensive workforce plan that you can realize the immense value it holds.

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STEP 1: The first step in your talent management strategy is to develop performance plans for each person you manage.

When creating these individual performance plans be sure to include:

  1. What specific activities or tasks the person will be doing, and when and where.
  2. How the person’s performance will be monitored, measured and rewarded.
  3. How the person will be coached, trained and developed.
  4. How the person will be compensated and incentivized.
  5. How the person will be retained.

Spend some time developing your individual performance plans. Be sure to keep an eye on your high performer models to evaluate the success of your performance plans as well, and adapt the plans as needed.

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The Three Steps of a Successful Talent Management Strategy

resume distortions Performance Plans for each employee in your organization.
resume falsehoods Human Asset Profiles are developed for each employee.
resume omissions Human Asset Investments are tracked for each employee.

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We can assist you developing a talent management strategy that will lead to long term productivity and performance gains and increased profits. Give us a call today or contact us to begin planning your high performance work system.
After you’ve developed your performance plans, your will want to establish your Human Asset Profiles and track your Human Asset Investments. Stay tuned for more on these topics and look forward to the discussions about next two talent management strategy steps!

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Valuing Employees as Assets: Human Asset Investments

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“People are our most important asset.” How many times have you heard that aphorism from Senior Executives? But while people (i.e. employees) are often spoken of as assets, the reality of business is they are generally treated as costs – particularly by financial departments who categorize them as “liabilities.”

 

Since value is driven by people more than any other factor, categorizing employees as financial liabilities is a major problem for businesses in today’s knowledge-based organizations.  Because of this “out-dated” approach, the manager’s mindset is inherently, and significantly, out of focus. You don’t manage liabilities the same way as your assets! Current best practices in Human Capital Management aim to correct this fundamental flaw by connecting or correlating the value of employees’ talents and attributes, with the value they produce in both financial and non-financial terms.

Valuing People as Assets

Defining employees as an asset is easy, since they meet the three key criteria:  1) They possess future service potential.  2) This future potential is measurable in monetary terms. 3) They are subject to the control of the company, or (their time) can be rented or leased.

Measuring the intangibles, such as employees’ competencies, skills, or talents – these types of valuations are frequently excluded from appearing in the management monitoring and control systems in any serious way.  This the true challenge that we focus on overcoming at HireSmart.

Generally, the traditional human asset valuation methods utilized at HireSmart include the following:

oneCost-based Valuation. This method looks at acquisition or replacement cost. The costs of recruiting and hiring an employee can be assessed. Alternatively the person’s annual gross remuneration can be used as a base.

twoMarket-based Valuation. The price to be paid in an open market must be a reflection of the value of a person. Value is very difficult to assess, and it does not take account of the value of service continuity in itself.

threeIncome-based Valuation. The cash inflows expected by the organization related to the contributions of the human asset, calculated as the present value of the expected net cash flows. This is good for individuals whose efforts are directly related to identifiable income (like sales talent).

Of all the business levers available to Senior Managers, the greatest potential to build value is offered by investments in human assets (i.e. employees).  It is time to recognize this, and demand a measurable approach to both valuing this most significant asset, and linking that value to the outcomes and benefits for stakeholders.  What gets measured gets managed!

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The Value of Talent Management Strategy

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The Benefits and Outcomes Greatly Outweigh the Costs for Talent Management Strategy

At HireSmart, we like to show the Return on Investment for a well-executed talent management strategy. The pay-offs are numerous and easily measured!

A well-executed Talent Management Strategy allows business owners and shareholders to enjoy the benefits of:

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  • Quickly knowing who should be retained if a “reduction in force” is required.
  • Understanding and appreciating the dollar value of the human side of the business.
  • Leveraging the success of top performers for competitive advantages.
  • Identifying observing and measuring organization’s performance driving behaviors.
  • Developing the strategic focus and planning for human asset investments.
  • Demonstrating the organization’s capacity to identify and leverage competencies, talents and knowledge for specific business outcomes.
  • Increasing the total value of the organization’s Human Assets.

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What is the Current Dollar Value of Your Human Assets?

Knowing the current dollar value will allow you to:  1. Confidently invest in talent management strategy. 2. Observe the business gains or losses compared to your baseline valuations.  3) Forecast and set future business goals for the human side of your business.

Contact us today! 

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If you’re interested in developing a talent management strategy and increasing your bottom line, contact us today at 480.503.2945.

Talent management increases value through long term productivity and performance gains. Here are a few examples:

  • Strategically-aligned job descriptions will clarify performance expectations throughout the organization.
  • Individual career development plans will clarify the future competency requirements based on the evolving talent management strategy. A clear plan for career growth can be articulated for each employee.
  • Performance Management systems will assess and manage gaps in skills, competencies, talents or behaviors for individuals and the entire enterprise.
  • Individualized performance incentives (i.e. pay for performance) will maximize goal attainment for the individual and the organization.
  • Succession plans will help clarify the future staffing requirements of the organization.
  • Human Asset Profiles will create a directory of the entire organization’s talents, so that managers can quickly identify people with specific skill sets, competencies or talents to be assigned to teams, critical projects or emerging problems.
  • Integrated Performance Management systems will align strategic business objectives and measurable behaviors leading to desired performance and business outcomes.
  • Success Metrics will measure key financial, customer, employee and business process improvements.  Monitoring innovations, new skills and competencies added creates a sense of excitement in the workforce.  Examples include innovation quotas, job satisfaction ratings, defect rates, turnover rates, cycle times, etc.).  Some success metrics (e.g. ROI, revenue growth per employee, cost reductions per employee, profit growth per employee, market share per employee, customer retention rates, new product revenues, are viewed as annual outcomes and celebrated.
  • Individual Performance Plans can be reviewed and updated on a quarterly or monthly basis holding people accountable for business outcomes.
  • Success celebrations will reward and celebrate documented progress frequently.
  • High Performers will be recognized for promotions, advancement, special projects, coaching, and perks leading to better retention.
  • Underachieving individuals will be identified for work improvement programs or termination.
  • Human Asset investments will be evaluated for their impacts on Revenue per Employee, Cost Per Employee, and Profit Per Employee

Read more about Human Talent Management Strategy here.

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First Steps to Better Hiring Decisions

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Hiring Mistakes Cost Much More than Money

As a hiring manager, you need the best quality information available on your applicants. Much of the information you collect on applicants is often embellished including resumes, references, work history and interview responses. You need to make sure you also have “accurate, objective information” that has not been embellished. The Quality of Information Collected Equals the Quality of Hire!

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HireSmart offers outsourced hiring services as well as consulting to improve your recruitment and selection strategy. Call us today to learn how to take the guesswork out of your hiring decisions to reduce staffing costs! (480) 503-2945

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In today’s fast-paced business world, the process of collecting, reviewing, and verifying critical information about job applicants is often rushed through or overlooked completely. Instead, hiring managers rely on resumes and other information provided by the applicant. Applicants benefit by telling potential employers what they want to hear. About 15%of job applicants having criminal convictions, and up to 66% of resumes contain serious distortions, falsehoods, or omissions. Therefore, it is a very high probability that your company will make some costly hiring mistakes unless you take steps to collect accurate, objective information about your candidates.

Fortunately there are some easy ways to minimize hiring mistakes. 

  1. Have each applicant sign a consent form giving permission for a background check, including a check for criminal records, past employment and education. Applicants with something to hide will often not sign this consent, or they will withdraw their application or admit prior omissions, convictions or falsifications.
  2. Make certain your employment application asks about criminal records in the broadest possible terms allowed by law – do not limit it to felonies!
  3. Remind candidates during interviews that your company will perform a criminal background check and reference check as a standard business practice.
  4. Job applications should clearly state that any false statements or omissions are grounds to terminate the hiring process or employment, regardless of when they are discovered.

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Two of three resumes are intentionally misleading!

Resumes are often misleading in three ways:

resume distortions Distortions include enhanced job titles or accomplishments.
resume falsehoods Falsehoods include listing educational degrees never obtained or degrees obtained from paper mills.
resume omissions Omissions include failure to list a felony offense on a job application form.

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Did you know? If an employer knows the cities (and counties) where an applicant has worked, it increases the accuracy of a criminal records search.

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If you don’t already have someone with specialized training in completing background searches, you will need to use a professional background search service that can obtain criminal records from all over the United States.

HireSmart outsources background checks for our clients. We design hiring systems that integrate background checks, integrity screening and objective talent assessments for the best results. Contact us to learn more about our hiring services and the background check services we recommend.

Professional background agencies can provide employers with:

  • social security verifications
  • academic verifications
  • civil records searches (County & Federal)
  • credit reports (Individual & Business)
  • employment verifications
  • fraud and abuse checks
  • global watch alerts
  • government data repositories
  • motor vehicle records
  • national practitioner data banks
  • professional license verifications

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QUICK HIRING TIP #1

Clearly stating on application forms that false statements and omissions are grounds for termination is important if a criminal record or falsification is discovered after someone is already hired.

While a criminal record can’t be used to disqualify an applicant unless there is a sound business reason, if an applicant has lied about a criminal matter or they have provided falsehoods, it could be the basis for a termination decision.

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Remember to keep records of your efforts! Documenting the background information collected on applicants will show your efforts at due diligence.  This is great not only to share with upper management, but also to help protect your company from negligent hire lawsuits.

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