This is work in progess. In this post I will collect research, quotes and best practices on Talent Management and the impact on business results.
1. Correlation between Integration and Operating Income Growth. Reference: CedarCrestone study in Integrated Talent Management: Extending the Value of a Strategic Framework, Oracle White Paper, March 2008, page 11 About the CedarCrestone study click here.
1a. “Ed Lawler and Susan Mohrman of the Center for Effective Organizations at the University of Southern California recently completed an intensive study of management practices in Fortune 1000 companies. Their study demonstrates that employee-involvement practices such as information sharing, skills training, rewards programs, and empowerment efforts — all of which fall squarely into HR’s domain — show a significant bottom-line return. In 1999, companies that were big users of employee-involvement practices boasted a 66 percent higher return on sales, a 20 percent higher return on assets, a 20 percent higher return on investment, and a 13 percent higher return on equity, USC investigators report.” Reference: Caudron, Shari: How HR Drives Profit
1b. “….various studies have shown that 15 to 30 percent of the total value of a company can be correlated to specific human capital practices” Reference: Caudron, Shari: How HR Drives Profit
2. “Companies with high scores across the board (Talent Management Practices) were more likely to have strong financial performance, based on reported change in operating profits between 2003 and 2006.” Reference: Talent Management: How to Invest in Your Workforce. A study by IBM and HCI (Human Capital Institute) in BusinessWeek, August 13 2008
3. “In fact, Bersin & Associates has identified the Top 22 processes (out of 62 studied) that drive highest levels of business impact. These include coaching; development-based performance management; the use of strategic competencies in recruiting, performance management and leadership development; implementation of skills and competency-based workforce planning; and creating personnel and organizational goals that align with current and strategic business goals.” Reference: Levensaler, Leighanne Integrating Talent Management Systems Strategically on TM, February 2008. “The three functional areas driving highest impact are performance management (34% improvement), competency management (31% improvement), and sourcing and recruiting (27% improvement).” Reference: Corporate talent management challenges include shortage of managers, engineers and salespeople, says Bersin, May 2007. Impact on the evolution of theHR Function the Talent Management Top Process see Reference: Bersin Blog.
4. “Research demonstrates that companies with enlightened talent management policies have higher returns on sales, investments, assets and equity (Caudron, 2001).”
6. Performance 2.0: Empowering the Next Level of Business Results. Reference: Taleo
8. “HR IMPACT: NEW REPORT DEMONSTRATES HR’S BOTTOM LINE CONTRIBUTION
Conference Board Study Reinforces How HR Strategies Can Drive Positive Outcomes
A small but growing number of major organizations are demonstrating the impact HR policies can have in meeting overall business goals, says The Conference Board in a soon-to-be-published report. Organizations such as Hewlett-Packard, Capital One, and Harvard University are using evidence-based approaches to Human Resources to show how company-aligned HR practices help them achieve business performance goals. The data are most welcome by every executive seeking to document the contribution of Strategic HR.” Reference
9. Europe Study: HR is Driving Business Performance with Talent Management
10. “A survey of 3,000 International Association for Human Resource Information Management (IHRIM) members and Knowledge Infusion clients’ in HR management revealed an explosive growth in talent management initiatives in their organizations. The 2006 Talent Management Survey, conducted jointly by IHRIM and Knowledge Infusion, found that 77 percent of survey respondents see talent management increasing in importance during the next three years.” Reference
11. “In the current skills drought, retaining and managing talented employees is crucial, but as two recent surveys revealed, very few companies have the processes in place to handle this effectively.” Reference
12. “High quality sales people and sales leaders require exemplary sales talent management practices, which require strong partnerships between sales and HR. In early 2008, DDI surveyed 297 sales and HR leaders to find out just how well the partnership between these two functions is working. Seventy-nine percent of these leaders hold mid- to senior-level positions, providing a unique perspective of challenges at the strategic level.” Reference
13. “For the past several years, researchers at Watson Wyatt have been developing what they call the Human Capital Index. The Human Capital Index (HCI) seeks to measure the impact of human capital management (HCM) practices on shareholder value. This research is based on a survey of over 100 questions relating to HCM practices, distributed to more than 750 companies in the US, Canada and Europe. ” Reference
14. “The Business Case for Human Capital Management: This white paper explains how a comprehensive human capital management HCM program differs from conventional HR functions. It argues that an HCM program that’s integrated with your business strategies can help HR managers: Improve workforce performance Focus on more strategic functions such as talent management and… ” Reference
15.” Research by consultancy Development Dimensions International and the Economist Intelligence Unit has concluded that half of business leaders feel their organisations are only sub-par when it comes to developing leaders, with a similar proportion believing they are poor or, at best, only fair at identifying talent.” Reference
16. Performance & Talentmanagement Trend Survey 2007. Reference.
17. Mark Huselid: SHRM Empirical Study “This table provides a summary and comparison of 158 empirical studies linking HRM systems with firm performance published between 1995 and 2003. Included in the table are the citation, level of analysis, sample, HPWS indicator, performance indicator, presence of main effect, presence of interaction, and effect size.” Reference
19. “The Building the Talented Organisation survey found that while almost three-quarters (73%) of respondents believed their company had an appropriate talent strategy in place, more than half (55%) said they had not seen it reflected in the decisions made by front-line leaders.” Reference
20. “Although McKinsey surveys show that business leaders around the world are deeply concerned about the intensifying competition for talent, few companies make it an integral part of a long-term business strategy, and many even try to raise their short-term earnings by cutting talent-development expenditures. “ Reference