Can we really measure the impact of integrated talent management efforts? A focus on talent management measurement strategies will be the next step for most organizations that have spent both time and energy on system implementation and process integration efforts.  Business leaders are beginning to expect HR and talent leaders to provide data that can help them make critical business decisions.

Just before our Bersin & Associates IMPACT conference last week, I had the great opportunity to visit Zurich and co-facilitate a workshop with three phenomenal companies (2 large international financial organizations, and a large international pharmaceutical organization). The workshop focused on sharing industry best practices and benchmarking in the HR/TM measurement space, highlighting case-studies of best-practice organizations, and more importantly, creating a safe environment for these three companies to share their own internal processes and discuss their current challenges and successes. It was a great opportunity to share both open dialogue and thought leadership, but also to highlight for these organizations how far ahead they were in this process compared to many organizations.

A talent management measurement strategy, or human capital measurement strategy, allows an organization to begin to tie together the efforts they have undertaken in data gathering, data integration, and analytics. We’ve seen that organizations tend to follow a standard path when working through HR/TM Measurement from:

1. Basic HR metrics (gathering & reporting)
2. Basic workforce metrics (gathering, reporting, and some analytics)
3. Integrated talent management metrics (gathering, reporting, analyzing, and dashboards)
4. Business metrics & analytics (gathering, reporting, analyzing, dashboards, executive scorecards)

So what are the greatest challenges in moving a measurement strategy forward?  Why are many organizations struggling to go beyond basic HR metrics reporting?

In a recent survey we launched last month on Learning & HR/TM Measurement, over 53% of the participants felt that their approach to measurement was either fair or poor. Additionally, 43% of all respondents stated that they were spending less than 2% of their HR budget on measurement and 72% of all respondents felt that they needed to be spending more of their HR budget on measurement.  Over 60% of them also noted that their HR and TM systems were fair or poor in reporting and analytics capabilities – and most organizations used a combination of TM platforms, HRIS systems, data warehousing tools, and advanced analytics tools to gather, analyze, and create reports and dashboards within their organizations.

Even more importantly, 58% of respondents said that they currently didn’t have a dedicated role or group within the organization who owned and focused on HR/TM Measurement for the organization.

From this same sample group we also asked which metrics are currently showing up on their executive scorecards/senior leadership reports:

• 72% said Employee Engagement
• 70% said Retention Rates
• 66% said Performance Ratings
• 63% said Employee Satisfaction

You’ll notice most of these are basic HR and workforce metrics that are single points of data versus rolled up indicators.  How are these measures currently helping organizations make good business decisions, ensure the health and wellness of their critical resource populations, and identify resource risks?  The more challenging analytics such as readiness metrics, internal mobility, high performer retention or more importantly risk – were less likely to show up on current executive scorecards for many reasons - difficulty of data gathering and analysis, lack of data on talent segments or high performers, lack of time within the organization to both gather and analyze data, or executives simply haven’t asked for it yet.

If you aren’t sure how important these kinds of metrics could be for an organization, a great example is a recent blog posting by Wall Street Journal’s “Health Blog” on AstraZeneca’s recent acquisition of one of Pfizer’s top neuroscientists – someone touted as “outstanding talent” and only recently added to the Pfizer ranks as part of their Wyeth merger. Losing critical talent can not only affect your bottom line, but branding, and industry perception as well. Additionally many organizations are beginning to include data on current critical talent within their organizations and succession planning in annual reports and financial statements (some voluntarily and some as in the financial space now through compliance).

For organizations who have moved beyond standard HR reporting, HR measurement and analytics is focused more on forward looking indicators versus lagging indicators, and using that data to help make smart business decisions and understand if an organization is prepared for the future or not.

We’d love to hear more about HR/TM Measurement efforts within your organization. Do you currently have an HR or TM measurement strategy? If so, who owns that within your company? What kind of data have your executives asked for and how are you answering their requests?