Developing sophisticated, data-driven talent metrics, much like the analytics used in professional sports, can provide actionable insights for businesses. The following are specific areas and recommended metrics for corporations to consider developing.
Recruiting Metrics
Effective recruiting relies on predictive power. The goal is to develop metrics that go beyond traditional measures and forecast future success.
- Predictive Performance: An algorithm that uses specific factors to predict a candidate's future on-the-job performance and likelihood of retention.
- Talent Competition: A metric that forecasts the level of competition for external top talent 6 to 12 months in the future.
- Quality of Hire: A metric demonstrating that the hiring process consistently produces employees who perform above the company average.
Retention Metrics
Understanding and preventing employee turnover requires a forward-looking, financial-based approach.
- Cost of Turnover: An algorithm that calculates the precise dollar value associated with the loss of a key employee.
- Turnover Risk: A risk-assessment metric that identifies which specific employees have a high probability of resigning within the next six months.
- Manager Impact: A metric that predicts the likely turnover rate for each manager 6 to 12 months in the future, including the associated organizational costs.
Development Metrics
Data can reveal the most effective pathways for growing talent internally and identifying future leaders.
- Impact Analysis: An algorithm that clarifies whether recruiting, internal development, compensation, or coaching has the most significant impact on team success.
- Leadership Potential: An algorithm designed to successfully identify leadership potential in employees with less than two years at the firm.
- Training Effectiveness: A predictive algorithm that shows whether a specific employee is likely to improve their performance after attending training.
Productivity & Innovation Metrics
Organizations can use metrics to proactively manage performance and cultivate a culture of innovation.
- Performance Downturns: A metric that accurately predicts a future dip in performance for an individual employee or a sub-team.
- Productivity Drivers: A process for identifying the specific job-related factors that most effectively increase employee productivity and innovation.
- Innovator Identification: A metric that accurately identifies natural innovators among both external candidates and recent hires.
Compensation Metrics
Aligning compensation with performance and impact requires sophisticated analytical tools.
- Reward Impact: An algorithm showing which reward and recognition factors have the greatest impact on improving employee productivity.
- Pay-Scale Accuracy: A metric that accurately determines which employees are underpaid or overpaid relative to their contribution and the market.
- Long-Term Value: A metric that predicts the number of years an individual employee will likely remain productive and "worth their salary."
Business Case Metrics
Ultimately, talent metrics must prove their value to the organization in financial terms.
- Program ROI: A method for calculating the current and future return on investment (ROI) for each major talent management program.
- Performance Value: A calculation that shows the increased dollar impact on the business for each percentage point of improvement in new hire performance.