Companies with more mature Talent Management capabilities reap strong bottom-line benefits, including earnings that are 18 percent higher than typical competitors. Research from The Hackett Group finds that the improved performance on talent management enables companies to generate millions in additional EBITDA earnings. The study, which examined the performance at more than 60 companies over a three-year period, found that in addition to higher earnings, leaders saw significantly improved net profit margin and greater return on equity and assets.
Companies with a mature talent management organization outperformed typical companies across an array of efficiency and effectiveness metrics. Leaders showed superior ability to increase overall employee engagement, faster recruiting cycle time, and greater linkage of talent management to business strategy. Their talent management professionals were also significantly more productive than those at typical companies.
Achieving more mature talent management
Talent management leaders achieved impressive results by creating an integrated set of talent management capabilities aligned with their business and talent strategies. They more carefully cultivate the appropriate organization and culture, focusing on people-management skills of managers and supervisors and employee engagement, the research found. They have a greater focus on improving the processes by which talent needs are identified and appropriate individual staff are acquired, developed, managed, and measured. Finally, leaders are more advanced at measurement and make more effective use of technology to enhance talent management processes and activities. While they don't necessarily spend more, they more effectively rely on technology to enable information access, track talent management development, and enable improved decision-making.
"By ignoring the strategic value of talent management and failing to develop a comprehensive program that drives top performance in this area, companies are missing the opportunity for a triple payoff - an enhanced bottom line, better performance across the enterprise, and improvements in specific talent management processes." said Hackett HR Advisory Practice Leader Stephen Joyce.