The Most Important Talent Management Metrics
A talent management system is critical to an organizationâ€™s ability to operate in the most efficient and cost-effective manner possible and to achieve and maintain a competitive edge. But, no talent management strategy is complete without performance indicators. By continuously monitoring key metrics with the use of a talent management system, companies can understand whatâ€™s working and what isnâ€™t in order to take immediate, corrective action to maximize their return on employee investment.
But, what performance indicators are commonly found in a talent management system, and what do they mean?
A talent management system includes pre-developed reports and graphs that cover the basics, such as:
- Turnover rates
- Average length of employment
- Recruiting statistics (average time to hire, placement ratios, average length of stay for new hires, etc.)
- Aggregated performance evaluation scores
And while these metrics are important, businesses also need greater insight into the effectiveness of their talent management initiatives. For example:
Competency Gap Index
This is the difference between the skills the organization needs to achieve its goals and those that its current workforce possesses. Most skill gaps can be corrected through the implementation of comprehensive training programs, or by using a talent management system to realign employee roles and responsibilities based on individual strengths. However, major skill gaps can be detrimental to productivity and may require drastic measures such as headcount replacements or a complete restructuring of organizational charts.
Employee Satisfaction Index
How happy are employees in their current jobs, and how likely are they to leave? It is important to note that measuring the satisfaction index alone is not enough. Companies need to use their talent management system to understand the underlying causes behind high levels of dissatisfaction, so corrective action can be taken to minimize attrition.
Workforce Confidence Index
This indicator assesses employee perceptions of the abilities of the organization as a whole. Do workers believe that the company and its staff are well-prepared to execute important plans and achieve strategic goals? Unlike the employee satisfaction index, which measures each individualâ€™s opinion of their specific job, this metric provides insight into the reputation of the organization among its workforce.
Ratio of External Hires to Internal Promotions
When high-level positions open up, companies should be able to find candidates internally before turning to external searches. However, this is not always the case, as few companies have fully leveraged their talent management system to develop and implement comprehensive advancement plans. This metric serves as a â€śwake up call,â€ť helping companies to understand if they are properly cultivating their existing talent.
The most vital talent management metrics will vary greatly from one organization to the next, depending upon unique plans and goals. They key is to be sure that the metrics are clear and well-defined, as well as easy to track, measure, and act upon. It is also important to communicate the results to stakeholders throughout the organization, so everyone knows whether or not talent management objectives are being met. Additionally, benchmarking progress against other companies in the same industry can provide even more insight into how well an organization is doing. With a robust talent management system in place, these metrics can be more easily obtained and used to improve talent management procedures.