Showing the Value of Talent Management

Excerpted from the report, Showing the Value of Talent Management.

The Bottom Line

CFOs are interested primarily in direct costs saved, costs avoided, and increases in productivity. Talent management does lead to value in these ways, but only through translation to the quantifiable benefits CFOs understand and appreciate. In looking at the direct and indirect benefits of talent management, Nucleus found both, with productivity gains ranging from 2.5 percent to 8.5 percent.

Productivity Gains From Talent Management Technology

Nucleus’s research shows technology for talent management to be a sound investment (Nucleus Research o199 – Talent management pays back $5.94 for every dollar spent, September 2014). In its analysis looking into the value of technology for talent management, Nucleus has found that it brings gains in productivity anywhere from 2.5 percent to 8.5 percent (1 to 3.5 hours per workweek). It depends on the application. Some organizations see even greater gains. Alternatively, well-executed talent management pays for itself when it helps a salesperson to drive even one million-dollar deal, or when a new technology helps the employer to avoid the cost of hiring additional labor. Following are examples:

  • Performance and learning management. Especially given the evolution of technology in human capital management (HCM), aggregate gains from 2.5 percent to 5 percent for employees and managers are feasible, Nucleus has found (Nucleus Research p199 – The coming mass extinction in HCM, November 2015). These gains come as trigger-point learning and performance management dismantle and replace entrenched, conventional approaches.
  • The availability of real-time data undergirds the predictive and prescriptive analytics that enable organizations to manage employees’ performance and learning in the moment, as opposed to just annually (e.g., the perennial performance review) or at times set by order of convention (e.g., scheduled training).
  • As user interfaces (UIs) continue to evolve to emulate common consumer-grade social media feeds, interactivity between staff and management amplifies the new normal. Performance- and learning-related feedback becomes more relevant to the employee. Attendant, marked decreases in administrative burdens and logistical difficulties translate to gains.
Read the full report.