Companies create talent strategies in their markets to ensure they attract, develop, and retain talent that will fuel business growth. Often, these strategies are linked to the business strategy and integrate best practices from other companies. Many companies follow a similar strategy process. Unfortunately, many companies do this with little in the way of measurement and metrics. They may not understand how they compare to benchmark data, whether their selected practices will have an impact, or if their practices will create long-term strategic value. To have a robust Talent Strategy, you need to determine how your strategies "measure up" early in the strategy formulation process.
Measuring-up Against Benchmarks. Having benchmark data is powerful. This insight allows companies to understand where they stand against others, both within the company and outside the company. As a region leader, Butch Clas of Dow found that benchmark data within the company was particularly helpful. He used our Talent Strategies Audit with several countries in the region to assess the maturity of their practices. Although others within the company were always critical of China practices, they found that their practices were quite mature compared to other countries in the region. Because of the tight talent market in China, Dow China had successfully implemented local talent practices that helped them stay competitive. A great insight was that in reality, some countries do not need more mature practices due to different factors such as size, cultural working norms, and the level of professionalism and discipline of the local workforce. By comparing data across countries, Dow was able to share best practices, which also created opportunities to share resources internally. Other companies find external benchmarks more helpful. By comparing to external benchmarks, companies can understand how they are performing against their competition, allowing them to better target their future strategic efforts.
Measuring-up Against more Strategic Practices. Often, organisations find themselves executing multiple global and local practices. Sometimes these practices meet the immediate needs of the business but may not help the organisation stay competitive and succeed over the long-term. With the right tools, you can compare your current practices against practices that are executed at a highly strategic level. For example, many companies will identify candidates in the marketplace when a specific position opens. However, we found that companies with better leadership bench strength use a more sophisticated approach to this practice. They are more likely to map and track candidates in local markets over time for key roles. They also encourage their managers to cultivate their professional network and to always recruit talent. By doing so, they are able to rapidly identify candidates and fill critical roles more quickly. All talent practices vary in their maturity and sophistication, going from reactive to proactive to strategic. Understanding how each practice varies by these levels can help HR leaders make the right investment decisions for their companies.
Measuring-up Against Impact. Most companies struggle to measure the impact of a specific strategy or talent practice. Most often, companies react to business needs by adapting best practices or by employing the latest trends in practice. However, talent practices are not created equal. Some practices have more impact than others in building leadership pipeline and bench strength. Understanding practices that have impact requires cross-company or control group research. Take formal mentoring programmes as an example. This practice is commonly used to develop leaders. However, control groups show that the developmental impact is relatively low. Cross company research shows that these practices do not build better bench strength. Having insight into the impact of talent practices is critical for companies to make investment decisions that will deliver results.
As you review your talent strategy or consider adding new talent practices, consider asking yourself the following questions to make sure that they measure up:
- Do I have benchmark data against other companies and between countries? Use a tool that provides benchmark data between companies so that you understand how well your practices measure up against your competitors for talent. Also, use this to compare how you operate across countries to identify synergies and possible challenges that should be a concern for the whole organisation.
- Are my practices strategic? Many practice audits provide ratings that are not anchored. One company may rate themselves a "3" and have terrible practices while another company may rate themselves a "3" have highly sophisticated practices. Look for audits or tools that have multiple anchors describing each practice so that you can understand how practices vary by level of HR maturity.
- Will this impact business results? Some best practices are not "best" because they don't impact key metrics or their ROI is limited. When selecting practices or measuring yourself against benchmark, make sure you understand or get guidance on the impact of each practice.
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