HR Management | Human Resource Management

ADP Research Institute®

Human Resource Management: Survey Reveals Talent Management Strategy, Process, and KPI Shortcomings

This insight is from: "Talent Management 2011: Perceptions and Realities"



The five pillars of talent management - talent acquisition, performance management, employee training and development (including elearning), succession planning, and compensation management – lie at the heart of successful human resource management. Nearly every company practices some form of talent management, whether it’s a loose policy backed up by paper or an integrated strategy supported by a fully automated system. But do companies believe they’re doing a good job at talent management? Our recent survey of HR managers at 600 enterprises with 500 or more employees revealed that, while most think they are on par with or better than their industry peers when it comes to managing talent, many may be falling short in their actual practices.

Most Organizations Use Talent Management KPIs, But Are They Effective?

Almost all enterprises surveyed use KPIs (Key Performance Indicators) in at least one of the five talent management areas. They are most likely to use KPIs in the areas of employee training and development, performance management and compensation management, and least likely to use them in talent acquisition and succession planning. While virtually all companies in the study use performance metrics, no more than a third of HR managers rate their use of KPIs as best in class or ahead of industry peers. These findings indicate that many companies see opportunities for improvement in their use of performance metrics for measuring talent management effectiveness.

If Companies Have Talent Management Strategies, Chances Are They’re Incomplete or Unaligned

Just under half of the companies surveyed lack a formal talent management strategy. Of those that have a strategy, only 38 percent say it addresses all five areas of talent management — talent acquisition, performance management, employee training and development, succession planning, and compensation management. What’s more, only 12 percent say their strategy is completely aligned with overall business objectives. How can 75 percent of survey respondents rate themselves on par with or above their peers in overall talent management maturity if they don’t have a formal talent management strategy that aligns with key business goals?

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KPIs Fall Short in Measuring Progress on Talent Management and Human Resource Management Strategic Goals

No more than a third of HR decision makers in enterprises that have a talent management strategy and use talent management performance metrics think their KPIs are very effective in measuring progress toward strategic talent goals. In addition, fewer than half of enterprises that employ talent management performance metrics use KPIs that address more than one talent management area. Equally telling, our survey revealed that only a quarter of HR managers in enterprises that use talent management KPIs believe these metrics effectively measure the impact HR has on achieving corporate goals or the return they realize on talent management investments. If most HR decision makers question the thoroughness and effectiveness of their KPIs, how can they trust them to measure the overall state of talent management — a critical component of the human resource management function?

Talent Management Perceptions and Realities Summary

Although many HR managers give their company’s overall talent management maturity high scores, our survey uncovered two key findings that call this prevailing perception into question. Our survey results indicate a lack of standards for measuring complete talent management effectiveness and a widespread inability to assess the impact of talent management on achievement of corporate goals. Until these issues are addressed, organizations will be hard pressed to assess their true talent management maturity and how it compares with that of their peers.

*A complete list of sources and citations can be found in the full report.

About This Report: Report data and conclusions are based on a survey conducted by the ADP Research Institute, a specialized group within ADP that provides insights for leaders in both the private and public sectors around issues of human capital management, employment trends and workforce strategy. See full report for details on research methodology.

Keywords: HR Management, Talent Management

Business Types: Research for Large Organizations

Roles: Research for Human Resources Professionals

Talent Management

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