The Top 22: a Priority List for HR

As part of its research into high-impact talent management organizations, Bersin & Associates surveyed more than 700 corporations and interviewed approximately 55 executives to learn more about top business problems, talent-related challenges, and the adoption and sophistication of various talent-related processes. We wanted to understand the issues involved in implementing these processes and, even more importantly, determine how these processes drive business results.

But don’t nod off yet. While the analysis and number crunching involved in this work would put most people to sleep, the findings are a wake-up call.

Our research found that of 62 processes examined, 22 consistently drive highest business impact. These processes (The Top 22) represent a priority list for HR executives and business leaders when it comes to developing and managing talent. If your organization is questioning where to start or how to strengthen your talent management program, these are the processes on which you should focus.

The background

We strongly believe the value of HR and learning organizations is directly tied to their alignment with business. Our research involved a methodology designed to determine exactly where and how HR organizations get the highest business results.

Our list of 62 talent processes, compiled through our experience and market knowledge, falls into eight categories: sourcing and recruiting, performance management, comptetency management, learning and development, leadership development, succession planning, workforce planning and HR systems.

For each process, we asked respondents to rate their organizations on 16 different business measures. Examples of measures include, onboarding of new employees, response to business change, compliance, employee engagement and retention.

Because The Top 22 processes were identified using this methodology – with no opinions or subjective assumptions factored in – they provide an unbiased perspective.

What this tells us

Analysis of The Top 22 provides highly actionable guidance. At the top of the list is the implementation of coaching programs for employees. Organizations with strong coaching cultures, coaching programs, and support structures develop much higher levels of engagement, leadership, flexibility, and performance.

Organizations are adopting a variety of coaching programs – ranging from intensive executive coaching to informal, ad hoc programs for specific skill development.

For example, NASA found its managers, mostly engineers and scientists, were not engaging well with employees. While these managers were highly capable of solving engineering and technical problems, they were having a hard time dealing with strategy, planning and personnel issues. The result was an in-house coaching program, offered through a small set of senior employees who had unique skills in listening, coaching and development. These coaches quickly became highly regarded and sought after. NASA is now trying to figure out how to leverage this program enterprise-wide.

Ranking second and third on The Top 22, are skills-based workforce planning processes. However, while most organizations have such processes, many do little more than collect target headcount requirements for each business unit. In today’s tight talent market, businesses must thoroughly understand and address current and future workforce skills gaps.
One company we work with embarked on a nine-month study of workforce skills gaps and factored in retirements, attrition, new project demands, and known demographic shifts. Analysis revealed that in order to achieve targets set, the company had to recruit 45,000 new engineers. This startling finding led them to dramatically revamp their sourcing, internal career development, and job placement strategies.

Research shows that competency management is the “currency” for talent processes and decisions. Without identifying the competencies that make your organization succeed, talent decisions are made on quicksand. Well-defined competencies help you set goals, appraise people, identify high-potentials, create development plans, identify leaders, and develop the leadership pipeline. Seven of the top 22 processes fell into this area.

We don’t recommend that organizations try to build enterprise-wide models in one sweeping initiative. Such a project is so daunting it’s an invitation to failure. Rather, we urge companies to start with the most important competencies required for the company’s most important jobs.

Performance management is key. Focus on goal setting and development, not appraisals. Effective performance management takes place every day, not once or twice a year. While periodic appraisals are important, the biggest business impact comes from setting goals, ensuring goals are correctly aligned and developing employees. A performance appraisal is only a single point in this wide continuum of activities. While the saying is trite, it’s true. Products don’t make a company successful; people do. How they are managed on an ongoing basis greatly influences your success.

Consider that, over the next 15 years virtually all industry sectors will have more jobs than qualified people. In a tight labor market, organizations must do a far better job of targeting, sourcing, recruiting, and assessing potential candidates. Recruiting has moved from a purchasing function to a sales and marketing function.

Moreover, there are a wide variety of new tools now available to improve the efficiency and effectiveness of talent acquisition. These include exciting new assessment systems, highly specific job boards and sourcing sites, innovative university recruiting programs, and new competitive intelligence approaches. In addition, career development programs are back. Organizations must invest in training and development programs which can help prepare employees for key positions throughout their careers. Many learning and development managers are placing a renewed emphasis on talent development programs for a wide range of positions, including engineers, sales representatives, manufacturing managers, and middle managers.

Focus on processes first, systems second. In spite of the attention given to technology, it doesn’t add as much value as most people think. In fact, the use of HR systems barely even makes the list. Let’s be clear, HR systems are important. But technology’s value is in the automation and streamlining of good programs and processes – not in creating them. In order to maximize business impact, focus on processes first. Don’t expect to gain value just by buying technology.

When setting expectations for new systems, it’s also important to factor in the change management, training, and communications required for any system implementation. For example, it takes approximately 2.4 years for a new performance management system to generate a positive ROI. This means that when you implement a new software solution, you can expect to invest at least two years in training and change management before the associated performance management processes run more efficiently.

So if performance management is your top priority, first spend time on process design, competency modeling, and clarification of business requirements. Only then should you automate.

This is a time when HR can bring significant business impact by focusing on high-value roles, solving business-specific talent problems, and helping the organization adjust to the changing workforce. We’ve come a long way from the days when HR was typically viewed as the “personnel department,” with primary responsibilities around payroll and benefits management.

But, many HR organizations are still grappling with this transition – not sure where to start, how to prioritize, and how to evolve in an efficient and effective way.

You can use The Top 22 to help you “boil the ocean” and determine which processes are most critical, given your unique business challenges and requirements. Additionally, we recommend you focus on these three basic guidelines. First, focus on the processes and people that matter most to the business. Find the 30 percent of your workforce which generates 70% of your organization’s value and spend your time and dollars here.

Then work with your business leaders to design and implement processes that drive impact, with a careful focus on change management, governance, and monitoring and maintenance.

Finally, automate as much as you can, but focus on automating processes which work – not using software to drive change.

This research shows that talent management can be transformational, and even business changing. For years we’ve talked about becoming a strategic business partner. That time has come.

Josh Bersin is founder and president of Bersin & Associates and author of The Training Measurement Book.

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Top 22 High Impact Talent Management Processes