The Hidden Costs of Ignoring Your Talent Management Strategy
January 7, 2021
Building and maintaining a successful company hinges on having the right people to execute projects and drive results. People, we hear time and again, are your company's most valuable asset. But their success — and HR's ability to recruit, engage and retain them — depends on HR pros who are strategic decision-makers, armed with the proper tools to let them excel at their jobs.
Modern HR professionals manage much more than payroll and benefits. But their technology tools, in many cases, haven't evolved past basic productivity software like email or Microsoft Word. HR simply can't be strategic with old-school tools that reduce people to statistics and give little insight into what the numbers mean.
Emails and spreadsheets were not designed to deliver meaningful insights into people's performance, suggest when employees should be promoted or highlight skills gaps in a company. For that, HR needs a broader, more strategic set of talent management tools, which lets professionals manage every aspect of the workforce, from training and performance reviews to collaboration and succession planning. Yet, research shows that less than 25% of companies use a unified, holistic approach to their talent management.
The Real Costs of "Doing Nothing" As a Talent Management Strategy
The critical relationship between business strategy and HR strategy too often gets overlooked by senior leadership. While it may seem like the company is saving money by managing recruiting, training, performance and succession via manual and paper-based processes, in reality it’s costing your business more than you know. For example:
- Without a talent management strategy, a company with 2,000 employees is losing almost $2 million every year in preventable turnover alone.
- Businesses that don’t invest in learning suffer from decreased employee performance and engagement to such a degree that they can expect to realize less than half the median revenue per employee. That’s a direct impact on the business.
- In employee performance management, organizations without a focused strategy waste up to 34 days each year managing underperformers and realize lower net income.
To learn more about the business impact of talent management and how to start building out your strategy, check out the eBook Why Your Nonexistent Talent Management Strategy is Costing You Money (And How to Fix It) and register for the March 19th webinar, Building the Business Case for Talent Management.