The 2008 global financial crisis forced many organizations to
rethink the way they manage and develop talent. After organizations
responded to the initial crisis by making significant cost and
headcount reductions, many talent management professionals
scrambled to demonstrate the value of their programs to the
organization. More importantly, executives recognized the urgent
need to quickly innovate after cutting costs to retain market share
and speed ahead of the competition.
The role of the talent management professional has gradually
emerged as critical to an organization's ability to survive and
thrive beyond the immediate economic crisis. However, talent
management professionals continue to face growing challenges in
demonstrating the monetary value of program investments and
ensuring those investments are targeted to the right people, at the
right time, and for the right reasons. The key is measurement.
Without measurement, talent management professionals risk failing
to demonstrate value. For example, consider an OD leader of a large
healthcare provider whose entire team was eliminated because
leaders could not see what contribution this team's work made to
the company's competitive advantage or bottom line. Or think about
a training leader at a not-for-profit whose role and team were
nearly eliminated because executives had no data about how that
team made a difference to the organization's operational
Moreover, as training budgets are reduced and competitive pressures
continue to increase, the demand for a targeted focus on specific
talent groups has become equally important. According to a 2009
ASTD report, organizations slightly reduced average expenditure per
employee from $1,110 in 2007 to $1,068 in 2008, reflecting a
decrease of 3.8 percent - a decrease also likely to be reflected in
2009's data. Now is the right time for talent management
professionals to adopt a strategic, accountable approach to
developing high-performance employees.
A strategic, accountable approach
In the past, training and development activities were assumed to
work. Reporting was focused on the number of participants in
attendance, number or programs offered, and reaction and
satisfaction data. Today, things have changed. There is a need to
develop high-performing employees so their impact is reflected in
bottom-line outcomes as well as in other intangible measures.
Programs must be linked to business strategy, and there are greater
expectations to provide a comprehensive approach to measurement and
Much of this change is reflected in the way top performing
organizations run their talent management function. For example,
ASTD has tracked the characteristics of the BEST
award-winning organizations since 2003 - those that demonstrate
enterprisewide success as a result of employee learning and
development. Award-winning companies are identified by their
previous year's financial and operational data, such as customer
satisfaction, quality of products and services, cycle time,
productivity, retention, revenue, and overall profitability. The
2009 BEST award winners continued to validate the same eight
characteristics identified in 2003, which include clearly defined
processes to link learning strategies and initiatives to increases
in both individual and organizational performance. Additionally,
the BEST organizations indicated that they used a balanced
scorecard to assess learning's impact on individual and
organizational performance metrics by gauging key performance
indicators or performance objectives.
Why a scorecard?
A scorecard is an effective way to provide critical information to
client groups, including senior executives. The scorecard also
provides a useful way for talent management staff to track success
and ensure their approach focuses on their business's key
Building the scorecard
The primary target audiences for the scorecard are the executive
and talent management teams. Additionally, supervisors of program
participants, as well as the participants themselves, will likely
be interested in the scorecard.
Traditionally, a talent management scorecard reflects the costs and
includes budget, money spent per employee, and number of
participants, among other pieces of data. While this information is
important to include in the overall scorecard, it is not the only
data to include. The scorecard should also include learning,
application, impact, and return-on-investment.
The first step is to determine which and how many programs will be
evaluated at the various levels. Ideally, as many programs as
possible will be measured at the ROI level. Then, data from each
program must be integrated to present an overall picture at the
macro level. The end result will be a scorecard that represents
seven major categories, which includes indicators, each of the five
evaluation levels, and intangible benefits.
Challenges in creating a scorecard
Three main challenges must be addressed in moving to a
comprehensive scorecard to measure and track success. The first
challenge is to allocate appropriate resources for measurement and
evaluation. The scorecard can be developed and implemented for 5
percent of the total talent management budget. However, cost
savings can be realized when effective measures reveal programs
that should be eliminated so budgets can be utilized more
The second challenge is to approach the task in a disciplined,
methodical method. This is difficult when not required by senior
management. However, the responsibility for ensuring the process is
utilized appropriately rests on the talent management team.
The final challenge is the actual use of the data. While the data
reveals successes, it potentially also reveals programs that are
not effective. Treating the scorecard and the methodology as
approaches to process improvement (not merely program elimination)
alleviates the fears that some may have with this approach.
In summary, more organizations are facing greater scrutiny in their
approach to talent management programs and finding it difficult to
communicate the success of any program in a credible way. However,
a scorecard of program success, based on outcomes rather than
activities, provides evidence that developmental opportunities for
high-performing employees are working within the organization.
Note: Portions of this article have been adapted
from the author's work in Managing Talent Retention: An ROI
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