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Improve Earnings by Improving Talent Management
Typical Fortune 500 companies net nearly $400 million annually by improving strategic workforce planning and other key talent management functions, Hackett finds
Atlanta — July 27, 2007 — By excelling in talent management, the average Fortune 500 company can generate a nearly 15 percent improvement in earnings before interest, depreciation and amortization (EBITDA), netting almost $400 million annually, according to new research from strategic advisory firm The Hackett Group.
Hackett said its "Book of Numbers" research demonstrates the bottom line impact of more effectively managing human assets and provides evidence of the value of developing such intangible assets as a company's workforce. The research also provides human resources (HR) organizations with a new way to demonstrate the effect of their efforts on productivity, customer satisfaction and employee commitment — and, by extension, on sales, profits and shareholder value.
"Certainly it makes intuitive sense that attracting, developing and retaining a talented workforce can enhance a company's performance," said Hackett Chief Research Officer Michel Janssen. "But like many areas of HR, it's been exceptionally difficult to measure the real impact of improvements."
Achieving Excellence in Talent Management
Janssen said that achieving excellence in talent management is not something that happens overnight, since changing how a company strategically addresses talent takes time and often requires a real cultural shift. "But Hackett's research for the first time quantifies the potential returns and demonstrates why talent management is a worthwhile investment," Janssen added.
According to Hackett HR Practice Leader Stephen Joyce, the best companies treat employees the same way they treat their business lines, as something to be carefully analyzed and strategically developed in support of their business goals.
"They determine the skills, competencies and experiences needed to run their company over the next few years, quantify the gap between their needs and their current resources, then acquire the expertise they need through a combination of staff development and hiring," Joyce explained. "As a result, they are more competitive in the marketplace, and this is reflected in improved earnings."
Better Talent, Better Earnings
Hackett's analysis, which is being issued as part of its new Book of Numbers research volume, "Talent Management: Buzzword or Holy Grail?", was based on the results from more than 125 human resources benchmarks performed by the firm over the past three years. Using Hackett's methodology for determining top performers, metrics were chosen to reflect a balance between talent management efficiency and effectiveness.
Hackett said its "Book of Numbers" research demonstrates the bottom line impact of more effectively managing human assets and provides evidence of the value of developing such intangible assets as a company's workforce. The research also provides human resources (HR) organizations with a new way to demonstrate the effect of their efforts on productivity, customer satisfaction and employee commitment — and, by extension, on sales, profits and shareholder value.
"Certainly it makes intuitive sense that attracting, developing and retaining a talented workforce can enhance a company's performance," said Hackett Chief Research Officer Michel Janssen. "But like many areas of HR, it's been exceptionally difficult to measure the real impact of improvements."
Achieving Excellence in Talent Management
Janssen said that achieving excellence in talent management is not something that happens overnight, since changing how a company strategically addresses talent takes time and often requires a real cultural shift. "But Hackett's research for the first time quantifies the potential returns and demonstrates why talent management is a worthwhile investment," Janssen added.
According to Hackett HR Practice Leader Stephen Joyce, the best companies treat employees the same way they treat their business lines, as something to be carefully analyzed and strategically developed in support of their business goals.
"They determine the skills, competencies and experiences needed to run their company over the next few years, quantify the gap between their needs and their current resources, then acquire the expertise they need through a combination of staff development and hiring," Joyce explained. "As a result, they are more competitive in the marketplace, and this is reflected in improved earnings."
Better Talent, Better Earnings
Hackett's analysis, which is being issued as part of its new Book of Numbers research volume, "Talent Management: Buzzword or Holy Grail?", was based on the results from more than 125 human resources benchmarks performed by the firm over the past three years. Using Hackett's methodology for determining top performers, metrics were chosen to reflect a balance between talent management efficiency and effectiveness.
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