Strategic Talent Management

VPs and Directors of Staffing in Global 2000 corporations are responsible for staffing budgets in the tens of millions of dollars. A staffing budget is an investment in people, processes and systems. How does a staffing director determine whether the corporation is getting good value for its investment? Taleo Research has developed a Return on Staffing™ methodology as a way of measuring the return on an organization’s staffing investment.

 

Staffing spending has three outcomes:

Fundamentally, corporate management and shareholders need to know the ratio of input (measured as the cost of staffing) to outcome, measured ultimately in terms of corporate operating income. Too often staffing has been judged in isolation of its outcomes. Measurement of a corporate staffing function typically has been focused on direct cost savings and reduced cycle time. Today, the best performing companies are measuring the results of the staffing process—workforce quality and retention—in association with traditional staffing efficiency metrics.

 

To date, very few good metrics have been available to measure and help manage the output of a staffing function. The focus in the past has been on the staffing process itself, particularly on costs and cycle times. Executive management needs to know a staffing function is performing on both tactical and strategic levels, yet few intra-company benchmarks for staffing efficiency and effectiveness exist.

 

To measure how a staffing function is performing requires measuring both efficiency and effectiveness. Return on Staffing focuses at the high level on four metrics that measure the efficiency as well as the effectiveness of the corporate staffing process. Cost-per-hire and time-to-hire metrics measure process efficiency. Effectiveness of staffing as it contributes to corporate goals is reflected in the metrics for first year involuntary turnover and productivity.

 

Taleo Research is currently gathering data that will help establish new metrics and benchmarks for staffing effectiveness, and explore the relationships and tradeoffs between metrics. It is often said that you can pick any two of: faster, better and cheaper. With the four staffing drivers of cost, speed, productivity and retention, we see staffing departments adopt different approaches to prioritizing efficiency and effectiveness, and accept different tradeoffs between cost, speed and quality. The purpose of the Return on Staffing study is not only to help determine what value an organization’s staffing investments are delivering today, but also to outline what more could potentially be achieved.