The upcoming Watson Wyatt Human Capital Index study holds some interesting facts to show your CEO or CFO why you need to invest more on some specific talent initiatives.
WW looked at two key corporate financial impacts: 3 year total return to shareholders – below I will call it return, and market premium or how much the intangible assets are worth – I will call it premium.
A few results:
1. Active velocity of labor movement is a value creator: faster time to fill is correlated with significantly better return ” 59% compared to 11%. Higher referrals (38% vs. 9%) bring a 48% vs. 23% return and 40% vs. 13% premium.
2. Internal promotion is only good in a moderate fashion. From the results, having 12% internal hires is too low (return -2%) and having 80% is too high but better (return 32%), a mid point at 50% reaps a reward of 56% return.
3. Similarly, turnover must be measured: 5% or 43% are too low and too high with a return of 31% and 34% while 15% turnover reaps a 43% return. Of course these are only overall data results and should be looked at specifically for your organization and industry.
Unfortunately we will not have data for BPO, to better quantify if it pays off in market value to outsource your Talent Management processes.
The WW results are in line with our review of Taleo customers that focus on Excellence in Human Capital Performance. There we saw a return over 2 years of 48% versus 38%.
