Use these metrics to Rev your talent engine: Development

In this third post in a series on maximizing the talent in your organization, we’ll highlight five metrics focusing on the development of your team members. Last time we looked at talent intake: from the first touch in recruiting through day 90 of employment.

Now that your new employees know where to find the coffee machine, the emphasis shifts to building competency in role quickly so that the organization can maximize the contribution each employee makes in role. By my rough math based on surveys from OECD, BusinessInsider, and US Department of Labor, companies should expect about 2 years of contribution from each employee. So getting each person up to speed quickly and delivering in role is essential.

The essential component of the Development stage is competence in role. Reaching full competency in role doesn’t mean never making a mistake, like a fat-finger trade, it just means being able to do a job effectively and independently. Being able to measure competency in role means that your organization:

  • has a competency model in place for each role
  • assesses competency during hiring/selection
  • uses on-the-job training and assessment to close any remaining gaps
  • actually verifies that the written capability requirements for roles match reality over time

This can seem like a lot of paperwork to manage, but the alternative is an ad hoc system where new employees get thrown in over their heads, ask the people that sit nearby “do you remember how [person who had my job before] used to …,” and then just make it up. So the effort to document tribal knowledge into a current competency database supporting hiring and training can pay off quickly. especially when the cost of low productivity can easily outpace an average cost per hire of $5,100.

Now that we’ve covered a high level introduction to competency in role, here are the essential metrics for the Development stage of your organization’s Talent Engine:

  • Engagement: go beyond satisfaction to measure engagement, especially if you use Gallup’s method which has been validated to correlate to productivity
  • Percent at fully competent in role: this snapshot can be summarized by functional group, business segment, level, or geographical location across an organization
  • Time to reach fully competent in role: show this as a histogram over a certain time period with lines demarcating the current period and previous period averages
  • Percent attrition: total exits divided by approved headcount during a time period (can be summarized as in percent fully competent above)
  • Percent regrettable exits: same calculation as above, but in the numerator only include voluntary exits for which the hiring manager would re-hire the individual into the role

Accelerating the development period of your talent cycle is the “tide that lifts all boats” in the organization, because both your above- and below-average employees will benefit from learning their jobs faster. While we all hope to avoid suffering from the Peter Principle, reaching competency faster is something every employee will welcome.


Get your Talent Engine Revving: the Four Stages

Most leaders would agree that having the right talent on their teams is essential for success, and recently Build Network has confirmed this hunch in a leadership survey. The goal of this post is to provide some structure to the talent cycle and help leaders get the most from their talent by segmenting the tenure of any employee into four phases: Intake, Development, Delivery, and Transition. While similar to the four stroke engine cycle, we’ll try to limit the amount of compression and ignition we put our employees through.

Except for the stereotypical Japanese salarymen, very few employers expect to need more than one hand to count the average tenure of staff. And while the US Department of Labor’s 2012 data showed average tenure across all industries has increased to 4.6 years from 4.4 in 2010, data compiled earlier in 2013 by Payscale showed employers in retail and IT companies should expect closer to 2, as reported by Business Insider. And based on the bankrupt and bailed out companies at the other end of the Payscale list, and the bankrupt and bailed out countries in the OECD data set from 2011, seeing tenure rise above 10 years should be a warning sign (especially when long tenure comes along with unsustainable pension obligations).

So let’s make the math easy and propose you’ll get 2 years of contribution, on average, from your employees. I’m defining the Intake phase as the period from the first touch during recruiting through the first 90 days of employment. Take off the last month before exit for Transition, and we are left with 20 months. So if the goal is to maximize the contribution to the business from each employee, it’s important to “compress” the Development period, which I’m defining as the length of time required for an employee to become fully competent in role.

  1. Intake: starts with first contact with a prospect during recruiting, ends at day 90 of employment. Recruiting, onboarding, and orientation are key processes. Coordination between HR, Facilities, IT, Finance, and hiring managers is essential to establish new employees with high engagement and reduce early exits.
  2. Development: from day 91 through the point at which an employee is fully competent in role. Coaching, training, and peer support will help ensure employees can contribute high quality work, independently, as quickly as possible.
  3. Delivery: could be as short as a few months for organizations with low overall tenure and long intake and development periods.
  4. Transition: allowing for knowledge transfer from an outgoing staffer to the incoming hire. Internal promotions will allow for longer transition periods, but most US employment agreements expect only 2 weeks notice.

An upcoming series of posts (linked in the list above) will look at the key metrics to track in each of these phases of the talent cycle, along with the most important processes to streamline in your organization to ensure your team is happy, developing, and delivering at each phase of the cycle.