Human Capital Management Part One: Trending Toward Retention
by Traci K and BrightMove Applicant Tracking and Recruiting Software
The focus for 2012 is shifting towards retention and overall human capital management (HCM), including a continued concentration on smarter hiring. The wide range of strategies to increase retention are like the “As Seen On TV” advertisements – there’s a new one every few months, offering nothing unique and making the same promises as its predecessors. The real answer to retention and HCM lies in three factors: know the market, know your employees, and know your limits as an organization. You can make your employees happy without giving away the farm and a lot of that has to do with the way workers are managed, both by their supervisors and in their career paths. By learning how to better manage your people, in every sense including keeping them engaged, the opportunities to grow the business will increase.
Aberdeen Group, an organization devoted to research studies and providing business resources, recently published a study on Human Capital Management. Participating companies were screened and allowed to take part in the study if they met three “Best-in-Class Performance” criteria:
- 81% or more company employees must have rated themselves in a recent engagement study as being “high engaged”;
- 71% of positions identified as “key positions” must have a successor identified who is both ready and willing to fill a potential vacancy;
- Hiring manager satisfaction must have a proven year-over-year improvement of at least 13%.
In using these criteria, common characteristics were identified among the companies that made it through the screening process including:
- “Knowing how talent impacts the business by understanding which roles are critical to business growth and performance;
- Holding the business accountable for talent management activities as part of everyday business; and
- Providing the right data to all stakeholders to understand, measure and monitor the effect of talent decisions on the business.”
In order to reach the status of these companies, Aberdeen Group found that organizations must:
- “Understand how the business measures success, how the definition of success is changing, and be able to track and communicate performance on the impact of HCM efforts in the business language;
- Automate, integrate and share HCM data with the business and with managers to empower better decision making; and
- Create differentiated hiring, retention and development plans for critical talent and critical roles to better manage talent risk and support organizational growth.”
One conclusion from the HCM research was the recognition that normal 50 years ago, is not normal now. It used to be that hiring as fast and as cheap as possible was the ideal way to keep costs down. Citing unemployment, increased regulations, healthcare, and an uncertain economy, Aberdeen found that the inability to afford a bad hire has caused the new normal to be focused on quality of hires as the “balance of cost-savings and quality is essential to making the organization more efficient”.
In order to reduce turnover and the costs associated with replacing key employees, top companies need to invest in a few crucial areas. Read the upcoming article on the continuation of Aberdeen Group’s Human Capital Management Trends to find out what those important focus areas are.
Traci K. is an HR professional and freelance writer based in the Midwest, specializing in recruitment and immigration. When she’s not improving unemployment, she keeps busy with her husband and four children.