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Cathy Missildine, HRExaminer Editorial Advisory Board Member

Cathy Missildine, HRExaminer Editorial Advisory Board Member

I have been thinking about what HR professionals will be focused on in the next few years.  In order to figure that out, I started thinking about the external operating environment and current trends that affect organizations. My short list includes:

  1. The economic recovery and decline in the unemployment rate
  2. The retirements of baby boomers and shortage of skilled workers in later generations
  3. The mismatch between jobs available and skills available

All three of these issues pose significant risk to organizations.  It’s a basic supply and demand problem.  Organizations will be demanding top talent and the supply just won’t be available.

Just like finance assesses financial risks using trends and data, HR can do the same by analyzing internal HR data with external employment data in order to “scenario plan” for the future. Many companies today accomplish this task via workforce planning which incorporates the current supply of talent contrasted with the future expected demand for talent. Trend data using turnover, and other internal “movement” data is used to paint the future talent forecast.

In today’s environment, most CEO’s are unusually risk adverse following the recent recession.  In a typical organization the risks associated with the above trends are many. Over the recent months I have heard executives discuss the following:

  1. Strategic execution will be impacted if top talent is not acquired and retained.
  2.  Bench strength is difficult to build when talent is scarce thus leaving the organization with key positions without successors.
  3. Retaining top talent becomes mission critical as turnover in this area leaves the company vulnerable.

All three risks above can strip a human capital rich company of its competitive advantage.  Ed Lawler, writer for Forbes Magazine states, “A recent survey by Lloyds found that executives believe a talent shortage is the number two risk facing business today, up from twenty-second place in 2009. “  I believe that HR has to be razor focused on the way talent is managed.  Now longer does a “one size” fits all approach work for managing talent in this environment.  Another key area that HR must focus on is metrics.  Because so many companies are focused on risk mitigation, metrics that monitor those risks are extremely important.

The area of HR metrics has been grown immensely in the last few years.  There are hundreds of metrics to choose from.  The ones that measure the efficiency and effectiveness of the HR department are essential, but the metrics that are tied to organizational strategy and risk are the ones that the C-Suite really cares about.

Here are the important metrics to monitor risks associated with hiring and retaining employees.

  1. % of key positions with identified successors-If this number is low, the risk of business interruption is high
  2. % of top talent at risk for leaving-this is a predictive metric that involves analyzing turnover, performance and engagement data.  Once analyzed, HR can proactively address issues in order to save top talent.
  3. Quality of Hire-this metric (or index of several metrics) can be critically important in analyzing the effectiveness of the recruiting function.

These metrics are very different than cost per hire and time to fill.  If tracked correctly HR can spot trends and can course correct.  Smart companies are proactively changing their talent management strategies now in order to preserve their competitive advantage later.

graphic for The 2019 Index of Intelligent Technology in HR


 
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