Tag: talent management

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Labor analytics: A how-to guide for company leadership

astronaut with a magnifying glass

Summary

  • Requesting and collecting data in real-time allows your management to make better business decisions and keep costs low.

  • Focus on gathering insights that will ultimately address your business needs.

  • With labor analytics, variety is key. Use and collect data from multiple sources.

Data plays a vital function in all aspects of running a business. It is used in everything, from analyzing and predicting product performance to segmenting and understanding your customers in order to optimize the user experience. 

So naturally, data has an important role to play in workforce management through the process of labor analytics – also known as workforce analytics. Through labor analytics, HR professionals gather and analyze workforce data to:

  • Understand what new roles and functions a company should seek to fill and which ones it should cut. 
  • Understand what roles and functions might require a reduction or elimination altogether.
  • Forecasting the value and success a prospective employee can bring to a company.
  • Obtain actionable insights on how to better manage labor costs.
  • Gain a deeper understanding of the employee experience and what positively boosts employee engagement.
  • Optimize business strategy in a way that increases performance and productivity.
  • Make data-driven business decisions on fair and cost-effective worker compensation and incentives.

The good news is that most businesses already have access to massive amounts of workforce data – the catch is that gathering and making sense of this data can be tricky. But in the end, the benefit of utilizing labor analytics significantly outweighs the effort spent organizing the data. 

Research shows the positive impact that workforce analytics has on business outcomes. Case studies show that companies that use labor analytics say they have a clearer understanding of their workforce needs and can identify employees with high potential. They have also noted an improvement in retention rates and are generally happier with their human resources. 

Webinar: How to Stop Employee Turnover

Since the pandemic, attracting talent has never been trickier, and the benefits of labor analytics cannot be overstated. Following these four steps will help you optimize your labor analytics process and put your business in a better position for success.  

Gather analytics data in real-time

It is essential that your C-suite decision-makers have access to labor analytics in real-time, before they need to make critical business decisions. Visibility like this improves response time to frontline labor issues and ensures a more efficient allocation of resources. 

Real-time analytics give managers a clear picture of labor costs as a percentage of revenue across all locatins and throughout the day, allowing them to see where and when their workforce is struggling. This way, they can make better decisions regarding staffing levels, absenteeism, overtime, and more.

Whitepaper: Workforce Analytics

Connect labor analytics with business needs

While organizations should always make decisions on the most current data available, having too much data can hinder decision-making. Labor analysis shouldn’t be aimless in scope. Each research activity should address a specific question that needs answering by the organization. In other words, business outcomes need to guide the analytics process in the right direction.

Use multiple types of data and analytics

To best utilize data analytics, using multiple, targeted sources of data — including business-appropriate performance analytics and HR/talent management analytics — is important. But it’s not enough. In workforce analytics, variety is key.

Internal reports focus on metrics such as completed training hours or satisfaction with training. Predictive modeling uses statistical analysis to project the outcome of various actions. And external benchmarking allows an organization to compare itself against the industry-standard. Incorporating data from a variety of analytics types gives the business a more robust viewpoint, allowing for better-informed decision-making.

Avoid common data analytics mistakes 

Organizations should be sure to avoid common pitfalls when using analytics. The data needs to be organized and cleaned, and organizations should start with small, simple projects rather than something big to help get leadership buy-in. 

They should also be careful not to confuse correlation with causation in research results. For example, if data shows that older employees are more successful at a task than younger employees, that may have nothing to do with age demographics but with years of experience. 

Data literacy – “the ability to read, write, and communicate data in context” — is a vital skill for any business today, according to 2019 Gartner research. Some companies may still have ways to go to maximize the potential of their labor analytics. Hiring a chief data officer or data scientist or outsourcing analytics capabilities to a vendor can help make sense of the data that’s collected. 

The growing importance of data analytics is inevitable. For the unprepared company, this may be intimidating. Getting leadership buy-in and using data analytics strategically to achieve a specific business outcome can help. But once the organization gets a handle on its labor analytics function, it can expect promising business outcomes. 

Optimize your labor analytics process with Workforce.com

Utilizing labor analytics tools like Workforce.com makes it easier to turn your data into real-time, actionable insights. These insights help you more efficiently tackle frontline labor issues like:

  • Predicting future hiring requirements
  • Understanding current staffing needs
  • Managing compensation and overtime
  • Understanding and optimizing employee engagement

If you’re interested in using workforce management software to improve both your labor analytics and your bottom line, check out our webinar below featuring exclusive research from a Forrester TEI report:

Building a Business Case for WFM Software

For more information, get in touch with us now. 

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Workforce Planning: Overview, Steps, and Checklist

31 core competencies

Workforce planning is a systematic process that involves proactively analyzing current workforce gaps and forecasting future staffing needs to avoid potential shortages and surpluses of human capital.

It is based on the premise that a company can be staffed more efficiently if it takes initiative to regularly analyze and forecast its talent needs as well as the actual supply of talent that is or will be available.

Here are some of the benefits of workforce planning:

  • Rapid talent replacement: Having the capability to rapidly figure out positions that are vacant due to sudden (or unavoidable) employee turnover so that production or services don’t miss a beat.
  • A smooth business cycle: You can smooth out the cycles by developing processes that ramp up and down your talent inventory and work effectively during both good times and lean times.
  • Lower turnover rates: Employees are continually groomed for new opportunities that fit their career interests and capabilities. They transition easily and rapidly to them.
  • Lower labor costs: Labor costs are rapidly reduced as the right people are hired, at the right time, in the right place, and are managed correctly, all without the need for large-scale layoffs.
  • Fewer future layoffs: Managing headcount ensures that the company won’t have a surplus of talent.
  • Increased internal opportunities: Efficient workforce planning will free up HR professionals so that they can take advantage of talent-sourcing opportunities from a competitor as a way to find exceptional talent during tough economic times.

The primary reason for doing strategic workforce planning is economics. If done well, workforce planning will increase productivity, cut labor costs, and dramatically cut time-to-market because you’ll have the right number of people, with the right skills, in the right places, at the right time.

Workforce planning works because it forces everyone to begin looking toward the future, and prevents surprises. It requires managers to plan ahead and consider all eventualities.

While it is one of the most important issues that HR leaders and operations directors are talking about today, many have not gone beyond the talking stage as the task of actually implementing workforce planning is often seen as a daunting one. Don’t worry, we are here to break it down for you here so it’s not so intimidating.

 

Infographic of Workforce.com's four core components of workforce planning

Core components of workforce planning

While there is no standard “one size fits all” structure for the workforce planning process, below are some key elements of most plans, including some supplementary components that can and will work better for some companies than others.

The most common parts of a workforce planning model are:

  • Workforce Analysis: Analysis of the company’s current supply of labor and its needs, as well as a forecast of future workforce needs and requirements
  • Staffing Gap Analysis: Identification of gaps between the current workforce supply and demand, as well as gaps in the company’s present ability to anticipate future changes in workforce needs.
  • Solution Deployment: Implementing and executing a plan to address staffing gaps
  • Performance Assessment: Monitoring success metrics to ensure the workforce plan is meeting business needs

Being prepared is better than being surprised

If a company is more efficient, it can avoid the need for layoffs or panic hiring. By planning ahead, HR can provide managers with the right number of people, with the right skills, in the right place, and at the right time. Workforce planning might be more accurately called talent planning because it integrates the forecasting elements of each of the HR functions that relate to talent management–recruiting, retention, redeployment, and leadership and employee development.

Businesspeople who just wait and then attempt to react to current events will not thrive for very long. The new standard is to provide managers with warnings and action plans to combat full-blown problems before they become more than a blip on their radar.

The human resource management world is no different.

The rate of change in the talent market is dramatic. We now know how important talent is to the success of a business. It’s time to make the talent pipeline more efficient.

Many of the other overhead functions–like procurement, manufacturing, and even the mailroom–have developed effective “pipelines.” If human resources cannot develop effective pipelines, then the alternative option is to have its entire function outsourced to an external vendor.

HR should be aware of the business cycle

HR professionals often face the painful boom-and-bust cycle of budget cuts, rapid growth, and more budget cuts. What they want is stability. Unfortunately, the way that some HR people act or fail to act compounds the pain of the boom or bust phases.

Everyone knows that the business cycle has ups and downs. There are phases of growth and phases of recession; each seems to happen every few years. The surprising thing is that HR, rather than preparing customized approaches for the different phases of the business cycle, tends to do things the same way no matter what the economic climate, operating independently of the business cycle.

The main reason that HR suffers through these phases is that it has no business strategy or plan to participate in its company’s business cycle. Rather than seeing the big picture and setting a strategic direction, HR departments sometimes tend to coddiwomple with temporary programs that only address crises in the moment.

HR should have two distinct reasons for planning ahead. The first reason is to lessen the impact of the boom-and-bust cycle on the management and operation of the HR department itself. The second–and perhaps more important–reason for planning ahead is that HR manages the new hire pipeline for the organization. It’s crucial to maintain both that pipeline and the talent inventory at the right levels.

This is where workforce planning strategy comes in.

A closer look at workforce planning

To better prepare a company to handle current and future staffing needs, human resources should generally follow the four-step workforce planning process listed earlier in this article. Here is a closer look at what each of those steps entails:

1. Workforce Analysis

This first step in workforce planning involves assessing both the current state of your company’s workforce as well as its ability to address future changes in staffing needs. Additionally, it is also important here to analyze the current external labor market, company revenues, expenses, and growth opportunities.

There are three primary areas of the Workforce Analysis:

  • Current labor supply & demand: checking the supply of labor the company currently has available, as well as the level of labor it currently demands.
  • Forecast of future workforce needs: taking initiative on discovering what external and internal variables could impact workforce needs, and understanding where the company will need to be agile in the future to ensure staffing levels are always correct
  • Skills and interest inventory: Identifying current and required job and competency needs as well employee skill sets.

From the workforce analysis, you should uncover a deeper understanding of your company’s current staffing situation, including its strengths, shortcomings, opportunities, and threats.

2. Staffing Gap Analysis

In this step, you take the information gathered from the workforce analysis and use it to pinpoint the talent gap between the company’s overall staffing needs and the identifiable supply of labor.

There are three parts to the staffing gap analysis:

  • Surplus/shortage determination: Reviewing the current supply and demand of labor, as well as current and future workforce needs, and determining the presence of either a surplus or shortage of labor.
  • Potential retirements: Figuring out the demographic of who is eligible, when they are eligible, who will replace them, and what alternative work arrangements are available that could prevent vacancy issues stemming from retirements.
  • Talent action plan: Outline what specific actions all (HR or otherwise) managers will have to take in terms of talent management. The action plan designates responsibility and outlines the specific steps that should be taken in order to fill the talent pipeline, address skill gaps, and maintain the talent inventory at the levels required for the firm’s projected growth rate.Each action plan has a set of goals, an individual who is responsible for making sure the plan objectives are met, a budget, a timetable, and a measurable result.

3. Solution Deployment

This is where everything comes together. Once the workforce analysis is complete, gaps are determined, and a talent action plan is made, a solution is determined and then executed.

Deploying a workforce plan is not a once-and-done situation. It is an ongoing process built on agility and continuous improvement. Once current staffing gaps are filled and the overall workforce is strengthened, the deployment continues in the form of adjusting and adapting to changes in future needs.

Here are some of the main areas of solution deployment:

  • Succession planning: Designating the progression plan for key positions.
  • Leadership development: Designating high-potential employees; coaching; mentoring; rotating people into different projects.
  • Talent recruiting: Estimating headcount, positions, location, timing, and more for new employees.
  • Talent retention: Forecasting turnover rates; identifying current employees who are at risk and how to keep them.
  • Redeployment: Deciding who is eligible for redeployment, and from where to where.
  • Contingent workforce: Designating the percentage of employees who will be contingent, and in what positions
  • Career path: Career counseling for employees to help them move up.
  • Backfills: Designating key-position backups.
  • Internal placement: Developing job-posting systems for internal employees to get a leg up on new openings.
  • Outsourcing: Determining business functions that would be better accomplished by labor outside of the organization
  • Contractors and consultants: Determining what new business requirements would be best met by specialized workers or consultants

4. Performance Assessment

Finally, the last step of a workforce plan is performance assessment. Again, this is an ongoing process, alongside solution deployment, in which select members of your organization monitor predetermined workforce success metrics to make sure strategic objectives are being met. These metrics should speak to if the workforce plan is actually benefiting the organization at all, and should indicate if the plan was flawed to begin with or if it is not being executed properly.

The future of workforce planning

Putting together an abstract workforce plan is one thing. Executing it across your entire workforce is another. Managers need the right tools and systems in place to monitor staffing levels, productivity, labor costs, and more.

While workforce planning has been around for a long time and has gone through many changes and multiple iterations, one thing is for certain: it is getting much easier.

Thanks to modern advances in workforce management software technology, workforce planning is becoming easier to visualize, deploy, and actively monitor.

Benefits of workforce management software

In order to execute effective workforce planning and achieve your business goals, HR leaders need a whole host of software solutions at their disposal. Chief among these is obviously HR software for talent and performance management. But other solutions are also required, including workforce management and labor forecasting software, both of which are extremely important to workforce planning.

Here are some of the ways workforce management and labor forecasting can streamline your workforce planning:

Everything on a single system

Nearly all the workforce planning data you need is housed in workforce management software. From time clock and scheduling data to employee records like pay rate and ob titles, everything is held in a single, cloud-based system optimized for easy access.

More visibility into labor costs

By combining scheduling and time tracking into a single system, workforce management software allows managers to leverage real-time data on labor costs. They can view costs per team, individual, week, or location to better understand where and how they are spending money on talent. Moreover, managers can view potential wage costs on schedules, and compare scheduled costs with actual costs on timesheets to pinpoint overspending.

Increased user self-service

Onboarding and retaining employees is critical to workforce planning. With workforce management software, employee self-service is maximized – users have access to a simple system to view schedules, request leave, pick up and swap shifts, clock in and out, and approve timesheets.

Easy insight into labor needs

The right labor forecasting software optimizes your workforce planning with AI and machine learning. It predicts demand and automatically matches labor ratios to that demand, making it easy to determine shortcomings in your supply of human capital. Clearly seeing where you lack the staff necessary to fulfill labor forecasts helps you hire more purposefully moving forward.

Comprehensive BI reporting

Managers can generate reports on historical wage costs, employee engagement, absenteeism, overtime, and more. These reports can be filtered by team, location, or job title, providing more clarity for managers when they are analyzing workforce trends.

Ensure labor compliance

Upon deploying a workforce plan, it is important to make sure your organization is complying with all necessary labor laws. It is particularly easy to misclassify contract workers, owe back pay, or violate various provisions of the Fair Labor Standards Act. Avoid all these issues when deploying your workforce plan with labor compliance software that schedules and pays employees accurately with the help of an extensive Wage & Hour Compliance library.

Optimize your workforce planning with Workforce.com

As a best-in-class workforce management platform, workforce planning is what we do. To learn more about how to streamline your business objectives with market-leading scheduling, compliance, and time tracking software, contact us today or sign up for a free trial.

 

FAQs

  • What is workforce planning?
    • It is a proactive and systematic process that involves analyzing the current supply of talent in your workforce, identifying gaps in your labor supply, forecasting future staffing needs, and developing shift plans to close gaps and meet budgets to avoid potential shortages and surpluses of human capital.
  • Who does workforce planning?
    • It is a collaborative effort between managers in multiple departments with a range of specialties since organizational alignment is important. Typically, HR and operations are most heavily involved.
  • Why is workforce planning important?
    • It is important for preventing over and understaffing as well as for building agility into a company’s talent management, retirement, and succession planning processes.
  • What tool do I use for workforce planning?
  • How does workforce management software help with workforce planning?
    • Workforce management software helps managers execute and monitor the success of workforce planning. It allows businesses to schedule and track time accurately and compliantly. It also lets them view reports on labor costs, attendance, and engagement, which are all vital for keeping a business agile in its ability to forecast and react to changes in workforce needs.
  • Is workforce planning difficult?
    • No! Workforce planning generally involves four core steps and is continuously improved as businesses move forward. With the help of various software solutions, workforce planning is simple yet very rewarding.
  • How is workforce planning different from talent acquisition?
    • Talent acquisition is simply a small function of HR involving the identification and acquisition of workers for your company. Workforce planning is much broader, involving assessments of current talent supply, future talent supply needs, gaps in labor, and much more.

 

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Labor data analytics can inform better talent decisions

labor analytics, people analytics

Labor data can help organizations make more informed talent decisions, but more companies could be taking advantage of it. 

According to Mercer’s “2020 Global Talent Trends Study,” 39 percent of organizations use predictive analytics to inform their people-related decision making. Thirty-one percent said they use a cause/effect analysis of key workforce and business outcomes, and just 18 percent gather data to assess the impact of different pay strategies on performance.  Meanwhile, 61 percent of executives who have used talent analytics said that doing so to inform decision-making is the number one HR trend that has delivered an impact

A workplace strategy expert spoke to Workforce about the potential of people analytics and how organizations can use it in their talent management strategy.

Using labor data analytics to measure employee impact

People analytics can inform complex predictive models, but it can also help organizations understand  how certain decisions have impacted employees. 

One prime example of this is pay equity, according to Tauseef Rahman, partner in Mercer’s San Francisco office. Labor analytics can be used to understand if there are pay gaps at an individual or group level, after taking into account factors like where employees live, what work they do and how long they’ve been working at the company. 

Also read: Labor analytics add power to workforce management tools

Analytics can also help organizations understand performance measurements better, Rahman said. Based on performance ratings and rewards like promotions or raises, are those performance ratings biased toward a specific subset of employees? 

Doing this analysis at a company-wide level is a good place to start, Rahman said. From there, leaders can see if there’s a company wide gap. There may not be a pay gap within the organization as a whole, for example, but through analytics, one can drill down and see if there are gaps in a specific business unit or a specific team. 

“That data can certainly help shine a light on where those patterns are and then that will help redirect efforts and resources to areas that need the most help,” Rahman said.

Using data analytics predictively 

Remote work has become more commonplace for many organizations during the COVID-19 pandemic, and experts expect remote work to continue to be more widely accepted afterward as well. Rahman said that analytics can help organizations interested in adapting an increasingly remote workforce. 

As organizations consider a more geographically distributed talent pool, many questions arise, like: If we hire people from across the country, how does that change how we do talent acquisition? How does that change how we pay people? And how do we manage the employee experience across different locations?

 Data can help answer questions and  inform decisions like this. 

Also read: The most pressing workforce management issues of 2020

Acknowledge the inherent flaws of data collection

No set of data can be completely unbiased, but what organizations can do to address this fact is simple, Rahman said. The key here is to clearly acknowledge that there’s bias in how data is created. 

Also read: Keeping Data Safe: The Next Wave of HR Tech Innovation

People who use data to inform decisions or strategy can acknowledge this bias by considering a few questions when they plan on using a dataset to do or plan something. These questions include: How was the gathering of this data framed? Was anything missing? Was answering these questions optional or required for survey takers? Were survey creators biased to presume certain outcomes?

For example, in recruiting, Rahman has seen the presumption that no one over the age of 65 would be interested in applying to a tech position. The reasoning behind this may be laziness or mental shortcuts rather than malice or age discrimination, but it’s flawed reasoning no matter the intention. “Things that are done in the spirit of making it easy can result in unintended consequences,” Rahman said.

Cross functional teams are critical

labor analytics, people analytics

According to Mercer’s “2020 Global Talent Trends Study,” the  “quality and reliability of data are critical.” Cross functional teams are critical for organizations interested in using data the right way, Rahman said. 

The team shouldn’t only include analysts and statisticians but also people with HR expertise, legal expertise and an ethical understanding of data collection. What data does an organization have access to, and how can it collect it in a way that’s not creepy?

“You can configure technology to do whatever you want. If you do something wrong, you can’t blame the technology. You blame the people who configured it,” Rahman said. 

Managing privacy concerns is an important part of these teams. There are interesting ethical questions that come up with the possibility of using labor analytics predictively. For example, Rahman said, what are the ethics of having a model that predicts how likely an employee is to quit? If they haven’t actually quit, what decisions can you ethically make with that prediction? 

Having someone with policy expertise is also beneficial for a cross functional team. For example, if an employee has a 90 percent chance of quitting according to an analytics model, a policy expert could consider what could be driving the employee’s dissatisfaction and what workplace policy could help them be more engaged. Maybe it’s something related to compensation or work-life balance that can be addressed.

The scope of people analytics 

Businesses go through times of uncertainty for many reasons, from global crises to national recessions and more. Times like this highlight the role of labor data analytics to make the employee experience better, at a time when many employees may be going through financial or personal struggles. 

Still, while focusing on improving the employee experience, organizations cannot lose sight of broader, also important areas of business that analytics can inform, Rahman said. These bigger picture topics include pay equity and diversity. 

“Having a broad mindset is really important,” he said. “You want to solve daily issues, weekly issues, monthly issues and multiyear issues, [all while] not losing sight of the fact that you still have to do your pay equity analysis and you still have to make people engaged in your company. It’s a lot more work, but who better to do it than these strong, multi-disciplinary [people analytics] teams?”

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Sector Report: Wellness Valuable as a Recruiting Tool

corporate wellness

Wellness benefits have officially changed teams. These health-inspired programs and resources are no longer viewed as health care initiatives, but rather as a “new talent value proposition,” said Mike Maniccia, specialist leader for Deloitte in Los Angeles.

“The origins of wellness programs were about saving money by creating a healthier workforce,” he says. But the financial returns on wellness investments have been notoriously difficult to measure, which diminished their value and caused them to lose the backing by cost-conscious execs.

However, in a low unemployment economy where millennials dominate the talent pool, wellness has gained new life as a powerful recruiting tool. Offering on-site yoga classes, healthy food options in the cafeteria, and a suite of physical and emotional wellness apps can help win over hard-to-land new hires. “Appealing to millennials is dominating the wellness conversation,” he said.

Companies like Google, Apple and Patagonia win constant accolades for their innovative wellness efforts, which often include over-the-top offerings like on-site massage therapy, weekly cooking classes, and free outdoor-inspired daycare centers. Maniccia worries a bit that the hype generated by a handful of mission-driven and well-funded wellness programs will make it impossible for others to keep up. “It’s difficult to replicate that kind of culture in manufacturing, retail or a small business,” he said.

However, in reality, companies don’t have to spend a lot of money on wellness to impress talent, as long as they are creative and offer programs that employees actually want. Deloitte’s 2018 “Human Capital Trends” report found that the top two wellness benefits desired by employees are flexible schedules and the option to telecommute, both of which require no real financial investment and can actually cut overhead costs.

Also read the 2018 Sector Report: Is Wellness Just an Employee Perk? 

Also read the 2017 Sector Report: Workplace Wellness Programs Continue Healthy Ascent 

Benefits Come From Within

Beyond flex time, employees are seeking wellness tools that fit their unique needs and interest. That’s has caused an evolution in the types of programs offered and how employees are encouraged to take part, said Linda Natansohn, head of corporate development, meQuilibrium, a resiliency training company in Boston. Most companies have evolved past things like incentives for biometric screenings, in part because of negative publicity that saw incentives as a form of coercion, but also because they didn’t generate the desired results.

corporate wellness

“No amount of extrinsic rewards will drive people to change their behavior,” she said. “Employers have to figure out what is meaningful to their people.”

To connect with these personal drivers, companies have begun curating an assortment of offerings to address employees’ physical, social, emotional and fiscal needs. Many of them come in the form of apps and wearables that encourage healthy behavior and offer intrinsic motivators, like leader boards and positive messages when users hit daily goals.

Though not everyone is motivated by an app, said Steven Noeldner, head of total health management for Mercer. Some employees like self-directed programs, but others will prefer real-time workshops, consulting, or small group classes. “The idea is to have a broad array of services designed for different segments of the population.”

That includes social and emotional wellness programs, which are gaining popularity as companies realize the value of having a happy and well-adjusted workforce, noted Natansohn. These offerings can range from on-site therapists, to meditation apps to “kindness clubs,” where employees work together to create a better and more inclusive culture, she says. “It’s a more holistic approach to well-being.”

Regardless of the scope of offerings, managers and executives have to show their support for using these programs if employees are going to get on board, according to Noeldner. “Organizations with strong leadership support have higher participation and better health outcomes,” he said.

He recently completed work on a joint study between Health Enhancement Research Organization and Mercer that found organizations whose leaders actively participate in health and well-being initiatives reported higher median rates of both employee satisfaction with health and well-being programs (83 percent) and employee perception of organizational support (85 percent) compared to organizations whose leaders did not actively participate (66 percent and 67 percent, respectively).

“The C-suite and management create the climate around wellness,” he said. No matter how carefully companies select their wellness offerings and vendors, leadership support for the program will be critical to their success.

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The Talent Trifecta

We know it matters. Some go to war for it. Professional sports teams draft for it. Actors audition to show they have it.Businessmen in suits holding a giant magnet and trying to attract young talent to their company

Others consider it the ultimate solution and try to manage it. Agents contract for it. Some are innately endowed with it, while others strive diligently to develop it. We all want it.

“It” is talent, which is evolving into a science for some HR professionals and a passion for many line managers. A multitude of programs and investments have been made to attract, retain and upgrade talent.

Yet, sometimes after stipulating that talent matters, it is easy to get lost in the myriad of promises, programs and processes and lose sight of the basics. At the risk of grossly oversimplifying, let me suggest that there is actually a deceptively simple formula for talent that can help HR professionals and general managers turn their talent aspirations into actions: Talent equals competence times com- ¬mitment times contribution.

Competence means that individuals have the knowledge, skills and values required for today’s and tomorrow’s jobs. One company clarified the usual definition of competence and framed it as “right skills, right place, right job.”

Competence clearly matters because incompetence leads to poor decision-making. But without commitment, competence doesn’t count for much. Highly competent employees who are not committed are smart, but don’t work very hard.

Committed or engaged employees work hard, put in their time and do what they are asked to do. In the past decade, commitment and competence have been the bailiwicks for talent.

But my colleagues and I have found that next-generation leaders for an organization may be competent (able to do the work) and committed (willing to do the work), but unless they are making a real contribution through the work (finding meaning and purpose in their work), then their interest in what they are doing diminishes and their willingness to harness their talent in the organization wanes. Contribution occurs when employees feel that their personal needs are being met through their participation in their organization.

Organizations are the universal setting in today’s environment where individuals find abundance in their lives through their work. They want this investment of their time to be meaningful. Simply stated, competence deals with the head (being able), commitment with the hands and feet (being there), and contribution with the heart (simply being).

In this talent equation, these three terms are multiplicative, not additive. If any one is missing, the other two will not replace it. A low score in competence will not ensure talent even when the employee is engaged and contributing.

Talented employees must have skills, wills and purposes; they must be capable, committed and contributing. HR leaders can engage their general managers to identify and improve each of these three dimensions to respond to the talent clarion call.

Competence
    Competent employees have the ability to do today’s and tomorrow’s tasks. Creating competence comes by following four steps:

1. Articulating a theory or setting a standard.
Competence begins by identifying what’s required to deliver future work. Rather than focus on what has worked in the past by comparing low- and high-performing employees, more recent competence standards come from turning future customer expectations into present employee requirements. At any level in a company, an HR professional can facilitate a discussion sparked by these questions:

}What are the current social and technical competencies we have within our company?

}What are the environmental changes facing our business and what are our strategic responses?

}Given our future environment and strategic choices, what technical and social competencies must employees demonstrate?

By facilitating a discussion about these questions, HR professionals help general managers create a theory or point of view on competencies that leads to a set of employee standards. When general managers build competence models based on future customer expectations, they direct employee attention to what they should know and do. The simplest test of the competence standard is to ask target or key customers: “If our employees lived up to these standards, would they inspire confidence in our firm?” When customers answer yes, the competence model is appropriate; if they answer no, it needs more work.

  2. Assessing individuals and organizations. With standards in place, employees may be assessed on the extent to which they meet or do not meet standards. In recent years, most talent assessments have evaluated both results and behaviors. Talented employees deliver results in the right way. The right way is defined by the competence standards I described in Step 1. These behaviors may be assessed by the employee and others through a 360-degree evaluation by subordinates, peers and supervisors. But to provide a holistic view of employees who have contact outside the company, they can also be evaluated by such stakeholders as suppliers, customers, investors and community leaders. This shifts the 360 to a 720 (360 times 2 equals 720). This assessment lets the individual know what to do to improve, and it also provides valuable input to the organization about how to design and deliver HR practices to upgrade talent.

3. Investing in talent improvement. Individual and organizational gaps may be filled by investing in talent. In work my colleagues and I have done, we have found six investments that may be made to upgrade talent:

Buying: recruiting, sourcing and securing new talent into the organization.

Building: helping people grow through training, job assignments or life experiences.

Borrowing: bringing knowledge into the organization through advisors or partners.

Bounding: promoting the right people into key jobs.

Bouncing: removing poor performers from their jobs and/or the organization.

Binding: retaining top talent.

When HR professionals create choices in these six areas, they help individuals and organizations invest in future talent.

4. Following up and tracking competence. Hoping for talent won’t make it happen. Ultimately, talent measures should be derived to track how well individuals are developing their skills and how well the organization develops its talent bench. Individual employees can be tracked on their understanding of their next career step and their capacity to do it. Organizations can track the extent to which backups are in place for key positions. Or, leaders who are measured on how much money they contribute to their company can also be assessed on the extent to which they are talent producers rather than talent users. Here is what I mean: If these leaders run through an organization’s talented employees, driving them away or burning them out, there should be some accountability for such outcomes. As leaders produce money for a company, so should they be held responsible for replenishing the talent pool, and must be expected to answer to the organization if they are only tapping it out.

These four steps will help HR professionals and general managers ensure competent employees to do today’s and tomorrow’s work. In the past 20 years, almost all companies have done at least minimal work in these four areas.

 Commitment
    Competence alone is not enough. Commitment means that employees are willing to give their discretionary energy to the firm’s success. This discretionary energy is generally conceived as an employee value proposition that makes a very simple statement: Employees who give value to their organization should get value back from the organization. The ability to give value comes when employees are seen as able to deliver results in the right way.

Those employees who give value should get value back. In many studies of employee engagement, researchers have identified what employees get back from their work with the firm. Almost all consulting firms have engagement indexes that can be used as a pulse check to track employee engagement. Generally, these instruments suggest that employees are more committed when their organization offers them:

Vision: a sense of direction or purpose.

Opportunity: an ability to grow, develop and learn.

  Incentives: a fair wage or salary for work done.

Impact: an ability to see the outcome or effect of work done.

Community: peers, bosses and leaders who build a sense of community.

Communication: knowing what is going on and why.

Entrepreneurship or flexibility: giving employees choice about terms and conditions of work.

When these seven dimensions exist in an organization, employees have a VOI2C2E, as shown in the acronym above. They demonstrate their engagement by being at work on time, working hard and doing what is expected of them. Commitment (not just satisfaction) may be measured through surveys or productivity indexes.

Contribution
One of my colleagues graduated from a top business school (a validation of competence), got her ideal job and was willing to work very hard (which demonstrates commitment). But after about a year, she left. She still savored the job and was willing to work hard, but she felt that the job was not helping her meet her needs.

In recent years, many people have been finding that traditional organizations, such as families, neighborhoods, hobby groups and churches, which had once met people’s needs, have been faltering. As employees work longer hours and with technology removing the boundaries between work and life, companies need to learn how to help employees meet their needs. When people have their needs met through their organizations, they feel that they are contributing and finding abundance—the personal fulfillment and meaning that we seek in life.

My wife, Wendy, and I have scoured theory and research from positive psychology and developmental psychology—individual motivation, personal growth and organizational theory—to figure out what organizations can do to help employees find abundance, which occurs when individuals feel they are contributing. We have identified seven questions that leaders may help employees answer so that employees experience abundance in their work:

Who am I? How does the employee identity meld with the company reputation?

Where am I going and why? How can the organization help the employee reach his or her goals?

With whom do I travel? How does the organization build a community of support so that an employee feels connected?

How well do I practice spiritual disciplines? How well does the organization practice such spiritual disciplines as humility, service, forgiveness and gratitude?

What challenges do I enjoy? How does the organization help an employee find challenges that are easy, enjoyable and energizing?

How well can I access resources? How does the organization help the employee manage health, physical space and financial requirements?

What are my sources of delight? How does the organization help the employee have fun? Fun work environments mean that employees have the ability to laugh at difficult situations, thereby becoming resilient and positive.

When managers help employees find answers to these questions through their participation in the organization, these employees will find abundance and feel that they are contributing.

Talent is not an “it”—some abstract, unknown and impersonal set of ideal principles. Nor is talent a random set of programs and policies that evolve according to the whims of talent-fashion trends. Using the simple talent formula—competence times commitment times contribution equals talent—leaders and HR professionals may join in helping talent become a reality. It is worth doing.

Workforce Management, September 10, 2007, p. 32-33 — Subscribe Now!

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Repatriation Planning Checklist

FMLA

Repatriation presents one of the most complex sets of issues facing international human resources managers today.tax reform impact on relocation

Successful re-entry means that the employee reaps career and personal payoffs for the overseas experience, and that the company enriches its organization through the addition of the international competencies of its repatriated employees. Repatriation difficulties vary by company, by job type and by industry. High attrition rates at re-entry, poor integration of repatriated employees, lack of appropriate positions, downsized organizations and dissatisfied repatriated employees and families are some of the most frequently cited problems.

Although there’s no easy, one-size-fits-all set of answers to the challenges of re-entry, there are guidelines that corporations can follow to positively facilitate the process. The following checklist targets: senior management involvement; expectation management; comprehensive career planning; selection and development processes that ensure that the expatriate acquires new capabilities; upgraded change management systems; and interventions to address the losses that repatriates experience.

Career Issues

Prior to departure
! Involve international human resources at corporate strategic levels when planning for international activities

! Clearly establish the need for the international assignment with input from home and host locations

! Utilize research-based selection processes to make certain that the employee and family are suitable and able to succeed abroad

! Provide cross-cultural and language training to increase effectiveness and adaptation overseas

! Offer career spouse counseling and assistance during assignment

! Outline a clear job description for the expatriate’s position

! Communicate realistic expectations about re-entry to employee at the time the position is offered

! Design career tracking and pathing systems that recognize and reward returning employees

! Establish expat developmental plans that include international competencies

! Link performance appraisals directly to developmental plans with home and host evaluators measuring performance

! Adapt performance appraisals to recognize the cultural demands of the assignment

! Feed performance appraisals into a larger internal human resource communication vehicle

! Appoint home and host mentors who are held accountable to track and support the employee during the assignment, and to identify potential positions at re-entry

! Send job postings to the expatriate while abroad

! Prior to return (one year to six months) arrange a networking visit to home office to establish viability with line and human resources managers

! Repeat networking visit three months prior to return if necessary

! Assist employee with polishing resume writing and interviewing skills

! Circulate resume to all potential hiring units

! Establish fallback position if no job is available

! Arrange for employee to maintain visibility through regular business trips home and through contact with visiting home-country personnel

! Create communication links to employee via E-mail, newsletters, copies of important memos and relevant publications

! Enable family members to stay in touch with changes at home through news publications

! Encourage employee and family to return home for home leave.

At Re-entry
! Arrange an event to welcome and recognize the employee and family, either formally or informally

! Establish support to facilitate family reintegration

! Offer repatriation counseling or workshops to ease adjustment

! Assist spouse with job counseling, resume writing and interviewing techniques

! Provide educational counseling for kids

! Provide employee with a thorough debriefing with a facilitator to identify new knowledge, insights and skills, forums to showcase new competencies, and activities that utilize competencies

! Offer international outplacement to employee and re-entry counseling to entire family if no positions are possible

! Arrange a post-assignment interview with expatriate and spouse to review their view of the assignment and address any repatriation issues.

Financial Planning and Related Activities
! Coordinate with home and host offices prior to repatriation to identify repatriation date

! Run cost projection with anticipated repatriation date to determine the most cost-effective time frame for departure

! Arrange pre-repatriation home country house hunting/school enrollment trip to allow for re-occupying/securing home country housing and registering dependent children for school.

! Arrange for shipment of personal goods.

! Identify dates for temporary living in home and host countries.

! Arrange tax exit interview for employee with tax service provider to determine need for tax clearance/final host country tax return to leave the country.

! Provide tax service provider with year-to-date compensation data for tax clearance/return processing.

! Process any relocation payment.

! Process return incentive payment.

! Process payroll documents to remove employee from expatriate status and review need for actual withholding payments for remainder of year with tax service provider.

! Provide HR generalist in new location with necessary personnel files.

SOURCE: Bennett & Associates and Price Waterhouse LLP

Personnel Journal, January 1995, Vol. 74, No. 1, p. 32.