Tired of your annual performance reviews? Try talent assessment. (6-7 minute read)
Annual reviews are important. But they do not help your company determine what talents it has and what talents it needs. While reviews are the most common form of employee assessment, your company could do better by assessing its existing talents and finding out what talents are needed. How can you do this?
A performance review is usually one person’s point of view (the manager’s) and the stakes are high because compensation and promotion are often tied to it. While many managers are effective, the reality is that the performance review is often a dreaded task to get over with, rather than an opportunity to develop talent. When human resource professionals were asked to rate business managers, only 32% rated managers as effective in offering feedback and coaching, and only 24% of managers discuss developmental opportunities (Human Capital Institute).
Only 32% of Managers offer feedback and coaching
Employees – or human capital—may be most important assets that your company has. And you should be concerned if you’re not looking after those resources. It’s getting harder to keep them, because employees leave sooner than they used to.
Employees leave sooner that they used to.
According to Forbes, “job hopping is the ‘new normal’ for millennials.” Today’s average worker stays at his or her job for 4.4 years, but the youngest workers stay for only half of that (Bureau of Labor Statistics).
Your company needs every competitive advantage it can get. You can maximize your “human” capital by doing three things:
1. Profile your existing talent (and the talent gaps)
2. Nurture that talent (and hire to fill the gaps)
3. Keep the talent (nurtured and new)
1. PROFILE EXISTING TALENT (AND THE TALENT GAPS)
Find the “high potential” employees – the ones who are likely to rise at least 2 levels; the ones who are a step or two ahead of their peers, the “keepers”. Assess their talents, after all, no one is good at everything. When you realize the talents you are missing, then you’ll know what you need to hire.
2. NURTURE THAT TALENT (AND HIRE TO FILL THE GAPS)
Now that you know who you want to keep, you can look after them. Hire the ones you need to. Does this mean you’ll be laying off people? Not necessarily. You don’t need a company full of high flyers — so you don’t need to lay off the “steady performers” but you also know where to focus your efforts: on the rising talent that will help make your company successful.
3. KEEP THE TALENT (NURTURED AND NEW)
Your “high potentials” want to be noticed and appreciated, promoted and rewarded. They want to be stretched and make a real difference now. You have to really listen to these people and show that you respect them. If you don’t, they will vote with their feet.
If you agree that one or all of these steps are valuable, the next question is how do you do this? How do you identify what you have, what you need, and keep the best? You need to get information that you can act on — not just data, but information and action.
A Chief Financial Officer (CFO) has financial data; an effective CFO knows how to interpret the data, look behind the predictions, and create a financial picture that helps the executive team make decisions about their future.
HR needs data,
just like the finance
department needs numbers.
In the world of Human Resources (HR), new technologies are enabling an increasing amount of data: online and offline, monthly, quarterly and annual surveys, engagement surveys, satisfaction surveys, 360-degree tools and more. Inevitably, there is valuable data, but it may not be informative. And without information, there can be no conclusions and no action plan. An effective CHRO (Chief HR Officer), like an effective CFO, interprets the data, and creates an action plan.
What is talent assessment. How does it work?
A talent assessment is more than just a survey of employees. It builds thorough talent profiles which provide the following:
- Reliable feedback
- Prioritized recommendations
- Quantitative scores
- Insights for executives
Think of it as a really helpful audit of your current leaders (how they behave and what they are capable of); this audit rigorously assesses executives and provides actionable steps. You can use this information to develop your talent pool, and hire new talent where needed.
Is it something to do just once?
The talent assessment is the baseline. It can be shallow (C-suite only) or go deeper through the management ranks. It all depends on what your company needs.
And of course, it’s not good forever. Business needs change, executives might be hired, and the environment in which your company is operating will also change. Implementing some ongoing programs to update the baseline assessment will maintain the accuracy of the information. And a complete re-fresh would be needed, most likely within three years.
Regardless of shelf-life, getting a thorough talent assessment and acting on the recommendations can transform a company.
Can you do this in-house?
You can do this in-house, but not really. Your company might have assessment centers that administer surveys and other assessment tools, which is great. But the talent assessment is really much more. You use an external accounting firm to audit your financials. The audit of your key talent is no different. An outside firm has some advantages:
- Objective: No playing favorites. An outside firm has no vested interest or risk associated with blatantly stating the truth.
- Experienced: An outside firm has (hopefully) done this many times before AND they will bring cross-industry perspectives.
- A Trustworthy Confidant: Participants are more likely to speak candidly to a confidential outsider than a fellow employee or in-house consultant, yielding higher quality information.
Do you need this?
If your company only does performance reviews, consider the following comparison:
If you’re already doing some assessment, consider whether it’s thorough and actionable enough. And is it impartial? Are you losing your “good” employees? Is your key talent highly engaged? Do you have data to help you understand leadership ineffectiveness risk?
Could your company use talent assessment? Probably. According to a Human Capital Institute study of high potential employees (those likely to rise at least 2 levels in a company) by the Human Capital Institute:
- 1 in 4 intends to leave in a year
- 1 in 3 admits to not giving 100%
- 1 in 5 believes personal aspirations differ from the organization’s
- 4 in 10 lack confidence in co-workers or senior team
1 in 4 of your high potentials
is likely to leave within a year
So now you know that it is possible to thoroughly assess your team – identify where your talents are, how to develop them, and identify where the gaps are. And often, when you look after the talent, those employees notice and thrive; they stay longer and they encourage their talented friends and former co-workers to join your company. Talent assessment helps with retention, hiring and developing talent in both predictable and unpredictable ways. And because it’s based on truthful and thorough analysis, those changes are almost always for the better.
What’s happening where you are? I’d love to hear what’s working and what’s not. And I’m happy to answer more questions about talent assessment.
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6-7 minute read