Earlier this week, The Predictive Index* (PI) published The 2020 State of Talent Optimization Report. It’s required reading for anyone interested in the talent optimization discipline.
PI surveyed over 600 executives across 20 industries. Without spoiling the results, the bottom line was clear — organizations that practice talent optimization drive greater business results than ones that don’t.
Three reasons why you should block off your calendar to download and read the report in full:
- Implementing a talent optimization strategy already? You’ll have industry benchmarks to work off, so you’ll be able to gauge if your strategy is working.
- Interested in learning the basics of talent optimization and how to get started? You’ll better understand the massive opportunity in front of you.
- You’ll see what business leaders across sectors and industries all have in common – business problems are people problems that are costing time, money, and stress.
The full study is overflowing with interesting data (60 pages worth!), so we’d like to summarize the report in a bite-sized way for you. Here’s a small sample of the findings:
- People are a company’s biggest expense and most valuable asset: Executives say 64% of costs are labor costs, and also attribute 72% of their company’s value to employees.
- Key Takeaway: Employees are, without a doubt, the most expensive asset to a company. Why would you not try to maximize their productivity and happiness?
- Having no talent strategy is the norm: Only 36% of companies have a talent strategy, and a mere 12% align their talent strategy with their business strategy.
- Key Takeaway: If you haven’t started with talent optimization yet, there’s still time to lead your industry and make it a priority in 2020. On the other hand, the practice is growing rapidly, and you’ll fall behind if you don’t start now.
- Talent optimized companies outperform other companies: When companies implement specific talent optimization practices, their strategic success rate rises to 89%.
- Key Takeaway: This may be the most jaw-dropping stat in the report. When talent optimization is implemented properly, strategic success rate climbs. Wouldn’t a 9/10 success rate on key initiatives be worth it? FYI — the industry benchmark is a strategy success rate of only 7/10.
- Talent optimization increases retention: Companies that optimize talent are 30% more likely to keep their top performers.
- Key Takeaway: Employee churn is a major issue with most companies. What’s worse than losing an employee? Losing a top employee. Make sure you’re engaging them and showing a clear career growth path for your all-stars.
- Talent optimization boosts performance: Organizations that practice talent optimization have 34% higher employee performance.
- Key Takeaway: Squeezing the value out of your employees, and closing that ever-present talent gap, is the difference between winning and losing in business. Boost performance in all areas through strategic team alignment and hiring.
- Talent optimization improves efficiency: Talent optimized companies spend 31% less time on people problems.
- Key Takeaway: People problems can eat up a massive chunk of your company’s budget if gone unchecked. Wouldn’t you love to have 31% of your budget back for other needs?
The report also provides data and insights into how hiring, management, and employee engagement practices (the aptitudes of talent optimization) impact business outcomes, including:
- Bad hires are prevalent: Executives say 51% of last year’s hires were bad hires.
- Key Takeaway: A 2019 CareerBuilder report found the average cost of a bad hire was roughly $18,700. Using that estimate, a workforce of 100 employees might burn through almost $1 million per year due to bad hiring. Learn how to make better hires.
- Talent keeps execs up at night: Executives’ No.1 concern is employee performance and productivity.
- Key Takeaway: If employee performance is at the top of your issues list, you’re not alone. The executives surveyed all agree that productivity and engagement are major problems that need to be solved in 2020.
- When it comes to engagement, execs are in the dark: Only 22% of companies know what’s driving employee disengagement.
- Key Takeaway: This is troubling. Employees are underperforming or finding new jobs, and 78% of executives don’t know why. As a business leader you need to be clear on how your employees are feeling. Reminder: the four main causes of disengagement are job, manager, team, and culture.
These are a mere fraction of the findings from The State of Talent Optimization report, so if you’re looking to start a talent optimization strategy to crush your business goals this year, the full report is a must-read.
Please leave us a comment below with your favorite stat from the report, and how your company compares to that particular benchmark.
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