Companies from Best Buy to IBM are starting to apply quantitative measurement to talent management and HR. They are reaping profits and cost savings from doing so. As other organizations catch on to this, measurement will finally become a part of HR. And this will put many HR professionals in a strange space – that of determining with some level of certainty which people perform better than others, which managers have lower turnover, and which functions add the most value (revenue/loyalty/patents).
Most HR professionals are uncertain about measurement, not usually understanding what it means and not quite believing that it can be done to people. And, until sophisticated algorithms and software were developed it was a challenge. But, the new HRIS tools along with CRM and specific measurement software, are making it easier to gather data and mine it. Longitudinal studies can be carried out and base levels can be established so that the impact of future changes can be observed and correlated.
Books are appearing which educate and explain the hows of measuring people and their performance. One example, Investing in People: Financial Impact of Human Resource Initiatives, is a Society of Human Resources Management (SHRM) inspired book written by two big names in the HR measurement area: Wayne Cascio and John Bourdreau. In chapters titled “The High Cost of Employee Separation,” The Payoff from Enhanced Selection,” and “Costs and Benefits of HR Development Programs” they lay out an accessible framework for presenting HR data in a way that business managers can appreciate.
Another book, Reinventing Talent Management: How to Maximize Performance in the New Marketplace written by William A. Schiemann. Schiemann runs a consultancy that focuses on measurement. This book introduces the concept of “people equity” and shows how some employees are far more valuable than others. He also shows how to build equity and improve business performance in ways traceable to people.
Courses will be added to standard HR curricula and people with a quantitative bent will consider HR as a profession worthy of their skills.
My own prediction is that quantitative HR is quietly going to replace most of traditional touchy-feely HR within a decade. This will transform organizations and how we think about work.
