Talent strategy is an important priority for executives because of the resulting business value. The 2020 State of Talent Optimization report by The Predictive Index found a strong correlation between talent optimization and company performance. 600 executives across 20 industries revealed that companies with aligned talent and business strategies are more likely to outperform other companies, retain top talent, see higher employee performance, and achieve strategic success rates of nearly 90%.
Key findings from the report:
- 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
- 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
- Talent optimized companies outperform other companies: When companies implement specific talent optimization practices, their strategic success rate rises to 89%
- Talent optimization increases retention: Companies that optimize talent are 30% more likely to keep their top performers
- Talent optimization boosts performance: Organizations that practice talent optimization have 34% higher employee performance
- Talent optimization improves efficiency: Talent optimized companies spend 31% less time on people problems
In addition to uncovering the business value of talent optimization, The report also provides data and insights into how hiring, management, and employee engagement practices impact business outcomes, including:
- Bad hires are prevalent: Executives say only 49% of last year’s hires were good hires
- Talent keeps execs up at night: Executives’ No.1 concern is employee performance and productivity
- When it comes to engagement, execs are in the dark: Only 22% of companies know what’s driving employee disengagement
While having an agreed-upon and well-documented business strategy is mission-critical, business strategies don’t execute themselves; people do. Senior leaders can maximize strategic performance by crafting an aligned talent strategy that mobilizes employees to handle the execution themselves.