Talent Benchmarking
Background
A lot of people – and a lot of organisations – are now talking about the need to ‘raise the bar’ with respect to leadership capability.
Talent Management (TM) can be a key lever to help achieve this goal, but how do you do this effectively? The old style HR approach would be to put all of the managers in a business through a range of development interventions and hope that some of them ‘stick’ and are useful. Indeed, there may be some occasions when this is style of development can still be useful, such as the launch of a major change programme.
However, current best practice TM would suggest that development needs, i.e. the gap between where your people are now and that ‘raised bar’ should be identified at an individual, team and organisational level. The most effective way of doing this is through structured and objective Talent Benchmarking, which can then be followed through with tailored development activity to close the gaps and influence changes to recruitment and promotion activities and policies.
There are seven core questions that will guide your thinking around Talent Benchmarking and how you approach it:
What Is The Key Business Driver For Talent Management?
Many organisations are grappling with the short term demands within TM, such as senior succession planning. This often manifests as questions around the quality of internal candidates for senior posts, the number of times that one individual appears on the succession plan or the number of roles with no successors identified.
This is often a key driver when the senior group has been stable for a long period and some of this group are now thinking of moving on. In this case the successors to these senior roles are often seen as good performers and their very familiarity to the business makes it difficult to distinguish between them and make the right succession decisions. Talent Benchmarking can add objectivity and fairness into this decision making process – as well as allowing benchmarking against future role challenges rather than the issues the business is facing at the moment.
Equally, longer-term TM drivers, such as diversification or embarking on an acquisition will take you down the road of Talent Benchmarking. Only in these situations the challenge is more likely to be to find the people who can lead the changes and have the commercial nous to work outside of the current business paradigm.
The key driver for TM in your organisation can tell you where to start and whom to focus the Talent Benchmarking activity on in the first instance. Whichever the initial driver for TM and Benchmarking, it is imperative that we do not forget to develop our approach to deal with the next cycle of challenges – which is often closing the development gaps of those that have been benchmarked.
Who Is The Target Group?
A critical question to guide your approach to Talent Benchmarking is the level and type of talent that is to be benchmarked. Typically, organisations are interested only in benchmarking certain key groups that will enable delivery against the overall business strategy. Traditionally, this has been high-potentials (or Hipos) but in recent years more and more businesses are recognising the benefits to be gained by getting a better understanding of the strength of their people in other key groups outwith the Hipo population. These include graduates, the mid-career ‘engine room’ of the business, senior managers aspiring to Executive roles, technical specialists/ key talent and general managers.
Who Are You Benchmarking Against?
To many people not working in the TM arena the idea of benchmarking implies that it is against an external standard of ‘world class’. However, as we know there can be more appropriate standards against which to benchmark your key groups. In the very largest organisations with well-recognised brands – the kinds of organisations that naturally attract good people to them – it is often more useful to benchmark across divisions and geographies than it is to compare the people with other organisations. In these types of businesses making sure that there are not talent gaps or major discrepancies in ability and potential across the business is the most important role for benchmarking.
Interestingly, benchmarking also plays a critical function in professional services organisations – which are typically partnerships – because traditionally people coming up towards partnership are ‘sponsored’ by a senior figure in the firm and there is often doubt about the quality of candidates that other partners are putting forwards. Benchmarking provides the partners with objective views around this, generates faith in the process and reinforces the criteria across the firm about what makes a good partner.
As well as the internal or external question around benchmarking, an approach that always adds value is to benchmark against future demands that will be placed on an individual or group. All organisations talk about the speed of change the need for leaders and managers to be able to take the business forwards – so measuring people against these future demands and the interest and ability to change themselves and others is critical.
1. What Outputs/Data Do You Want And How Will You Use It?
Before embarking on talent benchmarking at any level it is important to answer the obvious question: ‘Why are we doing this’ and to get buy in from senior line people to the answer. Starting down the benchmarking road with a vague intention to ‘do some development’ will almost inevitably mean that the process becomes unstuck when a line manager wants to see some data to make a promotion or placement decision.
As with any TM process, as well as the aims, objectives and business benefits being clear and communicated, in benchmarking it is important to get the confidentiality issues clearly mapped out and agreed up front:
- Who is going to see the outputs
- Where will they be stored?
- What will they be used for?
Often, individuals are anxious about others having access to an in-depth analysis of their weaknesses and development needs. An effective way to deal with this is to agree that others will only have access to the executive summary and development outputs to enable support for the process. Organisations that allow individuals to solely own the benchmarking data clearly miss out on a lot of the benefits and often find that their objectives cannot be met.
Some organisations have found that when they the outputs from benchmarking activity can be vey useful in an M&A situation. Acquiring businesses have reported that this is the best information they can get on management capability pre-purchase.
Which Methods To Use?
There is a vast body of research in the public domain about the effectiveness of different assessment methods. Most forward-looking organisations will use some version of an assessment or development centre based around a business simulation, often with some supporting psychometrics, e.g. a personality questionnaire and an aptitude test. In addition, when benchmarking it is very useful to include some 360 information – particularly from peers and direct reports (which are the best predictors of performance) – as an input into the process.
The assessment that is used should be focused on seeing the individuals perform in real situations that they will have to encounter in the future. In the past, many organisations have used predominantly backward-looking techniques, e.g. the ‘tell me about your childhood’ interview, which has little relevance when looking at the ability of people to run major parts of large commercial ventures.
Typically, successful Talent Benchmarking is clearly positioned as a two way street, where the organisation is going to gain an objective view on its people and where the individuals can gain from their investment of time and energy through the commitment to a more focused development plan. Now, and even more so in the future, as Generation Y come into the fold, this needs to be extended so that it is not just the development plan that is the benefit to the individual. The additional conversation should be around personal and career goals, work/ life balance desires and a discussion of possible career paths to follow.
How Do You Ensure The Quality Of Your Benchmarking Data?
The least effective benchmarking occurs when any or all of the following are the case:
- Competencies used are old (3+ years)
- Competencies focus on what is needed for success now, rather than in the future
- People making the judgements lack experience of the level and type of people being benchmarked
- Assessor pools are too large, since consistency and a common vision of potential is impossible to maintain
- Insufficient or no training given to the people benchmarking; there is no QA process to ensure the inputs, benchmarking and outputs are of the right standard.
Any professional Talent Benchmarking process will formally collect and monitor the output data. This will be both for legal reasons but also to establish the benchmarks and ensure that there is not slippage as assessors become more used to and comfortable with the process.
Organisations frequently use external support for their benchmarking programmes. This can be a good route to get a clear view of an external benchmark group and providers in this area should be able to offer good benchmark data to compare against. However, whilst working with an external partner most of these issues highlighted in this section can be overcome – but TM professionals should ask the questions of their partners to make sure they are being addressed.
What Do You Tell Your Talent and What Next?
A key aspect of any effective benchmarking programme must be the briefing and communicating – both of line managers and the individuals themselves. For line managers this is regarding the overall purpose of the programme, what is required of them and a nomination guide to help them decide who to put forward. They need to be tuned into the overall purpose of the benchmarking and how it can make a difference to the performance of their people and their business.
For the individuals being benchmarked, there must be a clear rationale for the benchmarking process and the benefits of participation sold to them. The themes picked up under the methods above – around the need for the process to be two- way and a broader career conversation to happen – should be outlined here. As should the consequences of opting out of the process – if that is an option.
In addition to producing development plans and giving feedback, effective Talent Benchmarking will incorporate a handover back to the business of two things: firstly, the individual development plan – best done by a three way meeting to include the line manager and ensure buy-in; secondly, an output that describes the strengths and development needs of the benchmarked group. This is clearly essential to feed into the next phase of the TM cycle of individual/ group development and/ or the need to recruit new skills and experiences.
Conclusion
Talent Benchmarking should be a vital tool in the armoury of the TM professional. It provides the business with invaluable information about the size and shape of the gaps in leadership capability – both for current and future demands on the business. It also gives the TM professional a clear and meaningful view on the way forward for the key TM processes and policies and how these should be adapted to prepare people for the demands being made on.