‘We do not accept the premise that there is a talent shortage. The best ones are already in the business. Industry just needs to get a whole lot better and more objective at determining what drives performance in each role. With that answer, a whole new world in people performance opens itself up. It super-charges your talent management programs.’ – Mike Erlin, co-Founder AbilityMap
As leaders across a $1B company, innovative start-ups, global technology companies or must-win turn-arounds, we’ve always tried to simplify complex concepts to help our teams understand which goals are desirable, and which are achievable.
As co-founders of AbilityMap, our goal was to leverage our experience in recruitment, management consulting and human capital technologies to improve human productivity and satisfaction. What we found was people remain complex, increased productivity continues to be desirable and how to optimise both endures as a complex, challenging concept. However simply stated, the desirable and achievable goal is enabling and/or finding more people capable of doing what works in a job within the culture of a specific business. They key is knowing what actually works.
An Executive-view of the long term HR strategy can be reduced to a simplistic statement such as: “We need to produce the same goods and services with less staff, or we need to produce more with the same staff.” So, how does HR contribute to this?
Typically, HR professionals analyse the output per head or profit per head required to meet each companies’ financial targets. They effect change for their people through quality learning and development, progressive performance management and engagement and retention programs. They then find new talent through succession and recruitment, by using the latest technologies. However, despite all of this effort, the results continue to fall short of business expectations and stops the CHRO functioning as a peer and valued partner within the business.
Humans vary greatly in their performance within the same role. A substantial amount of research shows variability between the top and bottom third of up to 80% of salary cost or 40% of output. Add to this variability that recruitment outcomes today are not significantly better than one or two decades ago. We still have a sizeable percentage of the workforce underperforming.
In order to understand the scale of the issue across a wide range of companies, we invented the following performance question – “if you knew at time of hire what you now know, would you re-hire that person?”
The results; On average 32% would not be re-hired.
Our research findings have reinforced the ‘One-Third Problem’: approximately 1/3 of the average workforce would definitely not be re-hired by their manager.
If a company’s products or services only satisfied customers 67% of the time, the company would be out of business. So, why does it appear the industry has accepted 67% as a satisfactory performance level for our people and, more importantly, why are we building our operations around this expectation?
We started AbilityMap in 2014 to unlock a solution to the ‘One Third Problem’. We found the key was for a business to know the objective answer to the following question:
‘What drives high performance in a specific job within your company & unique culture?’ With that answer, we have the opportunity to dramatically impact the way a business operates.
Unfortunately, today’s tools don’t identify the critical issue affecting HR’s ability to reduce variation in productivity across a business: The competencies chosen to identify, develop and promote talent do not accurately reflect the actual drivers of performance in a role.
This problem can be seen in an example that repeats itself countless times every day.
Provide two or more hiring managers a competency framework and ask them to individually select the top 6-8 competencies they believe drive performance in a common role they manage. Have them share the results, and you will observe they are not the same. In fact, they vary greatly.
Furthermore, if the company were to have an analytic capability available, the next step would be to evaluate the competencies of actual high performers in that role. What you will find is that this group’s strongest common competencies are not the same as the hiring manager’s choices.
The following example is based on managers and actual performers for a disability support role. Hiring managers only agreed on 3 competencies present in high performers.
It is this subjectivity error that is causing the significant performance variability seen across our workforces. Until it is addressed, the problem will remain.
Companies want a greater ROI from their people, so why isn’t this happening?
The reason businesses cannot improve the productivity of their workforce is because the available tools and methodologies don’t answer the critical question: ‘What drives high performance in a specific job?’
To actually shift the productivity curve within an organisation, CHROs must have quantitative data, equivalent to that of a more familiar ‘Salesforce Dashboard’. This ‘Ability Dashboard’ provides a statement of position and highlights gaps in the workforce’s competencies to those required to be at productivity targets. This Ability Dashboard must provide quantitative evidence supporting the tactical programs to change competencies that have been validated as drivers of productivity. In essence, it’s changing the paradigm from ‘What is average output?’ to ‘What is required in learning, workforce planning, performance management and recruitment to improve productivity.’
Only with this answer, can HR begin to make quantitative, data driven decisions that impact an organisation’s productivity through its people.
Why don’t current methodologies and newer people analytics tools answer the question?
According to Josh Bersin, “Organisations can only reach their full potential in analytics maturity when data driven decision making is embedded in the culture.” The first step he recommends is to ‘recognise the issues’, which in the context of a business, means those constraining productivity.
HR typically examines historical trends and applies them broadly, perpetuating what has been. However, this misses the critical components required to better predict performance:
- what is a job’s required mix of soft-skills to be effective in it; and
- whether an individual or team has that mix; and if not
- where are the specific gaps in capability?
All jobs require specific soft-skills to effectively operate in the environment in which they exist. See this as a team, manager, division or overall company culture. If an individual has highly qualified technical skills and work-experience for a job, yet does not maintain the mix of soft-skills required to operate in that environment, the role will not be filled effectively.
Today’s companies require agile and contemporary HR teams that have an accurate understanding of the soft-skills required to be a high performer in each specific job within their company. Current tools and methodologies do not focus on this requirement.
What can HR do to improve results?
Shift the paradigm. To do this, we challenge you to provide the same level of commitment to understand the requirements of the job as you have done to the individual.
Answering the critical question: ‘What drives high performance in a specific job?’ and comparing existing and potentially new team members will provide the necessary insights to enable HR to reprioritise business partner resources and optimise the allocation of available budgets to finance change.