Peter Ducker, the founder of modern management once said: ”You can’t manage what you don’t measures”. Since acquiring, managing and retaining the right ‘talent’ is the topmost priority for most organizations today, this quote takes on special meaning and to this end, talent metrics (indices that quantify and measures the value of talent in organizations) are gaining traction across Pakistan’s corporate sector.
Here are three talent metrics you should employ to ensure a dynamics, skilled and talented workforce:
1. ROI (return on investment) on manpower is calculated by dividing the organization’s net income by the cost of its management functions, which include employee recruitment, interviewing, testing, orienting, training and rewarding. An increasing ROI over time justifies your expenditures; if the ROI continues to decrease for more than a year, it implies that your workforce is dominated by redundant employees, unable to meet targets and who need to be replaced.
2. Revenue per employee is calculated by dividing the organization’s total revenue by the number of employees. This ratio indicates how efficiently the company is utilizing each employee. The higher the ratio, the more productive your workforce. However, keep in mind that labour-intensive organizations (such as a textile factory) will have a lower ratio compared to a service based organizations (such as a bank) and that the more educated and skilled each employees is, the higher the revenues s/he is likely to generate.
3. Workforce innovations index is calculated by dividing corporate revenue by the cost of employees-suggested products innovations. A higher index indicates that your products innovations have been well-received in the market and are contributing significantly to overall sales. Production and operations experts believe that this index should at least be 33% (irrespective of industry) to ensure that your ‘new’ products are generating return that are five times higher compared to your standard products offerings.
By Mehreen Ahmed The writer is a project coordinator at a multinational company.