Workforce Productivity and The Talent Management Lifecycle

Updated: Feb 17



How can organizations measure and quantify workforce productivity? This question is one of the most challenging obstacles that organizations face in their efforts to better understand their investments in human capital and drive value with workforce planning and analytics.


It is critical that organizations have a strong foundation and framework for analysis. Workforce productivity and human capital value can differ significantly by job role, tenure, performance and other workforce attributes. In order for organizations to quantify these differences, and make strategic investments in the workforce that provide the highest ROI, organizations must drive standards for measuring and classifying the workforce.


Quantifying productivity for some segments of the workforce, such as sales positions, is fairly straightforward. Incremental productivity can be directly measured as sales production or revenue. However, for other positions such as professional staff or management, the linkage of performance to productivity is not as clear. For these positions, productivity can be measured by considering workforce efficiency and costs in addition to output. Furthermore, in order to holistically quantify the impact of workforce productivity, organizations must understand how the workforce drives value across the talent management lifecycle.


The talent management lifecycle can be broken down into the following components: Recruiting and Hiring, Mobility, Leadership and Management, Training, Performance and Engagement, and Turnover and Retention. Tracking workforce metrics that capture components of talent management across the lifecycle enables organizations to identify areas where value is created or destroyed. For example, Quality of Hire, an index metric that combines several individual metrics across the talent management lifecycle can be used to represent the overall impact of Recruiting and Hiring on workforce productivity. Measuring the impact of each element of the talent management lifecycle and tracking the change or variance over time can show not only how, but also where the organization is creating or destroying value.


This value can be further broken down by position or performance level to identify core, high value add and critical job roles at an organization. Using this approach, organizations can understand and quantify cost of turnover impact, ROI of training, value of career paths, productivity differentials for high performers, managerial effectiveness, and more. By linking these impacts directly to workforce costs, revenue, and profit, organizations have the ability to shape workforce strategy and leverage their investments in human capital to increase workforce productivity and drive business results.


For more information on quantifying workforce productivity across the talent management lifecycle, and measuring human capital as an organizations most valuable asset, please download our Human Capital Financial Statements whitepaper.