New Research From IBM & the Human Capital Institute Demonstrates ROI of Talent Management

ARMONK, NY and WASHINGTON, DC - 14 Aug 2008: A study by IBM (NYSE: IBM) and the Human Capital Institute (HCI) shows that while 84 percent of organizations know that workforce effectiveness is important to achieving business results, only 42 percent of those surveyed say managers devote sufficient time to people management.

The study, Integrated Talent Management, was based on research with 1,900 individuals from more than 1,000 public and private sector organizations around the world. It was undertaken by IBM and HCI to identify the return on investment of integrated talent management. Among the findings:

• Organizations that apply talent management practices demonstrate higher financial performance compared to their industry peers. Those specific talent management practices that most distinguished financial outperformers from other organizations are understanding and acting upon employee engagement and aligning recognition and performance management systems.
  

• While organizations recognize the value of talent management practices, they find it difficult to apply workforce analytics (only 40 percent accurately forecast skill needs), promote collaboration (49 percent provide the right tools), deploy people effectively (64 percent say they do,) and develop those employees in a timely and effective manner (only 38 percent have the right focus).

• The study also found that organizations between 1,000 and 10,000 employees are less likely to apply leading talent management practices compared to other organizations. These "corporate adolescents" appear to be too large to be able to manage informally and too small to have the necessary managerial focus or human capital infrastructure.
  

• Knowledge and service-intensive industries, such as electronics, technology and professional service firms, are more likely to apply talent management practices, while the public sector significantly lags in their use.

"The IBM/HCI study clearly calls for the same rigor in talent analytics and management that CEOs and CIOs require to make the strategic decisions their companies depend on," said Tim Ringo, vice president Human Capital Management, IBM. "The challenge laid out for IBM's clients is to treat their most valuable asset -- their people -- as their most competitive edge."

"The long-term payoffs of strong talent management far outweigh the costs and complexities associated with upfront investments," said Allan Schweyer, Executive Director of HCI. "This research proves that in today's increasingly globalized, technology-driven economy, a strategic and integrated focus on talent can in fact help your organization prepare for corporate adolescence and financially outperform competitors, no matter the size or industry."

A full copy of Integrated Talent Management is available to interested members of the media. The study respondents varied by position and included people involved with HR and non-HR functions. The surveyed companies represent a variety of industries, geographies and sizes. In addition, it tackles maturity and geographical differences among employers and their workers.

About The IBM Institute for Business Value
With business experts in more than 160 countries, IBM Global Business Services provides clients with deep business process and industry expertise across 17 industries, using innovation to identify, create and deliver value faster. We draw on the full breadth of IBM capabilities, standing behind our advice to help clients innovate and implement solutions designed to deliver business outcomes with far-reaching impact and sustainable results. http://www.ibm.com

About The Human Capital Institute
The Human Capital Institute (HCI) is a global network of more than 120,000 members in 40 countries committed to shaping the world's new talent economy. Leaders, executives, and practitioners in HCI's network represent organizations of all sizes across public, charitable and government sectors, and collaborate on the next practices in strategic talent management. Through communities, education, events and research, HCI provides actionable, results-driven solutions to help members foster talent advantages to ensure organizational change for competitive results. In tandem with HCI's training, peer-to-peer learning, and public and private research on talent management best practices, the HCI Human Capital Strategist designation sets the bar for expertise in talent strategy, acquisition, development and new economy leadership. www.humancapitalinstitute.org

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