What Does Your CEO Know About Talent Assessment?

Q: What does your CEOs know about talent assessment?

A: Nothing and everything.

Let me explain.

Most CEOs don’t have time to focus on the details of their firms’ talent assessment strategy. In addition to inspiring and leading their troops, CEOs must set strategic direction, which means grappling with big0picture issues like:

  • Profits: Bringing in revenue is mission critical to any business
  • Customers: You can’t have a business without them!
  • Growth: Even for less aggressive companies, growth is essential for building valuation

There are two key ingredients that are core to both the above concerns: metrics and people (aka talent).

Metrics: The job of the CEO is metrics driven. The buck literally stops on his/her desk and the ability to use data to support and evaluate strategic decision making is essential. Analytics and feedback are becoming essential tools for running a business effectively.

People: CEOs realize the value of talent to achieving their mission. But the general consensus is that they are unprepared to meet the talent challenges that will define the success of their businesses. Recent surveys of business leaders by PWC and Deloitte both identify major gaps between the perceived value of talent and the readiness of organizations to manage it.

CEOs are increasingly focusing on both people and metrics. Talent assessment is the science of measuring people in order to predict their ability to drive business results. It represents the intersection of people and metrics. When you look at it this way it is a no-brainer that talent assessment should be a critical part of any CEO’s game plan.

Yet talent assessment is generally an afterthought. It’s often bolted on at the tail end of bigger concerns related to HR technology systems, if it’s even used at all. Talent assessment is almost never seen as a strategic tool that can help drive measured impact.

The strategic value of relating people-related data to business metrics is no secret to us I/O psychologists. We have known the value add of talent assessment for a long time and we are finally starting to see an increasing amount of evidence that companies with sound talent assessment programs outperform those that don’t.

CEOs should have talent assessment top of mind and any CEO who says they are concerned about talent in their organization but doesn’t use talent assessments is not putting his/her money where their mouth is. This is an epic fail.

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But hope springs eternal because CEOs already know enough about talent assessment to be beyond dangerous. Talent assessment is actually in lockstep with a CEO’s priorities. Here’s why:

Profits: CEOs know that getting the right talent in the right place is critical to all business outcomes.  Talent assessment has a proven track record of doing exactly this. Talent assessment is finally getting the supporting cast it needs to shine.  Here are two important trends that are helping CEOs gain a line of sight to profits.

  • Integrated talent management: Silos are for farmers! An increasing number of companies are finally realizing the value of taking a holistic and integrated approach to talent. This methodology sets the stage for success by building out a foundation for data collection across the entire employee lifecycle.

Customers: Customer acquisition and retention is directly related to branding activities. CEOs are realizing that building and maintain a brand is an all-encompassing activity that must extend to talent acquisition. Job candidates are customers who share their experiences (positive or negative) very easily. When it comes to building a killer employment brand, differentiation will live through customer engagement and retention.

  • Engagement: There are a host of new talent assessment products emerging that are all about driving candidate engagement.  These assessment products are actually providing extra value via their ability to both entertain and measure key applicant traits simultaneously. This drives customer engagement by helping the company brand come to life in a way that candidates will talk about, while at the same time selecting in applicants who have what it takes to fulfill the brand’s promises to customers.
  • Fit: Everyone is talking about it, but what does it really mean? The term can mean many things to many people, but in the world of an I/O we are talking about it as: how people fit with their jobs and their work environment. No matter how you define it, fit is all about the things we I/Os love to work with: understanding jobs and organizational culture and then measuring people vs. these things so the right person can be routed to the right place. CEOs understand fit as a way to drive brand through employee engagement. Fit is also critical for identifying and filling skills gaps — another key area of focus for CEOs who care about the future of talent within their organization.

Valuation: Talent is continuing to define valuation of companies via its impact as an intangible asset.  My friends Linda Brenner and Tom McGuire are onto something in their new process for demonstrating that talent is the engine that creates value by building intellectual capital.  Intellectual capital creates differentiation and drives the market value of company.  This viewpoint is directly relevant to talent assessment because it depends on both people and metrics. Measuring and understanding the collective skills of an organization’s talent provides a framework for viewing key metrics of organizational success.  Hello talent assessment! This is the chance you’ve been waiting for!!

Ask any CEO about talent and they will definitely tell you that it’s critical to their company’s success. But how many CEOs are really raising the bar for how the organization attracts, hires, and develops talent?   

While CEOs may not know much about the specific ins and outs of talent assessment, they know everything they need to know about why it is a crucial asset to their efforts. So those who leave talent assessment off the agenda as a core HR strategy are missing a significant opportunity.  Losing candidates and customers to the competition is an epic fail for any CEO.  That’s why talent assessment will continue to be a differentiator for those who value it.

Dr. Charles Handler is a thought leader, analyst, and practitioner in the talent assessment and human capital space. Throughout his career Dr. Handler has specialized in developing effective, legally defensible employee selection systems. 

Since 2001 Dr. Handler has served as the president and founder of Rocket-Hire, a vendor neutral consultancy dedicated to creating and driving innovation in talent assessment.  Dr. Handler has helped companies such as Intuit, Wells Fargo, KPMG, Scotia Bank, Hilton Worldwide, and Humana to design, implement, and measure impactful employee selection processes.

Through his prolific writing for media outlets such as ERE.net, his work as a pre-hire assessment analyst for Bersin by Deloitte, and worldwide public speaking, Dr. Handler is a highly visible futurist and evangelist for the talent assessment space. Throughout his career, Dr. Handler has been on the forefront of innovation in the talent assessment space, applying his sound foundation in psychometrics to helping drive innovation in assessments through the use of gaming, social media, big data, and other advanced technologies.

Dr. Handler holds a M.S. and Ph.D. in Industrial/Organizational Psychology from Louisiana State University.

LinkedIn: https://www.linkedin.com/in/drcharleshandler






5 Comments on “What Does Your CEO Know About Talent Assessment?

  1. The problem is not in talent assessment tools but primarily in egos – many are unwilling to listen to their recruiting teams about what is and isn’t working. They are subject matter experts but, like many HR departments, are pooh-poohed by executives as “admin staff” and are not treated as the business partners they are. I’m often blown away at how many executives pretend to want to hear from their HR teams but then do whatever they want anyhow – just to say they engaged everyone even though they think they know more than the experts they’ve hired. When you tell a hiring manager they’re lowballing candidates with the offers, or taking too long to make decisions on resumes we send them, or their expectations are unrealistic as to what they require in qualifications, or are creating convoluted, candidate-unfriendly processes in how they interview and evaluate applicants…and they dismiss you? it’s unfortunately all too common. And of course it’s the recruiters who are given the bad reputation because we’re the liaison to the outside, carrying out much of the strategy that is designed not by recruiting, but by the hiring manager.

    Treat recruiting and human resources like an actual partner and just as important as sales and marketing and engineering, then executives just might see that talent acquisition, assessment, and retention are things that can be improved with not just themselves, but as a true collaborative team effort.

  2. Hey Charles – well written as usual. I particularly like your definition;Talent assessment is the science of measuring people in order to predict their ability to drive business results. It represents the intersection of people and metrics.
    Have a call tomorrow where that will come very handy. Hope you are well. Let’s catch up soon.

  3. Good article.
    HR needs to learn to speak the language of the C-Suite to earn a seat at the table and teach the C-level how to think “people” and talent. Too often the strategy for talent acquisition is delegated to recruiters alone without the support and required understanding from the “C”- level required for success.
    Jason Kipps
    Director, Canada
    Twitter: @jay_kipps

  4. I disagree on a few points. While some high profile CEOs might be supportive of, and diving into talent assessment as a crucial aspect of their business, most I’m aware of barely pay attention to it. To the extent their HR deparments are building metrics, the concentration is on old school stuff like time to fill, and the overall view is that employees are a cost, not an investment/revenue generation aspect of the company, which is what they actually are.

    Also, most CEOs don’t even know what an employment brand is. When they do, they usually approach it as a PR issue with little if any thought given to reality. They will bill their company as X, when according to every review site it’s actually Y, or Z, or anything other than X. The branding gap at most companies is so astounding it makes the Grand Canyon look like a crack in the sidewalk.

    Engagement is the new buzzword of HR, and the new euphemism for getting more work out of people for no more money or comp of any kind. Nor has anyone in any prominent HR position in the industry yet floated the idea that, with the lowest amount of off time in the developed world, the most hours worked on average, real and nominal salaries stagnant or falling, and benefits and other non monetary comp stagnant or falling too, that people might be too god damn engaged and burning out. A real engagement strategy will focus first and foremost on the fact that employment is a mutual exchange in which the employer is already getting the better deal by such a wide margin that asking for more at this point is ridiculous.

    The focus is on ‘fit’ because it’s vague and undefinable, and therefore the perfect reason for taking the safe bet, not hiring someone, assuming a dodged bullet without facts in evidence for that, and so the manager getting to avoid making a decision for which s/he will be accountable for a while longer. Since ERP systems rarely quantify the cost of a vacancy or turnover, the manager is lauded for being picky or demanding, even when they’re just being an idiot and avoiding having to make a decision.

    “Ask any CEO about talent and they will definitely tell you that it’s critical to their company’s success. But how many CEOs are really raising the bar for how the organization attracts, hires, and develops talent?”

    Most aren’t. They’re just throwing more crap at the wall to see what sticks. They are not questioning, much less actually dropping, old school and totally ineffective talent assessment tools like credit scores and drug testing, or interviews with people who have never been trained to interview, much less manage, nor are the replacing them with research based assessments that try to predict performance better than the typical 65% produced these days.

    Most of us have tried to bring talent to the forefront in the orgs we’ve worked for. We usually get quashed by CEOs and other senior management who apparently think people should be flocking to work for them at any price, despite market realities and despite employee treatment that ranges from bad to horrendous and potentially illegal. To truly lead a talent assessment charge we don’t need gimmick assessments or buzz words. We need ERP systems that quantify the bottom line impact of talent, the cost of vacancies and turnover, and then a solid foundation of research for assessing talent in a predictive manner with some better success rate than 65%, which most CEOs and senior leaders would ignore, because most of that research would place the blame for the costs of turnover and vacancies directly at the feet of their out dated and moronic, and often abusive policies.

  5. This occurs in public institutions as well. No appreciation or knowledge of what functions the staff provides or is required to provide to implement the institutions purpose.

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