- Talent Management
In the small business environment, you’re always looking for ways to save money. Unfortunately, this can create a kind of myopic way of seeing things that causes you to miss out on opportunities with the potential to take your business to the next level. Take, for example, the arrival of “big data” to talent management and human resources. When people running small businesses see the words big data, their minds often make the unconscious mistake of assuming big data must be for big companies. That’s why I sometimes prefer to use a different phrase such as technology-driven talent management or data-driven talent management.
If you’re not making use of data-driven talent management tools in your small business, you’re missing out on one of the quickest ways to ensure you small business is on the pathway to becoming a bigger business. It’s as simple as that. More specifically, here are the advantages enjoyed by companies that invest in strategy-driven integrated talent management functions (source):
Those are some eyebrow-raising figures that should make any small business sit up and take notice. And here’s the thing: If you as a small business take the leap of faith to embrace data, you will immediately and automatically be on the cutting edge. Why? Take a look at these facts (source):
But the potential for big returns exist for those willing to take the plunge. Let’s say your small business depends upon a successful team of salespeople. The company decides it wants to grow its sales by a particular amount or percentage. Now you have to figure out how many more sales people you’ll need to hire to meet that goal. You could just use a spreadsheet to calculate the average daily conversions of your current team to figure out how many more salespeople you need to hire to make the new numbers. But there’s a whole lot of nuance missing from such a simple approach.
No doubt some of your salespeople are better than others. What’s the magic formula that goes into your top performers? That’s what you want to replicate in any new hires, right? Hiring a bunch of mediocre salespeople will cost you a whole lot more than hiring a few superstars. If you’ve got the right data-driven talent management tools, you can easily figure all this out with a few keystrokes. With the data collected and analyzed, you can pinpoint what it is that makes for peak performance among your best salespeople and screen for it in your next round of hires.
There are all kinds of key performance metrics (KPIs) that your small business could be tracking around its own talent management functions with the right software tools. Software Advice did it’s own study on this, looking at the following talent management KPIs (source):
In every case, companies using data analytics software were doing far better on all these KPIs than firms who have failed to embrace data. Among small businesses, fully two-thirds have yet to start using data analytics in their talent management and HR functions. And of course you can guess the primary reason cited for this resistance – lack of budget – except I don’t think that’s the way to phrase it. I would call it a failure to invest wisely in what will give you the best bang for your buck. I would also challenge these businesses to admit that in many cases, the budget issue is really just their own preconceived notion that they can’t afford it. Most haven’t even really checked it out. My advice to any small business would be to buck the trends by embracing data-driven talent management and finding a solution that meets your needs – and it may not cost you nearly as much as you think.