When building a portfolio, especially if you were using financial planning, you’re able to use predictive analysis, forecasting, and research to help you make decisions and then watch the progress over time using data tools.

I will admit that organizations are getting there very quickly, and we are starting to turn the corner from looking backwards to having predictive analysis that allows us to look forward. The ability to integrate financial data directly into talent acquisition and talent management data is also critical step, and more talent acquisition leadership needs to make this the basis of their decisions, And reduce the number of decisions that react to the needs of the customer (which consequently happens when you do predictive analysis and decision-making)

Another element that I would add to having a talent portfolio, is the ability to have experimentation within the portfolio. Some call that risk, however having a element of the portfolio that allows for greater risk and greater reward is very traditional in a financial plan. It’s important to have that in the portfolio and be able to explain it, track it, and kill it if it is not giving the results based on certain milestones and timelines.

The most obvious point is that people are far more complex than equities and other financial securities. If leaders want to make better decisions about their talent portfolio, then there must be a discipline to data collection and analytics that is greater than or equal to that collected in financial services. I think that we see this with the apparent resurgence of formal assessments applied in the workplace. Even so, it also raises the question of the capability and motivation of HR professionals and hiring managers alike to understand this data and to use it for better decision making.

Second, as you state – timing is everything, and those that try to time the market do worse over time. Looking at time from a slightly different perspective, the time horizon of the HR professional, hiring manager, and the ‘equity’ must be aligned from the very beginning. Otherwise, initiatives will be taken and decisions will be made that will cause a structural problem in the talent portfolio and lead to suboptimal performance. These time horizons (as well as interests and values of those involved) are often opaque and unless the organization has a culture that supports the overall talent portfolio strategy, HR leaders will suffer the same fate as most portfolio managers in that they are not able to consistently beat “Mr. Market.”

Finally, and similar to the first point, there is a stark difference that HR professionals face when compared to portfolio managers/financial planners. Those professionals know the impact of securities that they failed to buy and add to their portfolios. If they decided buy RIM, and not buy Apple, for example – the impact is clear and he/she could potentially be out of a job. To date, HR professionals don’t have the visibility of how the talent that they didn’t hire actually performs at another organization. Even if they did, it is not captured broadly enough to get critical information. And if it were the case that they failed to hire a “market out-performer”……no one’s job is on the line.