What Is Talent, and How Do We Measure It?

Apr 25, 2006

Managers ask us to bring them the best talent we can find. We say that quality of hire is our most important metric and that it is tied directly to the kind of talent we can attract. Yet while we bandy about the term “talent,” we have no real definition of it. For many recruiters, talent is synonymous with “anyone who says yes.” For others, it is any hire that stays for six months or a year. And for still others, it is any hire that a manager finds satisfactory.

I think we should define “talent” as those employees whose contributions are vital to our ability to produce our product or deliver our service. Excellent talent then refers to those who produce an above-average amount of our product and poor talent means those who do much less than average. Sports teams measure talent this way all the time. When a team manager speaks of quality talent, he is talking about those individuals who make the most points, block the other team most often, or who the fans and players identify as essential for success. Almost all organizations rate and rank their sales forces. They know that above-average performers generate more sales than average performers. McKinsey, in its Talent War 2000 study, has also documented this. Those surveyed by McKinsey were asked to assess how much more a high-performer in a P&L position generates than a mid-performer. They estimated the difference at 49 percent, and they said that the high-performer should be paid 42 percent more.

When you think about what 49 percent means, it is astounding. That means that a high-performer brings in almost twice as much business as an average-performer or produces twice as much. If you, as a recruiter, could identify potential high-performers, how much more respect would you get? How much better would your reputation be? Defining quality of hire is not the hardest part, though. You should be able to sit down with hiring managers and get some agreement on quantifiable performance measures for most positions. For recruiters it could be simply the time it takes to present qualified candidates or it could be the number of candidates that you present who get an offer. Both measures are easy to track and directly measure your ability to source and qualify candidates and sell those candidates to the hiring manager. Here are four things you could do to improve the quality of hires you bring in and thereby clearly define what good talent looks like.

  1. Together with hiring managers, work to identify what characterizes a high performer. Is it quantity of output, amount of time spent, number of defects created, or is it the amount of revenue their group has generated? This is hard work and there aren’t a lot of benchmarks to go by, but we all know more or less who contributes the most to our organizations. Our task is to quantify that.
  2. Once you have agreed on some quantitative measures, find the people in each function who are in the top quarter of performers. Spend time with them and develop profiles for each of the high-performers. Try to find out two things: what one or two characteristics distinguish them from poorer performers and what, if anything, do they have in common with each other. These could be competencies, activities they engage in, attitudes or philosophies, education, or work methods or processes. You can then look at prospective candidates to see if they have any of the distinguishing characteristics or anything in common with the high performers. I think we all spend too much time defining and screening for factors that are not indicative of high performance. It is rare that having a certain college degree or grade point average or that having a certain defined amount of experience is going to be a real discriminator of high performance. It is more likely to be something much more subtle and often a combination of factors that makes the real difference. It is finding these that will give you an edge in finding the best.
  3. Find out where these high performers are located. This is necessary so that you can target your sourcing and advertising toward them. To do this well requires a focus on competitive intelligence. Competitive intelligence is well-known in the industrial world and many companies employ competitive intelligence experts to ferret our information about production capacities and equipment installations at competitors. The same principles apply to recruiting. You can gather information from competitors and from vendors and suppliers about where good people may be located. You can certainly use your employee referral program for the same purpose. Every time you actually find a person with the right profile and skill set, ask them where more people like them are. One of the most useful ways to collect information is to ask incoming new hires for referrals and for general information.
  4. Find out what will entice these potential high performers to your organization. Through discussions with the high performers you currently have, it should be possible to put together attractive recruiting messages. By focusing on what attracts high-performers, you will also discourage those who are not so good. For example, one organization learned that its best computer engineers tended to all be science fiction and fantasy fans. In fact, most of the best performers were avid readers of science fiction and loved to attend sci-fi/fantasy movies. So the organization invested heavily in putting recruiting messages in the pre-movie trailers that are shown in theaters. This led to a 25 percent increase in the number of highly qualified applicants at a very low overall cost. It also significantly decreased the number of unqualified applicants.

The key to successfully bringing in the best talent is, first of all, to define what it is and secondly, to create quantitative measures so that you can determine your success rate. By refining definitions and measures and by improving where you source and what you say to entice the right people, you will have developed a powerful recruiting machine.

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