roi of talent 0410
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The ROI of TalentLarry Sternberg
April 15, 2010
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Private and Confidential
All materials constituting this presentation (the “Materials”) are confidential and proprietary property solely owned and copyrighted by Talent Plus ® , Inc. (“Talent
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permission of Talent Plus.
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Dr. Hall’s Dream
“What would the world be like if everybody did
what they were good at and enjoyed?”
+ Dr. William E. Hall
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ROI?
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Talent?
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Gabriel García Márquez
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Shakira
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Fernando Botero
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Camilo Villegas
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Juanes
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Sofía Vergara
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Fame is not Talent
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Carlos Valderama
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(Talent + F) x I = G
Definition of Talent
A person’s capacity to achieve near-perfectperformance.
A natural ability not acquired through effort.
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Talent Advantage ® – Construction Management
Sales Productivity
Year OneIncrease of $168,740 per person inthe first year alone. Total revenueincrease: $2.5 million.
Year TwoTalented people outsold others by$514,800 per person.
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Talent Advantage ® – Financial Institution
New Hire and Retention Turnover
A financial institution reduced rotation in their check-processing area.
+ New-hire support staff rotation decreased by 38percent in a 12-month period.
+ Based on a cost estimate of $10,000 per employee (or anaverage of six months’salary), a savings of $220,000annually was realized.
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Talent Advantage ® – Automotive
Sales Productivity
Top sales consultants sold nearlythree times the number of vehiclesduring one year compared to allsales consultants.
GROSS PROFIT ANALYSISTop sales consultants sell an averageof 133 more vehicles per year than theaverage of all sales consultants.
*Employed 12 months or longer
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Talent Advantage ® – Financial Institution
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10% increase in sales exists betweenhighly talented sales people andothers
If all salespeople hire been highlytalented, this client could have addedan additional $1 million U.S. dollars inrevenue.
While decreasing the size of the sales team this past year (from 1,600 to 800)they have seen an increase in productivity.
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Talent SpeaksSM
– Manufacturing Client
Reduces Rotation
Manufacturing company has been able to save $6.5 million dollars
through the reduction of turnover and by selecting highly productive
employees.
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Talent Advantage ® – Retail
DECREASED ROTATIONSales associates: reduced 10%(1,000 fewer hires)District managers: decreased 17%(20 fewer hires).
FINANCIAL IMPACTRotation savings: $850,000 plus theIncreased sales: $5,000,000Total gain of $5.8 million in just onefiscal year.
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Talent Advantage ® – Health Care
Employee Performance
NEW HIRES’ QUALITY IMPROVEMENT SURVEY SCORESThis company found that scores previously well below the 65 percent markrose as high as 88 percent in just six months.
Work Performance Expectations
88% 87%82%
88%87%82%
88%
63%63%62%
0%
25%
50%
75%
100%
Month 1
(N=18)
Month 2
(N=19)
Month 3
(N=34)
Month 4
(N=34)
Month 5
(N=60)
Month 6
(N=32)
Month 7
(N=35)
Month 8
(N=29)
Month 9
(N=37)
Month 10
(N=34)
3
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Talent Advantage ® – Hospitality
Employee Performance
DECREASED CUSTOMER COMPLAINTS
25.0%
7.0%
4.9%
3.0%
1.0%
0%
10%
20%
30%
Year 0 Year 4 Year 5 Year 7 Year 9
3
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Talent Advantage ® – Health Care
Employee Efficiency and Effectiveness
QUALITY PATIENT HOURS vs. NON-VALUE-ADDED TIME
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Talent Advantage ® – Hospitality
Talented Culture Leads to Satisfaction
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GUEST SATISFACTIONWhen this company focused on selectinghighly talented employees, guestsatisfaction scores of this particular hotelincreased from 88 to 95 percent over sevenyears.
EMPLOYEE ENGAGEMENTThis hotel property also sawincreases in employeeengagement survey scores.
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How do I get this ROI?
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Lucy, Lucy, Lucy!
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Economic Value Add (EVA)
By Superior Performance
Hunter, J. E., F. L. Schmidt & M. K. Judiesch. “Individual Differences in Output Variability as a Function of Job Complexity.”
Journal of Applied Psychology 75, 1990,
Low Job Complexity =
119% Increased
Productivity
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Economic Value Add (EVA)
By Superior Performance
Hunter, J. E., F. L. Schmidt & M. K. Judiesch. “Individual Differences in Output Variability as a Function of Job Complexity.”
Journal of Applied Psychology 75, 1990,
Moderate Job
Complexity =
132% IncreasedProductivity
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Economic Value Add (EVA)
By Superior Performance
Hunter, J. E., F. L. Schmidt & M. K. Judiesch. “Individual Differences in Output Variability as a Function of Job Complexity.”
Journal of Applied Psychology 75, 1990,
High Job Complexity =
148% Increased
Productivity
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Talent and Productivity
Meta Analysis
Top 1% Productivity vs. Average Productivity
Top 1% Productivity vs. Bottom 1% Productivity
Low Complexity The top performs _____% better than the average.
Medium Complexity The top performs _____% better than the average.
High Complexity The top performs _____% better than the average.
Low Complexity The top performs _____% better than the bottom.
Medium Complexity The top performs _____% better than the bottom.
High Complexity
52
85
127
300
1,200
Too high to measure
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The Best Performer I Have Ever Known
Describe the best performer you have ever known. Useyour own adjectives, phrases, or other descriptions thatfit your perception as to why they are the best.1.
2.
3.4.
5.
6.
7.
8.9.
10.
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Talent Plus ® Growth Formula
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Understand the Talents
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Cast in Right Fit
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Invest
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Dr. Hall’s Dream
“What would the world be like if everybody did
what they were good at and enjoyed?”
+ Dr. William E. Hall
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Human Investment Planning
Rank the people you manage startingwith your best performer first and
concluding with your least effective
performer.
Rank the people you manage startingwith the person with whom you spend the
most individual (one-on-one) time and
concluding with the person with whom
you spend the least of your time.
Managing means making the strengths of people effective. Neither the welfare approach, nor the personnelmanagement approach, nor the control-and-firefighting approach address themselves to strength, however.
People are weak; most of us are pitifully weak. People cause problems, require procedures, create chores,
and people are a cost and a potential “threat.” But these are not the reason why people are employed. The
reason is their strength and their capacity to perform.
Peter Drucker, “Management: Tasks, Responsibilities, Practices,” 1973
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Relationship
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Build the Strengths,
Make the Weaknesses Irrelevant
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Jose Feliciano
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Thomas Edison
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Stephen Hawking
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Franklin D. Roosevelt
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Michael Phelps
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The Secret to Retention
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The Secret to Retention
Meet their needsAsk them!
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The Two Most Important Questions
Can I?Do I want to?
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What about the Millennials?
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Make a Difference in Their Lives
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Life’s Board of Directors
As chairperson of my life’sboard of directors, who are
the board members who sit
with me?
Around the table, write theinitials/names of your life’s
board members whose lives
have influenced you and
whose influence continues to
be reflected in your everydaylife.
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Summary
Hold out for highly talented peoplePut them in the right fit for their strengths
Grow the strengths, make the weaknesses
irrelevantMeet their needs
Make a difference in their lives