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Avoiding Employee Flight Risk: Organizations Use Data to Guide Investments in Workforce Capacity

Ruth Wright, Associate Director, Human Resources Management Research
Allison Cowan, Senior Research Associate, Leadership and Human Resources Research
August 20, 2010

Canadian organizations face heightened “flight risk” as employees evaluate new opportunities in a recovering economy. The recession gave employers only a brief reprieve from looming workforce shortages and an ongoing competition for talent. A growing economy and an aging workforce make it just a matter of time before pressure in labour markets begins to build again.

These human capital challenges mean that employers must make difficult decisions about how they best invest scarce resources in people. Thus, organizations need data about the quality and capacity of their workforce. They also require a better understanding of practices and initiatives that build talent most effectively.

The recession gave employers only a brief reprieve from looming workforce shortages and an ongoing competition for talent.

The Conference Board of Canada’s second human resources (HR) trends and metrics survey provides wide-ranging data and measures to support strategic workforce planning and talent management.

Use of Measures More Sophisticated

Based on responses from 167 HR leaders, the survey found that a growing number of organizations—43 per cent—have formal systems for collecting HR metrics and talent management data.

About one-quarter reported using metrics and analytics to link their HR investment with business outcomes, compared with only 15 per cent in the Conference Board’s 2006 report. More than two-thirds of organizations reported that their talent management practices are aligned and integrated with overall business strategy, compared with just one-third in the previous survey.

Yet, organizations are still far more likely to use measures to assess the HR function than to analyze the return on investment in their people.

Measuring Talent Management

The report, Valuing Your Talent: Human Resources Trends and Metrics, suggests metrics that can be used to analyze returns on investment in a range of talent management practices. These include talent acquisition, development, rewards, leadership, and engagement. For instance, organizations could compile the following.

  • A demographic snapshot of the workforce by age, gender, and diversity. In the responding organizations, close to half of the collective workforce is over the age of 45. Senior executives are younger in the private sector, but there is more diversity among executives in the public sector.
  • Leadership “bench strength” indicators. On average, organizations have successors for one-half of their senior executive positions and 55 per cent of other executive (not senior management team) positions. The latter result is an improvement over the 40 per cent reported in the 2006 findings.
  • Insights on effectiveness of recruitment. Responding organizations typically collect data on “time to fill” jobs and “cost per hire.” However, leading organizations go a step further and assess the quality of hire.

Ruth Wright
Ruth Wright
Associate Director
Human Resources Management Research
Valuing Your Talent: Human Resources Trends and Metrics
Allison Cowan Allison Cowan
Senior Research Associate
Leadership and Human Resources Research

Related Publications
Compensation Outlook 2010: Matching Strategy to the New Economic Reality
Benefits Benchmarking 2009: Balancing Competitiveness and Cost

Related Networks
Council of Human Resource Executives
Compensation Research Centre