The Talent Management Stats You Need to Know

by Debbie Shotwell | Posted | Industry Buzz

The Talent Management Stats You Need to Know

Welcome to the fourth and final post in our "Making the Business Case for Talent Management" blog series! This week, we highlight how talent management drives better business performance. For those of you who are new to the series, you won't want to miss our previous posts:

Part 1: Think Like a CEO: Tips for Getting Your Talent Initiatives Approved

Part 2: What Keeps the C-Suite Up at Night: Focusing on the Priorities that Matter

Part 3: 3 Ways HR Can Win the Keys to the C-Suite

Imagine this: you've just pitched your proposal for a great new employee referral program or revamp of your performance management process and the CEO says, "It sounds fantastic, but it seems more like a down-the-road opportunity. We've got other more pressing needs." Executives - as many HR leaders have experienced - often push proposed talent initiatives to the back burner in favor of what are perceived to be more immediate (i.e. revenue-impacting) investments. So what can you do to counteract this potential resistance when making the business case for your proposed talent program?

In today's business environment, talent management isn't a nice-to-have; it's a requirement. According to research from Bersin & Associates, companies with highly effective talent management strategies, on average, achieve 26 percent higher revenue per employee and 41 percent lower turnover among high-performing employees. When making the case for your talent initiative, it's important to communicate both the financial impact and the urgency of investing in your talent program. Highlighting the financial impact of not investing in your talent initiative can provide a compelling perspective as well. With every day that goes by without an effective, integrated talent management strategy, an organization actually loses money. There is, in fact, a tangible cost to ignoring or failing to make ongoing investments in your talent initiatives.

Below are more eye-opening statistics that can help strengthen the business case for your own proposed talent initiatives. These stats highlight the business impact of investing in each of these three HR functional areas: recruiting; onboarding and learning; and performance management.


  • The U.S. Department of Labor estimates that the average cost of a bad hiring decision can equal 30 percent of the individual's first-year potential earnings. (Source)
  • As much as 80 percent of employee turnover is due to bad hiring decisions (Source), and turnover costs 150 percent of the salary of the employee who needs to be replaced. For high level or highly specialized employees, that figure jumps to 400%. (Source)
  • 69 percent of employers reported that their companies have been adversely affected by a bad hire in the past year, with 41 percent of those businesses estimating the cost to be over $25,000, and 24 percent reporting a bad hire cost them more than $50,000. (Source)

Onboarding & Learning

  • In a study by Bersin, companies with high-impact learning programs generated, on average, three times higher profit growth than their peers. (Source)
  • Companies that invest $1,500 on training per employee see an average of 24 percent higher gross profit margins and 218 percent higher revenue per employee than companies who invest less. (Source)
  • In a study of more than 3,100 U.S. workplaces, a 10 percent increase in educational development produced an 8.6 percent gain in productivity. (Source)
  • Lost productivity due to new hire learning curves can cost from 1 percent to 2.5 percent of total business revenues. (Source)
  • Increasing employee engagement investments by 10 percent can increase profits by $2,400 per employee, per year. (Source)

Performance Management

  • Over an 11-year time frame, companies that had a performance management culture grew net income by 756 percent, versus a 1 percent growth over the same period for those that did not. (Source)
  • Departments with managers who receive feedback on their strengths achieve 8.9 percent greater profitability. (Source)
  • CFOs spend at least 40 percent of their time on business performance management, but they estimate that 30 percent of their company's performance potential is lost due to ineffective performance management processes and behaviors. (Source)
  • Companies that implement regular employee feedback have turnover rates that are 14.9 percent lower than for employees who receive no feedback. (Source)

The numbers don't lie: effective talent management simply makes cold, hard business sense. Since executives often persist in viewing HR as a cost center, it's critical for talent leaders to reframe their perspective by clearly conveying the proven, substantial impact of talent management on business performance. By including projected ROI - and perhaps even some of these statistics above - when pitching your proposed talent programs, you will be well on your way to making a more persuasive business case to the C-suite.

Making the Business Case for Talent Management Ebook

It\'s everything you need to get executive buy-in and ongoing support for your proposed talent initiatives.

Free Ebook
Cover of the book
Cover of the book

Making the Business Case for Talent Management Ebook

It\'s everything you need to get executive buy-in and ongoing support for your proposed talent initiatives.

Free Ebook

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