By Mike McCue, Editor-in-Chief, Sales & Marketing Management
As the holder of a Bachelor's degree in creative writing, I'm hardly an expert on measurements and mathematical formulas. When scientists and mathematicians can't sleep, they count sheep; I make up exotic storylines about how all of the sheep ended up in a meadow together.
ROI calculations have always fascinated me, but I’ve had to take the word of others when it comes to their accuracy and reliability. While that still holds true, I recently became aware of a metric that truly intrigues me: the Workforce Measurement Model, also known as “Return on Talent.” Jointly developed by the Forum for People Performance Management and Measurement and the Medill School’s Department of Integrated Marketing at Northwestern University, the metric attempts to express the contribution of a company’s workforce to its bottom line. Happily, it’s not a nebulous, touchy-feely model that will have no credibility in the finance department; the metric uses existing data that are compatible with other financial reporting tools.
According to Michelle Smith, president of the FPPMM, the Workforce Measurement Model is the result of a detailed analysis of a number of highly successful companies that had incorporated components of it into their current business practices. According to an August 27 press release, Smith said it is “a way to blend existing measurable attributes into a form that can be expressed alongside financial data to produce a Return on Talent that can then be compared across companies within an industry and even across industries.”
Of course, just because someone says they can measure and assign a numerical value to a human characteristic doesn’t mean that CFOs and other executives will accept the metric without question, but I like the trend. As an editor and former marketing director, I could always see where my team and I were listed as a “cost center” on the P&Ls, but we were never listed anywhere as an asset—just an expense. It’s a bummer to always be “quantified” that way.
I already disclosed that it will take people more number-friendly than me to determine how accurate and effective this “Return on Talent” metric actually is, so if you’re one of those people, check out the white paper for yourself: “The Workforce Model Every Organization Should Use,” http://www.performanceforum.org/White_Papers.21.0.html.
Personally, there’s only one measurement I need to decide how accurate and effective the tool is: The more valuable it says I am, the more accurate and effective it is!