The State of Talent Optimization
500+ executives reveal nearly all companies that practice talent optimization were able to prevent major financial loss during a tumultuous business year.
value of talent optimization
In February of 2021, The Predictive Index surveyed 515 CEOs, presidents, and SVPs from 15+ industries. The goal was to understand how companies that practice talent optimization—the discipline of aligning talent and business strategies—fared in one of the most tumultuous business years on record.
As you’ll see, talent optimization is a differentiator. After reading this report, you’ll understand how talent optimization can help you achieve positive business outcomes, even amid uncertainty.
“Your eyes and your gut
will fail you.”
– Billy Beane, EVP of The Oakland Athletics
What is a “talent
For the purposes of this report, we used the term “talent optimized company” to describe companies that:
Have a talent strategy
Have a business strategy
Align their talent and business strategies
It’s important to note that even though the word “optimized” indicates completion, talent optimization is an ongoing practice—not something you do once and check off your list.
Despite unparalleled adversity, most talent optimized companies reached their goals.
87% of talent optimized companies surpassed or met their goals in the past year.
Asked to describe their company’s performance during a business period like no other, the majority of respondents from talent optimized companies confirmed they still accomplished what they set out to do—and then some.
Which of the following best describes your company’s performance over the past year?
Talent optimized companies
We surpassed our goals
We met our goals
We fell short of our goals
Talent optimization helped prevent major losses.
93% of talent optimized companies were able to prevent major financial loss as compared to 76% of peers.
Many talent optimized companies experienced major shifts last year: reductions in force, indefinite remote work, restructured teams, etc. But when it came to their bottom lines, talent optimized companies weathered the storm better than companies without aligned business and talent strategies.
Did your company manage to prevent any major financial loss?
More companies now have a talent strategy.
55% of respondents have a talent strategy in place.
The study began by presenting the executive panel with a list of statements. We wanted
to understand how many companies had a talent strategy in place. More than 55% of
respondents have a talent strategy—up from 36% a year ago.
Which of the following statements are true?
76% We have a business strategy.
66% We have a financial plan.
55% We have a talent strategy.
34% We have a well-documented talent strategy that is understood throughout the organization.
“Let the storms show your mastery.”
– Mike Zani, CEO at The Predictive Index
Fewer talent optimized companies had to do a reduction in force (RIF) last year.
Of the reductions in force reported, 78% were from non-talent optimized companies.
On average, 62% of companies had to lay-off employees to survive the economic downturn. Of the companies that had a RIF, only 22% practiced talent optimization.
Did your company have a reduction in force last year?
Burnout is real, and managers are at highest risk.
32% of respondents listed managers as the group experiencing the highest level of burnout.
Respondents said the group that experienced the most burnout over the past year was the manager cohort (32%). Whether or not companies are practicing talent optimization, the toll the past year took on management is a serious concern, as they’re on the ground motivating the troops.
Which group experienced the highest level of burnout in 2020?
Even though managers are the most burnt out, individual contributors are the least engaged.
38% of respondents considered individual contributors to have the lowest levels of engagement.
As noted previously, managers were the most burnt out group. Managers are key to the engagement of individual contributors, which may help explain why ICs were deemed the least engaged group.