Why isn’t talent management built on data?

ByHanover Team
Posting date: 21 June 2023

Moneyball and leadership: winning against the odds

The film Moneyball depicts characters who, against all odds, take a data-driven approach to putting together a competitive baseball team on a shoestring budget. And, of course, the team they put together wins.


If data can be such a game-changer in baseball, where a bat, a ball, and athletic prowess are the playing cards, how much more impactful could it be in business, where the stakes are infinitely higher? 


It certainly gives you pause for thought, but many businesses still don't consistently leverage data in making critical talent management decisions.

The traditional approach to leadership hiring

Historically, companies have made leadership recruitment and talent decisions based on things like past performance, gut feel and existing relationships. This approach, though seemingly intuitive, falls short on several fronts. A Harvard Business Review article highlights the limitations of the typical "intuition-based approach" and emphasises the need for an evidence-based decision-making process.


One limitation of these traditional methods of hiring and promoting into senior leadership positions is that they are prone to conscious and unconscious bias. According to one study, 85-97% of professionals rely to some degree on intuition or a mental synthesis of information when making assessments of people. 


Unreliable management decisions can easily become the norm, and the detrimental consequences of such bias ripple through the organisation, affecting engagement, productivity and profitability. Combined, these factors can risk an increased staff churn, affecting retention rates and overall work culture.


Despite the evidence against this approach - an HBR analysis found that a simple equation outperforms human decisions in applicant evaluations by at least 25% - many companies persist in it due to the perceived complexity of data-driven methodologies or plain inertia.

The case for data-driven talent management at senior level

Embracing a data-driven approach in the recruitment and talent management process offers multiple benefits. At its core, it eliminates the bias and internal politics that can influence promotions or new hires. This fosters an environment of fairness and transparency, leading to better decisions and better staff morale. It also provides impartial feedback, allowing companies to make informed, objective decisions, and, in turn, this also supports robust succession planning.


An essential aspect of data-driven recruitment is its role in fostering a diverse workforce, especially at leadership levels. As organisations globally strive to build more inclusive work cultures, data can serve as an impartial arbitrator, ensuring that all potential candidates are assessed on their merits rather than any discriminatory factors. With a diverse leadership team at the top, the trickle down effect can be enormous.


But data-driven decisions do more than just assess current performance or look at a snapshot of where an individual is right now. They predict potential capability as well as simply evaluating current capability. This aspect is especially crucial when promoting internally, as it ensures the best fit for a role based on the employee's potential to grow, adapt and deliver results.

How Hanover can help

At Hanover, we understand the critical need for data-driven decision-making in the talent management process. We conduct comprehensive leadership assessments covering both personality and behaviour because we know that leadership, though seemingly intangible, can be quantified into measurable data.


This process involves defining the behaviours that are most critical for a role or leadership level. We then take individuals through a psychometric evaluation followed by an in-depth  interview. This enables us to look for consistent evidence of the key behaviours and assess an individual’s leadership capability and potential.


Adopting this rigorous, data-driven approach helps businesses quantify performance and potential, manage risk and engage people in a meaningful way. It empowers businesses to make the right decisions and build stronger, more effective leadership teams.


I believe that companies must shift from an intuition-based approach to a data-driven one for leadership hires and other critical talent decisions. And just as in Moneyball, we can use data to get powerful insights that lead to more effective and robust decision-making, particularly when the stakes are high. 

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