A recent study by The Boston Consulting Group and the World Federation of People Management Associations (WFPMA) demonstrated the relationship between people management capabilities and financial performance (Realizing the Value of People Management). The study found that the share price of the Fortune’s “100 Best Companies to Work For” outperformed the S&P 500 group of companies by 99% over a ten-year period. Companies rated high on a series of talent management practices achieved up to:

  • 3.5 times the revenue growth
  • 2.1 times the average profit margin

Out of twenty-two talent management practice areas, the top six were found to be:

The Boston Consulting Group and the World Federation of People Management Associations (WFPMA)
Source: The Boston Consulting Group and the World Federation of People Management Associations (WFPMA)

Within these top practice areas, specific actions were identified as being more common in high-performing companies. They included:

  • The existence of a leadership model and the use of it to make promotion decisions
  • Leaders’ reward and careers dependent on their people development efforts
  • Programs for high potentials and for developing emerging talent
  • Retention driven through personal development opportunities
  • Global standards applied in performance management