Tallying Talent Pool’s Return on Investment
By K.C. Neel -- Multichannel News, 10/21/2007 8:00:00 PM
Revenue growth may be stabilizing after years of double-digit expansion, but cable still does a better job than other industries when it comes to leveraging its talent pool to maximize financial results.
Launched last year by the Cable Television Human Resources Association and conducted by Saratoga, a PricewaterhouseCoopers subsidiary, the latest Human Metrics Survey compared cable to a database of 300 companies across 11 different business industries.
“This type of survey allows companies to take qualitative issues and give them a quantitative perspective,” said Shebani Patel, a Saratoga manager. “Human resource departments across the country are starting to do a better job of using numbers to manage the workplace and themselves. It’s different things for different companies, but it’s all good data to have.”
The problem is that a lot of companies don’t track many of the data points presented in the CTHRA survey, said Lisa Chang, senior vice president of human resources for The Weather Channel and chairman of CTHRA’s human metrics survey committee. Some companies either don’t know where to find the data or they don’t have the resources to gather and analyze it.
To that end, CTHRA is developing programs that will teach companies where and how to gather the data and what can be done with the information. The organization will hold a special session during its Oct. 23 daylong symposium to discuss the human metrics survey.
“We’re learning that a lot of companies don’t know what to do with the data, and that’s why we’re having a special session at the symposium on this,” CTHRA president Pam Williams said.
This year, the survey found that revenue growth among participating companies is stabilizing and overall revenue and profits dipped year over year. Compared to the Saratoga General Industry index, though, cable companies have significantly higher revenue per full-time employee (FTE) and higher profit per FTE.
The survey also showed that the CTHRA members’ labor costs — the relationship between labor dollars invested and revenue generated — increased overall by approximately 17.8% over 2005 to 17.2%, much lower than the general industry average of 29.8%, according to Chang.
CTHRA and Saratoga officials believe the numbers are rising for the cable industry because labor costs continue to grow, while revenue has stabilized.
“As an industry, we tend to have higher returns on investment and higher margins than other industries and that has to do with our business models. We are more a goods and service industry than widget makers, and that affects our numbers,” Chang said.
Chang has already seen firsthand the benefits of participating in the human metrics survey. Last year’s analysis showed that both the industry and The Weather Channel were below average when it came to spending on employee learning and training.
“We saw last year’s number and it was inconsistent with our company philosophy,” Chang said. “So we made some significant changes in our learning and development programs.”
Overall, CTHRA participants increased their investments in learning and development year-over-year by approximately 20%. But those companies still allocate less to learning and development as a percentage of operating expenses than the Saratoga General Industry index.
Turnover is down among participating companies, to 16.6% this year as compared to 18.1% a year ago. Chang attributed the decrease to more internal hiring practices. “We’re getting smarter,” she said. “It’s not about people acquisition so much these days as it is about people retention, by focusing on things like training and career management.” Still, employee turnover remained higher than the Saratoga General Industry index of 14%.
The average number of employees that cable industry managers oversee decreased from 6.6 employees per manager in 2005 to six employees per manager in 2006. When compared to the Saratoga General Industry median of 7.8 employees per manager that indicates that participating cable companies have “thicker” management structures than other industries.
Sixteen companies participated in the 2007 survey, up from last year’s 15. This year’s participants include returnees Advance Newhouse Communications, A&E Television Networks, Cablevision Systems, Charter Communications, Comcast, Cox Communications, C-SPAN, Discovery Communications, ESPN, Scientific Atlanta, The Scripps Networks, The Weather Channel, Time Warner Cable and Turner Broadcasting System, as well as first-timers Hubbard Broadcasting and WildBlue Communications.
“Our biggest challenge is convincing companies that they should participate in [the Human Metrics survey],” Chang said.
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