Unlocking Profitable Revenue Growth Through Talent Management
Five core functions of effective talent management
Unlocking sustainable revenue growth in healthcare now requires more than a well-defined business strategy, new product developments and a robust commercial engagement model. It demands a holistic talent management approach. Just as a skilled surgeon’s precision can transform lives, nurturing and empowering your commercial teams can pave the way for accelerating revenue growth and improved margins.
Alexander Group recently conducted a 2023 Commercial Talent Survey where over 250 companies across industries, including over 60 healthcare organizations, shared their talent management practices. The study analyzed what is prevalent in the market and how leading companies are differentiating themselves. Overall, profitable growth leaders have more productive and efficient workforces with:
- +9% more revenue growth
- +13pts higher EBIDTA margin
- +15pts more sellers achieving quota
- +5pts likelihood of exceeding 2023 revenue goals
- +7 pts higher net revenue retention
- 32% lower cost of turnover
The leaders are orchestrating a mix of talent management functions, all of which are pivotal in determining their organization’s successful trajectory. These five core functions are the cornerstones of effective talent management:
- Employee Experience
- Talent Acquisition
- Strategic Talent Architecture
- Compensation & Total Rewards
- Coaching & Recognition
Healthcare companies with strong employee engagement have more satisfied customers with an over 7% increase in customer satisfaction. There are two key pillars empowering these organizations―workplace flexibility and culture and cohesion. Workplace flexibility acknowledges that the traditional 9-to-5 model no longer caters to the diverse needs of modern sales teams. Embracing flexible work arrangements such as remote work options, flexible hours and leave of absence policies, helps recognize individuals’ responsibilities outside of work and nurtures a sense of trust and autonomy. All of this then leads to higher levels of job satisfaction and engagement. Culture and cohesion are the intangible threads that weave an organization’s identity, values and purpose into the fabric of daily operations. Healthcare organizations must solicit voice-of-field (VOF) feedback, create well-defined career paths, and implement DEI initiatives and training opportunities. The overall focus of these programs is transforming HR from a cost center into a strategic revenue growth function.
High-performing healthcare companies with formal programs to communicate advancement opportunities to employees fill open positions two weeks faster and train sellers to full productivity two months faster. This all starts with a meticulous process on how to attract and retain the right talent. Organizations that cultivate a culture of continuous learning and professional development improve overall productivity and reduce the cost of turnover. Constantly turning over sales team members after two years of training significantly increases the overall cost, impacting the bottom line.
Strategic Talent Architecture
Profitable healthcare leaders focus on competencies. These organizations improve both employee and customer satisfaction through formal and well-documented programs around measuring employees’ skills and competencies, using skill assessment to drive advancement and clearly defining what skills are necessary to execute the job. Frequent and more scientific skill measurement also naturally helps promote movement within the company in a transparent way. In fact, profitable growth leaders are much more likely to formally use skill assessments in career progression decisions.
Compensation and Total Rewards
Pay is the number one reason why candidates accept offers (57%) and why employees leave their current companies (48%). The war for talent has subsided over the past year, but healthcare organizations should continue sourcing and analyzing the market pay data annually. The best practice is to put the data into action and make compensation strategy changes reflective of market dynamics. To supplement market competitiveness, organizations must continuously review their sales compensation program and plan effectiveness. For talent prioritization, focus on ensuring plan mechanics (e.g., thresholds, accelerators, no caps) are competitive and sales teams have equitable sales quotas.
Coaching and Recognition
Profitable growth healthcare organizations have a tighter span of control, with approximately one fewer seller per manager. High performers are also not afraid to push out poor performers, seeing eight points higher in involuntary turnover. These organizations believe in a similar mindset – performance evaluation goes beyond quota attainment. Leaders are differentiating evaluation metrics across individual contributors and first-line sales managers. For individual contributors, teams are looking at share of wallet, competencies, cultural fit, forecasting accuracy and time in the role. Sales managers’ evaluation metrics include company bookings %, team turnover (involuntary, voluntary), balanced team performance and net revenue retention. Another key program to champion coaching is supportive sales management cadences. This includes a codified approach for sales managers to execute the appropriate people development activities on a weekly, monthly, quarterly and bi-annual cadence.
In conclusion, effective talent management is crucial for healthcare organizations to achieve profitable revenue growth. By harnessing the power of the five talent management functions, companies can create a symbiotic relationship between commercial strategy, external customer engagement and internal talent enablement. As we approach 2024, it is essential for healthcare organizations to review each function and ensure they are building upon each to unlock incremental profitable growth.
Why Alexander Group?
Alexander Group’s experience in the healthcare segment allows us to provide proven ways to improve sales compensation plans that yield improved results. By applying our best practices and industry insights, we can help you improve your performance and profitability by designing and implementing effective sales compensation plans. We can help you recognize and adopt best practices while keeping you informed about industry trends, insights and frameworks. Contact us today to receive a complimentary briefing on our latest report, Five Principles of Effective Talent Management.