What Matters More in a Manager -- Experience or Talent?

 


When hiring a manager, which is more important: talent or experience?

It's one of the most critical decisions your organization makes.

Managers account for roughly 70% of the variance in employee engagement, which in turn drives the outcomes most critical to success -- retention, customer relationships, productivity, and profitability.

The choice between experience and talent has serious implications.

And 82% of the time, Gallup shows, companies pick the wrong manager.

But for all the right reasons -- or rather, reasons that feel right. It does feel right to put a candidate with a long track record in the manager's chair. It feels like prior experience ought to predict future performance. It feels right to avoid taking a gamble on a novice.

That feeling isn't backed by data, though.

When companies systematically pick the right managers based on talent, Gallup research shows, they can achieve 27% higher revenue per employee than average. What's more, the top 10% of managers post 48% higher profit, 22% greater productivity, 19% less turnover, a 17% increase in engagement, and 5% greater customer engagement. Talent and experience are not the same things and they clearly produce different results.

The Most Talented Managers Share These Traits

Those results come from incumbent studies Gallup conducted with hundreds of companies and millions of managers in dozens of industries, which uncovered five unique behavioral traits of the most talented managers:

  1. Talented managers are born motivators.
  2. Talented managers hold themselves and others accountable.
  3. Talented managers are assertive.
  4. Talented managers create, sustain, and value genuine relationships.
  5. Talented managers make informed decisions.

However, though all talented managers do those five things, they don't do them the same way or in the same order. And our studies show that talent isn't just specific to the role, it's specific to the type of role and its scope.

The choice between experience and talent has serious implications. And 82% of the time, Gallup shows, companies pick the wrong manager.

For instance, the best team managers -- like those in retail stores -- make good decisions around employee performance, and their problem-solving is oriented toward their local team. Those who manage larger business units, such as entire districts or regions, make good decisions related to unit- or district-level outcomes, tending toward efficiency in initiatives and compliance.

Differences like these crop up all the time, which is why well-aimed talent has such a significant impact on business outcomes. But detecting that talent requires precise and scientific tools. Assessing experience is much easier -- it just doesn't produce the same results.

Set Aside Experience, Start With Talent

That doesn't mean the experience has no value. Experience gives managers lessons to draw from, allowing them to make comparisons and form conclusions.

Some managers have crafted positive, long-term relationships in their role, giving them a network to leverage when they need it. And there's nothing like the outcomes of past decisions to suggest the probability of success for a choice currently faced.

Experience is useful, but talent wins every time on the metrics that matter most.

So yes, a manager's experience is valuable in certain situations. But talented managers get more value from their experience than others, which gives them a bigger foundation for the experience to build on. That foundation can be expanded by developing the manager's strengths in an engaging work environment.

In fact, Gallup analysis shows that people who use their strengths every day are six times more likely to be engaged at work, 8% more productive, and 15% less likely to quit their jobs.

The Additive Effect: Revenue Per Person
Gallup discovered that four human capital strategies combine in a powerful way to add up to 59% more growth in revenue per employee.
Additive effect on revenue per employeeCombined effect on growth potential
%%
When Companies:
Select the right managers2727
Select talented employees633
Create a culture of engaged employees1851
Focus on strengths859
GALLUP

The Winning Choice

When an organization has to make a choice -- and hiring a manager is one of the most critical decisions it can make -- Gallup research is clear: the criteria with the most predictive power is not experienced, it's talent.

So yes, a manager's experience is valuable in certain situations. But talented managers get more value from their experience than others, which gives them a bigger foundation for the experience to build on.

Assessing experience is easier; all it takes is a look at a LinkedIn profile and a call to a former employer. But talent can be identified, and its outcomes predicted with the right selection tools.

Using them is nearly effortless and the ROI is enormous: talented managers deliver higher revenue, higher profit, and greater productivity. Experienced managers don't -- unless they happen to be talented, and talent can't be discerned from a resume.

In the end, the choice between experience and talent is clear, according to the managers and organizations Gallup has studied: Experience is useful, but talent wins every time on the metrics that matter most.