The days of traditional organizational designs supporting static business models are gone forever, challenged by disruptive models such as Uber and AirBnB. Companies that are over a century old can be challenged at any time by these new entrants who utilize digital technology to bring new, competitive value chains to market. Organizations that want to survive understand the critical role of human capital and its management in the new economy. In their 2016 report, Deloitte found that, of the 7000 companies interviewed globally, over 80% of their focus was on organizational design (92%), leadership (89%), culture (86%), engagement (85%), and learning (84%). In his predictions for 2017, Josh Bersin, a noted thought leader in talent management, expands on Deloitte’s report and rates talent management as one of the key drivers of sustainability. This is why talent management software has become a high-priority purchase for companies who want to maintain their high performance.
Talent Management, The Hot New Software
However, with hundreds of talent management software products that lay claim to some or all of the talent management capabilities, the choice is not an easy one. Some of the factors that can influence the decision are given below:
- Existing IT architecture.
The talent management software has to integrate with a variety of systems that may already have been acquired, ranging from the existing HR system through to a Learning Management System (LMS) such as Moodle and knowledge and content management systems.
- Employee engagement.
Talent management is about the talent and their ability to access and self-manage their careers. Employees must want to use the system and engage with it via any channel that suits them best.
- No one-size-fits-all solution.
The full scope of talent management is very broad, and companies may find that they have acquired and paid for features they do not need, such as diversity management.
- Legacy solutions.
Talent management software that has been around for some time is not geared towards the new dynamics of teams, collaboration and self-service. These are not cosmetic features and cannot be layered on top of an obsolescent design. This is to be considered in case a company has invested in an enterprise solution with a single vendor.
For some companies with a clear idea of their talent management requirements now and especially in the future, the option of a custom solution is very attractive. The ‘build-versus-buy’ option works well for companies that understand what their future needs will be and can articulate their requirements clearly. Following this approach, an Australian recruitment company went for a Java-based recruitment platform and is used by businesses, recruiters, and candidates with up to an 80% cost saving for the users.
A Very Broad Portfolio
The definition of talent management is wide and differs according to business priorities. For instance, the recruitment company above is focused on finding new candidates, putting them in roles at companies they service and tracking their careers. Another company that reside in a country with complex diversity management compliance would appreciate an automated solution for analyzing and reporting on their diversity status. Below is the list of most (if not all) modules that a comprehensive talent management application should contain:
- Recruitment, induction, and on-boarding.
- Role definition, skills audits, and competency management.
- Career planning and training management.
- Succession planning.
- Performance management and compensation management.
- Diversity management.
The strengths and weaknesses of each area need to be thoroughly assessed when making a purchasing decision, especially if your current HR application covers some of the requirements. However, there are some essential features of talent management software that are non-negotiable.
Essential Features For A Resilient Organization
Whether you opt for an off-the-shelf solution or take the development route, the following criteria will help you make your decision.
The business processes that enable each talent management capability must be visible, transparent, and open for customization without any vendor’s or expensive consultant’s intervention. This will enable you to make radical shifts in business operations when required.
2. Team-Based Design.
The need to assign employees to teams is becoming the new way of working. A modern talent management system will support team-based design and enable collaboration between and across teams. At the same time, there should be a holistic view of an employee’s performance across teams.
3. Ease Of Integration.
Your talent management system has to plug and play with many different areas of the business, and a tight integration between systems is required. The vendor should also be candid whether a module was developed in-house or purchased. Where the module was purchased, the integration is not always as robust as it should be. The areas to pay special attention to are your learning management system, your wiki and your employee data. Poor integration will result in poor data analytics.
4. Software-as-a-Service (SaaS).
A SaaS offering by a vendor has several benefits:
The cost depends on the number of users and the functional scope.
Upgrades and enhancements are no longer an issue.
Migration to another application is much easier.
The migration option is important if you are ’testing the waters’. You can select a particular application, use it until you become familiar with its benefits and constraints, and when you are ready, move to a solution that provides a better fit or opt for customized development. This is a good and cost-effective solution where you are starting down the talent management path.
5. Social Media Integration.
The ability to integrate with existing and future social media platforms is essential, especially as a route to employee engagement.
6. Channel Independence.
A potential recruit, employee, and an HR professional alike should be able to engage with the talent management system using their preferred channel or device, whether it be an Android smartphone or a desktop.
7. Other Considerations.
These are some other options to be considered, which are important for companies which are undergoing culture challenges.
8. Local Flavor (Glocalization).
For multinationals, the ability to tailor talent management software to fit local conditions is essential. However, this could also be applied to conglomerates that may not be geographically distinct, but are very diverse in products and services. At the same time, it must be possible to have a single view of the enterprise.
9. Climate Measurement.
The ability to assess and measure the cultural climate can be very beneficial, especially in cases where the culture undergoes radical change such as at the time of mergers and acquisitions.
Gamification features that drive aspects of talent management such as learning and development can be very effective in increasing employee engagement.
Talent management is a wide and complex subject, and we would need to put a book together to fully explore all the angles. What is clear is that, despite there being over 250 commercial products to choose from, a good case remains for a custom solution.