Any business owner, manager, and executive will attest that a company limited, or empowered, by the quality of its employees. In the face of a tight job market that is impacting the compensation and benefits packages companies provide, prioritizing talent management and development has shifted from an add-on to an essential component of HR services.
However, like other areas of HR, talent management can be a vague, ill-defined area with lots of overlap with other HR processes . This is just as, if not more, true for talent management software products. To help business professionals who aren’t sure what talent management software is, why it matters, or whether they need it, we’ve provided an overview of the HR area in addition to a comprehensive list of talent management solutions.
What is Talent Management?
Talent management is an area of HR management that focuses on cultivating and developing a business’s talent. This includes processes throughout the employee lifecycle, from recruiting to succession planning. Talent management software solutions are offered either as standalone suites, or as modules within Human Capital Management (HCM) suites. HCMs with notable talent management offerings include UltiPro and Ceridian. Cornerstone and SuccessFactors also offer leading standalone talent management suites.
While the specific features and processes can vary by source and solution vendor, talent management consists of six core areas: Recruiting and onboarding, learning management, performance management and goal planning, employee engagement, career development and succession planning, and compensation planning. To be considered a full talent management product, solutions must include at least 4-5 of these feature areas.
- Recruiting and onboarding: Recruiting and onboarding are increasingly offered by vendors as the same product, rather than distinct offerings. Recruiting capabilities commonly include candidate relationship management, applicant tracking, and job posting management. Onboarding focuses on transitioning and integrating new hires into their new organization, with an emphasis on transitioning new hires’ information, training, document management, and assessments.
- Learning management: Frequently packaged as a Learning Management System, these capabilities focus on continual skills development and trainings to ensure regulatory compliance for relevant industries. Learning management includes the ability to author your own eLearning content and utilize preexisting content libraries for general or industry-specific purposes.
- Performance management and goal planning: The area most commonly identified with talent management, performance management is the setting and tracking of employees’ goals, with an emphasis on reporting metrics and measurements.
- Employee engagement: A newer area of talent management, employee engagement measures and manages how engaged employees are with the company culture, job satisfaction, and competencies to better inform and direct future employee development and company culture.
- Career development and succession planning: closely aligned with performance management, this area specializes in helping employees self-service their long-term goals and career progression within the organization. Succession planning entails the organization evaluating and identifying top candidates for promotion and leadership and facilitates said candidates’ career development.
- Compensation planning: Compensation planning entails establishing pay grades and financial rewards structures, such as bonuses and promotions. Many compensation modules also support financial modelling and budgeting to forecast the implications of various compensation structures.
Making the Most of Your Talent
All the talent management features are designed to help you get the most value possible out of the talent available to you, particularly talent you’re already paying for! Talent management is offered as a suite because of the multiple touchpoints that talent, or personnel, have with their employer. For instance, having excellent continued education opportunities via an LMS is not a good long term investment if employees have low job satisfaction and are high flight risks of taking their knowledge and skills elsewhere. Career development plans are far more effective for your business when you can coordinate them with succession plans that identify leadership candidates early on.
In almost every case, the value of talent management is boosted by the rise of data-driven reporting and analytics- capabilities that frequently fall under workforce analytics. A key goal behind data-driven talent management is to mitigate subjectivity and bias in career progression and performance evaluations in the near term, as well as forecasting and addressing talent gaps before they impact your business down the road.
HCM Suites vs. Standalone Talent Management Products
Talent management products are almost always offered either as standalone suites or modules within comprehensive HCM suites (but not all HCM suites have talent management modules). Which deployment is right for you depends largely on your context, and whether you need to purchase a full HR management suite or not. In terms of feature checklists, HCM modules can be competitive with standalone products, but the quality of features may vary by vendor and module.
There’s a risk that HCMs may not have as much focus on the depth of their talent management features since talent management is still considered by some to be less core to HR management. This issue frequently comes up in reviews regarding the knowledge of customer support. However, talent management modules naturally integrate with the rest of the HCM suite, and can present some price benefits from bundling with other modules. If you only need talent management functionality, or already have an array of different HR software in place, standalone products may be more effective, but if you’re already working with a primary HR management vendor, adding on a talent management they already have could meet your requirements.
Do I Need Talent Management Software?
At the end of the day, there’s two simple questions you have to ask yourself: Do I need talent management software, and if so, which product is best for me? Talent management software isn’t necessary for all businesses, and the specific feature set you need can easily expand or change over time. If you only need one or two features from talent management, more specific point solutions may be a better fit. However, the workforce is constantly developing, and the expectations of employees and job-seekers are far from static. Talent management software can help you stay competitive make the most of your most valuable resource—your people!