Talent management is sometimes considered a synonym for performance management. However, in reality, talent management software is a set of HR capabilities—including but not limited to performance management—that are considered strategically important to the organization. One possible definition is that talent management software is designed to manage talent through the entire lifecycle from acquisition through development, to reward, and measurement to ensure that the best people are being hired, developed and trained and compensated to maximize value for the organization.
The primary constituent elements of talent management suites form a continuum of activities and processes, revolving around the most important resource in any organization – its people. The primordial talent concerns of most organizations include:
- Improving the quality of hires
- Speeding up the time to competency
- Improving performance and development
- Making sure that everyone is working on projects with the highest potential for impact
- Ensuring that talent is rewarded and compensated
- Finding a new generation of leaders
- Continuously developing staff to meet the fast changing needs of the modern corporation
Talent management software is designed specifically to help organizations meet these highly strategic goals.
Not all talent management vendors offer all of these capabilities, and there are also many vendors offering software that performs just one of these functions. For example, there is an entire category of recruiting or applicant tracking software that is designed to simplify the recruiting process and nothing else. However, recruiting is increasingly being seen as a key strategic capability for organizational success, and is being absorbed into the talent management area. Vendors selling large suites into the enterprise market, like Ultimate Software and Workday, have been able to build recruiting systems from the ground up that incorporate innovative new functionality like social recruiting, mobile access, and search engine optimization, forcing traditional ATS vendors to follow suite. Similarly, there are many learning management vendors providing software focused on just that area; however, some talent suites have absorbed a simple level of LMS, although there will always be requirements for an LMS to address complex learning requirements.
Vendor solutions are not always directly comparable. The various product solutions often have different legacies and different combinations of capabilities with quite different strengths and weaknesses. Not all products do everything equally well and there will inevitably be tradeoffs.
Organization size is also a factor in making a purchase decision. Some of these products have been designed for large organizations and are scalable across many thousands of employees across many departments and even different geographical locations. Others are less scalable and have been designed for smaller organizations. For this reason, we have included separate TrustMaps for SMBs and enterprises.
Single function products handling a single component of the talent management suite of capabilities are not included. Products do not have to contain the entire range of capabilities, but must offer two or more to be included in the guide. Each product must also have at least 10 reviews and ratings by end-users on TrustRadius (most have many more). We will be publishing a guide focused specifically on recruiting / applicant tracking in the near future.
The following section outlines the primary capabilities common to most talent management software products:
Recruiting or Applicant Tracking Software is software used to manage the recruitment process electronically by handling job postings, applicant status, resume management, etc.
Features related to Recruiting/ATS are:
- Ability to create and manage job requisitions quickly and easily.
- Ability to post jobs to the internal website and also to external social media sites and top job boards.
- Bulk upload of resumes with some contact information parsing functionality to increase efficiency.
- Ability to recognize duplicate candidates to prevent candidates from being entered more than once.
- Search functionality making it easy to retrieve candidates with specific attributes.
- Applicant status tracking allowing hiring team to see status of each applicant.
- Collaboration allowing notes and evaluations to be shared across the hiring teams.
- Notifications and alerts reminding team members of tasks to be completed.
Onboarding is the process of orienting new hires to the social and performance aspects of their jobs so that they are able to function in their new roles as quickly as possible.
Features relating to Onboarding are:
- A new hire portal where all required reading materials, corporate information, forms and other paperwork can be posted online.
- Tracking tools allowing managers to check status on individual hires for all onboarding activities.
- Tools for compliance tracking and reporting allowing managers to ensure that all new hires are in compliance with federal regulations for employment.
Performance management is the process of ensuring that employees meet pre-determined objectives and goals through regular check-ins and a formal employee performance appraisal process.
Features related to Performance Management are:
- Supervisors have the ability to write individual performance plans including goals, and competencies, including ability to weight or prioritize specific elements of the plan.
- Supervisors can track disciplinary actions such as performance improvement plans.
- Supervisors can monitor and track performance with dashboard showing milestones and status.
- Supervisors can nominate additional employee raters for feedback.
- System can generate reminders to ensure review completion timeliness.
- Workflow restrictions ensure that employee can only see finalized official review once completed.
- System supports multiple review types including annual, quarterly mid-year and anniversary reviews. Some systems also support 360-degree feedback appraisals where peers, managers and direct reports give anonymous feedback designed to improve performance.
- System provides dashboards, ad-hoc reports and custom reporting capabilities.
Closely connected to performance management is goal alignment, which is the practice of ensuring that all employees have clearly designed goals in support the overall corporate strategy. Goals are aligned across the enterprise such that they cascade downwards from the top-level corporate goals.
Features related to Goal Alignment are:
- Corporate goal setting enables definition of corporate goals, and/or vision statements.
- Subordinate goal setting enables definition of subordinate departmental or team goals in support of overall corporate goals.
- Individual goal setting enables definition of individual goals that align to organizational and subordinate goals.
- Non-hierarchical goal setting allows goals to be set which are outside of official reporting relationships.
- Line-of-sight visibility for each goal to see how goals support overall corporate objectives.
- Performance tracking allowing managers to track individual progress against goals as a component of overall performance.
Succession planning is the identification and development of internal employees with the potential to fill key business leadership positions in the company.
Features related to succession management include:
- Managers can create and manage pools of potentially high-performing individuals.
- Candidate readiness for key business positions can be ranked and assessed.
- Ability to view and manage potential succession management candidate profiles.
- Candidate development enables the assignment of learning and development goals, sometimes in response to 360-degree appraisals.
Learning management is the development, deployment and management of training modules to enable employees to pursue learning goals either to reach development milestones or to meet regulatory requirements.
Features related to learning management include:
- Course creation capabilities in support of performance goals or succession plans, including the ability to create assessments, quizzes and certifications to track employee progress.
- Course enrollment functionality allowing employees to register and sign up for courses and receive notifications and reminders as course date approaches.
- Tracking and reporting tools allow administrators to view student progress, export data and create relevant reports demonstrating whether training programs are meeting their objectives.
- Integration with other talent management capabilities in addition to external systems like CRM systems. CRM integration can be helpful as it enables sales training materials to be provided directly from within the tool that sales people use every day.
- Recommendation engine to suggest or identify courses that will help individuals make progress toward their developmental goals.
As corporations strive to capture strategic advantage through hiring and training top-quality staff and aligning work in pursuit of strategic corporate goals, talent management systems have received enormous attention recently. The emergence of talent management suites over the last ten years has followed a familiar path to anyone familiar with software category lifecycles. Product suites spanning most or all of the talent management components have emerged through a process of mergers and acquisitions as well as new development.
One source of talent management capabilities is Core HR software vendors providing functionality like employee database, payroll, job and position management, and employee self-service. As companies increasingly look for product suites with a broad range of interconnected capabilities in order to avoid the difficulties of having to integrate different software themselves, the appeal of a suite that includes talent capabilities and Core HR functions is obvious. Many Core HR vendors have expanded their products in this way. For example Ultimate Software introduced performance management and onboarding in 2007/8, and then introduced a new, built from the ground up, recruiting solution in 2014. ADP and Ceridian have adopted a similar strategy, and there have been some notable acquisitions demonstrating the same trend. For example, SAP acquired SuccessFactors in 2011 for $3.4 billion, while Oracle acquired Taleo two months later for $1.9 billion. Even Salesforce, a vendor one does not normally associate with HR technology, has entered the HR arena through acquisition of social performance management tool Rypple in 2011 (this has since been integrated with Chatter and re-branded as Work.com for sales improvement). This expansion of Core HR capabilities to include talent management has resulted in the creation of what is often referred to as Human Capital Management suites or HCM. Workday is an example of a company with even greater aspirations concerning breadth of functionality, moving in the direction of a complete ERP platform from its starting point in Core HR.
There are many reasons why customers might not want to procure talent management capabilities from the same vendor that supplies their Core HR functionality. First among these is the belief that Core HR vendors have a core competency in back-end administrative systems and data integrity rather than talent management, and their talent solutions are always somewhat of an add-on afterthought. While this has been true in the past, these vendors have made significant strides in recent years, and their talent offerings have improved significantly, even if they do not always offer the same breadth of capabilities as pure-play talent vendors. Interestingly, a small sample of feature rating data on TrustRadius shows that end-users highly rate the talent management features of some Core HR suite products. Recruiting capabilities in particular score very highly.
The following table summarizes the scores for talent management feature ratings for four different Core HR products that also offer talent management capabilities and compares their scores to those of pure-play talent management products:
A second issue is that Core HR product platforms tend to be older legacy products, many of which were not originally designed for the cloud, even if many of these vendors now offer cloud versions of their original products.
A further objection is that these capabilities have often been acquired by Core HR vendors through acquisition and bolted on to the Core HR product such that the resulting product offering does not offer a truly integrated or unified user experience.
Still, many customers have proved willing to accept a more restricted range of functionality or a less unified user experience in order to simplify procurement, deployment, and support processes by having a single vendor.
Talent Management suites are entirely focused on providing an integrated suite of capabilities from recruiting and onboarding, through goal alignment, performance management, succession planning and learning.
The advantages of this focus are considerable. Integration of these capabilities reduces errors and improves data integrity, resulting in better analytics and ultimately better overall corporate performance.
Another benefit of integrated suites is that they may offer a more unified user experience and are much easier to learn for that reason. Generally speaking, a unified customer experience across modules has a positive impact on overall satisfaction. However, the range of capabilities available varies from one product to another, and the strengths of the various modules are often quite different. For example, Cornerstone OnDemand and Saba Software began life as learning management systems, while Halogen and SuccessFactors have a strong legacy in performance management. IBM Kenexa and Taleo, on the other hand, have a strong recruiting or ATS legacy. While each of these vendors has since expanded to offer the full range of talent management capabilities, many of them retain a core strength in their area of original focus. The same “bolt-on” problem we have seen with Core HR is also an issue with talent management suites. Just because the various modules are marketed as a suite does not mean that all modules are well integrated or that they are all equally strong. In reality, integration of modules varies in quality, as does the relative quality of the various modules.
- User Experience
Just as Core HR vendors have often acquired talent management capabilities through acquisition, pure-play talent vendors have also frequently expanded beyond their original area of specialty through acquisition. It is important to look for a product that has a coherent user experience with a unified user interface across modules. As discussed in the companion guide to this one on Core HR, products are increasingly being designed around a user engagement model that makes people want to use them rather than obliged to use them. User experience is very important for getting buy-in for employees—making sure that they actually use them productively.
- Robust Functionality Across Modules
Not all vendors have the same robust capabilities across modules but may have strengths in a couple of specific areas. Look for a balanced set of capabilities across all areas that matter to you, with the provision that if a dedicated point solution is being used for a particular function like recruiting, capabilities in that area may not be relevant.
- Unified Reporting
Since talent management suites are by definition an agglomeration of different capabilities, it is essential that the reporting engine is capable of pulling data from across modules in order to build reports that provide real business insight. For example, employee data from the performance management module indicating particularly high-performing employees might be linked to leadership and development resources in the learning management system and to the succession management module, which helps companies source and train the next generation of leaders.