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 functionality like social recruiting, mobile access, and search engine optimization. Point solutions designed around the concepts of social and mobile recruiting have emerged as well, while traditional ATS vendors have struggled to keep up the pace. Similarly, some talent suites have incorporated an LMS to facilitate strategic talent development; however, with the exception of Cornerstone OnDemand, the LMS piece is not always fully integrated into the rest of the talent suite, and often cannot address complex learning requirements. Thus, the need for learning point solutions persists, and there are an increasing number of online learning management vendors providing software focused on just that area.
Lately there has also been what many experts and vendors are referring to as a “renaissance” of employee performance, feedback, and engagement tools, with many new point solutions emerging to focus on facilitating continuous feedback between managers and employees, employee engagement surveys, workplace culture surveys, social recognition, etc. Examples include EchoSpan, Quantum Workplace Performance, Virgin Pulse, Engagedly, Reflektive, Impraise, CultureIQ, and Small Improvements. Some of these products are intended for use at small businesses that might not be able to invest in a full talent management suite; others are meant to be used to supplement existing HR enterprise systems. The major benefit of these smaller tools is that they are able to be developed and deployed much more quickly than features offered by large suite vendors, who may not be able to stay ahead of trends and changing HR best practices.
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 paper-work 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.
- May also include videos, culture surveys, or other welcome/networking features.
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. However, some solutions are pivoting to facilitate more dynamic, continuous feedback.
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, monitor and track performance with dashboard showing milestones and status, and nominate additional employee raters for feedback.System can generate reminders to ensure review completion timeliness, and 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 of 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 candidate profiles. This is one common area where predictive analytics are coming into play from some vendors.
- Candidate search provides search capabilities for potential candidates based on attribute or other profile data.
- 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 spans 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. (Oracle's offering has since evolved into an end-to-end talent management suite with sourcing, recruiting, onboarding, goal & performance management, talent review, career development, succession management, and learning features.) 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, which 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. In each product profile in this guide, we indicate whether the product is pure-play talent management, or includes talent management and Core HR.
There is also some crossover between talent management and workforce management, with HCM vendors like Ultimate Software including scheduling, compliance, and workforce optimization features in addition to talent management, or, in the example of Kronos Workforce Ready, aiming to extend talent management features developed for the professional realm to the hourly workforce as well. 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. However, note that neither Ultimate Software nor Workday sells talent management as a standalone product; though their talent management offerings are evaluated alongside pure-play talent suites, they are only available along with core HR, as integrated HCM platforms.
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 or 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, particularly around performance management and goals. Workday HCM, notably, scores above the talent management average in all five pillars. (Others, of course, score predictably low in talent management areas.) In addition, looking at comparisons run by buyers on TrustRadius, many of the top comparisons are between talent management vendors and HCM vendors or Core HR vendors who offer some talent management features.
The following table summarizes the scores for talent management feature ratings for seven 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. However, this is also a concern for some pure play talent management solutions, in terms of integration between different pieces of the suite. For example, reviewers cite system silos and an inconsistent user experience as major cons for both SAP SuccessFactors and SilkRoad.
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. Other customers continue to urge vendors to improve support for integrations, so that they can use the strongest (or best fit to their particular processes) products/modules from different vendors—several vendors, particularly in the Core HR space, have responded by creating app ecosystems of pre-built partner integrations, or by opening up their APIs. Ultimate Software's UltiPro offers several options to help customers exchange data with other business systems, including the Integration Studio, Web Services, and the UltiPro Carrier Network. Workday, a firm believer in having all of HR data contained within a single system (customers must purchase Core HR and talent management together), is approaching this issue in yet a third way: the company recently acquired the data preparation and visualization tool Platfora, which is it building into the underlying architecture of its Workday Big Data Analytics platform to allow users to aggregate and import data from 3rd party systems into Workday.
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 (now part of Oracle HCM Cloud), 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.
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. For some products that started out as point solutions and continue to have a core competency in one capability, much of our reviewer feedback talks specifically about that capability, and may include less detail about newer features—one example would be IBM Kenexa's ATS, based on BrassRing. Buyers should note that while reviewers don't necessarily talk about all of the capabilities offered by a vendor, they focus on the areas most important to their use case, which is helpful for identifying which use cases are closest to the buyer's own.
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 mid-sized companies and enterprises. Although there are also a handful of talent management tools designed for small businesses, such as Cornerstone Growth Edition (formerly Sonar6) and Namely (which combines talent management and core HR), talent management suites are much less common down-market since many of the processes they cover aren't a priority to automate at a small scale.
Here's one expert's framework for comparing solutions—it includes buyer tips for determining a suite's core competency, whether a particular product fits your use case, and the vendor's business model/true cost of the product.
“Buyers in this market right now have to figure out:
1.) What does this product do that nobody else in the market can do? Many of the value pitches all sound similar (especially for end-to-end platforms), so buyers need dig in to figure out what is it this product does really well. It needs to be more than just ‘it does everything.’ If you're not buying around a specific business problem, or because it has a specific feature, you need to take a step back.
2.) How does it help you do your job better? At the end of the day, this product better make your job easier, because it's going to be an investment in budget, training, and resources. You have to know your problems before you find solutions, and you have to be realistic.
3.) Buyers need to ask vendors: how do you make money? Cost over time isn't always clear, and some of these vendors make most of their money in a services layer. The product may be intentionally complex, so that users have to call for paid support, or it may be a cheap all-in-one platform that's just plug-and-play, but that charges by record, or for data, or for add-ons/premium subscriptions as the company grows. Buyers need to understand the true cost, and make sure it's worth it.”, Executive Editor at Recruiting Daily
1. User experience, especially for employee self-service features: 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 from employees, both HR professionals and the people they coordinate—making sure that they actually use the products productively. This is also a priority for vendors, whose motivation here is to increase adoption across the company, digging into the daily work life of employees beyond the HR department.
2. 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 separate, dedicated point solution is being used for a particular function like recruiting, capabilities in that area may not be relevant. In that case, though, ask specific questions up front about integration to the point solutions you use. Many reviewers said getting these integrations to other talent management point solutions to work was difficult, took more time than expected, or didn't work, requiring them to enter duplicate data. The HR technology trend towards open APIs and app ecosystems may alleviate this issue over time.
3. 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 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. This is particularly important for companies who are looking beyond HR audit reports for data cleanliness, and are hoping to use people analytics to aid in more strategic decision-making.
Experts say performance, learning, and leadership (succession) management are growing in importance, and are areas of rapid innovation, both on the HR practice and technology sides. For example, most of the disruptive point solutions cropping up in the HR tech space right now are trying to change the way companies measure and communicate about employee performance, or the way companies train employees and allow them to gain new skills. Josh Bersin, of Bersin by Deloitte, believes areas like feedback management—which encompasses pulse survey tools, feedback apps (suggestion boxes), performance feedback systems (for managers or teams), new work environments (e.g. collaboration tools like Slack), and social recognition tools—are here to stay, and will likely be rapidly adopted by a majority of the market. (See Bersin's report Predictions for 2016: A Bold New World of Talent, Learning, Leadership, and HR Technology Ahead for more on his view of talent management trends.) With the emergence of these new tools, established vendors are likewise adapting to make both performance and learning more continuous, more social, and more collaborative.
Further, experts and vendors believe that talent development programs, or a lack thereof, are at the root of the employee engagement problem. (“Employee engagement” has been troubling the HR world since a 2014 Gallup research study showed only 13% of employees being highly engaged, with 26% actively disengaged. Perhaps more troubling is that the stats did not improve much in 2015.) They see integrated HR data, around performance and learning especially, as the key to better, more responsive management decisions that will lead to more sustainably engaged employees.
“‘Employee engagement’ technology is last year's news. Surveys, feedback and performance reviews, and even wellness apps address symptoms of a much larger problem: we don't know how to manage people and optimize performance. I'm much more excited about learning management systems and disruptive management programs that teach the fundamentals of management. When you marry a core management program with real-time performance data, magic can happen.”, Founder of LFR LLC (HR, marketing, and technology trends consultancy)
The move to approach performance, learning, and success differently is largely a cultural shift, which some experts see as driven by changes in the generational mix of the workforce and employee/employer expectations for job tenure.
“The biggest talent problem is that companies are less willing to train, and colleges aren't preparing students, so we have a lot of smart people looking for jobs who have never been trained. Combine that with job-hopping millennials, and people aren't getting a solid foundation. This is going to come back to bite us at some point.”, Writer, Evil HR Lady
“I've seen more attention on the evolution of performance management in the last couple of years, primarily driven by fact that so many large corporations and global organizations decided to pivot away from traditional performance management. Now many others have taken notice and are thinking about changing as well. In terms of the technology that supports those processes, established players are trying to adapt, and secondarily, there are a number of smaller entrants into the space in the last year or so. For those new solutions, it's easier to adapt to changes in performance management, and corollary processes like goal alignment.
In the last 18 months, I've also seen a lot of energy around career development and providing tools for individual employees to better envision a future in the organization, articulate their shared vision, and align their strengths with existing opportunities or opportunities that may exist in the future. Especially in really big companies, technology is helping them envision what it will take for them to take these steps in their career, by suggesting mentors or connections, or raising learning and development opportunities, both formal and informal. Some of that is in response to data showing that after compensation, the primary driver of retention for the younger generation of workers is: do they see themselves having a future?”
From a technology perspective, talent development may be starting to become focus areas for vendors and HR tech users now that more companies have a handle on HR administration and talent acquisition, which were two early areas covered by HR technology. With learning management in particular, experts see an opportunity for buyers to be more strategic about the tool they select and how it is connected to the rest of their talent management and broader HR technology ecosystem.
“There is so much disruption happening in learning, on the talent management side. Learning used to mean having an elaborate LMS, that really, because of complexity and maintenance, sat outside of the TM system. Now learning is more on-demand, casual, and there are an incredible number of solutions coming to play for buyers to choose from. Buyers have the ability to match learning system to culture and workforce—you need a different system for firefighters or police officers than for fast food workers, because it's a different kind of content, different certifications, with a different level of urgency.
Buyers need to ask questions like: what access to technology do my employees have, and how do they interact with the technology? Are they primarily mobile, like in a retail environment, or are they in front of a computer in an office environment? These questions should really drive the buyers' selection of learning tools. But historically, buyers chose a solution because it had less moving parts. I'm not saying we'll move away from platforms, but I think we'll see some companies adding strategic value by adopting some of these new learning tools and integrating them into talent management, rather than using only the LMS that came with their talent management platform, or just using a separate, disconnected LMS.”, Principal Analyst & Founder, #HRWins
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. We have not included all HCM products, depending on how established the talent management pieces are—would they compete against a pure play talent management product?—and whether we had enough reviewer feedback about the talent management side. Each product must also have at least 10 reviews and ratings, with at least 5 full reviews written or updated within the last year. If you are looking for software that focuses on a certain pillar of talent management, check out our Buyer's Guide to Recruiting Software / ATS, or read reviews of employee performance management software, time tracking software, leadership development solutions, benefits administration software, community platforms, workforce management, compensation management, and/or survey tools.