Integrated Talent Management Solutions:

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Integrated Talent Management Solutions:

  1. 1. Integrated Talent Management Solutions: Break Down the Silos, Connect the Dots
  2. 2. Search for efficiencies and making the business case Talent management initiatives are essential for organizations looking to maximize the potential of one of the biggest investments for any business – human capital. Organizations understand that talent management software, including applicant tracking systems, performance management, compensation management, succession planning and learning, can facilitate increased employee productivity and more efficient business processes. Because they understand the benefit, a majority of companies are poised to purchase a talent management solution today. According to a recent report by Towers Perrin, nearly two- thirds (64 percent) of the surveyed companies were going to increase their investment in HR technology in 2009 (21 percent) or keep their spending at similar levels as the year before (43 percent).1 As they consider how to spend their money, many are re-evaluating their existing approaches and don’t like what they see. Past Watson Wyatt research indicated that most companies weren’t satisfied with their talent management solutions. To see if this was still the case, HRsmart recently asked HR leaders for their impressions on talent management solutions and HR solutions. Our research confirmed the previous Watson Wyatt findings – 55 percent said that the ROI of their talent management solution 55% has been below expectations and 25 percent said that ROI of said that they have been unable to measure any their talent benefit. management solution has been below expectations. With finance departments scrutinizing every expense, this inability to demonstrate ROI is not 25% any benefit. said they have been unable to measure 1 Shadovitz, David. HR Technology Spend Shows Resiliency. HR Executive Online. June 29, 2009. http://www.hrexecutive.com/HRE/story. jsp?storyId=225889958
  3. 3. “We are reaching a point in this sustainable. HR must be able to demonstrate the market where ‘integration’ is more return on investment of any talent management important than ‘functionality,’” initiative. As many businesses consider making the Bersin wrote. “The days of having one island of software for learning switch, they will increasingly turn to an integrated management, another for talent management solution, according to leading performance management, and a industry analyst Josh Bersin, CEO and President third for recruiting, are slowly of Bersin & Associates, an organization of senior going away – most mid-market analysts and consultants with extensive experience and an increasing number of large companies are now heavily leaning in corporate learning, e-learning, performance toward ‘full suite’ solutions.”2 management, leadership development, talent management, and enterprise systems. “We are reaching a point in this market where ‘integration’ is more important than ‘functionality,’” Bersin wrote. “The days of having one island of software for learning management, another for performance management, and a third for recruiting, are slowly going away – most mid-market and an increasing number of large companies are now heavily leaning toward ‘full suite’ solutions.”2 Bersin’s insights were also confirmed by HRsmart research. The HR leaders we surveyed believe that integrated talent management solutions offer a larger ROI, more efficiency, a higher level of customer service, a lower Total Cost of Ownership (TCoO) and an increased probability of user adoption. This paper will take a closer look at why respondents feel this way and how they can transition to an integrated solution. 2 Bersin, Josh. The Talent Management Software Slump. JoshBersin.com. May 7, 2009. http://joshbersin.com/2009/05/07/the-talent-management-software- slump/
  4. 4. The Value of Integrated Solutions As talent management software solutions have become more pervasive over the past decade, two approaches have emerged: The Best-of-Breed Approach: A business should implement the best individual software solution to address a specific need, such as recruiting or performance management, even if that means going with five separate software solutions. The Integrated Suite Approach: Every aspect of talent management should be addressed by a single suite of software solutions from the same vendor. Many organizations opted for the Best-of-Breed Approach as they sought to address a specific area of need within their organization. At first glance, this may seem like the best approach: go with the best single product in any category and you will end up with an exceptional system. In practice, this doesn’t turn out to be the case. If you were remodeling your kitchen, you could select the best appliances regardless of manufacturer and be 95% believe that a suite of integrated talent management modules have a satisfied with the results. However, your refrigerator, your stove and your high probability of delivering dishwasher don’t need to communicate significant process efficiency with one another. Your Applicant Tracking improvements. System, your Performance Management 35% believe that non- integrated talent management solutions can System, your Compensation System and your other Talent Management and other deliver these improvements.
  5. 5. HR systems do. For many organizations, the inability to seamlessly integrate these solutions is where talent management breaks down. Hanny Shehadeh, Chief Product Officer for HRsmart, explains: “Several years ago, a well-known consulting firm was working with a bank in the Northeast, and implemented a best-of-breed talent management solution. What they found after a system audit was that they were spending $200,000 a year maintaining adapters, which would only work until the next update of any single system component.” “Without seamless integration, the value of the solution decreases dramatically,” Shehadeh said. Unfortunately, to achieve the full power of a talent management solution, you must have full integration. In our recent HRsmart survey, respondents clearly understood the value of integration with 70 percent saying they believe that integrated solutions offer large ROI. By contrast, only 15 percent said the same about non-integrated solutions. Furthermore, 95 percent of survey respondents believe that a suite of integrated talent management modules have a high probability of delivering significant process efficiency improvements. However, only 35 percent say non-integrated products can deliver these improvements. Businesses that have tried to piece together a Best-of-Breed solution are beginning to understand the pitfalls. However, awareness is only the first step.
  6. 6. Action is required, but many don’t even know where to begin fixing a broken process. As one survey respondent explained: “We are seeing a very low ROI from our performance management tool, but we are not sure we can change it because we are a global company with 70,000 employees on it.” Continuing to use a talent management application simply because it would be difficult to change is simply making a bad situation worse. However, some failures attributed to the tool should also be blamed on the process, and both should be scrutinized by an organization considering a change.
  7. 7. Redefine your idea of customer service as you reevaluate your current solution What many want is a partner to help them 80% believe that vendors delivering an integrated suite of talent refine and reimagine their current processes. In management products are able our survey, 80 percent of respondents said that to deliver. they plan to re-evaluate and streamline talent management processes to increase user adoption. 30% believe that a talent management solution made up of different, non- “Reimagining processes is focused on two main integrated vendors can deliver a areas: professional service and technology,” said high level of customer service. Shehadeh. “Professional service is true consulting on the front-end of the process and focuses on where a business is, where they want to be and how to get there. I call it the now, the wow and the how.” This approach redefines the level of service that organizations should expect from their talent management provider. Instead of a reactive approach that is geared around solving problems, the focus needs to be centered around a more proactive approach. An integrated approach facilitates this process re - engineering. “Structuring a solution with all of the elements in one database cuts the work by orders of magnitude,” said Shehadeh. “When you do the work up front using a unified set of competencies for all modules and locations, the implementation is more far-reaching, and you end up exploring issues that are usually only discovered after going live with a single module.” Survey respondents seem to understand this already. Eighty percent of respondents believe that vendors delivering an integrated suite of talent management products are able to deliver a high level of customer service, but only 30 percent believe that a
  8. 8. talent management solution made up of different, non-integrated vendors can deliver a high level of customer service. As one respondent said, “When you can get a ‘suite’ of products, it’s less expensive than buying them separately.” Shehadeh confirmed this. “A single suite solution will more than likely cost less than an organization is paying for any two vendors.” Not only is it easier to maintain, the efficiencies are myriad. “You set up the infrastructure once, then use it multiple times,” Shehadeh said. “You don’t need five different system administrators, you only need one. You don’t need five different training classes or updates. When you have changes in personnel, you only need to enter the information in the system once.”
  9. 9. Integration Reduces Total Cost of Ownership (TCoO) Increasing Employee Adoption To increase user adoption, you Determining the Total Cost of Ownership must show employees what’s in it for them. Increasing employee (TCoO) for any talent management solution acceptance can be easy if you: can be tricky. Certainly, hard dollar • Make it simple: As one survey respondent said, expenses such as the cost of implementation, “Asking employees to use so many different systems means that it’s difficult getting them monthly costs or license costs are easy to to master any one system.” An integrated system means there is only a single system to determine. What about soft costs, such learn with a common methodology underlying the functionality of all systems. Training and as time to adoption, usage and training? employee communication is also essential – 65 Downtime, poorly integrated solutions and percent of survey respondents believe that investing in training can increase adoption and tools that employees don’t use effectively ROI. Explain the rationale for the system, the business benefits and how to use it. also have a cost. • Allow users to own the process: Forty percent of survey respondents say they are Although attaching a dollar figure to the total willing to evaluate new vendors and make a switch if necessary. However, before making cost may be difficult, survey respondents any change, a committee representing all stakeholders from top executives to end users clearly believe that TCoO is lower for should be involved in process improvement and technology selection. If employees are integrated solutions than ones that are involved in the selection and implementation not. Seventy-five percent say that the total process, they are more likely to embrace it in the adoption process. cost of ownership for non-integrated talent • Create a meaningful outcome: “Did the needle move in performance? Did somebody’s management solutions is expensive, versus rating go up as a result? Were quotas met or only 45 percent who say an integrated talent exceeded?” asked Shehadeh. “The user needs to understand what they are getting out of the management suite is. process. They need to be able to connect their effort to tangible business results.” One of the most unpredictable variables in • Focus on continuous improvement: Things change so quickly in business today with any talent management implementation is technology advances, new business needs and economic changes can mean significant user adoption. Employees must understand changes from quarter to quarter. Is your organization and its technology agile enough to respond? “Every single HRsmart user has a direct connection to product management,” said Shehadeh. “We are able to take this information and roll out changes with our weekly updates.”
  10. 10. the rationale behind the new system and how to use it, which can be difficult enough with one system, much less multiple systems from different vendors.
  11. 11. Discover the Power of an Integrated Solution Above all, an integrated talent management solution makes it easier for organizations to tear down the silos that isolate information. Unifying this information can facilitate HR functions that cross over several aspects of talent management. “Some processes don’t lend themselves to a single module, like offboarding,” said Shehadeh. “Offboarding is not really a single event. It touches on recruiting, performance, just about every possible module in a talent management suite. That’s the advantage of a single talent management suite. Some of the highest value HR functions require an entire suite to function seamlessly.” The value of talent management isn’t just about automating business processes, it’s about improving them. Integrated talent management breaks down silos of information and seamlessly connects the intelligence dots across all HR processes. For an example of how unifying this data can improve business performance, consider the recruiting function. The metrics that most organizations cite for success of their applicant tracking systems (ATS) are the ones easiest to capture within that single module: time-to-fill, time-to-hire and cost-per-hire. However, the most important metric – quality of hire – is less frequently cited, if at all. “That’s because it takes longer to measure and requires access to different data silos,” said Shehadeh. “The true measure of quality of hire comes from performance management and goal achievement, years after the hire. Without an integrated solution, this information is difficult, if not impossible, to capture.”
  12. 12. If HR wants to get a seat at the table, they need to learn to speak the language of business, and that language is focused on bottom-line results. A comprehensive, holistic approach to talent management needs to focus on the financial benefit to the organization. “If you can say that you saved $2 million last year because you increased retention, the CEO will listen,” said Shehadeh. An organization that is experiencing poor or invisible ROI from any part of a Best-of-Breed solution must explore the difference an integrated single-suite solution can make. To get started assessing and implementing the appropriate integrated talent management solution for your organization, consider these recommendations: Know where it hurts: Most organizations are reluctant to change unless there is a significant business pain. Whether the need is increased employee productivity, acquiring top talent, implementing pay for performance, implementing e - Learning or establishing a succession plan, identify your organization’s greatest need, but remember that your solution must be holistic and not confined to that one area. Understand what it is costing you: An existing tool that is not delivering a positive ROI is costing your organization money. What is the opportunity cost of an e-Learning system that is not integrated with a Performance Management system? What is the value of increased productivity because you are able to connect available learning programs to employee development goals and skill gaps? Also, consider the economies of scale of purchasing an integrated solution. “A single suite solution will more than likely cost less than an organization is paying for any two vendors,” said Shehadeh.
  13. 13. Engage stakeholders: As mentioned in the sidebar of the previous section, allowing end users to own the process increases the probability that they will embrace the final result. Bringing together HR, IT and business unit leaders and end users increases the likelihood of separating must-have functionality from the nice-to-have, but less essential, functionality. This group should be armed with a budget up - front so they can qualify or disqualify a product before they get too deep into the evaluation process. Consider the global impact: Talent Management must be a global effort. It’s one thing to deploy in a single country, but it’s another to do it worldwide because of language, compliance and support issues. If your organization needs French language support, there is a difference between Québécois French and Parisian French. Any organization with global talent management needs must identify a solution that has the ability to integrate different cultures into one corporate family. Think about the future: Beginning with the end in mind can help an organization identify and select the appropriate software solution. However, a business should also have an eye on the future – what are the business needs three to five years in the future? The work you put in on the front could pay off with huge time and cost savings down the road. About HRsmart HRsmart provides the fully-integrated Talent Management Application suite, including applicant tracking, performance management, learning management, career development and succession planning on a single unified platform. HRsmart helps organizations of all sizes attract, identify, develop, motivate and retain top performers. HRsmart is headquartered in Richardson, Texas, and has operations in the United States, Europe, Canada, Latin America, South Africa, Australia, Singapore and the Middle East. Learn more at www.HRsmart.com.

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