Automated Talent Management
The New Strategic Imperative for Performance Efficiency
What is Talent Management? 3
the evolution of talent management processes and systems 4
The State of Talent Management in Small to Mid-sized Companies 5
Current Issues and Challenges 5
The 15 Most Common Talent Management Tasks 7
benefits of automation and integration 10
Taking Advantage of External Resources 10
HR Systems Integration: The Key to Improved Efficiency 12
about the study 15
about ADP 16
The purpose of this white paper is to help decision makers in small to mid-sized companies
understand the role that talent management plays in their competitive success, and to
gauge the benefits of investing in an automated solution for managing the requirements of
an effective talent management strategy.
When it comes to making sure the right people with the right skills are in the right
positions at the right time, mid-sized companies have just as much at stake — perhaps
more — than larger ones.
With automation of key talent management functions comes efficiency. Resources
(both human and financial) are freed up to contribute to business growth, not business
administration. People continue to make the decisions. Technology is just a tool — but
a highly valuable one.
What is Talent Management?
Also known as Human Capital Management (HCM), talent management has been
described as “a deliberate and ongoing process that systematically identifies, assesses,
develops and retains talent to meet current and future business needs and objectives.”1
It begins as soon as a potential hire is identified, and continues throughout the person’s
entire tenure as an employee.
A 2010 analysis of the integrated talent management
landscape by IDC2 identified the following functions talent management
as vital to a single integrated solution: by the numbers
• Recruiting and applicant tracking
The capabilities needed to manage job openings Research from strategic
and potential candidates (both internal and advisory firm The Hackett
external) for those openings. Group3 reveals that companies
with top-quartile talent
• Employee performance management management outperformed
Management of the goals, objectives and typical companies across four
skills of the position to provide ongoing feedback standard financial metrics:
to the employee.
• EBITDA (earnings before
• Learning and development interest, taxes, depreciation,
Assessment of skills gaps, prescription of learning and amortization) of 16.2%
and development activities to fill those gaps, and versus 14.1% for typical
delivery of learning content. companies
• Compensation management • 22% improvement in net
Management of salary planning and tools to profit margin
ensure equitable policies are applied. • 40% improvement in return
• Career and succession planning on assets
“Internal recruiting” designed to have the right • 27% improvement on equity
people ready to ascend from within.
To this list of critical talent management functions, many HR professionals would add
onboarding — the systematic, comprehensive approach to orienting new employees
so they quickly acclimate to new surroundings and become productive, contributing
members of the workgroup.
Though larger organizations have adopted technology solutions designed to facilitate the
process of talent management, recent research shows that similar solutions have yet to be
embraced by smaller organizations.
1 “Talent management – Managing talent from the danger zone to the value zone,” Ernst & Young, EYGM Limited, 2009.
2 IDC MarketScape: Worldwide Integrated Talent Management 2010 Vendor Analysis, IDC, 2010.
3 “Talent Management: Buzzword or Holy Grail?” Stephen Joyce, Jean Herreman, Kel Kelly, The Hackett Group, 2007.
the evolution of talent management
processes and systems
The growth of talent management parallels
the development of the overall human
resources function — from an original
focus on efficiency and effectiveness to a proven return
a critical driver of 21st century corporate on investment
strategy. Just as HR has progressed from its
roots as a solely administrative function,
talent management has grown into an Research by Gallup4 shows a direct
increasingly imperative and complex correlation between increased
process over the years. Top-performing employee engagement and a positive
organizations across the globe understand impact on key business metrics.
that talent management — and by Business impact studies have
extension, employee engagement — is a demonstrated typical net gains
force that drives business outcomes. as follows:
Today, HR support systems and Annualized
solutions take many forms. Companies Net Gain*
of all sizes adopt automated or • Retention (for high-turnover
outsourced technologies for common companies): 60%+ 15%
HR administration functions like • Retention (for low-turnover
payroll, time and attendance, and companies): <60% 26%
• Customer 3%
However, the automation or outsourcing of • Safety 48%
specific talent management functions —
such as recruiting, performance
• Productivity 11%
management, compensation management • Profitability 15%
and learning — remain the exclusive
*Net gain based on comparisons of business units
domain of larger organizations, despite within companies (year one to year two), comparing
significant advances in solutions designed growth units to average performance.
specifically for mid-sized businesses.
4 “Employee Engagement: What’s Your Engagement Ratio?” Gallup Consulting, 2008.
The State of Talent Management in Small to Mid-sized Companies
In 2009, ADP commissioned a study, Identifying the Talent Management Needs of Small to
Mid-sized U.S. Companies, that provided an in-depth look at how organizations with fewer
than 1,000 employees are currently handling their talent management functions. The intent
of the study was to develop a detailed profile that provides insights regarding how talent
management tasks are processed.
Respondents to the study were HR heads or senior HR executives within their organizations
with the best overall view of their company’s needs in hiring, assessing, retaining, and
developing their employees; those either fully or partially responsible for evaluating
alternatives who made either recommendations to senior management or who had actual
Current Issues and Challenges
The study uncovered three main areas of concern among respondents with regard to their
talent management needs:
Recruiting is the #1 challenge facing HR executives. Problems include the volume of
applicants (too many or too few), applicants lacking the right skills and experience,
applicants lacking qualities related to a desirable work ethic, location, and compensation
limitations. One HR executive recalls posting an ad for an administrative assistant on
Craigslist earlier this year. Nearly 400 applicants responded in four hours. She says, “That’s
an average of 100 applications an hour. I took the posting down because I couldn’t possibly
deal with that kind of volume.”
While the war for talent may have cooled in the current economy, the flip side presents
an even greater hurdle for resource-challenged companies — wading through the deluge
of applications for every position posted to find the best candidates and streamline the
The study also shows that keeping employees is HR’s next most significant challenge, with
compensation more strongly linked to this particular issue. When budget constraints and/
or lack of funding limit or prevent pay raises, it often results in a high turnover rate.
In a down economy, an intense talent shortage may be difficult to envision, yet the
impending retirement of an aging boomer generation will soon force companies to
confront significant labor and talent shortages, especially in industries such as healthcare.
In Identifying the Talent Management Needs of Small to Mid-sized U.S. Companies, 20% of
those surveyed ranked learning and training as their most pressing talent challenge.
The challenge comes with implementing cost-efficient systems for not only increasing
employee engagement and aligning the goals and interests of individuals with those of the
organization, but also determining if these investments are producing tangible returns,
such as increased sales or greater productivity.
Training departments are also frequently tasked with meeting complex industry
compliance and certification requirements — and avoiding costly penalties by tracking and
fulfilling all the necessary federal, state and regional reporting requirements.
Recruiting Presents the Biggest Challenge, Followed by Retention and Learning
Retaining employees 23%
Nothing/no issues/not sure 17%
The 15 Most Common Talent Management Tasks
Identifying the Talent Management Needs of Small to Mid-sized U.S. Companies focused on
15 tasks related to recruiting, retention and learning, and how they are currently addressed
by small to mid-sized companies. The following identifies those tasks and the prevailing
methods currently in use among respondents.
Tracking of all open positions
(requisitions) from initial posting and 5%
approval by senior management to closing 6%
out the requisition when job is filled.
Talent Acquisition Posting jobs
to attract internal and external
candidates using tools like 7%
company web site or national job boards. 9%
Candidate Screening Managing 92%
and searching résumés, as well as
screening candidates before they 2%
begin the interview process. 6%
Applicant Tracking Tracking
job candidates through the
entire recruitment process, 7%
from their initial application
to final hiring decision.
Conducting background checks
(verifying identity, education, 12%
previous employment, etc.) and screening 5%
(driving record, credit record, criminal
record, etc.) on new hire candidates and 2%
manual automated only combination not sure
Scheduling and conducting
employee performance appraisals 5%
as part of the annual, introductory, or 8%
disciplinary review process.
Setting goals for individual
employees that are aligned with 4%
company-wide goals. 7%
Competency Management 89%
and/or job-specific competencies 4%
for employees. 6%
360 Reviews Gathering
performance feedback on
employees from peers, managers, 6%
subordinates and external sources.
High Potential Management 96%
Identifying, preparing, and
tracking high potential 1%
employees for promotion. 2%
Position and Pool-based
Planning Building talent pool
and identifying successors for 2%
key positions and leadership roles.
Providing employee training
courses to address skill gaps, 4%
achieve individual goals, and prepare for 12%
Managing and tracking all
learning and training activities, 8%
including e-learning, classroom training, 12%
on-the-job learning, and certifications.
Compensation Planning 87%
Developing company salary
structure and benchmark pay 6%
grades against the broader market. 5%
Managing the overall
compensation budget and 5%
link pay to performance for merit
increases, bonuses, stock options, and
manual automated only combination not sure
The data in the preceding charts provides a clearer view of how most small to mid-sized
companies currently handle talent management — for the most part, manually. Manual
tasking depletes human and capital resources that could be focused on business growth
instead of business administration.
Instead, companies can realize significant business advantages — including relieving
recruitment and retention issues, increasing overall employee productivity, and
strengthening their bottom lines — by implementing cost-efficient solutions that offset
manual tasking and allow them to benefit from the strategic levers provided by an
appropriate talent management solution.
benefits of automation and integration
Taking Advantage of External Resources
With the demonstrated financial and productivity benefits associated with today’s talent
management solutions, why do so many small to mid-sized companies continue to
address these tasks manually? Survey data indicates that most are simply not aware of
the more efficient options available to them, or assume that they carry too high a price
tag. However, many survey respondents were receptive to the concept of outsourcing or
automating several talent management tasks:
The research indicated that heads of HR are most interested in having an outside
service provider track applicants and verify background information (35% are
extremely/somewhat interested in the former, and 29% in the latter). Twenty-five
percent are interested in even more services: initial candidate screening, developing job
descriptions/tracking job ads, and generating/tracking requisitions.
Automated recruitment tools can screen and vet candidates with precision. Employers
can review résumés by searching for a specific keyword, or identify applicants who have
answered specific prescreening questions inserted in an initial job posting. This frees
employers from having to review hundreds, perhaps even thousands, of résumés from
In addition to identifying the best getting onboard
candidates, outsourcing and automation
can thoroughly vet candidates who merit
serious consideration. Additional filtering
options help refine searches even further The results of a soon-to-be-released
(e.g., background checks, driving records, Aberdeen Group study5 support the view
etc.). These types of recruitment tools of a strong onboarding program as a
deliver functionality that makes it a lot significant contributor to employees’ future
easier — and faster — to recruit than even success. Some highlights of the research:
the best manual process can ever approach.
• 37% of executives surveyed said
A Florida-based VP of HR describes the their onboarding budgets would
efficiencies gained over manual recruiting increase in 2010.
systems, such as email. “It used to take more • 65% of respondents indicate
time to sift through résumés in our inbox their onboarding process is at least
and spam folder,” she says. “Automated partially automated.
tools have helped our applicant process by
giving us one place to keep résumés and no • 57% of those with at least partially
longer having to use email.” automated onboarding indicate
their cost-per-employee onboarded
Onboarding has decreased.
Onboarding is the critical bridge that new
5 "Onboarding: The First Line of Engagement," Kevin Martin, Justin Bourke, Aberdeen Group, 2010.
hires cross between the hiring stage and the beginnings of performance assessment.
Automation lets employers collect much of a new hire’s information at one time. It can
introduce the company, policies and culture, provide learning and conduct orientation.
And, by using self-serve employee and data update wizards, employers can ensure their
records are always up to date.
Not only does automation gather all the data an employer needs, it provides the new hire
with all the information he or she needs, such as company policies. It also helps capture
the specifics of employees’ “talent” records — details about education, prior experience,
and certifications that can be leveraged in the employee’s new role.
About a third of heads of HR are interested in help with performance reviews, building
competency models, performing regular audits of their performance review process,
creating a competency library, and creating company-wide goals that tie to employee
goals. The biggest challenges respondents face in performance review processing are
the timeliness of reviews (managers doing them on time/finding time to do them),
participation (getting the managers to do them), consistency/uniformity, and accuracy/
honesty of the comments contained.
Automated solutions can resolve many of these performance management issues —
helping employers accurately identify top talent; assess individuals’ strengths and
weaknesses; provide an historical perspective of performance, and even uncover
opportunities for development and learning — in addition to reducing the overall cost of
A regional hospital that upgraded its redundant paper-based system, for example,
realized an estimated $50,000 in man-hours and paper costs during the first year of
With learning and development, there are many areas for HR executives to address. It’s
important to capture the skills every employee brings to the table, establish short-,
mid-, and long-term goals, identify learning needs, track and maintain essential industry
certifications, and provide appropriate learning opportunities.
Four in 10 heads of HR who responded to the study expressed a desire for help in building
learning curriculums and providing job-relevant, instructor-led and on-line self-study
courses. The biggest challenges identified in learning management are scheduling/
finding the time for learning, lack of learning, and identifying learning needs — all issues
that can be addressed with the right technology tools, such as a Learning Management
One HR manager points to the benefits of an automated solution for maintaining
compliance. He says, “Tracking training for our SASS 70 and other reports was a
nightmare. What used to take me three weeks to gather now takes 10 minutes. I have
everything I need at my fingertips.”
HR Systems Integration: The Key to Improved Efficiency
With automated talent management tools now spanning the entire employee lifecycle,
clearly the largest gains to be had in terms of organizational efficiency will be made with
solutions that not only streamline the number of vendors involved in the integration
process, but also fully integrate with a company’s current HR systems and processes.
A 2007 research study by Aberdeen Group reported that best-in-class organizations favored
fully integrated talent management solutions across multiple benchmarks:
• Global war on talent
• Competency management
• Employee performance management
• Learning and development
• Core HR systems
Four in 10 respondents to the ADP study found the idea of an integrated talent
management solution extremely compelling/interesting; especially if a single vendor
could meet all of their talent management needs with an integrated software solution
with modules that would:
• address specific data categories;
• move data automatically among the modules, and
• easily share data with any existing HR software.
Among study respondents who did not express an interest in an integrated talent
management solution, reasons included the perception that their organizations were
too small to benefit from such a solution, or that it would be too costly.
But the true cost may lie in not exploring these types of integrated solutions. By
consolidating data and processes, businesses benefit from what Aberdeen Group terms
“a single source of truth” — improved data integrity and the ability to leverage that data
more easily for strategic planning purposes.
Most Respondents Receptive to Automating Certain Talent Management Tasks
Performance Management 53%
Learning Management 49%
finding and onboarding new hires:
the power of automation
There’s no doubt that the process of recruiting and onboarding new hires
represents significant investments in time and money…especially for companies
who are still handling each task manually. If you’re among those who have yet to
make the leap to automation, compare the following scenario to your organization’s
1 Manager defines a hiring need and fills out a requisition using an
automated job description template.
2 Requisition is automatically routed to upper management
3 Approval triggers posting of the position on internal and external
job board sites.
4 Respondents’ résumés are sorted and prioritized according to
requirements specified in the job description.
5 Top-ranking candidates are interviewed. When a desirable
candidate is identified, a background screening is ordered.
6 When screening is complete, hiring manager uses “click to hire”
functionality to map the candidate’s information over to their
7 On the new hire’s first day of work, he or she is presented with an
online link to all the necessary documentation and paperwork
(such as I-9, W-4 withholding and benefits elections, and company
policy handbook/acknowledgement form), and is automatically set
up in the company’s payroll and benefits administration systems.
8 Employee starts the new job with a clear position description and
onboarding/learning curriculum, so he or she can get off to a very
fast start…and hopefully long-term success.
If the new employee’s business objectives were included in the original job
posting — a best practice now adopted by many companies — those objectives
are also automatically mapped over to the new employee’s performance record.
With this information so plainly defined, employees and managers alike are able
to achieve real clarity about their respective roles right from the start.
Today’s highly accessible talent management solutions represent significant
opportunities for small to mid-sized companies to streamline their recruiting, retention
and learning processes, and to relieve much if not all of the burdens and barriers related
to manual processes.
More importantly, by integrating talent management with core HR processes, organizations
can benefit in multiple ways:
• Economies of scale in leveraging a single provider relationship
• Reduced learning curve with familiar, consistent user interfaces
• Less drain on internal IT resources
• Improved data integrity and accessibility for strategic decision making
With 83% of the small to mid-sized companies surveyed agreeing that they face important
challenges with their current manual approaches to talent management, it’s clear that
the time has come to explore the benefits of solutions designed to meet the needs of
Regardless of the economic or competitive climate, one fact remains constant for
today’s employers — employees remain a company’s most important investment.
There is no doubt the right employees add measurable, significant value to a business.
Driving the continuing emphasis on talent management are several factors, including
a hypercompetitive global business environment, changing stakeholder expectations,
shifting workforce demographics, and evolving legislative and compliance demands.
Take some time to study today’s best-in-class companies, and you’ll find a number of
commonalities in their approaches to talent management — including clearly defined
business goals, the core competencies needed to reach those goals, and a systematic
approach to talent management that recognizes and exploits the proven relationship
between better talent and better business performance.
With talent becoming a rapidly increasing source of value creation, clearly managing that
talent — using the latest and most effective tools available — has become an indispensable
part of every business strategy.
about the study
Identifying the Talent Management Needs of Small to Mid-sized U.S. Companies
• Non-federal government companies/organizations (state and local government
were included) with 50-999 total U.S. employees
• Head of HR or senior HR executive with an excellent strategic overview of their
company’s needs for hiring, assessing, retaining, and developing their employees.
• The person or one of the people responsible for evaluating alternatives and making
recommendations to senior management regarding HR systems and services.
• 62% of respondents were final purchase decision makers for major new HR system
• Telephone interviews: April-May 2009; 24 minutes (average)
• ADP was not identified as the study sponsor
• 50-99, 100-249, 250-499, 500-999 U.S. employees in company/organization.
• 95-185 interviews in each size group (485 in total) – enough for statistically reliable data
at the 95% confidence level.
• Within the four groups, interviews were weighted back into proper proportion by industry,
geographic region, and whether or not they are an ADP client.
• Interviews in the four groups were then weighted back into their proper proportion, so
no group is under-/over-represented in the total. Data are representative of the entire
non-federal government universe.
Automatic Data Processing, Inc. (Nasdaq: ADP), with nearly $9 billion in revenues and
570,000 clients, is one of the world’s largest providers of business outsourcing solutions.
Leveraging 60 years of experience, ADP offers the widest range of HR, payroll, tax, and
benefits administration solutions from a single source. ADP’s easy-to-use solutions for
employers provide superior value to companies of all types and sizes. You can count on
ADP for unparalleled compliance support and the most qualified and accessible client
service in our industry. For more information on ADP talent management solutions,
Study Universe by Size of Company
Percentage of Market 500-999