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Until recently, human resources departments have primarily been paper pushers, their days consumed by distributing, tracking and storing performance appraisals and benefits forms, processing new-hire documents and generating reports.
But with compliance duties becoming increasingly automated and skilled labor getting scarcer in the reborn economy, HR is being asked to play a bigger role: nurturing the talent that most companies now see as an indispensable strategic resource.
And so a boom in talent management software -- technology that helps organizations recruit, compensate, evaluate and train employees -- comes at the perfect time. It is helping transform HR into a lean, effective hiring and retention machine. Along the way, it has slashed the amount of paper pushing.
Three years ago, the HR team at OHL, a third-party logistics company in Brentwood, Tennessee, was buried in paper. Printers got an exhausting workout in performance review season.
"Think of 5,000 employees who don't have a computer with a 13-page performance review -- that's a lot of paper," said Tia Smith, senior manager of global talent. The signed documents had to be filed so they could be retrieved in case of a dispute.
Then OHL adopted learning and performance tools, first from Cornerstone OnDemand and later from replacement vendor Halogen Software. Now that policies, performance reviews and bonus acknowledgements are all completed electronically, Smith said, the stress on the HR department has eased considerably.
But those efficiency gains could ultimately pale next to the radical change in management training and career development the Halogen learning module enabled, with its links to 120 online courses from Skillsoft. OHL also uses Articulate, a Microsoft PowerPoint-based tool, to teach business processes, and a screen-capture tool called Captivate for software training.
"It really enhances our performance-review process," Smith said, by seamlessly integrating the career-development step. Now, after explaining performance ratings to an employee, a supervisor can move right into a discussion about training needed to reach individual and corporate goals—so there's no need for two meetings. Most of OHL's career development addresses issues that are particular to the transition into management, such as supervising former peers.
Having performance data more accessible has also allowed OHL to expand its succession planning to more easily spot people who are ready to move up the ladder—and promptly build individualized development plans for them. Though Halogen eSuccession was powered up only last November, it has already transformed the process by making it easier for the company's CEO and department heads to get involved.
OHL identified its top 180 performers, pinpointed the skills each needed to advance, entered development plans in Halogen and assigned mentors. Retention has also improved. "If we have someone who is a higher performer and is in danger of leaving, we need to address, that," Smith said.
Fallon Health, a Worcester, Massachusetts, healthcare service provider, automated its reviews with software from SumTotal Systems, boosted the HR department's efficiency and made the process more transparent, according to Scott Beaird, director of talent management. Today, employees can see precisely where they are in the 11-step review process -- from goal setting to formal evaluation -- at any given time.
The software has proved essential in executing a three-year-old strategy to instill a performance-driven, goal-oriented culture. "It allows us greater consistency, enables us to monitor and oversee the process more efficiently and provides a richer experience for both the manager and employee," Beaird said.
The improved data visibility has also allowed Fallon to fine-tune how it evaluates individual performance -- for example, by understanding rating bias. "We're able to report on [employee] performance against our strategy -- against the goals -- and also able to compensate on that."
For Edwin Castillo, vice president of learning and organizational development at San Francisco-based DocuSign, the learning component of talent management systems is not just for internal use. For the past two years, Castillo has been building out the e-signature technology company's learning program for employees, partners and customers with the help of Cornerstone OnDemand for Salesforce.com.
DocuSign has used it to train more than 10,000 businesses on how to use its technology since installing a beta version for customers last summer. Before rolling out the program, approximately 70% of customer calls concerned training, Castillo estimated. That percentage has been drastically cut back thanks to the online education.
DocuSign has achieved similarly impressive outcomes on the employee side. Before Cornerstone, sales training consisted of an in-person seminar with PowerPoint slides. Today, critical product messaging and sales skills training is delivered online, and competency is measured with automated tests. "We've been able to reduce our ramp time that it took [sales reps] to sell their first deal down from nine months to four and a half," Castillo said.
A few good recruits
Much of the innovation in talent management systems is happening in recruiting, the very first step in the talent management process, according to Holger Mueller, an analyst at Constellation Research. "With the rise of social media, recruiting is changing rapidly, allowing companies to change their recruiting processes with the ability to micro-headhunt," Mueller said. "It also allows recruiters to search for talent actively rather than posting on job boards."
Recruiting was the automation challenge at LCS, a Des Moines, Iowa, developer of senior-living communities. Without a tracking system, the company relied on the fax machine to process resumes. "Because we're in 30 states, it was very difficult and time-intensive to process a resume," said Cynthia Thorland, vice president and director of educational resources.
SilkRoad's Open Hire recruitment module assuaged the problem by automating the application process. Then Thorland tackled another sore spot: performance. "We knew there were pockets across our organization that weren't doing performance appraisals, but it was hard to track." With the adoption of SilkRoad's performance module, Thorland can now prove definitively that all workers are being evaluated.
Recruiting is staffing company Yoh's bread and butter, so having shoddy talent acquisition technology in place isn't an option. Yet before implementing SuccessFactors' recruitment marketing module in 2010, the Philadelphia organization's career site wasn't driving much traffic.
With SuccessFactors' help, Yoh revamped and optimized its website to draw more eyeballs and target its marketing campaigns more effectively by, for example, spotting the best-performing regional vendors. "We can see very quickly into our cost per click, cost per offer, cost per hire," said Cynthia Lombardo, director of candidate marketing. "You have this beautiful picture in front of you of what is truly working for your business."
Just one year in, the before-and-after statistics astounded Lombardo. "We saw a more than 200% increase in unique visitors, and we increased the number of candidates in our ATS [applicant tracking system] by 350%," she said. In addition, average time to hire was slashed by 15 days.
Lombardo also used SuccessFactors to help her company tackle the same economic and labor pressures as its clients do. "For three years, our budget didn't move a penny. But despite that, every single year we increase the hires that we did" -- by more than 30% annually. "And we reduced our cost per hire by 30%, which is phenomenal."
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