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The market for talent management software is growing for good reason -- these tools can help organizations attract, retain and develop top performers at a time when large analyst firms like KPMG say companies are waging a war for talent.
But experts in human capital management (HCM) warn that installing the latest and greatest technology alone won't necessarily improve performance reviews, cultivate employee engagement and loyalty, or achieve a host of other important management objectives.
"Many companies are still devising their long-term strategies for how to manage talent and grow their workforces to become more competitive," said Luke Marson, chief cloud HCM architect for Hula Partners, a human resources strategy and implementation company.
To balance talent management software and best practices, organizations need a well-developed project plan that guides them through the technology implementation process and then addresses the training and cultural issues that arise with the new system. Unfortunately, many organizations may skip this essential planning phase, partly because installing new software and services is so easy today, said Mike Astringer, director of talent at Alliance Life Sciences, a life sciences consulting company.
"These systems have become so simple to install, some people have forgotten they need to come up with a larger plan to make talent management more successful," he said. "When that happens, they may find that they've spent a lot of money for software that nobody uses effectively or just falls by the wayside."
How can organizations ensure they'll get the full return on their investment in a talent management system? Industry veterans outlined five steps that can get human resources organizations off to a good start.
Focus first on processes, then on technology. Before installing, or even purchasing, new software or services, take time to reassess existing HR processes that affect talent management, Hula's Marson said. "Find opportunities to enhance processes or make them simpler, more standardized and more efficient," he explained. "Then look for ways that technology can support those processes."
These reviews also may identify unnecessary activities. "As organizations move from paper-based to electronic workflows, they often find steps that are no longer necessary," said Tiffani Murray, a consultant at T. Murray HR Tech.
Identify areas to tailor technology for specific needs. Even if an organization is satisfied a process serves a purpose, stakeholders should look for ways to improve it, Murray said. "HR leaders should ask themselves if the process addresses a need for only a small number of people or would it be better from a change-management perspective to adapt the process?" she said.
The good news is that tweaks are easier to accomplish with tools available in cloud-based talent management offerings. "The applications may not be customizable, but they're often highly configurable," Hula's Marson said.
Right-size the solution. Once any necessary process re-engineering is complete, HR organizations should match a new talent management system with the size of their companies. "Some of these systems are designed for small companies while others are intended for large companies," Alliance's Astringer said. "We have a little over 100 employees in the U.S., and [the legacy, enterprise-class talent management system] I inherited when I came here just wasn't the right system for us."
The company recently signed on to a cloud-based service that Astringer said provides modern capabilities important to his company. "Because these smaller, newer systems are Web-based, hiring managers and others can log on with a tablet or smartphone from wherever they happen to be," he said. "Also, these systems are much more user-friendly and intuitive than large, old-school applications."
Centralize and integrate data from various HR components. Organizations may uncover opportunities for improving talent management activities by combining data from performance management, succession planning, employee development and similar activities, said Jeremy Ames, chief executive officer of consulting firm Hive Tech HR.
"If the information from these areas can be brought together in one place, it will be easier to apply analytics that provide helpful insights," he said. "But data integrity is essential. As soon as people see the first demographic data element that doesn't look right, they're going to start to question the whole system."
One aid for ensuring accuracy is a data dictionary that connects with the various talent management modules and enforces common ways of representing important categories of information. For example, dictionaries can make sure each system stores employee names in the same format, such as last name followed by first name. Otherwise, organizations risk duplicating names when they pull the information into a central location from separate modules.
Look for additional ways to use the talent management system once implementation is complete. Continue to assess the degree to which you're taking advantage of all the functionality, Murray said. "I've seen organizations invest more than six figures in a solution and use only 25% of what they're paying for. Many solutions now have mobile and social capabilities that are part of the contract and which you can just turn on. Just make sure you also have a mobile or social strategy in place for applicant tracking or performance management or other related activities."
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