Best Technology Feature 2008

With talent management now being viewed as one of the most important HR strategies, more firms than ever are investing in software solutions to help simplify the process. But can it really make that much difference? Verity Gough gets technical.

With HR’s broadening remit comes the challenge of managing masses of employee data, from payroll and performance management to 360-degree appraisals. Software is no doubt an asset but can it really give an organisation a competitive advantage when it comes to the war on talent?

Being inundated with information from every corner means a software system that integrates everything into one, easy-to-access touch-point is always going to win more fans than cumbersome spreadsheets and lengthy paper trails.

According to Chris Phillips, vice president of international marketing at talent management software provider Taleo, much of this is being driven by the need for managers and employees to have access to data so they are better equipped to manage their team, their department or their own individual career.

But he also believes that HR has seen a shift from siloed activity centred on performance appraisals and general mobility towards individuals thinking in terms of their own goals and what they contribute to the organisation. This trend is being prompted by the growing emphasis on retention of talent as well as acquisition.

“There has always been a focus on retention but it is now the strategic and systematic development of people,” agrees Matthew Parker, group managing director for talent management software providers, Stepstone Solutions. “HR needs to be able to measure this, to be able to go into the numbers and identify what is or isn’t working and where the talent is in the business.

“You can have a strategic objective which says we will do quality and performance interviews on everyone each quarter, but unless you put the mechanisms in place, it will never be easy.”

Making it work for you

According to Phillips, the challenge for organisations is in ensuring the software backs up and compliments the organisation’s business strategy. “Whether you are trying to grow very fast or expand into the Far East, the better companies will have a talent strategy that supports this directly,” he explains.

“Software gives HR a way of providing the tools and processes across the business to execute your talent management strategy. It gives you a way of measuring and, therefore, managing that strategy based on facts and data, rather than just speculation and opinion.”

But systems do not come cheap and many organisations are still cynical that vendors may be over-selling the merits. Sue Filmer, head of talent management at HR consultants Mercer, is quick to counter this. “You can be a lot more proactive, take pre-emptive action around your pipeline strength and make decisions using the data before you actually come to a crisis point,” she points out. “Everyone is talking about talent so the more you can be ahead of the curve, the stronger your position.”

She argues that where software really plays a part is when organisations use it to measure employees’ skill sets and capability gaps. “Once you have collated the data, you need to process it. The software pulls all the information together so it can be viewed, meaningful conversations can take place and decisions can be captured,” she says.

The third element is giving the organisation the insights and intelligence into its strengths and weaknesses to move forward. “You can see the skill set changes, so when the CEO says to HR: ‘Where’s our gap?’, the information is to hand,” Filmer continues. “They have the data to back-up their requests. Essentially it tells you about the health of your workforce.”

Future trends

As the pressure on organisations to attract and retain the best talent increases, so too does the need for a process to ease the information overload. Phillips and Parker are both keen advocates of the social networking phenomenon, which they believe will be one of the next trends in HR software. “There is a sea change in how people are viewing careers, which has to a large extent been brought about by the tools that are out there on the internet,” says Phillips.

“In the past, a career was viewed very paternalistically from the point of view of the company: we will look after you, we will define your career path, we will tell you when it is time to move. It was very controlling. With the emergence of social media, prospective employees can now use all kinds of job sites, do salary comparisons, use LinkedIn and Facebook to network with people and find out what it is really like to work in a company.”

Similarly, the increased use of mobile communications, particularly with regards to recruitment, is also a trend likely to become more commonplace. With prospective employees being invited to interview or being sent job specs over their mobiles, the process can be cut down from several weeks to a matter of days, saving both time and cost.

However, as the war on talent continues to rage, Filmer urges HR to remember that software is an enabler, not the sole solution. “It’s about business intelligence and seeing your workforce as a landscape; the ebbs and flows,” she adds.

But as business needs change, this landscape view means software can essentially highlight how things are and how they are likely to be. And in this uncertain climate, forewarned is forearmed.