I have been having a lot of calls over the last few months with different investment firms. Some are VCs. Some are investment banking firms. All of them are interested in opportunities and different vendors in the HCM world. One of the companies I spoke with today asked me what would happen to the growth of the talent management application market if the economy started to cool (which he believed was starting to happen). I had to think about it for a second and, unfortunately, I think it would have a chilling effect (pun intended). As important as I think talent management is, I think most companies would view it as discretionary spending if belt-tightening is required.
Why is that my natural reaction? I guess I am skeptical about the view of HR by the rest of the business. I am also skeptical about the business case for many talent management initiatives. It is hard to cost-justify. I also think too many projects focus on the automation of talent management processes and not enough on how talent management can impact business performance and outcomes. If the economy does slow down and you have not linked your talent management initiatives to specific needs of the business, expect the budget to go away. It is that simple. Also, vendors that focus purely on automating talent management and not on how to effectively leverage talent management to improve business performance will be at risk.
You know what is a lot easier to cost-justify: BPO. Food for thought.