I was just perusing the "CEO Briefing: Corporate Priorities for 2007 and Beyond" from the Economist Intelligence Unit. Probably the most startingly thing in their survey of CEOs was they did not refer to "HR" at all. They called it "Recruitment/Talent". I had seen results from previous years where it was called "HR". Here are some other tidbits:
The Talent Gap was one of its headlines in its summary of the research. The biggest area of CEO concern for the talent gap was in emerging markets (e.g., India and China), not developed markets.
There was a sidebar about Jobster and "recruiting the Web 2.0 way"
When asked "Which of the following represent the greatest barriers to growth for your business within both emerging and developed markets over the next three years?", "Lack of available local talent" was by far the greatest barrier for emerging markets and in the top 5 (out 13) for developed markets.
When asked "What do you think are the greatest risks your company will face over the next three years?", "Difficulty attracting and retaining talent" was in the top 3 (out of 12) for both developed and emerging markets. "Rising employee wages and benefits costs" were also in the top 5.
When asked "How would you rate the performance of the following functions within your organisation?" (on a 1 to 5 scale with 1 = excellent and 5 = poor), CEOs answered for Recruiting/Talent:
1 - 6%
2 - 27%
3 - 38%
4 - 22%
5 - 6%
Don't Know - 1%
This is hardly a ringing endorsement and was near the bottom of the different functions within the organization (only Online Channels and Supply Chain rated lower -- Finance was rated highest)
I have been meaning to comment on this post on the Systematic HR blog for a while. It was spurred on by this post from Dave Lefkow's Director of Recruiting blog. I agree with Dubs that it is nice to see someone from the recruiting arena acknowledge that talent management is more than just talent acquisition. Both Dave and Dubs discuss who in the HR organization "own" talent management.
That is where I depart ways a little bit with both of them. I was asked the question "who owns talent management?" on an industry analyst panel at the National Human Capital Institute Summit last week. I answered that the HR organization does not own talent management, it helps enable talent management. Executives and managers own talent management. Data from Gallup and others points out that the relationship between employee and supervisor is the greatest indicator of employee engagement. For talent management to be successful, it has to be embraced, and owned, by the business.
This is the first major purchase by a private equity firm in the human capital management arena. Kronos will gain access to more resources to support its global expansion and movement into talent management applications.
Financial management, human capital management and procurement applications form the administrative "backbone" for all organizations. These Key Issues for 2007 summarize Gartner's research in these areas.
Also, if you are a Gartner for IT Leaders client, check out the new ERP/SCM specialty page off of the Application Management Home Page. There is an Analyst Corner section that I post blog entries to on occasion.
"MarketScope for Employee Performance Management Software"
I have been traveling a lot lately and going to many conferences, consulting engagements, and events. Every time I am in front of a HR audience, talent management is top of mind. It is the buzzword du jour. However, I find many people forgetting that talent management is a means to an end. The end is (or should be) how do we improve business performance, hopefully by an order of magnitude, through better talent management. Automating performance appraisals, applicant tracking, or training administration, though a good idea, is only a step along the journey.
Instead of thinking about talent management as a set of applications, think of it as levers that managers and executives can pull to achieve specific business outcomes. If I want to improve customer satisfaction, then I should focus on how I recruit customer-facing employees, develop them, manage them, and motivate them. Recruitment, development, performance management, reward/motivation are the levers. The technology can help enable those levers, but it is only an enabler (and if the technology lacks the flexibility to support how you want to do talent management, then it can be an inhibitor as well).
Start with your business challenges and what talent management levers you can pull to address those challenges. Finally, once you know what levers to pull (and how you want to pull them), then start looking at technology requirements. Do not let your talent management application implementation become just an exercise in automating your Microsoft Word performance appraisals or Microsoft Excel compensation planning spreadsheets.
When you are trying to find scarce skills in the market, you have to innovate. I am at the Gartner Business Intelligence Summit in Chicago (yes, I am home for a conference -- it is extremely nice). It has been a good event thus far. I was passing by the message board for conference attendees and I saw that one company posted a job opportunity. I was taken a little aback, but when one thinks about it, it certainly makes sense. It is a role where talent is scarce (Business Intelligence) and a conference where some of the best and brightest in the field are attending. What better place to find scarce talent? I am not recommending that everyone go to Gartner conferences as a recruiting exercise (there are other important reasons to go). However, it does make sense to think outside of the box for your candidate sourcing strategies.
It is interesting to see the level of interest from ERP/HRMS vendors in the SaaS delivery model for HCM. These vendors are competing against SaaS talent management application vendors and want to fight fire with fire. However, when one looks at the reasons why customers are using niche and talent management application suite vendors instead of the ERP/HRMS, the SaaS delivery model is not the main reason.
Customers choose niche vendors and talent management application suite vendors primarily because of the depth/maturity of functionality (and domain expertise) compared to the ERP/HRMS vendor for the release that they are on. The end of the last sentence requires emphasis. ERP/HRMS vendors are investing significantly in improving their talent management functionality, but you have to be on the most current release to take advantage of it. The biggest adoption issue for talent management applications from ERP/HRMS vendors is that most customers do not upgrade frequently because of the time and expense associated with the upgrade. The functionality from ERP/HRMS is becoming "good enough" in many cases for customer needs. However, customers do not want to wait until they upgrade to get that functionality. The SaaS model allows customers of niche and talent management application suite vendors to get required functionality right away, continue to add new functionality with little disruption, and still allow them to migrate back to the ERP/HRMS vendor in the future (if they want to do so).
So, does the SaaS delivery model solve these issues for ERP/HRMS vendors? It will only solve the problem if the ERP/HRMS vendor changes its primary delivery model to SaaS (so upgrades become less of an issue) or if decouples the talent management applications from the core HRMS applications. If the ERP/HRMS vendor decouples the talent management applications from the core applications, allows it work on top of any of the supported releases of the core applications (and is delivered via the SaaS model), it could work. However, just supporting the SaaS model alone does not solve the problem.
The retention rates I have seen do not support the notion that many customers are migrating back to ERP/HRMS vendors at this point. However, do not be surprised to see it start to happen like it did in SCM and CRM because the solutions are becoming "good enough". If ERP/HRMS vendors leverage the SaaS model as I described above, it could accelerate that trend.
I have been talking to a lot of vendors lately for my Employee Performance Management research and other things. Almost every vendor is focused on speeding up implementation (and lowering total cost of ownership in general).
Faster is not always better, especially in talent management. The implementation challenges for successful talent management have more to do with good process design, content (competencies and more), and, especially, change management than it does with configuring the application.
Pre-configured solutions are useful. These solutions have best-practice processes and content. If your processes are broken, this can be exceptionally helpful. However, if you have a process that works well that you are looking to automate. Using the pre-configured process may not be the best course. In addition, pre-packaged content can provide a lot of value to customers. Competencies are critical in talent management. However, it can take a lot of time and cost a lot of money to create competency models. Pre-packaging this content to use as a starter set is a great idea. However, for key talent, using the out-of-the-box content for anything more than a starting point is probably not a good idea.
Though a fast implementation can help organizations reap benefits more quickly, it should not be a goal in and of itself. If you implement the wrong process, with the wrong content, and without adequate buy-in from stakeholders (especially managers and employees), then it means you will fail faster.