Talent Management Software Vendors get a C+ in Customer Satisfaction
We just completed a year-long research study on the customer experience with talent management software. Despite the sky-high market valuations for these companies and the growth rate of the market, these products are not fully meeting customer needs. In fact, among the 1,146 companies we surveyed, their average overall satisfaction is 3.65 on a scale of 5.0, giving the vendors as a whole a grade of C+.
Why the low score, and what can companies (and vendors) do to avoid low satisfaction in their own implementations?
Let me highlight a few of the key findings here:
1. First, buyer expectations for integrated systems are unmet. This year’s overall satisfaction rate is slightly lower than the survey done in 2010 (which had an average of 3.79), demonstrating that talent management systems users are even less satisfied with their solutions than they were a year ago. Every vendor has announced some form of suite (most of which are incomplete and as yet not well integrated), driving buyers to expect these products to be fully integrated systems which handle recruiting, performance management, succession, development planning, learning, and compensation. Very few are capable of doing all these things in an integrated way.
2. Buyers have had a tough time rolling these systems out. Our research and conversations with customers shows that it takes 2-3 years to fully implement a new talent management system and even then HR buyers struggle to get employees to use the system. Even the most successful public vendor products are not widely used (or only a few modules are used) because they are simply not compelling applications. The vendors are all trying to revamp their user interfaces and add mobile modules to fix this, but the “consumerization” of talent management software is still a work in process.
3. Some vendors, frankly, are far better at supporting their customers than others. Without naming names, the lowest rated vendor had an average customer satisfaction of 2.86 and the highest had a rating of 4.32. Once again the research shows that vendors which have a “focused target market” outperform those who try to meet the needs of all different customer sizes. (Message to buyers: look for a vendor with lots of customers like you – in your industry, of your size, and of your level of maturity.)
4. ERP provided solutions tend to underperform. In this year’s survey 16% of the respondents told us they are using their ERP vendors’ products for talent management (a big jump over last year). These customers are among the least satisfied. As we’ve mentioned in the past, ERP-vendor products tend to lag the focused vendors in functionality and they suffer from the “interlocked upgrade” problem. (You generally can’t get the new release of the talent management product until you upgraded your ERP/HRMS system, which is often years away.)
5. Users were most satisfied with the performance management products. Recruiting (ATS) and learning (LMS), the two most widely used product areas and oldest of the talent management modules, were rated low (3.47 and 3.49 respectively), demonstrating how these older systems are ready for a major revamp. (Social recruiting and social learning are essentially revolutionizing both application areas.)
6. Social tools and workforce planning tools are still immature. Users had the least experience with social software and workforce planning products, which is understandable in that these are areas with the least time in the market. Only 6% indicated they had experience with either of these (social software provided by talent management vendors is not widely used). Overall scores were 3.2 for social and 3.3 for workforce planning software, the lowest satisfaction ratings.
7. Once again, the lowest “area” of satisfaction with these vendors is what we call “business partnership.” This covers topics like the vendor’s ability to understand a client’s business and talent challenge, the ability for a customer to influence vendor features, and the visibility of a vendor’s future roadmap. Many of the bigger vendors have simply grown so fast that they can no longer hand-hold each customer so this intimate relationship is harder to maintain. Yet in our 2010 study, it proved among the most important correlated factors in the decision to renew or upgrade a system.
8. Interestingly, one of the most highly correlated factors which drive higher satisfaction is active use of the vendor’s customer community. These systems are very complex and hard to use, so buyers really need to talk with other similar customers in order to best understand how to use the systems. If you are shopping for a system (or vendor), talk with as many references as you can and take a peek into the vendor’s customer community to see how active and supportive it is.
9. HR buyers still have a mixed relationship with IT. Only 62% of the responding organizations told us that they feel they have a partnership with their IT departments, which means that more than 1/3 of the companies using talent management software are doing it without professional technical support. Many HR and talent management teams are not experienced rolling out enterprise software products, often making the implementation more difficult.
10. Ultimately, our Talent Management Factbook® and High-Impact HR® research programs both show that talent management software alone does not directly create or drive improvements in business performance. What does drive performance (improved revenue per employee, retention, productivity) are the practices themselves: career development, accountability, goal transparency, feedback, coaching, development planning, and leadership development. This research shows that companies actually do not directly credit their talent management software with improvements in these areas – rather they are viewed as a necessary tool to help put these practices in place. So remember that before you go out and implement any of these solutions, it is vitally important to build your own talent management philosophy and define how you want people to be managed.
The vendors included in this research include ADP, Cezanne, CornerstoneOnDemand, Halogen Software, HealthcareSource, HR Smart, iCims, Insala, JobPartners, Kenexa, Kronos, Lawson, Lumesse, Meta4, NorthgateArinso, NuView, Oracle EBS, Oracle PeopleSoft, PageUp People, PeopleFluent, Pilat, Plateau (SuccessFactors/SAP), Saba, SAP, Silkroad, SuccessFactors, SumTotal Systems, Taleo, Technomedia, TEDS, TowersWatson, Ultimate Software, and Workday.
Research members can access this report directly (entitled “The Customer Experience: Talent Management Techologies for 2012“). If you would like help understanding this market or selecting the right vendor, we have a wide range of research, tools, and services to help you. Our Talent Management Systems 2012 Market Overview and Buyers Guide is a keystone part of this research.
Please contact us directly if you would like more information or consulting assistance in this important market… and we look forward to your comments.