JOSH BERSIN

Insights on Corporate Talent, Learning, and HR Technology

Talent Management Software – Yes, It’s Still Hard to Select the Right Solution

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The talent management software marketplace is now more than ten years old, yet it is still a daunting task to select the right solution.  This market is both consolidating and expanding at the same time – and let me explain why.

History of the Space

Originally these systems were designed as forms automation systems, often based on PC tools, which were used to automate performance appraisals or streamline the capture and storage of incoming resumes. Four independent markets grew up: learning management systems (for scheduling and administration of training), applicant tracking systems (for capture and search of resumes), performance management systems (for automating performance appraisal), and compensation systems (for tracking and managing compensation decisions).

Each of these four markets evolved from PC software to web-based software to today’s SaaS or cloud-based solutions.And as the technology evolved, vendors realized that they could integrated all these different functions into integrated suites.  I remember our first research study on the Suite market (around 2006) and we were debating whether or not this integration was really going to take place.

Well since that point in time, the world of corporate talent management has evolved, and companies now understand the benefits of linking all their talent processes together. While most organizations still have a separate training team, recruiting team, and OD or leadership development team, more and more companies now understand that by connecting these HR functions together they can accomplish things they could not accomplish before.  The simplest example is the sharing of common competency and leadership frameworks:  if you know what kind of people succeed in your company, you can source for them, recruit for them, manage to those skills, assess leaders against these skills, and adjust compensation based on these competencies.

Integrated Suites and HRMS Vendors

And as businesses realized the benefits of integration (and the headaches of having multiple talent platforms), vendors started to build integrated suites. In the last 18 months more than 30 different vendors were acquired and nearly every player in the market announced some form of integrated suite.  Even companies in the workforce management market (hourly scheduling and team management) are now getting into talent management.

Our market forecast, which will be published in the next week (Talent Management Systems 2012), shows that this market (not including the workforce management market) is already around $3 billion in size and is growing at nearly 12% this year (even during the recession).  So the whole area of talent management software has now reached “critical mass” and the big software players are now interested.

So now the biggest software companies in the world (Oracle, SAP, ADP, IBM) are in this market. All these companies are selling integrated talent management modules of their own, and most are highly competitive.  The pioneers of the market (SuccessFactors, Taleo, Saba, and Cornerstone being the most prominent public companies) continue to gain most of the visibility – but we believe these ERP and payroll companies are rapidly going to become major players.

New Disruptors Emerge

And now that this consolidation is starting to take place, a whole new breed of disruptors has emerged.  These are companies that are “rethinking the whole space.”  (This always happens in enterprise software.)

They generally fall into the category of “social XXX” platforms.  We categorize them into five new categories:  social recruiting platforms, social learning systems, social rewards systems, social performance tools, and social career management systems.  Note that I’ve used the word “social” for each of these new segments:  what these startups have done is radically “rethink” the problem and come to market with tools which implement talent management differently.  Instead of assuming that your line manager does all the “talent management” in a company, these companies have realized that great talent management is “social” – and transparent.  So rather than having your performance rating handed down by your manager, you get feedback during the year from your peers and they “rate you” on an ongoing basis.  (Ditto your rewards and recognition, career development, learning, etc.)

Just a few of these companies include Rypple, Achievers, GloboForce, Upmo, Zapoint, Work4Labs, Bloomfire, Wisetail, Jobvite, Jobs2Web, BraveNewTalent, Sonru, Hirevue, Branchout, and many many more.  We will be publishing a report on all these new companies in the coming month, so stay tuned.

Oh.. and by the way… now that companies have all these talent management platforms (and most companies have 3 or 4 at least), there is a huge market for software that integrates and analyzes all this data – so the market for cloud-based analytics tools is starting to grow.  Visier, Tableau, and a whole variety of new cloud-based analytics platforms are now available.  If you would like to learn more about this, join us at IMPACT 2012, where we will have a special track on the topic of BigData in HR.

I am not even going to try to list all the vendors in this market.  There are hundreds.  And from my perspective, this is an exciting time to be in HR – you have so many new approaches, systems, and models to think of.  But from your standpoint, the decision about “what to buy” is actually harder than ever.  And that is why we keep doing our comprehensive research.

This last week we published our 2012 Talent Management Systems Buyers Guide, a research study which is more than a full year in the making.  The purpose of this report is not to give you every feature from every company (that data becomes out of date in weeks), but rather to help you understand all the major players, the issues and factors you should consider, and give you the tools to quickly build a “short list” of vendors.  This research has two companion pieces:  our Talent Management Systems Market report and our Talent Management Systems Customer Satisfaction research (both of which are available to research members).

We as an organization, are experts on this market, these systems, and how to select the right strategy.  With more than ten years of experience working with these vendors and helping companies develop their HR technology strategies, I know our research and services can help you.

If you are not quite ready to purchase the report or join our membership program (60% of the Fortune 100 have already joined, so you’ll be in good company), come to the webinar we are hosting on November 30, “The Hot and Exploding World of Talent Management Systems: Key Trends for 2012 – The Role of Social, Mobile, and Big Data”.  I plan to do my best to give you the whole picture of what’s going on in only an hour.

This is an exciting time in the world of HR technology.  Join us as we continue to study, report, and help you make the best decisions on your company’s HR and talent management solutions.