By 2010, one-third of companies plan to upgrade or otherwise make changes to their talent systems to better aid succession planning. Another one-third of companies want to improve recruiting processes, while 29 percent aim to bolster their in-house learning functions.
The research is part of Watson Wyatt’s 2007 HR Technology Trends report, a biennual survey that was released in October 2007. It compiled responses from 182 large U.S. corporations.
Those are dramatic increases from Watson Wyatt’s previous survey on talent management in 2005. Tight labor markets and the looming retirements of older workers have fueled interest in talent management, a term for an integrated approach to managing various human resources processes, including recruiting, hiring, onboarding, training, performance management, leadership development and workforce planning.
"The overall number of companies who are looking to change or switch their systems was a bit of a surprise. System investments are not something companies take lightly," says Brian Wilkerson, who heads Watson Wyatt’s national practice for talent management.
Wilkerson says firms are trying to make better use of the reams of data they already collect on employee skill levels and competencies. Rather than relying on instinct when mapping out succession plans, organizations realize they need more objective data to pinpoint skill gaps and orchestrate appropriate training.
"What’s happened during the last 24 months is that more HR organizations are trying to be more strategic and data-driven" regarding promotions and leadership decisions, Wilkerson says.
For instance: Learning management systems let organizations track participation rates, class enrollment, attendance, course completion and test scores. But many companies, particularly large ones, remain frustrated that they can’t go beyond such transactional data to gain meaningful insight into both skill levels and skill gaps.
That points up the need for companies to better consolidate data from various networks, including learning management systems and enterprise resource planning systems, Wilkerson says.
Seagate Technology, which makes computer drives and storage products, uses a talent management process to bring together four important elements: workforce planning, the alignment of work teams with company goals, skills development and the evaluation of team and team leader effectiveness, says Marquam Piros, Seagate’s senior director of performance and learning management.
In addition, about 95 percent of Seagate’s 18,000 employees have created individual development plans that are based on their understanding of how their skills directly support company objectives.
Piros says Seagate demonstrates its commitment to employee learning with a corporate "people goal" that is designed to improve retention of more "world-class talent."
Heidi Spirgi, president Knowledge Infusion, a Minneapolis-based management consulting firm, sees a trend away from external hiring and toward greater emphasis on developing current employees. As part of this evolution, HR organizations are beginning to assess the training requirements needed to retain people in key positions, such as jobs that require lots of direct interaction with customers or other positions that generate revenue.
Companies also are asking themselves how they can best manage their broad-based pools of talent for succession management, Spirgi says.
Some companies are doubtless thinking about succession planning, but not all of them. Boston-based research firm Aberdeen Group says only 48 percent of companies are pursuing succession planning. Of those that have implemented such strategies, 84 percent have been able to increase the percentage of vacancies that are filled by internal candidates.
But in an echo of Watson Wyatt’s findings, Aberdeen says that the chief impediment of talent management systems in this process is their inability to share data with other systems and to provide snapshots of an individual’s talent and learning needs. Organizations might have internal candidates who, given the right development, could fill key positions, but they will go unrecognized.