There’s been growing interest in adopting a set of connected talent management applications, which refer to tools for key tasks such as recruiting, employee performance management, compensation management and employee development.
But companies should shop carefully as they pursue what often are called “integrated talent management suites,” analysts warn. The more than 20 vendors pitching such products have strengths and weaknesses, according to analysts from AMR Research, Forrester Research, Gartner and Bersin & Associates.
During a presentation October 10 at the annual HR Technology Conference & Exposition in Chicago, Bersin analyst Leighanne Levensaler says truly integrated talent management applications meet eight criteria, including a consolidated or shared database, shared employee profile information and shared “competencies,” which are descriptions of skills.
“The level of integration is strong in some applications and coming along in others,” she says.
The buzz around talent management suites stems from the way a combination of closely linked tools allows for streamlined operations and can help companies get a bead on useful information, such as which hiring sources lead to the best-performing employees.
Talent management applications are among the fastest-growing products within the HR software arena, which is itself the fastest-growing category of business software. Thanks to factors including fear of talent shortages, revenue from “human capital management” applications is slated to rise 11 percent annually between 2006 and 2011, according to AMR Research.
The surge in talent management suites can be seen at Authoria, which sells HR software including recruiting and performance management applications. During the past few quarters, 40 percent to 50 percent of Authoria’s new customer wins have involved three or more software products, compared with 25 percent during the first half of 2006.
A study by Forrester this summer of 10 integrated performance and compensation management products found Authoria to be a leader along with Plateau Systems, Softscape and SuccessFactors. In its report this year on software for performance management, compensation and succession management, Gartner gave a “positive” rating to 14 vendors, including Authoria, Plateau Systems, Softscape and SuccessFactors.
At the HR Technology Conference, Authoria beat SuccessFactors, Vurv and HRsmart in a “shootout” focused on integrated performance management and recruiting software. Attendees voted Authoria tops for the way its software solved each of three related problems.
Despite all the attention on talent management suites, the field has room to improve. Bersin found organizations with multiple applications from the same vendor report that their talent management systems offer just slightly better than “fair” assistance toward key talent goals such as retaining top performers and ensuring quality of hire.
Alan Lambert, vice president of product marketing at HR application vendor Saba, says that even while software systems allow for a unified approach to talent management, companies often continue to operate in silos. They may keep annual performance reviews entirely separate from employee development decisions, he says.
“That remains the greatest challenge to integrated talent management,” he says.
This article has been revised to reflect the following correction:
Correction: October 22, 2008
Forrester’s 2007 study of 10 integrated performance and compensation management software products initially concluded there were three leaders: Authoria, Softscape and SuccessFactors. Later, Forrester corrected its report, saying there were four leaders: Authoria, Plateau Systems, Softscape and SuccessFactors. This story did not reflect the conclusion of the updated report.