Conventional wisdom says any business is only as strong as its workforce. But building that workforce is often easier said than done, as many manufacturers know all too well. Most struggle to attract and keep skilled workers. Recruiting pressures are high, but talent management software can take some of the stress out of hiring, training and retaining employees.
Experts say that talent management challenges aren’t caused by a lack of candidates -- certainly many people in this economy need the work -- but rather a lack of applicants with business-critical skills. “The war for talent is on. Even large companies are having a hard time,” said Bob Parker, group vice president at IDC Manufacturing Insights, based in Framingham, Mass. “There’s a priority around talent as a competitive differentiator and even in emerging markets, finding bodies is easy, but finding skills is difficult.”
More on talent management software
Read an SAP talent management FAQ
Understand talent management software trends
Parker suggests that businesses start in their own backyards. “Focus on the talent you already have and work on retaining them. It costs a lot less to keep and train your existing talent than to find new talent.” And talent management software can also help with that, he said.
But businesses need to recognize that recruitment management alone may not be the silver bullet for their workforce challenges, according to Claire Schooley, a senior analyst at Cambridge, Mass.-based Forrester Research Inc. “While some organizations think the pain point is training, others think it’s employee performance and goal setting, and others think it’s hiring employees who are innovative and creative and will integrate well into the culture,” she said. “Most organizations are all over the place in that, but you can’t start all components of talent management at the same time. Usually, people pick out the one that’s going to make the most difference to them.”
Pillars of talent management software
According to Schooley, there are four “pillars” of talent management that should be supported by software vendors. These are the following:
- ) Recruiting, including workforce planning and succession planning: “This whole area has changed enormously in recent years because of social networking,” Schooley said. Attracting “pre-candidates” -- people who have not yet applied for a position -- involves tapping into these social networks and building a corporate website that reflects the company culture, she said.
- ) Performance goals: This is where the manager takes over, according to Schooley, to help workers chart their paths by outlining performance objectives, collaborating with new hires, identifying weak points in their skill and creating employee performance and career development plans.
- ) Learning: “Learning and performance should be integrated at this point,” Schooley said. “This pillar is also where appropriate learning and training courses for employees are identified.”
- ) Compensation: Pay for performance is a standard talent management tenet, according to Schooley. “If you overachieve, you’ll probably get a bonus. This also includes public recognition and non-cash rewards. It’s a part of the culture today to reward each other,” she said.
“Is anybody doing talent management tremendously effectively, with every pillar integrated? No, but the vendors are trying,” Schooley said. “The executives are looking at the role of HR [human resources] as more than transactional, payroll and insurance; they’re asking HR to take on a role that is helping other business units look at their staffing and skills needs. The VP of HR needs a much better understanding of the business as a whole.”
Luke Marson, senior solution architect at Gavdi, an HR consulting firm based in Denmark, advises talent management software buyers to look for packages that fit their needs, without much shoehorning required. “A lot of talent management software comes with nice features -- such as a nine-box grid, profile matching or calibration -- but if that functionality is the main selling point and the rest of the software doesn’t really support what you’re trying to do, then it’s best to look for something else,” he said. “It makes sense for the business to have software that is flexible enough to meet their unique processes, but robust enough to not need heavy customization to achieve it.”
Integrating talent management software
To get a comprehensive picture of a company’s talent pool -- and where the shallow ends are -- experts recommend integrating talent management systems with other enterprise software, such as ERP. “[Talent management] needs to be integrated with at least a core HRMS [human resource management system] solution, which may be part of ERP,” said Jim Holincheck, managing vice president at Stamford, Conn.-based Gartner Inc. “This is typically the system of record for employee and organizational hierarchy data that is used in the talent management processes. Many vendors also leverage third-party business intelligence tools for reporting and analysis.”
“Integration with reporting and analytics systems is becoming ever more important, as organizations look to identify how they are performing, where their weak links and strengths are and what are the areas of improvement,” Marson said. “If you have a bunch of key positions that you need to get succession plans for, then you need to know exactly how many positions there are, what level of coverage they have and, most importantly, what those positions actually are. If you are looking at rewarding your top performers, you want to know exactly how they are performing and who they are.”
Tapping into talent management software
When building a talent management strategy, Holincheck recommends that businesses decide how they want to change the way their workforce data is being leveraged . “If you already have well-defined processes and more manual approaches that work well in your organization and all you want is solutions to better automate, that is different from an organization that has multiple different processes that wants to standardize and re-imagine their talent management processes,” he explained. “The latter often requires specialized consulting help to be successful. The former can often be achieved with just vendor resources that can help you quickly configure the solution to meet your needs. Like many things, getting the right talent working on your implementation project is key.”
Marson emphasizes the importance of setting a clear talent management strategy before embarking on the software selection and integration journey. “Will you introduce performance, recruitment, development and succession or will you also bring in compensation and analytics?” he asked. “Do you have the organizational foundations in place, such as competencies and jobs? Are your managers and key stakeholders ready to accept this change and do they understand the bigger picture?”
Marson said companies shouldn’t overestimate what the software can do. "The software is just a set of tools to support the long-term objectives of the organization to measure, grow, develop and retain employees, as well as provide sustainability into the future and also reduce the need to bring in outside people who don’t understand the business or its culture,” he said.