Why? For many companies, talent management is a labor-intensive chore involving piles of paper. In a word, it’s inefficient. “A lot of companies’ information is locked away in Word documents and file cabinets,” says Brent Claxton, chief technology officer of Organization Metrics, Inc. (OMI), a provider of talent management solutions.
Not surprisingly, Claxton says management software can help. Doing talent management the traditional way means companies often lack relevant information such as demographic data and employees’ mobility preferences, he says. “Technology can give you a more comprehensive view of employees. We call it a talent profile.”
Such profiles are designed to provide a 360-degree view of employees, including the regions and sectors in which they’ve worked and a summary of their knowledge and skills. Some companies ask employees to keep their own profiles up to date. Others collect data by integrating the software with other enterprise software such as ERP systems.
Many companies focus first on using software to automate performance appraisals because appraisals are a major pain point for them, says Sean Conrad, a senior product analyst at Halogen Software, another provider of talent management solutions. They often add ongoing performance management tools to help ensure employees’ goals are aligned with organizational goals.
The next logical step, says Conrad, is adding a succession planning element. While Halogen sells standalone performance appraisal software, succession planning cannot be purchased independent of its other modules because it is so dependent on performance appraisal and other software in the suite.
Interest in performance management software is increasing. IDC expects spending in the category to reach $2.6 billion in 2012, after posting growth of 10 percent a year. Twenty-six percent of human resources professionals recently surveyed by CedarCrestone, a consulting company specializing in human resources applications, said their companies already used succession planning software, with 16 percent including it in their budgets for 2009. Fifty-four percent of respondents already used performance management software, with 13 percent including it in their 2009 budgets.
Another pitfall of paper-based succession planning, says Conrad, is that it tends to focus on traditional organizational charts, which are limited in scope. “If you are looking only at ‘What does John Baker, VP of sales, do?’ you end up looking only at John Baker’s direct reports.” A software-based process, in contrast, “doesn’t put a person’s name on a role.”
Instead, companies define the skills or competencies someone needs to perform a job, and the software identifies all employees who meet the targets – or could do so with some professional development. Halogen’s software assigns employees to “talent pools,” Conrad says.
Performance management and succession planning become more proactive because “managers can take people with potential and develop them to meet the desired targets,” he says.
Part of software’s value is that it presents this kind of data in a highly visual way, says Claxton. While gathering employee information and centralizing it online is helpful, it can still be daunting to review it in a text-based format, especially when hundreds of employees may be involved. OMI’s software presents visuals such as organizational charts, with boxes under each position showing how many potential successors are available now and how many will be ready in the near future, he says.
Employees get more value out of the software-based process, as well, says Conrad. Rather than a once-a-year appraisal in which they get limited and often vague feedback, software provides them with a sense of exactly which skills they need to develop to move into specific roles. It’s especially important with Generation Y workers, who tend to want more ongoing performance management from their managers.
ABOUT THE WRITER
Ann All was a leading media authority on automated teller machines before coming to IT Business Edge to cover tech alignment and business value.