Talent — the only resource that can transform a business into a byword — has become harder to come by and costlier to hire.
As a result, employers find themselves fiercely competing to lure highly skilled professionals into their ranks, while top talent finally discover their ability to influence how the recruitment game plays out. The scenario is turning into what many industry analysts describe as a battlefield.
With the talent war already raging, does your company have the proper HR assessment tools it needs to win?
In 2014, organizations increased their talent acquisition budgets by an average of 7 percent, with companies in the health care and IT sectors reporting two-digit increases amid fierce competition for in-demand skills. According to Bersin by Deloitte, companies in the U.S. incur an average cost of $4,000 just to bring one candidate on board.
That amount is loose change compared to the expense of hiring a bad candidate. If your organization manages to accept a bad hire even after a grueling selection process, expect to trim your bottom line by at least $25,000 and even northwards of $50,000, according to CareerBuilder. Those amounts are on top of potential, hard-to-quantify show-stoppers a bad hire can inflict during his or her stint at your company. Think productivity loss, wasted recruitment and training time, lowered employee morale, and other negative effects, then you’ll understand why nailing recruitment at the start is critical.
Automated HR tools such as applicant tracking systems (ATS) help minimize your workload during recruitment, but they are hardly the be-all, end-all of the talent management cycle. ATS may filter out a few good candidates from your pool of talent and serve up those who don’t fit your organization.
You’ll need training and development tools to keep your top talent in top shape as well as etention strategies to keep them from being mesmerized by a shinier employer brand or by better perks offered by a rival organization.
|Average cost of getting 1 job candidate on board||$4,000||Bersin by Deloitte|
|Average cost of getting 1 bad candidate on board||$65,000+ – 1 in 3 German employers$50,000+ – 1 in 4 of US employers$48,000+ – 1 in 2 Chinese employers$37,000+ – 1 in 3 Indian employers||CareerBuilder|
|Percentage of employers reporting a bad hire||88% – Russia87% – China84% – India66% – US62% – UK||CareerBuilder|
|Number of resignations/quits in the private sector||2.5 million – March 20072.1 million – March 20081.6 million – March 20091.6 million – March 20101.7 million – March 20111.9 million – March 20122 million – March 20132.2 million – March 2014
2.8 million – March 2015
|US Bureau of Labor Statistics: Job Openings and Labor Turnover|
|Number of employers worrying about their top talent leaving them||82% – October 201460% – February 2014||PayScale|
|Net change in company size||55% – Expansion9% – Downsizing||PayScale|
|Business outlook||73% – improved financial performance in 201522% – no significant change5% – weaker financial performance||PayScale|
|Plans to upgrade HR Technology||25% – purchase performance management system19% – purchase new payroll system13% – explore electronic ATS10% – explore human capital management systems9% – explore workforce analytics software7% – explore social recruiting software||PayScale|
In March 2015, the U.S. Bureau of Labor Statistics reported 2.8 million resignations, the metric’s highest level since the 2008 financial crisis. Among other things, the spike in resignations among employees signal their rising confidence in finding new and better jobs. It also reinforces the consensus the U.S. economy has completed a U-turn and is positioned for growth.
It’s giving employers the jitters. Letting go of problem workers is a welcome change, seeing top performers go can be devastating. A PayScale study revealed eight out of ten employers worry about retaining their in-house talent. Notably, even Apple showed some hint of employer insecurities when it granted employees some slack and a few perks as early as 2012, in an undisguised effort to keep them around longer.
The PayScale study also cited technologies and analytics that help mitigate worker exodus from your office space to the premises of your rivals. Among these are compensation management software that links pay, staff performance, and corporate strategy, as well as learning management systems (LMS) that keep your staff focused on discovering new skills instead of eyeing the aggressive startup or the upscale enterprise across the street.
You Need Innovative Systems for Talent Recruitment, Development and Retention
Given all the factors at play in the talent market, employers tend to be more aggressive, ready to pounce on professionals with valuable skills, and prepared to lock horns with other recruiters targeting the same talent.
The rising premium on talent is understandable. One venture capitalist noted that investors consider talent as arguably the most important factor that sways their decision to finance a company or a business idea. You may have the right vision, timing, or cash flow, but sourcing funds to support your organization will be more difficult than it already is if you lack a bright-eyed team of dedicated talent who will spawn, iterate, and sell your product.
As the landscape shifts amid rising business confidence, the race to innovate and create products to generate an eager customer base is in full swing. Without a talented, ambitious team, your business might stall and unnecessarily prolong your speed to market. That yields precious territory to your competitors, given consumers’ unbridled preference for instant gratification.
Forward-looking companies appreciate this change by tapping smart technologies to help drive their talent management cycle. Based on industry data, a lot of companies — from global corporations to startups — have already joined the club. Shea & Co. consolidated research from IDC and Forrester, projecting an 8.2% compound annual growth rate for the human capital management software market from $10.4 billion in 2013 to $15.4 billion in 2018.
Meanwhile, the brisk pace of investments and high value mergers in the sector — such as LinkedIn’s $120 million acquisition of resume-job matching service Bright.com and Skillsoft’s acquisition of SumTotal Systems, one of the largest global players in the LMS industry — indicate an even stronger role for HR technologies in the future.
The main components of this rapidly expanding market include the following:
- Compensation Management Systems
- Performance Assessment Software
- Learning Management Systems
- Recruitment Tools
- Core HR Administration Platforms
These tools help HR professionals perform many administrative tasks more efficiently. Common tasks include:
- talent sourcing
- candidate evaluation
- diversity compliance
- career planning
- succession planning
- performance evaluation
- training and development
- compensation management
- payroll and benefits administration
- workforce collaboration and engagement
Viewed from a broader perspective, upgraded HR management tools help perform business-critical functions such as:
- Automate tedious processes at different nodes of the talent management cycle, freeing HR to focus on corporate growth;
- Provide data analytics to rationalize strategic decisions; and,
- Establish appropriate learning and working environments to keep the workforce at par with market possibilities.
Sample Systems and Use Cases
Computerized HR management systems (HRMS) have been around for decades. Originally developed to simplify or automate the processing of common staffing concerns such as work hours and payroll, legacy platforms were on-premises applications that reside in mainframes and were affordable only to highly capitalized enterprises. These pioneering applications adopted a “systems of record” architecture and usually come with drab user interfaces featuring the iconic green-text-and-black-background combo.
Over the years, HR management systems (HRMS) have evolved dramatically. With the advent of more powerful computing technologies, HR software became more accessible to mid-sized companies and even small startups. Many of these new platforms are cloud-based and are offered via subscription as software-as-a-service (SaaS). Most have robust mobile components and strong user-centric designs. Many have also adopted a “systems of engagement” architecture by shifting their focus from processes to people, encouraging healthy collaboration among all players: managers, recruiters, employees, job applicants and even customers.
Here are some HR assessment tools, learning management systems, and employee engagement software you might want to consider for your organization. Note that some providers offer feature-rich, end-to-end solutions while others focus on specific HR functions such as applicant tracking systems. There’s no rule of thumb on which type best suits your business and most, if not all, stand-alone software can be integrated into other platforms. The trick is to determine your organizational needs and explore the features and costs of each system you’re considering.
- ChequedSuite – Staff recruitment goes beyond the required technical skills. You still have to assess a candidate’s soft skills before getting him or her onboard. ChequedSuite is a multi-featured platform for talent selection that includes several stand-alone components such as ChequedFit (a predictive cultural and behavioral assessment test), ChequedInterview (an interview guide for hiring managers) and ChequedReference (an automated service that collects and analyzes feedback from past employers).
- WebHR – Designed to bridge the HR department with the rest of the organization, WebHR is a cloud-based talent management software with a strong social architecture and a host of end-to-end features. The platform covers recruitment, payroll, performance, training, attendance, leave management, employees’ self-service, and other components. You can get the service for free if your business employs no more than 10 workers.
- Workday – Forrester reported in October 2014 that Workday remains a top choice among large businesses planning to migrate from on-premises legacy HR systems to sophisticated cloud-based services. Workday offers a full suite of integrated software used by hundreds of the world’s biggest enterprises. Its platform covers financial management, talent management, and big data analytics across a wide range of industries.
- Skillsoft – When you combine one of the world’s largest e-learning companies and one of the biggest talent management system (TMS) providers, you get the formula for a highly skilled, leading edge workforce. Skillsoft acquired multi-awarded HR software provider SumTotal in September 2014. The acquisition bolsters Skillsoft’s efforts at bridging the widening skills gap in many organizations.
- Keas – With wellness programs steadily becoming a standard component in workplaces, Keas’ health management platform promises to reduce your health care costs by minimizing health risks in your offices. The platform comes with the mobile app Keas+ that integrates personalized benefits recommendations, a health-focused community, wellness coaching, and gamified health challenges.
- Saba – Saba is a talent management platform that uses machine learning to generate intelligent recommendations to employees, managers and HR practitioners on how they can meet their respective goals and become better at what they do. Saba offers a range of services including recruitment support, learning management, performance analytics, and compensation management.
- SilkRoad – A pioneering HR software provider in the cloud-based SaaS market, SilkRoad offers an end-to-end talent management solution. From recruitment and onboarding to talent development and retention, SilkRoad’s award-winning suite of services promises a high degree of user engagement, adoption, and collaboration.
- iCIMS – iCIMS focuses on talent acquisition and offers three main services: iCIMS Recruit, iCIMS Connect and iCIMS Onboard. iCIMS Recruit runs as a robust ATS that helps you find quality candidates. iCIMS Connect helps you build and engage a talent pool. iCIMS OnBoard automates the process of transitioning job candidates into new staff. iCIMS taps the mobile, social and video technologies to bolster talent acquisition.
- IBM Smarter Workforce – Powered by Kenexa, this HR solution cuts recruitment spending, accelerates the hiring process, and uses data analytics to retain top talent.
- JobScore – JobScore is a free applicant tracking system that lets you automatically sift through a sea of resumes and find quality candidates who meet job requirements. Post to multiple job boards with a single click, and effectively engage your talent pool across social sites and professional communities.
What to Look For In HR Software Solutions
Dramatic changes in the talent and technology landscapes make it impossible to remain dependent on legacy HR management systems. Doing so will weigh down your organization and prevent your teams from achieving targets. That leaves organizations with no other option but to embrace change and adapt to the terrain.
So what do you need to consider when building out an HR management system for your organization?
As noted by widely respected consultant Josh Bersin, the trend in HR management solutions shifts towards user-centric designs, with traditional systems of record giving way to systems of engagement. Systems of record are primarily used by HR departments to log work hours, calculate payroll, and perform other administrative tasks. On the other hand, systems of engagement are designed to be used by everyone in the organization to learn, connect with each other, collaborate, and set individual as well as collective goals. As such, these systems should have a comfortable level of flexibility and provide excellent experiences for all participants in the talent management cycle: workers, managers and HR professionals.
On-premises platforms are also on the wane, with cloud-based services rapidly gaining ground and projected to ramp up market share to more than 50% by 2017, according to Gartner. Cloud-based HR software services will largely be subscription-based and more cost-effective, given the rate of change in computing technologies.
When it comes to applicant tracking systems, services that allow a high degree of customization — especially when it comes to setting the screening criteria — is preferred. This is to ensure that the algorithm for candidate selection won’t block good candidates from making the short list, nor allow chronic problem employees from getting on board.
For talent management systems, choose learning algorithms that have the capability to present rich media courses or links to the knowledge base within the context of what employees are working on at the moment, similar to contextual ad impressions being implemented on the Web.
With the number of telecommuting employees on the rise, integrating strong mobile capabilities into the HR management system should be a no-brainer. Simply discard a service that lacks a mobile component.
Social networks and gamification retain their significant influence on employee behavior and as such should also be integral to your talent recruitment and management tools.
In summary, opt for HR management systems that have the following features:
- Excellent UI/UX
- Mobile support
- Robust social component
- Extensive use of rich media such as videos and animation
- Contextual learning
Winning the Talent War
Talent has always been a key driver of organizational success. If business were a card game, having top talent in your payroll would be like having a few aces in your hand.
For HR departments, the search for talent should begin with adaptive applicant tracking systems that have strong social media and mobile support. However, having the proper HR tools and using them effectively account for just part of the battle. The more exciting part is the new role HR management systems have incidentally assumed.
From being just an automated system for administering paychecks, HR management systems have evolved into a powerful strategic tool for harnessing a company’s most valuable resource: its people. With the talent shortage and skills gap already threatening the competitiveness of many U.S. companies, your organization should quickly use this tool as the groundwork for a winning talent strategy.