Lisa Rowan is director of the HR and Talent Management program at analyst firm IDC, which looks at a broad spectrum of issues - ranging from recruiting to retirement and including employee learning and development.

Learning Executive Briefing: A growing number of suppliers claim to offer talent management solutions. How does IDC define talent management?

Rowan: It depends on the speaker's viewpoint, and there's been a lot of debate around the term.

Analysts agree that often suppliers use the term specifically to connect what they offer to the "talent management suite."

From the analyst perspective, talent management includes all of the capabilities a company needs to attract, develop, reward, and retain its workforce. Behind that - from a functionality standpoint - there is recruiting, learning and training, compensation planning, performance management, succession planning, and so forth.

Unfortunately, nearly all of the suppliers in the space have co-opted the term talent management, but they may or may not fulfill all of those needs or roles in their portfolio. Few have the full suite.

LXB: What about the term "human capital management (HCM)?" Does it mean the same thing as "talent management?"

Rowan: Some see HCM as being synonymous with talent management. I don't see it that way. I see human capital management as another way of saying HR, and talent management is a piece of that. Historically, I think people who didn't want to use the term "human resources" coined the term "human capital management." In that regard, HCM as a term is much older than talent management.

LXB: Is talent management the same as performance management, which is a term suppliers started using a few years ago?

Rowan: For the most part, performance management is tied to the performance appraisal process in buyers' minds. It usually goes beyond that, of course, because organizations are trying to move appraisals and reviews to an ongoing process rather than a point-in-time process. Organizations are trying to improve performance by paying more attention to it. Managers and employees are talking more about setting goals and objectives. If you look at it from an HR perspective, performance appraisals were the most onerous task - employees and managers alike hated it. If there was any way to make it less burdensome, companies wanted to buy it. Performance management tools fill that need.

LXB: But is talent management really new?

Rowan: Not particularly. What might be considered new is putting the individual components together to form a more comprehensive and integrated set of capabilities.

Some of the features of talent management have been around for some time. For instance, learning management has been around for 15 or more years in one form or another. Automated or assisted recruitment using applicant tracking systems have also been around for that long or longer. Of the components, performance management might be the only really "new" item, and some consider it the catalyst for spurring the creation of the talent management suite.

LXB: How so?

Rowan: Companies had LMSs. They had recruitment systems. Then they bought performance management systems. But none of the systems talked to the other systems, and the addition of performance management made that readily apparent.

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Before performance management tools, the thinking was that recruitment information didn't need to be analyzed against other data because those people didn't work for the company yet, and the LMS was specifically for people that did work for the company. Therefore, those two processes didn't seem like they needed to be connected. Performance management, however, was seen as integral to the LMS because companies wanted to be able to prescribe training for development needs that were tied to goals, and they wanted to be able to say how training affected performance. Once that connection was made, companies started to see that perhaps learning and recruitment also went together because they wanted to link new hires' development needs and goal achievement to performance.

As a result, a desire for reciprocal sharing of information became highly apparent. From there, it was just a short hop to compensation because companies had to figure out how to reward their people. Then it snowballed to succession planning because career planning isn't so far out of reach once you have plenty of information about your workforce. Similar connections were made among all of the other talent management capabilities.

LXB: But if talent management is not really new, why do you think it is currently gaining so much attention?

Rowan: First, talent management as a suite wasn't readily available before. Therefore, people didn't know they needed it. Kind of like the iPod. No one knew they needed one before it came out. Now, no one can live without one.

Second, it makes sense to connect these processes. At the risk of sounding harsh, before talent management arrived on the scene as its own process, many of these tasks weren't being done well because few organizations were doing a very good job of communicating and sharing information. For example, you had the recruiter focused on bringing people in - and that's it. Or, you had the CLO who probably did want information for planning purposes, but didn't always have access to it. Talent management suites facilitate communication.

There's still plenty of room for improvement, though.

LXB: Based on your description of talent management, it sounds as though learning is a major link connecting the various capabilities.

Rowan: You absolutely can make the argument that learning is a link or pivot point in talent management. From that perspective, you can look at some of the leading learning management players - SumTotal Systems, Plateau, Saba - they all have a performance and talent management angle. For example, Plateau started out as an LMS; it added performance over a year ago, then they acquired Nuvosoft, which manages compensation. It seems like most suppliers are rushing to fill out the suite.

LXB: Is there a solution out there that has all of the components?

Rowan: Plenty of them say that they do, and all of them do some things very well. When you begin to take a closer look at most products, you'll start to see that one capability or function is typically stronger than the others. For instance, SuccessFactors started out in performance management, so that is its strongest capability even though it has additional functionality. Meanwhile, a company like Softscape is more general, so its learning management may not be as deep as from a pure-play LMS vendor.

LXB: What should organizations keep in mind when looking at solutions - before they buy?

Rowan: Because not all talent management suites currently on the market are created equal, organizations need to concentrate on addressing their own culture and individual pain points. If your organization is focused on recruiting, you might want to take a look at how suppliers like Taleo and Kenexa are filling out their products. If you have a long learning and education culture, then you should start with that as your nexus and look at companies that started as LMS providers. You may already have something.

LXB: What's next? Are there any workforce trends helping talent management gain traction?

Rowan: The numbers don't lie. Changing demographics are having a direct impact on the growth of the talent management market. In 2008, succession planning is going to be under the microscope, and leadership development will keep rising to the top of most agendas. This is a reflection of the skill shortages many industries are experiencing and are expecting to face in the near future. Naturally, organizations are looking for ways to address these issues, and talent management promises to assist them.