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