The Case for an Integrated Approach
According to in-depth case study analysis from Nucleus Research, companies who invest in integrated talent management systems benefit from duplicated return compared to those who do not. To be precise, when organizations use standalone automation tools like work force management systems and HR systems, they can expect to receive $2.81 in returns for every dollar spent. In comparison, when organizations implement talent management into a broader integrated talent management approach, they can expect to receive $5.94 in returns for every dollar spent—that's more than double!
Why does Integrated Talent Management double ROI?
When using standalone workforce management and HR management systems, focus is set on cutting cost through automation and efficiency. Taking silos HR management systems for example, automation activities may include payroll, internal job positing, employee self-service, time and attendance and scheduling. Workforce management systems extend upon the aforementioned activities to include tasks like demand management, workforce dispatching and real-time mobile communications. All great ways to increase efficiency and cut costs but savings quickly cap.
Conversely, Talent Management Strategy focuses on the core activities that ensure organizations are equipped with talent to meet their current and future strategic goals. These activities focus on the employee life cycle and include activities like: recruiting, hiring, onboarding, performance management, succession planning and off-boarding. Incorporating these activities into an Integrated Talent Management System provides HR directors with the capability to optimize productivity by using tools that allow organizations to place talent into roles where they excel.
By creating employee records in an organization’s talent management system, HR managers are able to effectively see where employees are in the employee life cycle. For example, performance and appraisal data will allow HR managers to know which employees are ready for promotion. Coupled with workforce management data, this is extremely helpful to know when you identify employees who are ready for retirement or have been predicted to leave the organization. Currently talent management systems are set up to identify matches in promotion or movement opportunities before it becomes a problem. The next generation of talent management systems is going to transcend automation and notification capabilities to deliver solutions for talent optimization and self-maintenance.
The Talent Management System of the Future
As cloud-based technologies become mainstream, an increasing amount of organizations are beginning to realize the benefit of cloud-based investments. According to Nucleus, cloud-based technologies deliver 1.7 times more ROI than systems that host and store data on premise. Related to talent management systems, cloud-based technology currently permits data to be continually synced and stored in safe and centrally connected databases so that employee records are kept up to date. The next generation of talent management systems will better utilize employee data and cloud computing so that sophisticated analytics and reporting can predict problems and automatically solve them before they happen. One day sooner though, integrated talent management systems will be able to utilize data stored in the cloud from every single information system an organization has to create predictive reports that will allow us to make highly informed strategic decisions for the future.
If you're looking for more information, you might want to check out our Whitepaper on Assessing Return on Investment: