Talent Management System: Meaning, Key Elements

A talent management system (TMS) is an integrated software suite that addresses the “four pillars” of talent management: recruitment; performance management; learning and development; and compensation management.

A talent management system, or TMS, is an integrated software platform that supports core talent management processes, including recruitment, employee onboarding, performance management, learning and professional development, compensation management, and succession planning. These processes, and the technical capabilities that support them, are typically delivered via software modules. So, businesses can start with what they need and add additional functionality as they grow.

Most importantly, with a TMS, an organization can link human resource planning to its business strategy. This ensures proactive measures are in place to provide the necessary talent that will support the current and future goals of the business.

Purpose

Whereas traditional HRMS and enterprise resource planning (ERP) systems focus primarily on transaction processing and the administration of basic human resources processes such as personnel administration, payroll, time management, etc., talent management systems focus on providing strategic assistance to organizations in the accomplishment of long-term enterprise goals with respect to talent, or human capital. Talent management systems may also be referred to as or paired with an applicant tracking system (ATS) in either standalone application or as a suite of products. According to Bersin, talent management may be defined as the implementation of integrated strategies or systems designed to improve processes for recruiting, developing, and retaining people with the required skills and aptitude to meet current and future organizational needs.

The key elements of a talent management system.

• Ensure talent strategies align with the needs of the business. Work with leadership teams to understand business objectives, then ensure the talent strategy supports these outcomes.
• Recruit candidates. Source talent globally, nurture candidates throughout the recruitment process, and leverage the efficiencies of a comprehensive applicant management and tracking system.
• Onboard employees. Optimize new hire engagement with a dedicated onboarding portal. Ramp employees quickly with paperless new hire processes. Automate workflows for on-, off-, and cross-boarding.
• Manage employee performance. Help employees manage their goals. Use guided action planning for continuous performance management.
• Plan and design compensation models. Reward and recognize strong performers.
• Develop and retain employees. Provide modern and engaging learner experiences. Schedule and carry out compliance training. Develop proactive succession plans and actively develop leaders.

Functional modules and their market worth

TMS solutions typically offer one or many disparate or integrated modules which provide business functionality in areas of human capital management / human resources typically referred to as “strategic”.

• Performance management
• Goal management
• Compensation management
• Talent acquisition / recruiting
• Learning management systems
• Career development
• Succession planning

The role of talent acquisition and performance management has increased many folds compared to learning management systems in the talent management market. Many companies which were earlier working on only one of these domains have moved to developing integrated talent management systems.

Delivery methods

Many organizations struggle with HR data silos, disconnected technologies, and manual processes, the future of talent management is embodied in solutions designed from the ground up to provide business-centric functionality on a unified talent management platform. Talent management system recently have been at the forefront of growth in the software as a service (SaaS) delivery market following earlier iterations in the standard HR systems space via application service provider (ASP) delivery models. Traditional delivery via on-premises license sales still exist, but are much less prevalent in the competitive space.

Enterprise systems integration

Vendors of TMS software typically claim varying degrees of integration with other enterprise software vendors, and in particular with leading vendors of HRMS systems. The accuracy of these claims is often a question of interpretation, as the degree to which each vendor integrates with 3rd party systems varies considerably depending on circumstances and both the vendor and the third-party solution. In some cases, third party vendors offer certification for such scenarios, in order to offer some basis of comparison.

Competitive market

The so-called war for talent has driven a marked increase of attention and investment in the talent management space as new vendors continue to enter to support an ever-growing demand for strategic human resources applications. Many of these competitors have entered via the software as a service (SaaS) delivery model, affording small and medium businesses (SMB) new less-costly options. The Gartner Magic Quadrants for Talent Management Suites compares the major players of this market each year; in 2018 ranking products included Cornerstone OnDemand, SAP’s SuccessFactors, and Skillsoft’s SumTotal systems.

Benefits of Talent Management Solutions:

• Recruitment strategies that align with the objectives of the business.
• An integrated and centralized data model for all talent management activities.
• Improved employee onboarding, retention, and development.
• Better engagement between managers and employees, including processes for compensation, reviews, and rewards.

Evolution of talent management systems

In the 1980s and early 1990s, talent management focused predominantly on developing internal talent, leading to an excess of middle-management roles. Through the economic downturn, businesses restructured, and more emphasis was placed on attracting external talent. However, by the late 1990s, organizations found they were hiring and losing experienced people at about the same rate. This led to a new focus on retaining and nurturing existing personnel.

HR processes were incorporated, but without a centralized model, each track was siloed and information was often out-of-date. HR and recruiters had to deal with paper-based and time-consuming workflows with little time to focus on strategic initiatives.

Comprehensive talent management systems were created to integrate all HR talent modules within a single platform. Workflows became automated and digital, creating efficiencies across the organization.

Today, talent management systems are used by companies around the world and across all industries. Here are some examples:

A global construction company, Mota-Engil, implemented a TMS to transform its HR practices and prepare its workforce for a future of growth and innovation.

Terex, a leading manufacturer, uses a TMS to support workforce diversification while simplifying and streamlining HR-related activities for increased engagement.

A TMS also helps organizations with unique and modern challenges relative to talent management in the 21st century. For example:

• Diversity and inclusion: Implement diversity sourcing and candidate development plans. Provide proactive and continued development to regain and grow a diverse workforce.
• Skilling, upskilling, and reskilling: Identify skills gaps. Establish training and reskilling pathways to transition people to new or evolved roles.
• Remote workforces: Shift employee support mechanisms to accommodate remote workers. Provide new interaction models to ensure manager and employee engagement is optimized.