Why do enterprises invest in talent management systems?

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Human capital development

Development of an organization’s human capital — people — has a number of big-picture benefits. Talent management systems support organization development in many different ways. Talent management software enables managers, teams and employees to focus on the right goals of the organization and work towards larger corporate goals by tying development objectives and performance targets to those corporate goals. Such software provides structure and automation to employee development planning, training and enterprise learning.

Talent management tools provide ways to develop successors of incumbents in key positions, thus providing protection for the roles that drive the most value to the business. To review the development plans and performances, talent management software often provides cross-suite analytics, helping businesses make informed decisions about their talent and their goals.

On top of the benefits of employing talent management tools, using a cloud-based talent management system has its own rewards. Cloud talent management systems can be cheaper to maintain because there’s no hardware. They can integrate more easily with other systems compared to an on-premises system, so a business doesn’t have to rely on specific vendors. Cloud technology also has regular releases or updates, which can provide constant innovation to a business’s talent management system and process.

Organizations are typically driven to implement talent management systems because they are looking at taking their organization to the next level. Expansion can result in a business outgrowing its existing systems or processes. Another driver for procuring talent management software is that, over time, a business can acquire a series of disjointed talent management systems or can reach a critical size where structure is needed to formalize talent management processes and structure them using software. Organizations may also look to talent management systems to increase the productivity and performance of their workforce or to act simply as part of a larger HR or digital transformation.

Typically, a talent management investment will repay itself within two to three years as the efficiencies, productivity, reduced hiring costs and better-educated workforce drive business value and profitability. For example, various studies have shown that better recruiting and onboarding leads to greater retention of new hires — many newly hired employees make a decision to stay or leave within the first six months — thus reducing turnover and hiring costs. Additionally, retention builds continuity and engagement, which, in turn, could lead to greater productivity and profitability.