Let’s face it: a business-as-usual approach won’t do these days. As companies contend with the post-pandemic era workforce and the fallout of the Great Resignation, sourcing and retaining employees from an already diminishing talent pool is more important than ever.
The good news is that modern-day tech innovations can help you build and sustain dynamic workforces. That’s where talent management software comes into the picture.
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Here’s what we’ll cover:
- What Is Talent Management Software?
- Top Benefits
- Key Features
- Market Conditions
- Key Market Drivers
- What’s Trending?
- Consideration for Buyers
- The Wrap-up
What Is Talent Management Software?
Talent management software is an HR platform that assists organizations in creating a productive and engaged workforce. It provides managers and HR folks collaborative tools to make informed talent-related decisions and ensure that employees develop and remain with their organizations for the long haul.
Talent management software equips HR managers with the tools needed to optimize employee life cycles and manage core talent management activities by:
- Attracting best-fit candidates for open roles.
- Developing employees within your company.
- Motivating your workforce to succeed.
- Retaining top talent.
Primary Benefits
Whether it’s to improve hiring success, optimize succession plans, polish admin functions or achieve organizational efficiency, talent management systems have got you covered. Keep reading to find out how talent management software can support these initiatives and more:
Hire the Right Candidates
While you can rely on recruitment software for all your talent sourcing needs, you can only determine what an ideal candidate looks like after organizing and reviewing employees.
Talent management software helps you evaluate technical skills, professional experience, soft skills and attitudes to ensure culture fit and adopt a strategic approach for creating relevant job requisitions.
Track Employee Performance
Talent management systems provide a consolidated platform for managers to access employee profiles and check on productivity with complete visualization of active checklists, goals and objectives. With automation thrown into the mix, you can make workflows as simplified and error-free as possible.
Provide Development Opportunities
According to a Pew Research Center survey, the most significant factor for employees leaving their jobs aside from pay was lack of opportunities and respect at work.
As your employees contemplate their work and what it means to them, ensuring they feel supported at all times is essential. Talent management solutions provide tools such as reward programs, career development paths and roadmaps for employees to develop skills and foster a culture of continuous learning.
Not only will you transform your employees into active participants in their development, but you’ll also significantly improve competency at an organizational level.
Plan for the Future
Talent management strategies don’t have a set start and finish point. It’s an infinite loop that needs upgrades with every process change. And the best way to measure progress is through strategic planning with benchmarks at intervals.
Talent insights, real-time productivity levels and past performance reviews will equip you to take proactive decisions to improve employee life cycles, from hiring talent to offboarding employees. This approach will help ensure the long-term viability of your business operations.
Key Features
Before diving into the market conditions, let’s first look at the primary features of modern talent management software. Consider the following essential functionalities that a talent management system must include:
Recruiting
Talent management systems provide multiple recruitment channels like job boards, social media and your business’s website to source candidates. Recruitment KPIs, process automation and increased collaboration provide your hiring team with the right tools to expedite hiring cycles.
Applicant Tracking
Applicant tracking systems (ATS) monitor active candidate pipelines from resume submission to applicant screening through the application process from beginning to end. An ATS helps you organize prospective hires as they move through the hiring cycle.
Onboarding
A comprehensive talent management system helps you streamline new employee orientation from paperwork and document management to on-the-job training.
Learning and Development
Continuous learning is the key to opening new avenues, no matter how skilled your employees are. Create learning paths and assign training modules to develop employee skills. Track progress, test skills at intervals and deploy resources along paths.
Performance Management
Schedule recurring one-on-one meetings with employees to review performance, offer guidance and address doubts. Analyze performance KPIs and provide real-time feedback to your employees to foster a culture of continuous improvement.
Insights and Analytics
Analyze the performance of your existing talent management strategy based on skill gaps, productivity levels and engagement rates. Use actionable insights to make better decisions about your people.
Get our Requirements Template for Talent Management Software
Market Conditions
While there’s no crystal ball to predict the future of talent management, we can analyze the market conditions because, as they say, the numbers don’t lie.
Talent management software was prevalent long before the pandemic. Still, the need for management methods for safe remote work compelled more businesses to turn to software for help almost overnight.
By 2022, this surge in demand led to the exponential growth of the global talent management software market from $7.09 billion to $7.93 billion, an increase of $840 million within a year.
Recent data projects that the global talent management software market will grow even more, climbing to $17.66 billion by 2029, a CAGR of 12.1%.
The same study also revealed that global demand skyrocketed since pre-pandemic levels and continues to rise. This unprecedented growth means that not only did companies adopt talent management software, but more businesses will be inclined to keep using technological solutions to manage their talent needs.
Market Segmentation
Next, it’s time to understand:
- Who’s looking for talent management software and why?
- How vendors facilitate demand and cater to specific business needs?
By Deployment
Delivery models are the deployment methods vendors use to make their software products available to end-users. Depending on the provider, there are two ways that you can access your software systems:
- On-premise Systems: This software resides on local servers, and users download the program on their computers. No web access needed.
- Cloud-based Systems: The cloud model houses all your data on external data centers and is accessible via the web. It also syncs in the background as you work.
The most significant advantage of on-premise software is that it offers complete ownership of data, which is why larger enterprises investing in top-notch IT infrastructure tend to prefer this deployment method.
On the other hand, cloud-based software offers better flexibility and accessibility to its users. Moreover, you pay a monthly subscription fee for cloud software and renew as you go along, making it attractive for small to medium businesses.
By Components
Components cover everything you’ll need your talent management software to do for your company. It includes essential features, customer support and help resources.
When choosing a vendor, you need to look for a system that offers your team the technical capabilities to improve your talent management activities.
Based on components, the market can usually split into two sub-groups:
- Solutions: Talent acquisition, performance management, learning management, compensation management and others (which include succession planning).
- Customer support, user training, installation and platform maintenance.
By Company Size
Based on business sizes, the market divides into two subgroups:
- Large enterprises
- Small and medium companies
Given their vast capital and resources, large organizations are more likely to upgrade their talent management systems by investing in emerging technologies. However, SMBs are also catching up.
A recent Analysys Mason study uncovered that 93% of the U.S.-based small and mid businesses surveyed plan to increase their IT spending, making them the fastest-growing buyers of HR solutions.
By Industry
In terms of end-users, the market boils down to the following industries:
- Banking, financial services, and insurance
- IT and telecommunication
- Manufacturing
- Retail
- Education
- Government
- Media and entertainment
- Healthcare
- Others
Key Market Drivers
So, what’s affecting the market anyway? With the state of technology constantly evolving, it’s easier to address dynamic talent management processes and improve them.
To sum up, the key drivers of the market are:
- Talent uncertainty. A recent survey by WTW uncovered that 53% of workers continue to look for different jobs. Businesses that address the gradually plummeting employee engagement rates, reduce attrition and improve overall organizational performance will further drive market growth.
- The ever-increasing adoption of SaaS platforms. With cloud-based talent management software, companies can automate recruitment activities, create career-building opportunities, assign learning paths and recognize the top performers.
- Evolving tech. The penetration of automation, AI and business intelligence help managers create configurable workflows to increase productivity, improve adaptive planning and provide deep insights into engagement, performance and job fit.
Companies no longer stop at onboarding top candidates. The focus has shifted to the importance of productive and engaged workforces likely to remain with their companies for the long haul.
What’s Trending?
Keeping up with what’s trending can give your business a competitive edge. However, it’s crucial to invest in the new technology that’s suitable for your business practices.
With that in mind, let’s look at some recent market trends:
People Analytics
Many businesses have turned to HR analytics to uncover deep insights to manage their greatest assets: their people.
How do your employees feel about their job? What is the level of employee sentiment and motivation? And how can your business make informed decisions to improve productivity and employee well-being? In a nutshell, that’s what people analytics addresses. Modern talent management software combines performance statistics with feedback to offer predictive data.
Essentially, a people analytics module collects, analyzes and reports data that’s usually not easily quantifiable, presents them in a way that makes sense and facilitates well-rounded decisions.
SuccessFactors Talent Management provides people analytics with tailored workforce insights. Source
Employee Experience
While people analytics allows you to learn why your workforce feels the way they do about their work, employee listening tools help you align your efforts to drive lasting positive change.
Employee engagement tools like pulse surveys, feedback questionnaires, communication channels and intranet platforms are the talk of the town. But collecting feedback isn’t enough. You need to invoke a more profound sense of belonging from your workforce.
According to HR thought leader Josh Bersin, employee experience is the key to adapting to modern workforce challenges. Here’s why: by digging deeper into employee satisfaction, motivation and sentiment, your company will have the means to empower your internal talent and ultimately improve productivity, retention and overall business performance.
Workday’s employee listening tools assist managers with setting employee well-being, inclusivity and productivity benchmarks.
Consideration for Buyers
Companies take extensive steps to understand their customer base:
- Who are they?
- What are the problems they face?
- What do they want, and how can we deliver?
Similarly, when you look for software solutions, you are the customer and need to think like one to find the best-fit system.
- Start internal conversations with your talent acquisition specialists or HR managers to identify specific requirements.
- Analyze your existing talent strategy to uncover any shortcomings. Check for weak links in your performance management, employee recognition and succession planning strategies and use these shortcomings to guide your software search.
- Next, consider what’s trending in the market and evaluate how these new tools can benefit your business operations.
- Differentiate between must-have and nice-to-have features. Prioritize functionalities that will ultimately offer greater returns on investment. Use a requirements template to rank feature sets.
- Remember, while the upcoming talent management solutions are alluring, smart investment decisions depend on selecting a few practical tech innovations for your business.
The Wrap-up
Now that you’re aware of the new developments in the market, you’ll need to play your cards right and incorporate talent management solutions that’ll give your business a competitive edge.
The next step is to conduct a guided software selection search to find a system to build a healthy work environment where your employees can thrive. Check out our in-depth vendor comparison report to simplify the process.
Did we miss any trends? Do you have any predictions for the talent management software market? Let us know in the comments!
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