Despite the great potential of these solutions to automate discrete strategic talent management functions, the extent of their deployment within companies has been mixed. While more than 90% have adopted solutions to automate payroll, a survey of large enterprises indicates that only about one-third of companies have deployed automated solutions to support strategic talent management¹. Though products to automate certain functions, notably recruiting, have been relatively widely adopted, especially among large companies who process a high volume of candidates and new hires, functions such as performance management, compensation management and succession planning have been more resistant to automation. In fact, some analysts estimate that performance management solutions have been adopted by less than 10% of companies who could potentially benefit. Most companies today still rely on manual spreadsheets to manage compensation, and they still rely on paper-based systems to assess employee performance and develop succession plans. These antiquated systems persist despite their inefficiencies and the significant risks of inaccuracy and non-compliance.

Several factors account for the relatively modest adoption of technology solutions to address strategic talent management functions.

Impediments to Broad Adoption:

• Focus on efficiency, as opposed to effectiveness
• Designed for HR specialists, not business managers
• Lack of integration across functions

Focus on efficiency, not effectiveness: The early generation of solutions to automate strategic talent management functions have focused primarily on enhancing efficiency. The primary goal has been to reduce cost and save time. And, in fact, many of these solutions have achieved impressive results, measured by "time to hire," "cost to hire," "percentage of employees assessed," "lower compensation computing errors," "faster compensation cycle time," and other efficiency metrics.

But while these improvements in efficiency are important, taken by themselves they do not necessarily help organizations achieve significant business gains. For example, while an automated recruiting system may allow a company to hire people more quickly and at a lower cost, they do not necessarily enhance the quality of the talent brought into the organization. An automated compensation management solution may reduce the number of errors in computing salary and incentives, but it does not necessarily align compensation with performance to ensure that the highest pay increases go to the top talent. Similarly, an automated performance management solution may make it easier to implement and conduct performance assessments and ensure that more employees are evaluated, but it does not necessarily ensure that individual goals align with corporate goals. In a case of "paving over the cow paths," these early solutions often succeed in speeding up the existing talent management process, but they don't fundamentally change the process and directly help companies achieve their desired business outcomes.

Designed for specialists, not business managers or employees: Many of the early generation talent management automation solutions are built primarily for HR professionals. Recruiting solutions, for example, are designed largely for use by recruiting specialists. Though they can significantly speed up the work of recruiters, they are awkward for hiring managers and don't address their needs very well. Similarly, performance management solutions capture a great deal of information for organizational development specialists, but they require extensive training before they can be rolled out to all business managers and their employees.

This lack of attention to the needs of business managers is particularly evident in the user interface of these solutions. The interface on most early generation systems was designed for power users, not occasional users. While a recruiter may use the applicant tracking system everyday, a business manager may only hire a new employee several times per year. The business manager will not invest the time to learn a complicated interface each time they go through the hiring process.

The problem with the user interface becomes even more complex when business managers are responsible for multiple talent management functions. This requires that they learn multiple user interfaces: one for recruiting, one for performance management, and so on.

Because these solutions are designed for professional HR practitioners, business managers often don't derive much value from them. They may, in fact, resist using them. In some organizations, business managers regard these solutions as useless burdens imposed on them from HR. In part, this explains the difficulty in deploying them and their lack of impact on their business results.

No integration across functions: Most early generation strategic talent management automation solutions have been designed to address a single, discrete function. Each function – recruiting, performance management, compensation management, employee development, and succession planning - is viewed separately, in a "silo," each with its own specialized processes, outcomes, metrics, interfaces and data. These silo'ed solutions are often used by a single specialized department within the HR organization, so, for example, only recruiters use the recruiting system, or only compensation specialists use the compensation solution (see Figure 2).

Figure 2: The Evolution of Talent Management Solutions

While these discrete, single function solutions may meet the needs of the particular functional specialists and their individual departmental goals, they do not necessarily achieve the overall business objectives. Achieving business goals requires a cross-functional approach. In order to improve the quality of talent the organization hires, for example, there must be a link between the recruiting function and the performance function. Similarly, in order to appropriately reward and retain high potential employees, performance and compensation must be linked. The early generation of single function solutions do not provide these links.

Linking across multiple talent management functions is also necessary to measure results that are relevant to business objectives. For example, in order to measure quality of hire, it is necessary to link performance and recruiting. To measure the availability of people with skills sets required for vital positions, it is necessary to link performance assessments to succession planning and employee development functions. These metrics are far more relevant to business success than "time to fill," or "number of performance objectives per employee."