Approximately ten years ago, a software market for integrated talent management platforms began to grow. Today, it has evolved to a multi-billion dollar market for talent management software. Research by Deloitte indicates that HR spending grew by 4 percent in 2014 from 2013, mostly attributed to investments in technology. And in 2015, almost 60 percent of companies plan to increase their HR spending. And according to a new market research report published by MarketsandMarkets, the global talent management software market has a projected compound annual growth rate (CAGR) of 16.6 percent from 2014 to 2019.
According to Forbes, the larger vendors make up over 60 percent of the market, while small niche vendors make up the rest. As the market expands, there is evolution as large companies replace standalone systems and mid-size companies buy smaller systems at a rapid rate. In particular, the demand for cloud-based talent management software is increasing due to its cost-effectiveness and easy deployment.
As the market was developing, it was primarily focused on integrated suites combining various aspects of talent management including applicant tracking, learning management, and performance management. Today, buyers are no longer looking for just an integrated suite but rather an integrated, simple, easy-to-use solution.
Research by Bersin by Deloitte shows that the top talent issues faced by companies include engagement, leadership, and worker productivity. The challenges of these issues mean that HR managers are looking for talent management software that changes the way people work. Bersin by Deloitte calls this a shift from “talent management” to “people management”. This means that when purchasing software, HR buyers are no longer looking for process integration but rather systems of engagement that are easy to use, highly productive, and provide actionable data.
The Shift From Talent to People Management
Source: Bersin by Deloitte
These work management systems can serve various functions such as simplifying the way workers set goals, or creating recruitment networks based on referrals. As per Bersin by Deloitte, the three big issues that talent management software today needs to address include:
Provide a highly engaging and well-aligned place to work
Provide empowerment, learning, and tools to get work done
Create an environment that is fun, productive, and simple
Simplification in HR
Deloitte found that companies are finding it important to simplify work environments, practices, and processes, with 71 percent of companies rating work simplification as an “important” or “very important” issue, and 74 percent believing that their work environment is “complex” or “very complex.” More than 50 percent of the companies have programs to simplify work, drive productivity, and relieve unnecessary pressure on employees.
With the trend for simplicity is growing, technology companies are shifting their business models to develop talent management technology that supports HR in becoming more agile and forward thinking.
In a labor market, where corporate decisions are immediately exposed and organizational culture becomes increasingly visible, companies have realized the importance of establishing and maintaining their corporate brand. This year, worker engagement has emerged as a central challenge, with over 87 percent of organizations believing that the issue is “important” as per a Deloitte survey. Globally, according to a Gallup poll, only 13 percent of the global workforce is “highly engaged.”
In today’s workplace, employees tend to work more hours and are almost continuously connected to their jobs through mobile devices. They often work on cross-functional teams on collaborative projects. As such, flexibility, empowerment, and mobility become important areas of focus for worker engagement and technology solutions.
Bersin by Deloitte describes “Systems of Engagement” as technology systems that are used directly by employees, such as email, collaboration systems, social networking sites, and learning systems. These systems are generally cloud-based, easy to use, mobile-available, and visually appealing. While originally HR software was designed to help HR managers administer various people practices, now HR technology is designed to help employees and managers manage themselves.
In terms of measuring worker engagement, new tools make it possible for organizations to monitor employee sentiment and obtain feedback with the same level of speed and precision as customer satisfaction measurement.
“We believe that this is just the beginning of a major movement to apply innovative approaches and techniques like ‘design thinking’ to simplify and rationalize the workplace of the 21st century.” ~Deloitte