Executing Integrated Talent Management (ITM) – A Proven Seven-Step Methodology for Success

April 30, 2012

HRchitect has been involved in approximately 2000 HR technology related projects for hundreds of companies of all sizes and industries across the world. We have gained tremendous insight (and continue to every single day) and feel an obligation to share our expertise, and our war stories, with you. After all, with 15 years in business behind us in working with many of today’s leading companies, we’ve gained a unique perspective on the very puzzling world of HR technology.

First introduced as a concept in the mid 2000s, Integrated Talent Management (ITM) has become a major focus, and a major challenge, for many organizations today. Fulfilling the vision of ITM continues to drive many corporate HR departments, and is one of the hottest development issues facing Human Capital Management (HCM) software vendors. 

HRchitect defines Integrated Talent Management (ITM) as a comprehensive approach to maximizing the engagement, performance and effectiveness of the workforce by deploying integrated processes and enabling technologies. ITM technologies are a subset of HCM, and include recruiting, onboarding, performance & goals, learning, compensation, succession, career development, talent pro­file/competency management, assessments, workforce planning, communication & collaboration, and metrics & analytics. The power of the ITM approach principally resides in how firms can design processes and supporting technologies to leverage the natural linkages between these functions to enhance overall workforce efficiency and effectiveness.

Over the past three years the world has gone through a significant period of economic turmoil that had a ripple-down impact on overall HCM technology investments; many projects were deferred or cancelled during 2009-10. Of course, many talent-related needs in organizations remained; unfortunately, many HR departments were forced to “make do,” at best making only incremental changes to existing processes and systems. As the recovery gained momentum in the last half of 2010, business budgets were developed for 2011 to address much of the pent-up demand for all sorts of new HCM solutions (including ITM). Therefore, many firms are now trying to weave disparate HR processes and technologies into a comprehensive approach to maximizing workforce performance. For most organizations this is a challenging, multi-year project that involves much more than deploying technology or re-designing processes; HR and business leaders must take a strategic and thoughtful approach that firmly links Human Resources (HR) to organizational goals, strategies and outcomes.

Through a series of blogs, we’d like to outline a seven step leading practice methodology for successfully executing the ITM concept.

Methodology Overview

Many initial attempts to implement ITM have been unsuccessful due to the tendency of project teams to jump directly to technology selection, process redesign and implementation before thinking through all of the strategic issues involved with a major change of this type. Successful ITM execution requires a top-down approach incorporating the following seven components:

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Each step in this methodology has a fundamental driving question that must be addressed in order to proceed to the next step.

It is important to note that this seven step methodology for executing ITM focuses on business goals and objectives (the “What”) before addressing lower-level concerns like processes and technologies (the “How”). As a result, a firm can have multiple ITM technologies from disparate vendors, and still be executing a comprehensive ITM strategy. This broader, more inclusive definition is critical, given the state of the vendor marketplace that is attempting to fulfill the ITM vision of many organizations.

Successfully executing the ITM concept requires a holistic approach that includes embracing ITM as a philosophy, developing a strategy, applying science & measurement disciplines, breaking down process barriers, selecting and implementing enabling technology, and sustaining the new solution over time. Organizations that utilize HRchitect’s seven step methodology will increase their chances of successful ITM execution, and thus position their workforces to become a long term source of competitive advantage.

We’ll address each of the seven steps in upcoming blogs and please let us know how HRchitect can assist you to get maximum benefit that comes from Integrated Talent Management.


Winning the HCM Technology Budget Battle – Model Your Way to Victory

August 25, 2011

by: Ron Hanscome, Vice President of HCM Strategy Consulting at HRchitect

Activity in the financial markets over the past few weeks has raised the specter of 2008 and contributed to fear of another economic downturn (or worse). While it is not my place in this blog to comment on the economy per se, it is clear that the timing could hardly be worse for those in the midst of planning and budgeting for calendar year 2012 HCM technology projects. In uncertain times like these business leaders tend to become more conservative, and usually increase their expectation that technology projects demonstrate a strong return on investment (ROI) in order to be approved. Given that your HCM implementation is sure to compete for budget dollars with other enterprise technology projects, how can you increase your chances of getting approval to proceed from that big budget committee?

Many HCM project justifications fail to gain approval because they focus on mere efficiency gains for the impacted HR processes. Saving time or reducing paper for a relatively small number of HR staff will not garner much interest from the C-Suite. Instead, think about how your enabling HCM technology will affect broader segments of the workforce, and thus truly impact the bottom line of the organization:

Make Finance an ally, not an adversary – start working with your Finance team early to understand the various ways that projects can be justified. HRchitect has discovered a wide variation in what is considered “direct” versus “indirect” cost savings, and how these can be factored into an overall approval cycle. It pays to understand the rules for your organization, so that you won’t be surprised later in the planning process. Here are some recent examples of calculated savings that were used to justify a proposed talent management suite (TMS) project for a large global client:

  • Gathering information on global talent into one repository from disparate spreadsheets would increase visibility to all talent, and thus eliminate one expatriate senior leadership assignment per region per year; given the expense of a typical expat, this was estimated to save several million dollars per year.
  • Comprehensive talent profiles would also increase the effectiveness of internal talent searches and reduce the need to hire and onboard external candidates, as well avoid the expense of two “bad” hires per division per year; estimated savings for this category exceed $1M US yearly.

Model the impact of your HCM project on the business – stop telling yourself that HR projects and programs are too difficult to accurately quantify; instead, begin with available research and build a model with assumptions that shows how your project can deliver bottom-line results for your organization. Take a look at the following example that utilizes findings from a 2007 SHRM research study that indicates leading talent management processes supported by enabling technologies can reduce attrition by 12-28% over a multi-year period due to increased engagement and retention — note that this example is merely a representation of a fictitious organization and does not reflect any particular HRchitect client – all the numbers are made up:


This relatively straightforward model shows the cumulative impact of a TMS implementation over a five year period, assuming selection of the TMS is completed in 2011 and the first components go live in 2012. In this scenario we begin with an employee population of 5,000, and predict modest straight-line growth over the five year period. Note that the predicted impact on attrition is quite conservative to begin with, and increases sequentially as more modules are implemented and the processes are adopted by the workforce; however, at the end of the period the total impact on attrition is still at the low end of the benefits estimated by the SHRM study. The initial attrition rate (18%) is used as a baseline, and compared to the predicted “actual” attrition rate to determine how many positions per year are ‘saved’ from the need to hire; that number is multiplied by the organization’s average cost per hire to arrive at direct recruiting cost savings ($444k).

The greater savings component in this model is derived from maintaining productivity of the incumbent workforce due to increased retention. In simplistic terms, every position that is “saved” from the need to hire a replacement means that a trained incumbent stays in place, and the organization escapes from having to train a new worker and suffer reduced productivity as that replacement comes up to speed. In this particular organization, across all positions, the model assumes it takes a new worker 1 year to become fully competent, and that the new hire averages 50% productivity over the period compared to a fully competent incumbent. When multiplied by the number of “saved” positions and the blended average hourly rate, the results are significant – more than $6M over the four years when the TMS modules are implemented. The relative weight “Time to Competence” savings have in your organization’s budget approval process is highly dependent on the Finance function’s view of “direct” versus “indirect” cost savings; HRchitect has found that certain industry segments with a greater focus on worker productivity measurement (e.g, healthcare, manufacturing) are more willing to consider this as a direct cost savings, as they suffer the expense (e.g., overtime, contractor) of having to immediately plug workforce gaps.

My big goal in showing this model is not for everyone to adopt it carte blanche – instead, I’d much rather stimulate your own thoughts as to what will work best for your organization. Don’t like the sample assumptions? Plug in your own. Do you think “Time to Competence” is a bogus savings component? Fine – make up your own! Do you object to treating all positions alike and using a blended hourly rate? No problem – revise the model to focus it on your critical job categories, and run multiple scenarios on that subset. In the end, the main thing is to broaden your horizons and think of how your HCM technology can help impact the largest workforce levers that drive business results.

As you build your models, make sure you understand and can defend every assumption, so that when you stand before that budget committee the result will be lots of affirmative head nods, and comments of, “Makes sense to me!” instead of puzzled frowns. Once you get to that place, your chances of loosening the budgetary purse strings will significantly increase.

As always, if you have any questions please let me know. Otherwise, fare well during this budget season!

 


Don’t Miss Today’s HRchitect WebMingle with Rosette Cataldo of KMS Software

January 7, 2010

The weekly HRchitect WebMingle is designed to give you some insight into the puzzling world of HR technology, discuss news from around the world that we find interesting, talk about upcoming events in our industry, and provide insightful interviews with people of our industry – who they are, what they do and why you should care. The WebMingle has become the most popular live weekly Internet show in the HR technology industry!

The WebMingle has truly redefined how people get information about vendors, trends and really anything related to HR technology and we are very proud of that.

Today’s guest is Rosette Cataldo, Vice-President of Business Development with KMS Software.

KMS Software Company is the pioneer of Online Onboarding. They are exclusively devoted to providing world class human capital management software that combines process automation and employee engagement technology to help strengthen the relationship between employers and employees around the world. KMS is also the “only” Onboarding that powers many of today’s market leading applicant tracking, HRIS and Background Screening software companies. They have a proven track record of delivering Onboarding technologies and consulting services to companies that operate around the globe.

Rosette Cataldo is Vice President of KMS Software Company and is responsible for developing and managing all strategic partner relationships and business development initiatives. Her focus is to provide value to existing customers while expanding KMS’ market reach worldwide. She has been called “one of the most passionate person” in the electronic OnBoarding industry and hates to admit it….but loves I-9 management.

Visit HRchitect.com/Knowledge/WebMingle to listen live today, Thursday, January 7th at 2pm CST to the 48th show in our WebMingle series, and the first show of 2010. If you missed any of our previous WebMingles, you can also access them from that page.

Below is a list of some of our upcoming guests:

Jan 14 – Morne Swart, VP of Product Management with CyberShift, a Workforce Management vendor
Jan 21 – HRchitect will provide a look back at the world of HR Technology in 2009 and a look ahead to 2010.
Jan 28 – Tim Giehll, CEO of Bond Talent, a Talent Management Systems vendor and Author of “Human Capital Supply Chains”

We look forward to welcoming Rosette Cataldo from KMS Software to the HRchitect WebMingle today and hope to have you join us as well.


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