What constitutes a company’s assets? It’s basically two things: their people and everything else. Up to 70 percent of an organization’s spend today is on its people assets, while hard assets like buildings, inventories, and equipment make up 30 percent of the overall spend.
Most companies have become really good at measuring, tracking, and optimizing their investments in their physical assets and materials. These areas have been optimized for the past 30 years with significant investments in ERP, Supply Chain, and CRM software. As a result, we have concrete information about hardware inventories and other assets. We know how much they cost, their maintenance history, utilization, and inventory turns. Yet, we know very little about people, their skills, past experience, potential, and career interests – a true “talent intelligence gap.”
However, over 85 percent of companies struggle to link their talent management strategies to their business objectives. The significant cost of the talent intelligence gap directly impacts the bottom-line. A Corporate Executive Board study found that 25 percent of high-potential employees are planning on leaving their job within the next year and 21% of all employees rated themselves as highly disengaged. A Gallup study found that companies with more engaged workforces grow earnings per share 2.6X times faster than poorly engaged workforces.
Many executives agree about this talent intelligence gap and cite four major reasons for it.
- Information about people assets is “stuck” inside workforce data silos.
- Business processes often leave out data about people assets.
- There is a lack of powerful analytics to turn that data into information and insight.
- There is a lack of good decision support systems to act on that intelligence.
An effective talent management solution should synthesize and rationalize data from disparate workforce data silos and perform analytics on that data to turn it into intelligence and finally provide decision support to help users act on that intelligence.
Using cloud computing to deliver such a solution provides a number of added benefits:
- Business agility
- Analytics and intelligence ubiquitously over the Internet via browsers and mobile devices
- Trusted industry expertise in designing analytics for the specific talent management vertical
- Elastic infrastructure to rapidly scale in response to heavy-duty analytical processing and data crunching
- Deployment of solution rapidly in days instead of weeks or months
- Cost efficiencies
- Avoid up-front costs for hardware, software licenses, and IT implementation
- Avoid paying for expensive software upgrades and integration projects
- Offload expensive processing to cloud resources
- Pay only for resources and services consumed
- Perform proof-of-concepts without investing in new IT infrastructure
- User friendliness and collaboration
- Address the complexity and lack of skills for configuring and using analytics via friendly Web-based user interfaces
- Integrate with social and professional networking solutions like Facebook, Twitter, and LinkedIn
One company that is bringing to the market holistic talent management solutions combined with embedded talent analytics in the cloud is Taleo Corporation. In fact, 5,100 companies — including 49 of the Fortune 100 — use Taleo for talent acquisition, performance, compensation, and learning solutions. Recently, Taleo acquired learn.com, expanding its Talent Management footprint and adding a new dimension to the already rich data Taleo captures to help companies understand their people and grow their business. Taleo also announced last month the release of their enterprise Talent Analytics pre-built on-demand solution that powers strategic talent intelligence by aggregating information across workforce data silos. The solution provides executives, line managers, and HR teams the visibility they need to optimize the workforce and drive business impact through their talent management processes.
For Shail Khiyara SVP and Chief Marketing Officer at Taleo, this represents a renaissance in Talent Management. “Many companies understand their property, plant and equipment assets, but have not optimized their people assets,” says Shail. “Talent Intelligence gives HR and the executive suite visibility and insights into their talent, much like the insight they have into their financials, supply chains, and sales forecasts. It answers questions like, “What is employee attrition risk? What backgrounds and capabilities are associated with high performance? What factors are likely to lead to attrition?”
Talent intelligence is not just about analytics, it’s about synthesizing and rationalizing data from disparate sources and analyzing that data to provide intelligence and insight. It’s the ability, for example, to sift through vast historical data and look at trends by industry vertical. “It’s about actionable intelligence,” adds Shail. “If Talent Intelligence reveals that your sales productivity is less on the East Coast, you have the ability to drill down and understand the recruiting practices in that region, track a pool of (or individual) employees in terms of their performance and development paths, their compensation structure as compared to other parts of the organization, and decision support mechanisms that allow you to take action on that data.”
Using the Taleo cloud, you can compare this metric against best practices for your particular industry. “We have collected data over several years to gather the level of intelligence for a variety of metrics (recruitment levels, availability of talent, salary and compensation trends and so on,” says Shail.
The fact that Taleo’s solution is offered in the cloud means that it is much easier for Taleo to provide cost-efficient, scalable, user-friendly, and broad collaboration services. The cloud-based architecture and services enables Taleo to truly scale their operations as evidenced by these statistics: 5,100 customers, dispersed across 218 countries, with 200 million candidate profiles in the database, 115 unique partner solutions in the partner ecosystem, 14 billion transactions processed on the cloud infrastructure on an annual basis, and close to 3,000 customers doing social collaboration through their Knowledge Exchange. According to Shail, this speaks to Taleo’s scalable and elastic infrastructure and the underlying robust and extensible cloud platform that runs multiple applications for which they are seeing broad adoption and creating huge opportunities within their installed bases as well as net new opportunities. With this combination of ecosystem, multiple product set and a global footprint, Taleo is the largest Vertical Cloud in the Talent Management space.
Yet another advantage of the Taleo solution is its ability to easily integrate with social networking. From social sourcing to strategic sourcing to social recruiting and learning, Taleo offers solutions in each of these areas. The learning module, for example, has a huge social component. It enables pulling in information, video, graphics, text, etc from RSS feeds, chat rooms etc to create a non-formal training for sales. Furthermore, the Taleo social module can pull in referrals into the recruitment module through the built-in LinkedIn integration.
“The renaissance in Talent Management is here and leading the charge with embedded Talent Intelligence,” concludes Shail.
This article is based on discussions with Shail Khiyara, SVP and Chief Marketing Officer, Taleo Corporation. Thanks to him for talking with us and sharing valuable insights on the evolution of analytics in Talent Management.
Kamesh Pemmaraju heads cloud research at Sand Hill Group and he helps companies — enterprises and technology vendors — accelerate their transition to the cloud. Follow him on twitter @kpemmaraju.