Budget Cuts in 2010? Maybe, But Really Not in Talent Management Systems

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Jun 29, 2010

You know that a lot of things have changed because of the recession, but here’s another one you may not have thought of — how talent management systems have taken on a “must have” status for many HR professionals.

This insight comes courtesy of the 13th annual Towers Watson HR Service Delivery survey that polled HR and HR information technology executives from more than 450 organizations for their insight on topics and trends impacting the year ahead.

According to the study, HR departments today are more confident than ever in the value and efficiencies made possible through enhanced talent management systems. In fact, some 42 percent of the companies surveyed listed “talent/performance systems” as one of their top three HR service delivery issues for 2010. Towers Watson says that this was not only the most frequently selected issue among respondents, but that it was also ranked as THE top issue for HR pros by the largest margin ever in the survey’s history.

“Talent management technologies have unquestionably become one of the best ways for companies and HR departments to drive better employee performance and enterprise success following the recession,” said Tom Keebler, Global Practice Leader with Towers Watson’s HR Service Delivery and Technology practice , in a statement released with the survey. “In spite of the initial costs, organizations are increasingly deploying new or enhanced systems, recognizing that efficient and effective HR processes enable the flexibility and agility employers need in an uncertain but growth-oriented business environment.”

Key findings from the 2010 survey include:

  • Organizations have discovered and focused on the value of talent management systems to an unprecedented degree this year.
  • The importance of HR technology as a must-have in managing the business is reflected in technology spending — which not only held level during the economic downturn but has increased for 2010.
  • Not only were a great number of HR service delivery initiatives undertaken by organizations in the last 18 months, but they also (finally) delivered the desired results, often not just meeting but also exceeding expectations.
  • Talent management systems that heighten visibility — enable managers to see people and workforce trends, and employees to see training opportunities and career ladders — while sometimes difficult to implement, are highly effective once in place.

One more thing: “cost” seems to have fallen off the list of top HR service delivery issues in this latest Towers Watson survey, and that comes just a year after human resources professionals in this study listed “cost” as one of the top three most pressing challenges.

HR pros also say their technology budgets were not severely affected by budget cuts during the recession. In 2010, some 83 percent of survey respondents say their organization will be increasing or maintaining their technology budgets year over year.

Towers Watson’s Tom Keebler think he knows why.

“HR’s reliance on technology to achieve greater efficiency and cost savings during the recession allowed it to maintain and even grow HR technology budgets in a challenging business environment,” he said. “As companies recover and budgets expand once again, leaders appear ready to make a forward-looking commitment to talent management systems that will reap substantial long-term rewards for the HR department, line managers and the broader organization.”

And some of the analysis with the survey put a point on this.

“Our perspective is that technology is no longer a discretionary investment, but rather a “needed to play” in terms of delivering the HR, benefit, reward and talent management programs that attract, retain and engage the workforce,” Towers Watson said. “As such, technology has become a key enabler of growth, productivity and business results — and spending levels are beginning to reflect this.”

This is interesting stuff if you count on talent management systems to help manage your workforce, and clearly, more and more HR pros are doing so despite the recession and economic downturn.

There are more details in the executive summary of the report available from Towers Watson, but clearly, this is worth digging into if you have bought, or maybe are planning to do some investing in, talent management systems.