Elevate Your Business with a Talent Management System: The Top 8 Benefits
Talent management isn't just about recruiting the right people. It's about nurturing them, aligning their skills with your strategy, and maximizing their contribution to your company's success.
Poor management of the hiring part can lead to forgetting to follow up with candidates or keeping in touch with potential hires and seeing your dream hires sign for your competitors.
Similarly, missing out on nurturing the talent you already have can lead to a pile of resignation letters.
A solid talent management system is thus essential for your business to thrive and stay ahead of the competition!
This article will:
- Show how the right talent management system can elevate your people strategy and fuel business growth.
- Delve into the top eight benefits of a talent management system for your business.
After reading this article, you'll know what a talent management system is and why your organization will benefit from implementing one.
🧑 What is a talent management system?
A talent management system (TMS) is a software application that helps organizations manage and optimize their human capital throughout the employee lifecycle.
A TMS offers companies a holistic and strategic approach to attracting, retaining, and developing employees to meet current and future business needs.
Having a proper talent management strategy is the lifeblood of your organization. Without it, you'll risk missing out on recruiting high-performing employees. You also risk overlooking the vital nurturing of the top talent within your organization.
Employee expectations are higher than ever, so if you don't care for your people and their aspirations, they'll quickly lose their patience and look elsewhere.
💻 What are the core functions of a talent management system?
- To act as a centralized hub for the entire talent management system: from spotting qualified candidates to outreach, recruitment efforts, communication between hiring and the starting date, onboarding, and development/enablement of existing talent. It also includes compensation management.
- To ensure you stay up-to-date with your talent management. The labor market is evolving faster than ever, and spreadsheets collecting dust in a digital folder won't let you be on top of things. A talent management system keeps track of everything, so you don't have to!
- To automate candidate and employee communication so that you can delete the reminders in your calendar and focus on more creative endeavors.
🔍 For a deep dive into the best talent management solutions on the market, check our guide to the best talent management systems. You'll find a detailed feature comparison.
🏆 8 Benefits of a talent management system
Improved efficiency
Did you know that a talent management system is directly proportional to organizational performance?
A whopping 99% of survey responders in a McKinsey study claimed that improving their talent management made them outperform competitors. And talent management gets way easier with a stellar system.
A talent management system lets you keep everything related to the talent management process in one place. It's easy for everyone involved to get a quick overview of what's happening. For example, managers can keep an eye on where each candidate is in the pipe in the recruitment process. This helps managers stay in the loop of talent recruitment without scheduling many meetings.
Also, a system takes out administrative tasks and frees time for your HR administrative staff. They can spend less time on tedious tasks such as interview scheduling, following up, answering candidate questions, and confirming appointments.
Other things the system can take care of are creating job adverts, scanning application letters and CVs for relevant information, keeping track of applicants, and managing job offers.
You have everything to win in implementing a talent management system – and if you pick the right one, it won't take much time for the involved parties to learn!
Automation is the future of administrative processes happening now. If you don't use it, you'll fall behind and lose valuable time.
Data-driven decision-making
The system facilitates hiring and promotion decisions. You have one centralized location for all top talent data, easily accessible for anyone involved in the hiring process. You can also collect feedback about employees and candidates and thus make informed decisions driven by quantity and quality.
A sound talent management system can also impact critical employee decisions.
A survey commissioned by Instructure found that 75% of organizations didn't see themselves as having a learning and development culture. Meanwhile, 98% of employees said L&D was the deciding factor in whether to stay or leave an organization.
Development and a clear career path thus play a significant role in an employee's decision on whether to stay or leave an organization.
With a talent management system, you'll never fall behind on L&D, even when urgent things arise!
Improved employee experience
While people do forget at times, systems don't.
If you have hired a new top candidate, first of all – congratulations!
Second, you want to ensure you make a great first impression. This is particularly important since recent research shows that only 13% of employees are happy with their experience!
A talent management system can help you send out essential information on time, like welcome emails and employee onboarding information. Also, the system keeps track of key dates for training and professional development of your existing top talent to make sure you stay ahead of the game.
Employees who feel cared for become more engaged and deliver better results.
Alignment with business strategy
Having a separate system for talent management makes it easy to check whether it complies with your business strategy.
What's your 5-year plan? Are you taking the necessary actions now to recruit and develop top talent?
Another benefit of having a separate talent management strategy is that it allows you to pinpoint what type of talent you need.
Are you currently focusing more on the tech side?
Or are you looking to expand the marketing department?
Let your business strategy inform talent management – something that's easy with a great talent management system.
You can also quickly collect data to ensure your talents deliver value to the business and identify potential gaps.
Where do you need to invest in training and skills development?
Rightly done, this can save you lots of money – a LinkedIn survey showed that 79% of L&D pros agreed that it's cheaper to reskill a current employee than to look for new talent.
Holistic HR strategy with interlinked people processes
A talent management system helps you deliver the proper training to the right top talent at the right time.
Everything is organized in one central location, and you can collect relevant data, such as scores on performance tests or the percentage completed of a training module. It ensures a better candidate experience by ensuring all crucial documents are communicated on time, even if your HR staff is busy.
Another people process that can be connected with the talent management system is the performance appraisal, which ideally takes place regularly.
Studies have shown a clear correlation between regular performance reviews and top talent success: companies with continuous performance processes were 39% better at attracting top talent and 44% better at retention.
Better workforce planning
A talent management system helps with succession planning. You can quickly spot where there's a skills gap in your workforce, what training you need to schedule, and make decisions about hiring or promoting accordingly.
Offering opportunities for learning and growing is a cornerstone in employee retention in general and top talent retention in particular.
Your top performers will get bored if they're not continuously challenged and stimulated within their roles – and offered a clear career path and new roles whenever they're ready.
In fact, recent research has revealed that employees who feel like their skills are not put to good use in their role are 10 times more likely to look for a new job.
A talent management system can help increase career mobility by facilitating strategic planning, thus satisfying your most driven employees.
Your talent management system can also act as a parachute for unexpected resignations.
As a part of the system, you'll ideally have a pool of skilled candidates to contact when you have an opening. A talent management system is thus closely interwoven with succession planning.
Using existing data to improve diversity
Thanks to the data collected from your talent management software, you can spot if you favor people from a specific background. It facilitates following along with your diversity, equity, and inclusion (DEI) plan.
And diversity matters for business results.
A McKinsey study revealed that companies with gender diversity in the executive teams were 25% more likely to see results above average. Similar results are valid for companies with ethnical and cultural diversity.
Ensuring legal compliance
Implementing your talent management strategy into an automated system makes ensuring compliance with corporate and regulatory employment laws easier.
➡️ Zavvy: AI-powered 360 talent growth system
Zavvy is not your standard HR tool. Our AI-powered solution helps you with everything related to employee enablement:
- 🗺️ Career pathing
- 🌟 Skill and competency management
- 🌱 Employee development and training
- 📈 Performance appraisals
- 👩🎓 Learning management
- 🚀 Onboarding
- 👍 Employee feedback and surveys
And more!
Zavvy bridges the gap between feedback, skills, and performance improvement. It's your one-stop shop for all things HR so that you can go from multiple talent management platforms to one, shortening the learning curve for new HR staff.
Our clients are happy with how it removes the work of navigating different systems and transferring data between them.
You'll have access to growth plans and a training library with over 10000 learning resources, and templates where you can copy the processes of big companies.
AI is the glue that seamlessly binds together all these aspects of a successful employee experience, from talent acquisition to continuous development and promotions years in!
📅 Want to try it for yourself? Book your free demo to explore whether you want to join our hundreds of happy customers.
❓ FAQs
How is talent management different from performance management?
Performance management is a part of talent management. Talent management focuses on all aspects of the employee experience: from identifying talent and the recruitment process to hiring, onboarding, training, performance evaluation, and ensuring satisfying career paths within the company.
We've created a guide for you with a complete discussion of integrating talent management and performance management.
What are talent systems in HR?
Talent systems are workflows for different aspects of talent management. It's easy to see how having everything in one place facilitates talent management. Many processes related to talent management are connected.
For example, suppose a candidate moves from the final interview to getting an offer. In that case, they need to receive an email with the contract and all the information. Talent management solutions can send the email once the candidate is moved from the prospect to the employee stage.
What are the benefits for the employees with a talent management system?
Good talent management is not just helpful for HR and managers but also the employees. The system increases employee engagement without requiring a manager or HR executive to be directly involved. It allows employees to track their career goals and see their progress based on the activities they have completed at work. In the system, you can schedule and tailor training material for each employee that meets their skill levels and interests.
Employees will also feel more seen and cared for since they'll get the necessary information and training on time, which can sometimes be forgotten in manual systems due to the human factor. And employees who feel acknowledged for their efforts are likelier to stay within the organization.
Feeling valued for their efforts has shown to be a more critical factor behind employee retention than salary levels! In other words, even if you can't afford the highest salaries on the market, great talent management will help keep your rising stars. And excellent talent management starts with an extraordinary talent management system.
What does the future of talent management systems hold?
We see that the market is going towards increasingly personalized learning. As mentioned, employee expectations are at an all-time high, and to retain their top talent, employees need to give them what they ask for continuous opportunities to learn and evolve. This does no longer mean a once-a-year conference but is moving towards more of a micro-learning culture, where employees are constantly widening their perspectives and brushing up their skills.
A talent management system that will make it into the coming years must thus allow for a high degree of customization for each employee.
With AI, predictions also play a greater role: assessing an employee's development curve based on their current performance will be easier.
Trends are showing a higher overall employee turnover rate, which is costly for companies – so efforts like these are essential if you want to stay in the game!
What are considered the building blocks of a talent management system?
- Talent management philosophy – This block outlines your philosophy for hiring and retaining talent. The top management should support the overall values and school of thought for successful implementation.
- Talent management processes – This block describes the individual procedures that make up your system. Each process should have an owner. Some examples: scouting for new talent, creating job ads, owning the recruitment process, and managing learning and development.
- Talent acquisition – How your organization recruits and how the roles align with the short-term and long-term business goals.
- Talent management metrics – Identify the metrics you'll use to measure success, for example, the retention rate of new talent, turnover rate, and employee satisfaction rate.