Goodbye talent management, hello people management.
- Summary:
- Move over talent management, your time is up, make way for people management, says HR guru Josh Bershin, an argument Janine Milne finds intriguing.
Talent management is dead!
Well, okay, the rumors of its death may as yet be exaggerated, but the existing concept of talent management cemented over the last decade is heading for the door marked exit.
The HR profession is about to usher in its replacement - people management.
That’s the message from renowned HR, talent management and leadership analyst Josh Bersin, principal and founder of Bersin at Deloitte. In a couple of recent posts Is ‘Corporate Talent Management’ Dead? What’s Next? and Why The Talent Management Software Market Is About to Radically Change, Bersin starkly suggests that the talent management software market is in for a radical shake-up as customers’ requirements shift.
Bersin's view may sound radical, but it has a strong streak of pragmatism as well. Talent management has certainly been big business over the last decade, creating a thriving $10 billion software industry and Bersin doesn't suggest that this is about to disappear overnight.
But his key message is that it can't continue as is and must adapt.
Adaptability and evolution have been evident in the talent management sector for a long time of course. Small niche players have found themselves competing in a market dominated by traditional ERP giants, such as Oracle, SAP and IBM, as well as the rise of the likes of Workday.
These talent management vendors have met a need for integrating standalone talent tools, such as performance management, applicant tracking and learning management, to create a combined talent software suite. That's all good.
But customers are fickle beasts and seldom completely satisfied. They now want more. Basic requirements are being usurped by organizations’ broader needs, which Bersin sums up as engagement, empowerment (giving people the learning and tools to work) and environment.
Bersin postulates:
Integration is giving way to impact – and companies now want systems that change the way people work.
At the heart of his these is the idea that the biggest issues facing organizations today are engagement, leadership and productivity. These challenges are far wider in scope than those handled by traditional talent management and this is what drives Bersin to his 'RIP talent management' conclusion.
What Bersin is proposing is that ‘managing talent’ is being replaced with ‘engaging people’. This, he suggests, reflects a move away from seeing people in terms of what productivity can be squeezed out of them.
Instead, HR needs to think about employees as people rather than talent. The theory's simple: feeding people’s individual work needs, of feeling engaged, useful, supported and properly trained, is how the ‘talent’ will contribute to the organization.
This can already be seen in practice with a number of organizations having already renamed their HR department as ‘People Operations’ or ‘People Management’.
Different how?
How does this differ from old style talent management? Well, in the following ways, runs Bersin's thesis:
- Talent management looks at identifying and incentivising top talent.
- People management is concerned with empowering and improving performance across the board, using coaching and management.
- Talent management thinks of people in terms of their ability to add value to the organization and training them so they can deliver against business requirements.
- People management sees each employee as an individual and strives to create an environment where that individual wants to contribute to the business mission, in a manner that suits them. In other words, if you create an attractive environment or culture to work in, then people will perform better.
That's the theory and that's all good and well, but from a practical 'what do I spend my IT budget on' point of view, how does all of this impact on HCM software selection and deployment? How does traditional HR software help with this new set of requirements?
The answer (unfortunately) is not very well. Capabilities such as applicant tracking, employee goals and performance and so on have become pedestrian, but they are important and need to be done. But while there's no getting away from them, they no longer offer any competitive edge.
But inevitably a problem for some is an opportunity for others. If Bersin's thinking stands up in the enterprise reality, then there's a crying need for a new breed of people management software and services which in the first instance will fuel a new raft of start-ups. These will be based around mobile apps rather than websites and with a consumer-like look and feel.
Larger, established talent management firms will be locked into a product roadmap and are likely to struggle to change direction quickly. But as was seen with the 'coming round to the cloud' conversions of the likes of Oracle and SAP, all it takes is the rise of a hungry enfant terrible like Workday to refocus thinking. The same will be mirrored as and when the people management mantra beds in.
My take
It's not a revolution. This shift from talent management to people management represents a maturity in the market. Phase one saw the integration of the standalone applications that together comprise today’s talent management software.
Next-generation people management has a far wider perspective. One of the factors behind this is a demographic shift: there’s a shortage in top talent, despite the difficulties new graduates find in getting their first foot on the ladder. Your top performers are in the driving seat; they call the shots in choosing an employer that suits them.
It also reflects the common perception of the cultural shift fuelled by the Millennials – the ‘Me’ generation – bringing different expectations of the workplace. These expectations have been well enough (too well?) documented: they don’t want to be told what to do, they don’t like hierarchy: they expect to be ‘empowered’ and the workplace to fit their requirements etc.
The bottom line of this thinking is a shift away from the idea of what you can do for you company, to what your company can do for you and that raises challenges to the traditional model of talent management.
The talent management software market will follow these demographic and cultural shifts, but, as ever, we’re likely to see early innovation come from agile start-ups than the bigger players. But none of this is going to happen overnight.
Disclosure: at time of writing, Oracle, SAP and Workday are premier partners of diginomica.