HRMS vs talent management system: which one do you need?

The short answer to the question is, it depends (as I’m sure you could guess). The longer answer involves knowing what talent management is, as opposed to HR in general, and what the respective technologies can and will do for your business. So, all-in-one or best of breed? 

What is a talent management system?

According to Wikipedia, the practice of talent management is, “the anticipation of required human capital for an organization and the planning to meet those needs,” which is something of a jargonistic mouthful. Put more simply, talent management is a strategy designed to ensure that you have the right people, with the right skills, in the right role, at the right time. As such, it includes several HR activities: succession planning, learning and development, performance management, and career planning.

Potentially, this role-oriented focus on skills and development applies to every employee. But usually, talent management is focused on that segment of the workforce with potential – the ‘talent’, if you will.

Talent management systems support this strategy by automating the various related HR processes, and drawing on employee data to identify and support and develop employees with the required potential.

Check out our HRMS features guide to learn more about your HRMS system capabilities

The current talent management systems are a logical outcome of past standalone software that managed performance appraisals, training administration, and applicant tracking. Core features of a talent management system usually include:

• performance management
• succession management
• compensation planning
• alignment with strategic goals
• flexible reporting and analytics

Using employee data under these broad headings, the system builds a series of talent profiles, enabling individuals to be matched to business-critical positions. There may be links to recruitment too, and many recruitment and talent management systems leverage social media, reaching out to potential employees to build talent pools and pipelines that seek to ensure a flow of high-quality candidates into the organization.

A caveat: the label ‘talent management’ has become another marketing tool and there is no guarantee that an individual system will do all of the above, or do it well.

How is a talent management system different from HRMS?

They both help you manage your employees but take a different approach to doing so; one is more exclusive, the other inclusive.

An HRMS takes a broader view to a talent management system. Just as the field of HR is broader than talent management. An HRMS deals with all employees and while it may have talent management functionality, it’s also concerned with leave management, time and attendance, the employee database, maybe payroll. In other words, an HRMS has a more ‘administrative’ focus, compared to strategic talent management software.

A talent management system requires data to operate, and often that data is contained (or could be) within an HRMS: employee records, performance management information, learning and skills data, etc. the reverse is rarely true. An HRMS may draw on the data in a separate but integrated talent management system (to produce predictive analytics and reports, for example) but it can go about its daily business alone.

Can an HRMS meet your talent management needs?

The simple answer is, probably, depending on what they are. For most small and medium-sized businesses, the option of using an HRMS with a talent management module is sufficient to carry out a talent strategy.

Certainly, many (possibly most) HRMS options will support recruitment and onboarding, performance management, learning management, compensation and reward options, and a specialized talent management module will likely match employee profiles to potential future positions.

There are certain advantages to using HRMS talent management:

• A single database – separate systems have separate databases and require some form of middleware or software ‘bridge’ to communicate. The advantage to keeping everything within an HRMS is that you avoid potential errors by having to enter employee data twice. Also, a single database is potentially more secure, which gives you better protection for all that sensitive and personal employee information.
• Consistency and familiarity – when employees and managers are using a single system, there’s less possibility of confusion caused by different vendor user interfaces. What’s more, familiarity with a system leads to higher usage rates.
• Reporting – for reports and HRMS analytics, more data is available to the HRMS and it can use your talent management-related information to permit deeper insights into your workforce.

Not that an HRMS with talent management functionality is necessarily better for your business. There may be less implementation headaches (a single system and no integration issues) but for larger or more complex businesses, specialist talent management software may be more suitable. Or perhaps there’s a combined solution…

Integrating an HRMS with a talent management system?

Despite the simplicity argument for HRMS talent management, having two separate systems that are nevertheless integrated is potentially the best of both worlds – all the fancy features of a best of breed talent management system, communicating seamlessly and swapping data with a got-everything-else-covered HRMS.

After all, a specialist package is more likely to be on the cutting edge of talent management functionality, rather than just trying to offer everything. For example, while many HRMS offer recruitment and applicant tracking options, they are less likely to include sophisticated gamification and social media features.

The problem with integrating separate solutions tends not to be the performance of the software. Two systems can be enabled to ‘talk’ to each other and coordinate their operations – that’s a question of technical skill, getting your talent management software to sync with your HRMS’s onboarding, learning management, performance management, and analytics & reporting functions. No, the issue is more often in the user experience. If everything isn’t completely seamless (and consistent) for the person sitting in front of the screen then user adoption is likely to fall. 

Conclusion

Ultimately, it depends on what your business needs. If the fundamentals of personnel management and administration are the priority, an HRMS (perhaps with some built-in talent management options) is probably your best bet. If your organization’s performance is especially dependent on its people and you’re looking to take a more strategic approach to the whole ‘right person, right skills, right role, right time’ thing, then a dedicated talent management system may be the way to go.