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Small businesses need a talent management strategy to ensure that their employees and potential candidates are motivated, right from recruitment to managing the daily workflow. To achieve this, HR managers should invest in talent management software. The software will improve the hiring process and enhance the learning and development programs.
Automating the mundane and time-intensive tasks in these processes will help HR managers spend more time on sourcing and selecting quality hires as well as developing the workforce. In addition, employees that understand their role in achieving the business's overall goals are far less likely to leave than those who don’t.
However, before investing in talent management software, HR managers should run a deep analysis of the features, deployment options, important integrations, etc., of a solution. This will help you purchase the right solution.
In this buyer’s guide, we define the core features of talent management software, look at the deployment options, highlight emerging trends, and list some important questions that you should ask potential vendors.
Jump to the following sections for a quick look:
Talent management software is a way to automate important HR processes. Small business HR managers need a robust system to manage employees and provide them with an engaging experience during recruiting, onboarding, learning, and training. With talent management software, they can automate these and other processes, such as compensation management and succession planning.
Talent management tools help you attract top talent, increase employee performance, and increase the employee retention rate. With candidate and employee information on your fingertips, you can quickly accomplish routine tasks.
Let’s look at the two types of talent management tools in the market:
Off-the-shelf: This type of software offers basic functionalities such as talent acquisition, succession planning, training management records, and a competency database. It has a much lower initial cost than custom software. While this option may seem to be cost effective in the beginning, there could be issues with recurring licensing fees and scalability in the future.
Customized software: Not all small businesses can rely on generic software to attract and retain their employees. Some need custom software for their specific business requirements. This type of software allows you to add new functionalities such as resume importing, electronic record keeping, and performance management, giving you an advantage in the market.
Key question to ask your vendor before you buy: Is your talent management software suitable for my business size and the kind of business I do?
After you make a decision about your preferred software type, the next step is to select the right deployment model.
As a note, GetApp’s website focuses on cloud- or web-based software options. In general, these tools come with lower up-front costs, faster implementation time, and automatic updates; they also better support remote use, scale more easily, and minimize the need for IT staff and real estate.
However, it’s valuable for buyers to understand the range of deployment options. Most vendors offer one, both, or all of the following deployment models:
On-premise: This model is offered on a per-user license agreement, where the software is hosted on the client’s location. It comes with pre-built infrastructure, including communication servers, network equipment, and hosting environment. However, this deployment model can be expensive as it requires a complex IT set up and installation process.
Cloud-hosted: This model may be the most affordable one as it’s offered on a per user per month basis. It’s a monthly or annual subscription model where you don’t need to pay for installation, upgrade, or maintenance. Users can access the software remotely from any device as the data is stored on the cloud.
Do note that the availability of basic and advanced features changes based on the pricing tiers. This makes cloud-based solutions scalable and suitable for businesses that have an expanding database.
Web or browser-based: This model allows you to access the software on web browsers (with internet connection) such as Google Chrome, Firefox, and Internet Explorer. Users can log in to the system from any location. As it is web based, your HR data is stored on a central server. So, you don’t need to need to copy files or applications from one computer to another.
Key question to ask your vendor before you buy: What are the pricing plans for your talent management tool based on the deployment option?
In this section, we cover the key talent management software features that you should know about. Most small businesses will need most of these features.
Recruitment management: Helps recruiters manage candidate data, such as contact details, demographic information, and salary expectations, on a centralized database. The feature makes it easy to handle the candidate pipeline and track applicant status throughout the hiring process—from recruiting to onboarding.
Applicant tracking feature in Newton
Employee onboarding: Helps users manage the process of converting a candidate to an employee; also, tracks the completion of necessary tax forms (I9, W4, etc.), employee policy forms, and other tasks.
Paperless onboarding packet in ClearCompany
Performance management: Allows leaders in the company to manage performance reviews and cycles, set goals, manages employee development planning, and monitor and evaluate employee performance.
Performance management in Saba TalentSpace
Compensation management: Helps HR managers manage salary planning, budgeting, reporting, and incentive sharing. The feature lets them calculate bonus payouts based on the achievements and performance of individuals and teams. It also helps them monitor how salary modifications affect employees in terms of engagement, productivity, and performance.
Compensation planning in Compease
Succession planning: Helps HR managers identify key roles for employees with high potential. They can accelerate employee skill development to fill the talent pipeline based on current and future business needs.
Succession planning in UltiPro
Learning management: Automates the administrating, testing, tracking, and reporting of learner progress using eLearning modules. The feature allows students and/or employees to test their knowledge via online quizzes and gain certifications related to their roles.
The learning management dashboard in Degreed
Key question to ask your vendor before you buy: What are the most relevant features in your software that suit my business requirements?
Choosing software that includes all the basic functionality would be ideal for a small business. However, it could be possible that your business needs change after you implement the software, for which you require additional integrations.
In this scenario, here are some of the important integrations that you should consider integrating with your talent management software:
Performance appraisal software: Integrate this software to provide 360-degree feedback to your employees. This integration will help HR managers create development goals and set personalized development plans based on an employee’s ratings for competencies specific to their roles. This can help you increase your retention rate and improve employee performance.
Human resource information system (HRIS): This integration will help you update and access employee data such as cost-per-placement or average time to recruit. This data could help you make smarter business decisions. With the end-to-end view, you can analyze patterns in the organization data that make it easier to determine how future decisions will affect the business.
Key question to ask your vendor before you buy: What are all the integrations you offer in your solution that can help my small business?
Now that you’ve understood the common software features and integrations, the next step is to evaluate the advanced features that you may need. We haven’t labeled these features as “common”, but some of these could be vital to you based on your business type.
Competency management: Document and measure employee feedback to help HR managers make decisions related to promotion, relegation, or termination.
Goal setting/tracking: Create and assign employee goals for a specific time duration (annually, monthly, or weekly). Align these goals to your overall business objectives and track the status in real time.
Employee recognition: Reward employees with awards, e-gifts, additional time-off, etc., for their contributions to the organization. This program can help you boost employee motivation.
Watch out for the following trends in the industry to stay ahead of the competition:
AI to revolutionize the talent management process: In 2019, we will see a steep rise in the use of chatbots with artificial intelligence (AI) to match candidates with jobs. AI can automate talent management tasks such as onboarding, building performance metrics, filling candidate data, and enhancing candidate experience. This will help HR managers improve sourcing, conducting interviews, and shortlisting from a smaller, but more qualified candidate pool.
Talent analytics to transform HR’s business impact: According to a Gartner report, 70 percent of businesses could increase the resources for talent analytics. Talent analytics is highly beneficial as it can help businesses identify the top-performing talent, predict in-demand skills, spot attrition and its causes, and make hiring decisions based on data-driven insights.
From a business perspective, talent analytics can help HR increase their profit margins by 4 percent and drive talent outcomes by up to 23 percent. Small business HR managers can use it to solve critical business challenges in recruiting, onboarding, training etc.
See GetApp's future of work resource hub for more insights on managing tomorrow's workforce.
We referenced the following documents while creating this guide:
GetApp talent management catalog (Date accessed: 01/31/2019)
Best Talent Management Systems-2019 (Date accessed: 01/28/2019)
5 Tech Trends for Small Business, Capterra (Date accessed: 01/27/2019)
*Note: The applications selected in this article are examples to show a feature in context, and are not intended as endorsements or recommendations, obtained from sources believed to be reliable at the time of publication.