The intersection between HR strategy and HR technology

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It will be interesting to see what the SuccessFactors executives say on their 4th quarter performance results, and even more so for their projections for 2009. Given that they just did an across the board layoff ((I don’t have direct knowledge, but the word on the street was that they did 20% across the board)) it would be hard for them to say that they are still projecting strong growth.  This goes for pretty much all of the talent management vendors.

I’m suspecting that pretty much every technology vendor out there is going to have a very bad year.  Lets face it, pretty much all technology decisions for HR are discretionary.  If HR needs a new spreadsheet, that would be fine.  If HR needs to spend $100k then perhaps there is still a good chance.  But when software licenses are $100k or more, and there is implementation to consider as well, I’d hazard a guess that HR technology spending this year as going to be down right terrible.

The problem is that most organizations are going to be doing large reductions in force this year, if they have not already done so.  This simply means that much of the innovation that has been coming from talent vendors is going to slowly erode as R&D organizations thin and programmers find themselves on the street.  What I’m most concerned with is that we seem to be stuck with Talent Management 1.0.  I consider this to be a purely transactional system of managing talent and data.  While I know we are all pleased with where talent management has gone in the last few years, I’m sure we all also know that the evolution has not stopped and isn’t even close to being over.  This pause of innovating talent management could us back for a couple of years.  I think about what happened to HR technology in the years after the dot com bubble burst where HR technology spending stopped for several years.  Now, if technology spending stops and it’s accompanied by a severe reduction in vendor thought leadership.  I’m hoping that in 6 months, all this isn’t as bad as I think it will be.

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4 responses to “SuccessFactors Results”

  1. Scott Pruitt Avatar
    Scott Pruitt

    While earnings calls are always filled with their share of spin, I believe reality dictates that many TM software organizations are focused on aligning costs with revenue. For those organizations who were focused on a “land grab” market share strategy without regard to profitability, these economic times will display their ability to manage in the valleys as well as the peaks.

  2. Mike Kent Avatar

    So, you’re right, spending on HR technology will slow down as the economy worsens, but let’s not forget that it’s exactly the time when organizations need to spend the most effort on comprehensive talent management. Identifying your critical talent, your best performers, your key competencies and all the other aspects of an holistic approach to talent become even more important during tough times. Every organization needs to spend the effort required to be sure they have and keep the talent that is essential to their survival and to their eventual recovery. This is the time when it’s critical to be better than the competition and to differentiate yourself. All of these tasks can continue to be done with existing technology, even if not as easy or as elegant as the newest SaaS product. They can all be done with spreadsheets, or even manually, if necessary. It’s probably easier than ever to convince senior management of the time and commitment needed to do a better job on managing talent. This is an opportunity for HR to step up (or sit down at that proverbial seat at the table) and take the lead on a mission critical issue. And, by the way, let’s not forget that a reduction/layoff/redeployment/stimulated attrition program, whatever you call it, is a pure talent management issue itself.

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