Learning and Talent Systems Market Growing Even Faster than Expected

The $4.2+ billion market for corporate learning and talent management systems continues to grow rapidly.  Even more rapidly than we expected. Late last year we published our Talent Management Systems 2013 research, which forecasts an overall 22% growth rate in talent management systems with even higher growth rates in talent acquisition and performance management software. It may be growing even faster.

The interesting thing about this market is that nearly every vendor is growing, with some growing at dramatic rates and others only growing at moderate rates. CornerstoneOnDemand just announced 58% YTY annual revenue growth, for example, and the company is still only around $117M in revenue.  The other major solution providers in the space (Oracle / Taleo, SAP / SuccessFactors, Lumesse, SilkRoad, Saba, PeopleFluent, Halogen Software, ADP, SumTotal Systems, iCims, Ultimate Software, Technomedia, JobVite, and others) are also all growing, and major new entrants like IBM (Kenexa), ADP, LinkedIn, and Salesforce.com are all growing as well.

The reason for this continued growth is the accelerating demand for corporate talent solutions. Our research shows that 32% of all human resources dollars are now spent on talent-related programs (recruiting, training, leadership, succession, etc.). Integrated talent management, which is still a new and complex initiative for many companies, is now the equivalent of "supply chain management" in procurement: it's something any well run company must do.

We will be launching a whole series of new research findings at our upcoming IMPACT Research Conference in April (please join us, it will be the largest IMPACT ever- April 22-24 in Ft. Lauderdale), and what you will see is that global talent strategies have taken on a whole new look. Today's high-performing organizations are globalizing their programs, focusing on new models for performance management, integrating diversity and inclusion into their strategies, and using technology in exciting new ways.

As the chart below indicates, the three big new areas of talent management are analytics, mobile, and social. But these are not just technology features, these are whole new business solutions that drive better decision-making, planning, and employee engagement. And speaking of engagement, the topic of "systems of engagement" is now paramount in this market.

Talent Technology Directions

Fig 1:  Key Elements of a Talent Management System

Accelerators to Market Growth

The HR systems marketplace is very active right now. Our research shows that the average mid to large sized company has HR systems that are over 6 years old. This means that most big companies are ready to replace, integrate, or significantly upgrade their entire HR infrastructure.

While most companies don't particularly like spending more money on HR systems, the new generation of cloud-based solutions is so significantly different that a "systems replacement" can significantly change the way you do business.

While the market is still evolving rapidly, many of the vendor solutions have converged and have similar end-to-end functionality. So with the right long-term architecture (and we can help you with this), you can now expect all your HR and talent systems to work very well together.

What this gives you is a candidate, employee, and manager experience that truly changes the way people work. And using these tools, coupled with good analytics strategy (Deloitte provides world-class analytics solutions), can now deliver a working "BigData" solution that lets you understand and predict retention, leadership gaps, and many of the difficult challenges we face in HR.

I'm not here to say these systems are all perfect, easy to implement, or 100% complete. But today, for the first time in our history as an analyst firm, the talent management systems market is filled with excellent solutions (albeit each is different), all focused on high value capabilities, and ready for companies that don't want to take big risks.

impactPlease contact us if you would like more help with your talent management or systems strategy.

Come to IMPACT 2013: The Business of Talent, and Learn More - April 22-24, Ft. Lauderdale, Florida

Please come join us at IMPACT, our annual research conference, this year.  We have many special events planned, including a formal introduction to our new Deloitte colleagues.

This year we will launch brand new research on High-Impact HR, new research on global leadership in China, and some exciting new products for our research members. You will also meet 600 of the world's most successful companies implementing world-class solutions today. I look forward to seeing you there.

This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor.

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