Every year, Fortune magazine delivers their list of America’s most admired companies. The survey is a rigorous process that The Hay Group performs based on nine key areas:
1. Ability to attract and retain talented people.
2. Quality of management.
3. Social responsibility to the community and the environment.
4. Innovativeness.
5. Quality of products or services.
6. Wise use of corporate assets.
7. Financial soundness.
8. Long-term investment value.
9. Effectiveness in doing business globally (World’s Most Admired Companies list only).
The great news, highlighted by Jason Corsello of Yankee Group is that Taleo is powering many of those companies (50% of the Top 10!).

I was on a panel yesterday with many vendors in the talent management space and we were asked to explain: “What is Talent Management?”

I was surprised by the number of people who limited their definition to what they were doing: “Talent management is performance management, incentive compensation, or talent acquisition.”

If you look at what the analysts are saying, talent management is often much broader than that and includes training and development, succession and workforce planning, and even sometimes knowledge management.

Maybe a better definition than saying what talent management does it is to look at what it impacts. Talent management impacts labor related skills and competencies and they impact business performance. In order to do this, all true talent management systems MUST have a talent repository. At Taleo, we call it a Talent Master file and it is the true core of any functionality that would evolve into any suite of products.

At a Conference Board event last week, I was asked on a panel by Row Henson, now at Oracle, “Why do you think HR has been so slow to adopt Human Capital Analytics?” I built my response on five reasons, and asked the audience if they had more, but nothing substantial came to complement these:

1. Legal: except for regulatory reasons such as EEO, there is no established business obligation to report on any broad talent issues.
2. Cultural: HR and talent management have not been historically using metrics to represent results like finance or operations.
3. Value perception and funding: many executives understand that talent is key, but often they don’t know what to ask for and do not fully understand the key value drivers, so they are reluctant to fund those initiatives.
4. Lack of standards: even if we compile some data, it is often hard to benchmark ourselves against other companies, as there is little or no common standard.
5. Technical: until now, there were very few systems that could enable good talent management analytics.

Note that I said “until now”. Many of my colleagues at Taleo would highlight our existing benchmark data, staffing metrics and scorecards that Taleo currently produces, and our soon to be unveiled unique approach to talent analytics. Let’s hope that finally overcoming technical issues (#5 above) will enable Talent analytics to become the new standard for talent management metrics.

Note: the only companies that say they report systematically to their executives were companies that adopted the balanced scorecard approach! It is time that executives wake up and notice that talent metrics are some of the best leading indicators they can have at their fingertips!

Interesting results in the 2006 DirectEmployers Association Recruiting Trends Survey conducted by Booz Allen Hamilton.

Corporate websites are working well for sourcing:
• Fifty-one percent of new hires were sourced from the Internet.
• Employer websites were the single best source of new hires in 2005, followed closely by employee referrals.

Quality and recruiting processes are improving:
• Fifty-eight percent of respondents felt that the quality of hires in 2005 had improved relative to previous years.
• Fifty-six percent of respondents agreed that recruiting technology had made the job of recruiting easier.

The Source Value Index (see below) provides an indicator of the value of a source from an investment perspective. Referrals, social networking websites, and corporate careers websites are ranked as the top three.

As for the future, most study respondents anticipate their organization relying more heavily on their own website (74%) and employee referrals (68%) as a source of applicants in 2006.

After I recently attended a wedding reception in honor of two Taleo employees who had found romance in the workplace, my inquisitive mind asked: “Is it only at Taleo that relationships are formed?”

So I did some research. According to a SHRM study released this year, 40% of people have been involved—at some point in their career—in a romance at work! Yes! 40%!

But all surprise aside, for most people, choosing a life partner is probably the most important decision in an adult life. After that, comes the choice of your career. And if working with someone helps to discover the fit compatibility between individuals for a life partnership, the same can be said for work attitude and skills.

Indeed, I often recommend that managers “test” their potential employees. Not only by using assessments, but also by letting them come into the organization as a temp or a contractor and then converting them into a full time employee – if they fit.

That is exactly what Taleo Contingent and Taleo Professional solutions enable organizations to do today. In the age of the growing free agent nation, that could end up as the best strategy for capturing rare talent.

P.S. According to the same survey, workplace romance is dropping the negative stigma that was associated with it in the past. And as long as the courtship and relationship proceed in a civilized, harassment-free, professional manner within HR guidelines and are aligned with organizational objectives, then why not? So who will be the next couple in your workplace?

It is always interesting what comes out of this huge gathering of very influential politicians and business leaders at the World Economic Forum. As in 2000, one session contained the word talent in the title. This year that title was “The Global Talent Tap”. Perhaps the theme didn't evolve from the “War for Talent” of the 2000 forum, as The Global Chief Executive Officer of PricewaterhouseCoopers, USA, noted that in his 30 years of experience, he has never seen such an incredible shortage of, or demand for, talented people.

But Talent Management is a multifaceted concept that applies most meaningfully according to who and where you are. If you are the CEO of Infosys in India that needs to recruit 20,000 people and go through 1.4 million applications, it is a number game. If you are a company in need of creative innovation in order to grow, it is a qualitative game. But all will agree with Elaine L. Chao, US Secretary of Labor who said this in a session on the jobs of the future: "The greatest challenge is investment in human capital."

But there is always a big paradox here, as highlighted by Herminia Ibarra from INSEAD: "In the 1990s, companies claimed to be investing heavily in human capital, but as soon as there was a downturn, these budgets got slashed. So, is there something different going on now?"

I believe that there is something different going on now, and this something is called visibility of financial impact of human capital investment. This is exactly what I have been invited to speak about at the Conference Board event in New York next week, see you there!

Following the Microsoft announcement a couple of months ago about Windows Live and Office Live services, today SAP had a press conference to announce their move into Software as a Service (SaaS).

For them, this action is a response to customer demand. For everyone else, it’s a great validation for all on demand providers today serving large enterprises!

Targeting large enterprises and the upper mid-market, we think that it could be a strategic hit at salesforce.com for targeting the SAP users in the upper market. This CRM solution will start at $75 per user per month. And SAP is a bit shy of offering a “hybrid” solution, or the possibility to migrate from the on demand to on premise option.

Their interesting model differentiation is called isolated tenancy versus multi-tenancy.
This approach is another sign that the solution is mainly targeted at very large organizations. The ease of implementation with the isolated tenancy model is there. But the cost savings could not be.

Anyhow, this announcement is a major move in the enterprise software market and here at Taleo we see this as good news. It provides further validation that our model is what customers are looking for.

The Society of Human Resource Management (SHRM) recently released a report on Talent Management. We like it when our customer and the most significant HR association with its over 200,000 members takes a look at what we see as the most critical factor of HR today.

With only 11% of respondents having an HR department of 25 or more individuals and 22% more than 10, the results represent mostly the collected voices of small companies.
The top four areas of improvement the respondents looked for in their talent management programs were:

(1) Building a deeper reservoir of successors at every level (28%),
(2) Creating a culture that made employees want to stay with the organization (17%),
(3) Identifying gaps in current employee and candidate competency levels (17%), and
(4) Creating policies that encouraged career growth and development opportunities (16%).

However, one interesting trend to note was that about 60% of respondents said that their budget for recruiting and development initiatives will increase over the next three years, while only 45% said the same for the retention initiative.