Traditionally the end of the calendar year is when HR teams and company management get together to decide which staff will receive bonuses or pay rises, and often aiding in that decision is the annual appraisal.

Conducting appraisals is a natural and convenient time for HR directors to highlight the gaps within a team’s learning and development and their need for formal talent management. Reasoning for where and why training or a new technology is needed, and recording this, may be all that is needed for senior management to take note and to hand over the necessary budget. However, there will also be cases where a proposal needs to include extra detail, such as a projected return on investment

In any case, it is vital that arguments for budget are well prepared. A proposal for talent management technology should clearly set out the plans for growing and developing applicable teams and should show how, in the long run, the investment will result in less overhead costs plus better motivated, higher skilled staff prepared to meet their business’ goals in 2014.

When asked specifically what the projected return on investment for a given technology might be, the HR director should respond by saying that effective talent management is often linked to a rise in employee engagement. They can also point to numerous studies that claim businesses with superior levels of employee engagement and development easily surpass their competitors in areas including productivity, innovation, and most importantly, financial performance. Those companies that place particular emphasis on employee performance, by way of talent management, can experience a return on investment of up to 300 per cent.

But quoting studies rarely counts as tangible proof of value. In order to receive their required grant HR directors will need to provide a convincing argument for the cost savings, improved productivity and staff profitability that new talent management technology will bring about.

Staff Profitability

The most expensive event in an employee’s work cycle is their recruitment; businesses incur costs both in the searching and hiring of new staff, and also in the loss of productivity from other members of staff assisting in the onboarding process.

Businesses invest a lot in their staff during the early stages of their employment in the hope that this will pay off later. It can cost double an employee’s salary to find and train an employee; in fact, approximately 70 per cent of company expenses go towards paying staff salaries. No wonder companies are keen to retain employees for as long as possible.

One of the best ways to reduce staff turnover is to improve employee engagement, and this can be achieved by using talent management to help staff understand the importance of their roles. Similarly, tools can be used to identify an individual’s strengths so that they can be leveraged for the benefit of the business. If employees are aware of company goals and how they fit into them they will be reassured of the importance of their position, and it is this sense of purpose that will fuel job satisfaction and improve engagement.

If the technology in question will be used specifically for onboarding the argument should be that centralising the onboarding process and streamlining a new member of staff’s induction reduces the amount of administration undertaken by people within the HR team and elsewhere within the business. Strategic onboarding cuts the time it takes for staff to reach full productivity and helps them integrate with company culture much faster. This not only minimises costs and improve an individual’s profitability, but once again, reduces staff attrition.


A key argument when explaining the need for an investment in any technology is that even the most committed employees can’t fully productive if they aren’t provided with the tools that best enable them to do their job.

A core benefit of talent management solutions is that they provide effective communication mechanisms. If staff aren’t given regular updates on the company, their role and personal progress, they quickly become frustrated and productivity levels drop. This is particularly relevant in the event that mistakes aren’t identified and dealt with; without the tools to do this, error rates increase and employees feel like their efforts are wasted.

Talent management software improves staff productivity by formalising goal setting and goal alignment as a part of performance management. While improving engagement (and therefore reducing turnover) it gives employees a feeling of ownership over their careers and provides an avenue for regular, constructive feedback from superiors. Feedback given in the form of metrics can boost focus and result in a continuous improvement in performance. Concurrently it enables managers and the HR team to gain a clear overview of all staff reviews and development plans at one time.

As part of learning and development, technology can be used to effect collaboration and best-practice sharing. Rather than learning by themselves – and making regular mistakes – collaboration allows people within and outside of a team to share their ideas thereby helping to reduce any duplication in effort and common errors.

Cost savings

The fact that a manual process takes longer than one automated via software shouldn’t be up for debate. Similarly moving from an old system which has been proved ineffective based on current standards or outdated when compared to a new solution will obviously save everyone involved, time and therefore the company, money.

Think of it this way; how long do you spend trying to find files or pieces of paper, sorting these into bundles and completing forms and documents by hand? Now add to this the time spent chasing staff who haven’t yet completed the tasks set for them and the hours given to analysing and running HR reports for your superiors. The answer, over the space of a year, is likely to number in days potentially even weeks rather than hours or minutes. By automating all of these processes and enabling each to be managed at the touch of a button the whole system is simplified, stress is relieved and time is saved.

Of course the explanations given by a HR director when pitching for budget will vary according to the technology required. Saying that, the proper supervision of any element of talent management will result in the following: better productivity and staff engagement leading to improved staff profitability; streamlined processes that save time and money and a satisfied, motivated workforce with a lower overall staff turnover. All results that company management should happily invest in.

Nicholas Roi, Managing Director of SilkRoad UK, a provider of SaaS talent management solutions.