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Talent management systems: All you need to know

This guide provides a concise overview of Talent Management Systems (TMS) and their role in organizations.

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1. What is Talent Management

Talent management includes the HR processes involved in attracting, developing, motivating, and retaining high-performing employees.

Talent management helps employers grow their employees’ capabilities to help meet the objectives of the organization.

The talent management process includes these elements: 

  • Identifying vacant positions and gaps in talent 
  • Sourcing good candidates for hire 
  • Onboarding of new employees
  • Growing employees to develop the skills and expertise your organization needs 
  • Engaging, retaining and motivating employees to achieve long-term business goals.

2. Talent Management vs Talent Acquisition

Talent acquisition is the process of attracting and hiring employees to help meet the needs of an organization. It’s a subset of the activities that comprise talent management.

Talent management extends beyond the attraction and hiring of employees.

It involves:

  • Training and development
  • Keeping employees satisfied and engaged
  • Preparing them to take on more responsibility

3. Functions of Talent Management

Talent management includes these specific functions

Recruiting and onboarding
Performance management
Succession planning
Learning and development
Compensation and benefits management

4. What Is a Talent Management System?

A talent management system (TMS) is an integrated software solution that enables the full scope of talent management processes. A TMS focuses on meeting the needs of employees in ways that benefit employers.

5. Why Your Company Needs a Talent Management System

A TMS helps you make talent management processes consistent and efficient across your organization.

As your company grows, it becomes harder to track each job candidate and employee manually. This is especially true when you operate in multiple locations.

Your data is likely to be fragmented and incomplete. Your talent-management processes are likely to be inconsistent. You leave too much to chance.


As a result, some highly valued employees may be neglected. Employees who feel neglected are likely to get discouraged. Their performance suffers. They may leave your company.

A TMS helps solve these problems. It enables your Human Resources team to track and manage the recruitment, development, and performance of employees and candidates across your organization.

Essential Features of a Talent Management System

A TMS typically addresses these processes

This section also addresses integration between TMS and other HR information systems.

1. Talent acquisition

Talent acquisition includes the processes of










the best talent.

In high-growth organizations, the goal is to deliver talent fast. In slower-growing companies, quality of talent acquisition may be more important than speed.

Talent acquisition systems typically facilitate these functions:

  • Creating and managing job requisitions
  • Posting to multiple job boards
  • Assessing candidates
  • Conducting online interviews
  • Recruiting proactively

Most talent acquisition systems also include these capabilities:

2. Learning Management

Learning management systems (or LMS) enable companies and employees to manage the learning and development of employees.

LMS are likely to offer various combinations of these key capabilities:

  • Traditional learning
  • Social learning
  • Tracking and compliance
  • Coaching and sharing
  • Development and management of learning plans

3. Performance Management

Depending on the software you choose, you may find performance management capabilities within either a TMS or a Workforce Management System (WMS).

Regardless, performance management systems typically include these functional capabilities:

Rewards and compensation
Manager reviews
Development and improvement
Performance monitoring
Goal setting
Ongoing feedback
Outcome management

4. Compensation and Benefits Management

Compensation management and benefits management software may be packaged and licensed as separate systems. But some software vendors bundle the two together.

Through compensation management, employers plan and manage everything of financial value they give an employee in exchange for work.

Employee compensation includes an employee’s salary or wages, plus benefits, bonuses, and rewards.

Compensation management software helps organizations plan and administer employee compensation packages.

Companies use compensation management systems to manage salaries through an administrative dashboard. These systems also help companies to:

  • Develop merit matrices
  • Report and analyze company compensation data
  • View and adjust compensation policies
  • Plan employee bonuses
  • Recommend pay adjustments

Benefits management or benefits administration software addresses a subset of compensation management. The software helps organizations in two main ways. It helps:

Plan and administer employee benefits packages
Ensure employer compliance with government regulations

Many benefits management systems provide employee self-service portals. Through such portals, employees can update their data related to benefits options, beneficiaries, and more.

Employees can also find answers to common questions. They can communicate efficiently and confidentially with benefits administrators.

5. Succession planning

Succession planning is a software module often contained in a talent management system.

It enables HR processes that deliver these results:

  • Planning to fill future vacancies in critically important jobs with highly qualified candidates. The goal is to ensure business continuity.
  • Selecting and developing talent to fill vacancies
  • Creation of job and career mobility for current employees, based on verified skills and experiences
  • Alignment of employee aspirations with current and future business needs

6. Integration capabilities

Talent management systems must integrate with other corporate systems—especially the other applications the HR department uses.

Ideally, you want both kinds of integration. In choosing a TMS, carefully check any vendor claims of integration to be sure of what you’re getting.

1. Facilitates Data Sharing

An integrated TMS facilitates data sharing across an entire organization. Data sharing enables HR departments to view employee data in diverse business units, physical locations, and geographies.

2. Strategic Hiring Techniques

When your company hires strategically, you populate your organization for long-term success.


When you make a strategic hire, your company chooses the candidate that can help elevate the company beyond the needs of the immediate job.

That may mean you don’t hire the person with the best qualifications. Additional factors can make another candidate the better hire in the long term.

It’s easier to hire strategically when your process begins by carefully analyzing broader talent needs. A TMS can help with such analysis.

3. Better Onboarding Experience

Onboarding of new employees is the process of integrating them into your company and its culture. You provide new hires with the tools and information they need to become productive team members.

Onboarding involves more than new-employee orientation, a simple administrative process that takes less than a day.

In contrast, onboarding may take from a few weeks to a full year.

Onboarding is the first impression your company makes on new employees. So you want to avoid giving them a disappointing experience. You’ve wooed them through your recruiting process. Don’t drop the ball now.


A TMS can make your onboarding process consistent, so you’re less likely to miss important details.

Here’s an example. Rather than presenting new employees with a stack of papers to sign, you can send them documents for electronic signature. Enable your new hires to choose their benefits online. A TMS automates the paper-pushing.

4. Improved Employee Engagement

Employee engagement is the extent to which employees:

  • Feel passionate about their jobs
  • Are committed to the organization
  • Put discretionary effort into their work

You can increase employee engagement by providing consistently good processes for:







Companies with highly engaged workforces generate profits 21% higher than those with poor engagement.

Performance management is an especially powerful tool for increasing employee engagement.

Besides performance management, other tools in a TMS enable you to take quick-pulse surveys and annual employee engagement surveys. These tools collect the data, then link employee engagement KPIs to financial metrics.

You can see how well your engagement programs are working.

5. Retain Top Talent

Your company’s employee turnover rates expose the strengths or weaknesses of your talent management processes.

The average turnover rate across industries is around 10%. The cost of replacing an individual employee can range from one-half to two times the employee’s annual salary.

Talent management systems collect data related to employee turnover. With such data you can analyze possible causes of attrition. You can see, for example, turnover rates by manager, by department, by location, by demographic group, and more.




Demographic group

6. Data security and privacy

Data breaches rose dramatically between 2015 and 2017. Although they’ve fallen somewhat since their peak then, they’re still at much higher levels than a decade ago.

HR departments are attractive targets for data thieves because HR works with the sensitive personal information of job applicants and employees.

With such information, data thieves can develop a thorough dossier on a person and sell it on the black market.

When a company allows such information to be exposed—even inadvertently—the company is likely to suffer financial loss. Its reputation is likely to be tarnished. The company may also be prosecuted by federal regulators.

These risks make it essential for your TMS to be secure.

1. Define your organization’s needs

Identify your stakeholders and bring them together.

Be clear about the results you want to achieve. What future state do you want for your company?


Define the problems you want to solve or the pain you want to relieve.

List the goals you want to achieve and the risks you want to mitigate.

List the product features and functions you think you need. Also list other important selection criteria such as vendor viability, customer references, technology platform, and more.

Do you want to run the software in the cloud or on your premises?

Do you want to pay for a perpetual license or a subscription fee?

2. Set a budget

Establish whose budgets will pay for the project.

Determine how much you’re willing to pay for these elements:

  • Software licenses
  • Implementation costs, including software configuration, data preparation and transfer, integration, training, and change management
  • Operating costs, including IT staffing, computer hardware and software, maintenance of software and data integrations, support services, data centers, and the like.

3. Shortlist Vendors Based on Your Requirements and Budget

Check software-selection sites for third-party reviews. Also ask colleagues for recommendations. Research your alternatives online.

Come up with a manageable list of three to six products or vendors you can evaluate in depth.

4. Collect More Information About Each Vendor You Have Selected

Visit the websites of vendors you’ve shortlisted. Speak with their sales people or consulting staff to learn more about their offerings.

5. Conduct the Demo

For a software application as full-featured as TMS, you may need more than one product demonstration.

That’s because the various people on your selection committee will look for different things, and they may be available for demos at different times.

Prepare your list in advance of the capabilities you want to see in a demo. Involve your stakeholders in preparing the list.

Cooperate with your vendor’s demo team to help them provide a session that’s worth your time.

Make sure the vendor’s demo team shows you everything you want to see. Ask them to go through all the processes that are important to your business.

See if the vendor can customize the demo to your industry and maybe even your company. If you provide a sample of your data for the vendor to load before the demo, your demo is more likely to make sense to your team.

6. Talk to Your Stakeholders and Make a Purchase Decision

Apply the weighted decision criteria from your matrix, giving a numerical score to each product and vendor.

Narrow your list to two or three viable products and vendors.

List your remaining questions and concerns for these vendors.

As you resolve your questions and concerns, begin discussing final agreements.

Learn more about how CAVU’s talent management solutions can help you save money and time!

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1. Involve Key Stakeholders in the Software Adoption Process

Assign a team of people responsible for the implementation of your TMS. Include appropriate participants from IT, HR, and the various business functions or units whose operations the system will affect.

With your team of stakeholders, determine the amount of change the implementation will involve for each business function or unit. Assess whether you’re likely to need help with change management processes.

Work with your chosen software vendor and other chosen service providers to plan a step-by-step implementation process. Establish timelines. Designate resources. Seek permission from the managers of people you want on your project team.

2. Migrate Your Existing Data

You may hear the terms data migration and data conversion used interchangeably. But they are distinctly different processes.

Data migration is moving data from one system to another. If your old and new system contain exactly the same data fields, you can simply migrate your data.

But most often, the data fields in the two systems are different. That means you must convert or transform your current HR data to meet the requirements of your new system.

Migration of current data involves these steps:

  • Evaluate your data for accuracy and completeness. Cleanse your data as may be necessary.
  • Map the fields of your current data to your new system. Evaluate data definitions in both the current and new systems. Plan to convert your current data to any definitions that are different in your new system.
  • For fields in your new system that don’t correspond to data in your current system, plan how you’ll gather and enter the new data.
  • Load the edited data into your new system.

3. Conduct Internal Testing

Before making your new system generally available to users, conduct internal testing with a small, select team of people who understand your system and your data.

  • Conduct system configuration testing. Does the system present all data fields in the expected locations and formats? Are workflows configured properly?
  • Test your data accuracy after the migration.
  • Test your reports and analytics.
  • Conduct user acceptance testing. From a user’s perspective, does the system work as it should? How usable is it? How much time does it take for users to complete key tasks?
Few things are as likely to compromise a successful system implementation as a poor data migration. Users will soon stop trusting the system, and they may refuse to use it.

4. Provide Training and Support

Decide who will need training and how you will support your users.


Will your company provide Level One (or first-level) support, with the option to escalate issues to the software vendor? Or will your vendor provide Level One support?

Decide what kind of training you will provide and where you’ll provide it. Will training occur in a classroom? Will it be online, delivered remotely?

Decide who will conduct the training. Will you do it internally? Will your software vendor train your trainers to train end users?

1. How Much Does a TMS Cost?

It’s hard to answer this question briefly and accurately.

Some vendors provide transparent pricing information on their websites. Others provide only custom quotations. They do so because software requirements tend to vary from one company to another.

Software vendors typically license and price software in two broad ways:

  • Subscription plans for cloud applications (software as a service or SaaS)
  • Perpetual licenses for software operated on your premises

Subscription plans

When a software vendor hosts the application on their servers, your company typically pays a monthly or annual subscription fee.

The standard pricing structure is per employee per month. This is usually based on the number of your active employees.

Some vendors charge per user per month. This means you pay for your administrative users (e.g. HR) to use the system. If employee self-service is included as a feature, the vendor may classify employees as users. The published fees of software vendors vary widely.

Perpetual licenses

With perpetual licensing, you host the software application and data on your own servers. You pay for the software once upfront.

You may also pay a recurring cost, such as maintenance or support. You typically pay these recurring fees annually.

The perpetual license fee varies based on the number of employees or users.

Fees for standalone cloud-based talent management systems range from about $10 to $20 per user per month.

The total cost of ownership for a TMS includes these elements:

  • Software license fees
  • Maintenance and support fees
  • Implementation costs, including data migration, customization or configuration, integration, and training
  • The cost of infrastructure and staff to operate the systems

2. Can I Migrate Data from One TMS to Another?

Yes. You can migrate data from one talent management system to another.

The complexity of the migration depends on these factors:

  • The quality, accuracy, and integrity of the data you start with.
  • The data architecture and data definitions of your current system versus those of your new system.

3. How Long Does It Take to Implement TMS Software?

The time needed to implement TMS software depends on several key factors:

  • The amount of data you will migrate.
  • The amount of data conversion you must do.
  • The number of users you must train.
  • The amount of software configuration you must do.
  • The amount of money and number of resources you can apply to the project.
It’s common for the duration of TMS implementations to vary from expectations. Almost half run shorter than expected, according to a study from Capterra.

4. Should I Choose Cloud-Based Software?

You can choose TMS software delivered through either of two business models:

  • Software based in the cloud (that is, software as a service or SaaS)
  • Software you operate on your premises

Each alternative has pros and cons.

In one survey, about three-fourths of respondents chose a web-based or cloud-based system over one deployed on premises.

Cloud-based systems have become more common across most kinds of software applications.

For small businesses that lack IT staff or infrastructure to support on-premises deployment, cloud-based systems offer many advantages.

Even so, cloud-based systems have some disadvantages. They may offer less customization or custom configuration to the needs of a company. They offer less control over back-end infrastructure.

But it’s a myth that cloud-based applications are less secure than on-premises systems. Many cloud systems are more secure than on-premises systems because cloud providers often invest more heavily in security.



Talent management is a key process for any company with more than a few employees. The bigger the company, the more involved its talent management needs and opportunities are likely to be.

Growing companies are good candidates for talent management systems because their number of employees is growing, and their processes and needs change fast.

For information about how CAVU HCM helps growing companies manage their talent, please visit CAVU Talent Overview