Companies are rapidly shifting to talent management software simply because it has proved to be a sound investment giving a good output. Talent management softwares addresses cohesive goals of the organization while maintaining the consistency in talent management.
To calculate the return on investment (ROI) for Talent Management Software it is essential the metrics to assemble the costs incurred and are well synchronized. A symmetric measurement of human capital versus financial performance is take into account.To assess the return on Investment on Talent Management Software its ideally best to calculate for a consecutive period of 3 years. However prior to that, it is necessary to calculate current performance management process. As this will help you mark a difference by using talent management software.
5 key Tips to Measure ROI for Talent Management Software are :
- Calculate the cost of Implementing the Talent Management Software : Every software comes with its own cost and talent management system is not excused from the same. There are many talent management systems which may be quick and easy to use and implement. However there are certain costs which can not be ignored.This cost would include user licenses, servers, infrastructures,migration of data, consultation and training charges.
- Employee Retention : The overall functionality of talent management software is focused on employees. Overall talent retention rate thus becomes a key parameter in calculating the ROI. A talent management system should be able to support you with the intelligence on various employee retention data to formulate the relevant strategies.
- Hiring Cost : The cost to hire new talent should be taken into account along with handover, knowledge transfer and the time taken by a new employee to reach full productivity.
- Average Tenure : The number of years employees devote to the organization can be calculated by the number of employees averaged by number of years. This function assists management assess the drawbacks and works towards addressing employees needs.
- Senior Positions and Bench Marks : Taking into account the current talent pool and open senior positions gives an analysis of where training is needed. Certain bench marks can be laid and on achieving target employees can be promoted, saving the company hiring costs as well as earning a self developed and prolonged loyal employee.
Research shows that the companies who define goals initially and start measuring the ROI quarterly perform better than those who calculate annually.Talent Management software assists companies in development planning and taking into account key parameters helps addressing administrative and employee issues before they become major reasons for employees leaving the organization.