Workforce Management Tools Change Along with Demographics

Ann All spoke with Josh Bersin, president of Bersin & Associates, a research and advisory firm solely focused on enterprise learning and its organizational impact that recently produced a research study, "Performance Management 2006: Market Analysis, Trends, Best Practices, and Vendor Profiles."

All: Your research indicates that the market for performance management software will grow 40 percent this year. Why are companies so interested in these types of tools now?
Bersin: Growth in this market is resulting from a combination of factors. Two of the most important are the rapid changes in workforce demographics and the maturity of the software solutions. The software products are now easy to buy, easy to implement and affordable. Companies are realizing that with distributed workforces and many younger employees, they need tools to manage workforce transformation. In addition, these systems help global, distributed companies create alignment. Most organizations are moving away from the hierarchical, “command-and-control” models popular 10 to 20 years ago; automated tools help executives and managers more efficiently manage distributed, matrix-based organizations.

All: What are the benefits — financial and otherwise —- of using such systems?
Bersin: According to our research, companies realize many advantages, including easier creation of development plans (33 percent of respondents), easier access of assessments and employee proficiencies (29 percent), better understanding of company strategy and its relationship to individual performance (28 percent), and better access and integration of workforce-related data (26 percent). Other benefits cited include increased workforce satisfaction, improvement of management skills, improvement in workforce mobility, and more fair and equitable compensation.

All: What are some criteria companies should keep in mind when evaluating performance management tools?
Bersin: The tools are all different. We identified four major categories: pure-play systems, LMS-provided systems (integrated with learning management systems), talent management suites and compensation management systems. Each comes with different sets of features and benefits. Each vendor also serves different markets. Some solutions are simple, low-cost, easy-to-use systems specially suited for mid-market companies; others are designed for large enterprises. Asking for references of solutions used in your industry by organizations of similar size is a way to help sort them out.