Analyst Insight – Assessment in Talent and Human Capital Management: A Psychological Science Evaluation

Key Stakeholders:

Chief Human Resource Officers, Chief People Officers, Chief Talent Officer, Chief Technology Officers, Chief Digital Officers, Human Capital Directors and Managers, Human Resource Directors and Managers, Learning and Education Managers, Learning Project Directors and Managers, Organizational Change Directors and Managers, Talent Directors and Managers, Training and Development Directors and Managers, Training Officers.

Why It Matters:

Generational differences and continuous, rapid changes in the workplace, place a heavy burden on talent and human capital management platforms to effectively guide individuals through the full employee lifecycle from hire to retire. One-size-fits-all approaches to recruitment, onboarding, learning and development, succession planning and incentive compensation lead to weak employee engagement, poor job satisfaction and high turnover rates.

Top Takeaway:

Talent assessment blends psychology and data science, and when incorporated into talent and human capital management platforms, offers insights that are actionable and can increase engagement, satisfaction, and retention. Talent assessment is most commonly applied to recruitment and onboarding, and many vendors have developed impressive and effective offerings. However, talent assessment is less commonly applied in learning and development, succession planning and incentive compensation, which represents a missed opportunity.

Relevant Assessment Vendors: AllyO, Hirevue, IBM, Infor, Phenom People, PSI Services, TalentQuest

Relevant Talent and Human Capital Management Vendors: Bamboo HR, Cegid, Ceridian, Cornerstone on Demand, Kronos, Oracle NetSuite, PageUp People, PeopleFluent, Reflektive, Saba, SAP Successfactors, SumTotal, Talentsoft, Ultimate Software, Workday.

Overview

The goal of talent and human capital management platforms is lofty. These platforms aim to help clients guide employees through the full lifecycle from hire to retire. This includes interviewing and recruiting the right individual for the job, onboarding these new employees into the workplace, providing continuous learning and development, creating the ideal succession plan, and building compensation programs that keep motivation and productivity high. A significant challenge faced by talent and human capital management platforms is providing the right recruitment, onboarding, learning and development, succession planning and compensation plan for each individual employee. This is especially challenging for at least two reasons.

First, whereas Baby Boomers and Gen X’ers deem it likely that they will work for the same company from hire to retire, millennial workers expect to hold multiple jobs in their careers. This will affect the importance and type of succession planning and compensation for different generations.

Second, because the needs in the digital workplace are changing continuously and rapidly, a critical need today may become obsolete, and a qualitatively different set of needs may become necessary tomorrow. This will affect the types of individuals that companies attempt to recruit, how they will onboard those personnel, and how they develop training and development programs. In short, a one-size-fits-all approach is ineffective in talent and human capital management. Instead, a lean and agile approach is necessary that customizes the talent and human capital management processes to the individual and to the ever-changing corporate needs.

Assessment and Psychological Science in Talent and Human Capital Management

Talent assessment tools can add value in addressing these challenges by characterizing each potential or current employee along a number of important psychological attributes. Talent assessment blends psychology and data science and offers insights that are immediately actionable and can make the difference between workplaces that are high in engagement, satisfaction, and retention, and those that are weak on these same metrics. With the constant battle to find, develop, nurture and retain the right employees, talent assessment will continue to grow in value in talent and human capital management. A number of assessment tools are available on the market that assess cognitive functioning, emotional intelligence, personality and specific skills such as leadership, to name a few. Many of these are effective at measuring a broad range of psychological factors that are predictive of job success. The use of talent assessment is growing in talent and human capital management and is especially prevalent in recruitment and onboarding.

The Talent and Psychological Science of Recruitment and Onboarding

Talent assessment tools are especially useful when applied to the challenges associated with recruitment and onboarding. Current employees in each specific position can be evaluated along a number of important attributes. This information can be aggregated with metrics of job success to construct a talent attribute profile for the ideal employee. Talent assessment tools can be administered to potential recruits and a talent attribute profile can be generated for each recruit. Each recruit’s talent attribute profile can then be matched with that of the ideal employee to determine the level of “fit”. Because the fit will rarely be perfect, this process also identifies potential areas of weakness that can be remediated during the onboarding process.

Sophisticated statistical modeling and machine learning/artificial intelligence often underlie this talent assessment process, and customers in search of the best talent and human capital management platform should scrutinize the talent assessment process as much as possible. The best talent and human capital management solutions will be transparent with respect to the details of their talent assessment process, and the process should “make sense” even to the non-mathematician. Vendors who market machine learning and artificial intelligence without specific, common sense details to back them up should be avoided.

Talent Assessment: Beyond Recruitment and Onboarding

Although a number of talent and human capital management offerings effectively incorporate talent assessment into their recruitment and onboarding processes, in many cases this is where the application of talent assessment ends. From a psychological science perspective, this represents a missed opportunity given the importance of psychological factors, such as cognitive functioning, emotional intelligence, and personality to the nature of continuous learning and development, the design of meaningful succession plans and the creation of compensation programs that motivate.

Two areas where talent assessment, in particular, personality assessment, are beginning to gain traction is in learning and development and incentive compensation. A number of studies have shown that personality affects whether one is motivated by cooperative or competitive compensation plans, and that personality and motivation interact in their effects on learning. Although some forward-thinking talent and human capital management vendors are beginning to recognize the value of talent assessment in team dynamics, management and leadership training, succession planning, and incentivized compensation, many are not. As talent science matures, and the workplace continues its exponential rate of change, we expect applications of talent assessment to expand from recruitment and onboarding to the full gambit from hire to retire.

Conclusions and Recommendations

Talent and human capital management platforms offer clients tools for managing employees across the lifecycle from hire to retire. This is a challenging task given fundamental generational differences and fast-paced changes in the workplace. Talent assessment can provide value in addressing these challenges by characterizing each potential or current employee along a number of important psychological attributes. Talent assessment has been used by some talent and human capital management vendors to improve the effectiveness of recruitment and onboarding. A small number of forward-thinking vendors are beginning to extend the application of talent assessment to learning and development, succession planning and compensation.

If you are shopping for a talent or human capital management platform, we at Amalgam provide the following recommendations:

  • Consider vendors who incorporate talent assessment directly with the recruitment and onboarding process. The talent assessment process must be grounded in psychology and data science, but should be understandable to non-mathematicians and should make sense at face value.
  • Don’t be wowed by “machine learning and artificial intelligence” as buzzwords, without common sense details.
  • We also urge you to probe vendors on their vision for incorporating talent assessment into learning and development, succession planning and incentive compensation. Although these applications may not be implemented today, make sure that they are on the vendor’s roadmap for the near future.

We believe that talent assessment applications from hire to retire will be commonplace in talent and human capital management platforms, and it is important to ensure that the vendor you choose has that vision.

 

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