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Talent Management Software Becomes Prime M&A Target for HCM Vendors

Nucleus Research Technology Value Matrix Finds Significant Advances in Talent Management Are Making the Software More Desirable Within an Overall HCM Suite

Ironically, as talent management vendors add significant new value to their offerings, they are becoming increasingly attractive takeover targets by larger human capital management (HCM) vendors. The latest Technology Value Matrix for Talent Management from Nucleus Research shows a diminishing field of stand-alone applications as the solution becomes more of an embedded solution for HCM, much like AI and analytics.

“Successful vendors are innovating in the AI and natural language processing space, but adoption of advanced capabilities is still a challenge for many. Future innovations that are on the horizon for talent management include integrated coaching based on individual profiles and communication styles, accounting for the “whole employee”

Talent Management Value Matrix Leaders includeCeridian, Cornerstone OnDemand, Oracle Talent Management Cloud, PeopleFluent, Saba Software, SAP SuccessFactors, SumTotal Systems, and Talentsoft.

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“With only a handful of vendors surviving as standalone players against broader HCM offerings, talent management leaders are moving in the right direction with new features that support continuous visibility and learning capabilities, but they still need to do a better job of making these complex innovations more digestible for their customers,” said Rebecca Wettemann, VP of research at Nucleus Research.

Recruiting and retaining employees have become a competitive advantage for talent management vendors as they shift to bottom-up performance review and succession planning models that prioritize individual performance evaluations over broader departmental approaches. Leaders are also increasingly developing better collaboration tools, AI and natural language processing (NLP) capabilities to provide managers and employees with a more continuous and complete view of workplace talent.

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“Successful vendors are innovating in the AI and natural language processing space, but adoption of advanced capabilities is still a challenge for many. Future innovations that are on the horizon for talent management include integrated coaching based on individual profiles and communication styles, accounting for the “whole employee,” and the standard availability of succession planning,” said Trevor White, analyst at Nucleus Research.

Vendors are evaluated within the Value Matrix on both usability and functionality – key drivers of value – and placed into four categories: Leaders, Experts, Facilitators, and Core Providers.

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