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As organizations look to improve the competency and skills of their workers, learning management system (LMS) technology can help improve their efforts. Our latest benchmark research innext-generation learning management systems finds a range of progress in this regard. Our Performance Index analysis places organizations almost evenly between the two lowest (51%) and the two highest (49%) of four levels of performance. The results differ by size of company as measured by number of employees. For example, only 8 percent of small companies reach the highest Innovative level of performance, compared to 26 percent of very large companies, the largest percentage of any size. Analyzed by industry, the Finance, Insurance and Real Estate sector performs best: Two out of three (65%) are at the top two levels. We attribute this in part to the finance industry’s focus on processes and its need to comply with regulations and teach employees how to do so.
We also analyze performance by four dimensions: People, Process, Information and Technology. In this research, participants perform best in the People (74% at the two highest levels) and Technology (53%) dimensions. Conversely, more than half rank at the two lowest levels for Process (55%) and Information (62%). We attribute this difference to the existence of people-centered learning programs and the core technology components for learning management.
Learning management systems have existed in various forms for many years, yet the research finds that a significant number of organizations participating in this research have not adopted this technology. Although nearly two in three (63%) have a training department responsible for learning management, only about half (53%) have a learning management system. Moreover, a formal approach to learning management correlates with size of company: The numbers of those that have a training department rise at each size level, from 25 percent of small organizations to 100 percent of very large ones. There is a corresponding increase in the number that have learning management systems (small 28%, very large 92%). Because larger organizations have more employees, they likely wish to train them uniformly and more often have resources to devote to this function. Most organizations of all sizes said the primary purpose of the learning management system is employee development training (46%) or compliance-related learning (29%). The use of an LMS automate learning processes and be more efficient in their operations.
Also, learning management systems can contribute to the effectiveness of other employee-related systems including human resources management (HRMS) and talent management. Organizations can gain a more complete view of employees, their performance and what they learn by applying their learning management systems to worker activities. The research shows that most have not done such integration, but some have connected learning management to closely related HR business processes like employee development (35%), which the research shows is the primary purpose of their learning management programs for nearly half of organizations. Performance management (33%) and employee onboarding (27%) are the processes to which they have connected learning management next most often.
Integrating the learning management and performance review processes also makes sense in that the benefit of learning management most often cited (by 72%) is to create more effective workers. Three out of four (77%) of those connecting the two processes are satisfied or somewhat satisfied with how they link learning management and performance reviews. Looking ahead, the research finds double-digit percentages of organizations planning to connect learning management with other HR business processes in the next 12 months and similar percentages planning to do so within 24 months.
Effective learning management requires content to educate those who engage with the system. Yet one of the costliest aspects of a learning program is the acquisition and management of content. For years this has been handled by specialists using purpose-built tools. A new technology capable of alleviating some of this cost is the massive open online course (MOOC) model. The research shows that employees in 40 percent of organizations use MOOC technology as a source of content and courses; however, only 10 percent have MOOC linked to their learning management system, while the rest access it independently. Another emerging option is socially sourced content, which has the potential to reduce dramatically the cost of content development. Two in five (42%) organizations said that using this source is important or very important to their learning content management strategy; just one-fourth said it is not important. Currently most (46%) get no more than one-fourth of their content from social collaborative sources, but in the next 12 to 24 months 30 percent of organizations expect up to half of all learning content to come from such sources.
Learning management and employee training is a widespread corporate function, and the research finds that 70 percent of organizations have an annual budget for it. In nearly half (47%) of those the budget has increased in the past 12 months; in only 13 percent has it decreased. Thus the opportunity for further investment in learning management exists, as having a budget is the top-ranked consideration (placed first by 15%) for building a business case; among job functions, executives (23%) ranked budget as most important more often than others. Among those ranked first or second in importance, having a budget and ensuring executive sponsorship tied for the top consideration (28% each). These two factors should be considered in tandem.
Organizations building a business case can find key benefits in learning management systems; the most-often found in the research are creating more effective workers (by 72%), improving worker training (65%) and improving the efficiency and productivity of the workforce (54%). Engaging and retaining more of the workforce was cited by 44 percent overall, but more executives (60%) and management (vice presidents, 75%) chose this, reflecting their positions in the organization and value of this benefit.
Learning management systems have the potential to transform training organizations by increasing employees’ effectiveness in their jobs and preparing them to act according to their company’s policies and rules. Linking a learning management system to other human capital management processes and tools can bring a tighter connection between people and performance that can result in positive outcomes. Organizations seeking to prepare their workforces better for their roles should examine how the next generation of LMS can help them achieve this goal.
CEO and Chief Research Officer
It is more important than ever for businesses to attract and retain the best talent, and managing compensation effectively is an essential tool for doing so. Obviously companies must pay well to compete, but managing salary, merit pay, variable pay and incentives for employees, tracking their hiring anniversaries and conducting accurate performance appraisals make total compensation management a complex process. All of this must be managed within budget and policy guidelines. As organizations grow and require more employees, the challenges multiply and the difficulty increases. Our benchmark research finds that inconsistent execution is the top impediment to effective compensation management for nearly half (47%) of organizations. Software designed for this purpose can help.
Beqom, which has offered compensation management software since 2009 and previously was known as Excentive International, has advanced its applications to meet these challenges for all business units and especially Human Resources, which typically manages this process. It supports a range of compensation types from salary, merit and bonus pay to long-term incentives and stock options.
Beqom is rated a Hot Vendor in our 2014 Value Index for Total Compensation Management. Each Value Index methodically assesses vendors across seven evaluation categories covering the products and the vendors. Beqom ranks high in several evaluation areas; in particular it tops the list in Capability and ranks second in Manageability. The software’s flexibility in modeling can address all aspects of compensation, including sales compensation, in one application. For example, its ability to handle the variety of crediting from accounts and territories is effective for sales operations teams. In addition its ability to make compensation visually engaging in management of employees and hierarchies and tracking of budgets is simple and engaging. Its ability to define and apply rules and calculation helps support a range of compensation and incentive plans. Its compensation dashboard and reporting simplify oversight and management of compensation. The application has been designed to enable HR and operations professionals to administer and manage compensation processes with minimal IT involvement, which is one reason why it rated so high in Manageability. While beqom does not provide much public information on its advancements from one release to another, and I believe it should do more, it does bring out iterative improvements quarterly through feature packs and makes major new releases annually.
Since the publication of our Value Index, beqom has taken steps to demonstrate its total cost of ownership (TCO), which we found lacking. One unique aspect in which it has invested is to take the complexity of implementation and maintenance costs out of customers’ migration to its software. The company charges a single annual fee to migrate, implement and deploy. Most organizations do not assess costs beyond the use of the software and are surprised by extra fees for migration and implementation. Even in cloud computing there is no magic to migrate a company to a new application environment. Unlike many vendors beqom addresses these issues in procuring software by building in the services needed.
It also is different from others in the market that have integrated compensation management with their talent management suites. While there is value in a unified approach, many organizations don’t want to replace other talent management applications (such as recruiting and performance management) to acquire compensation management through a suite, and beqom’s stand-alone package suits this preference. Even so beqom has integrated its software with talent management applications in customer deployments and can help share compensation information with them.
Our compensation management research finds opportunity for vendors in replacing spreadsheets used for this purpose, which remain prevalent. A large majority (71%) of organizations have found some type of errors in payment that had to be fixed before payment or had to be corrected after the fact. Such problems create challenges in financial accuracy, employee trust and the ability to govern compensation. This is a factor in more finance organizations getting involved to help improve compensation processes; our research finds that in almost one-third of organizations Finance is stepping up to influence improvements. Almost one-fourth of finance departments want direct access to this information for financial planning and analysis. Software such as beqom’s can help organizations replace spreadsheets and more importantly reach the primary goals of compensation management: improvement of efficiency, alignment and performance, which are important to about nine out of 10 participants in our research. Closing the gaps in compensation policies and practices is critical, and managing it effectively and transparently can build confidence and trust among employees.
Seeing is believing with beqom. If you are assessing your current approach and considering changes to simplify compensation management, it is worthwhile to view a demonstration of what it can do.
CEO and Chief Research Officer