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Questions to Ask During a Merger or Acquisition

colleagues shaking hands

Mergers are different from acquisitions because the two companies are equal (for the most part), and they make the joint decision to combine forces. An acquisition is typically a takeover of a smaller firm by a larger firm. Most of the announcements in the HCM space are acquisitions, but we have seen a few mergers over the past year, including Shaker and Montage (ModernHire) and, most recently, Kronos and Ultimate Software.

Kronos and Ultimate Software can easily be characterized as equal companies coming together. They both have 6,000 employees, both have revenue of nearly $1.5 billion, and both went public and then went private again. But, more than anything, they both have the type of leaders who would come to your home if you were sick and cook you a meal and babysit your kids. It’s the type of leadership that was built on a foundation of kindness and decency. In technology, this type of leadership is rare.
While I do have some early thoughts on the merger of these two firms, some of my friends like Lance Haun have done a better job covering this announcement. But I have been thinking about mergers and acquisitions and what I would want to know if I were a customer.

So, here are a few questions that customers and prospects might want to consider when faced with a merger or acquisition:

Company
– What is the timeframe for change? When can customers expect to see changes to the company or products?
– What are the goals of this announcement? Are the revenue and product goals realistic?
– Will any office locations or headquarters change in the next year?
– Are there any plans to add headcount to the new organization?
– Will there be a rebrand?
– Are there future acquisitions or mergers planned in the next year or two?

People
– What will happen to the current leadership team? Are there a certain number of years leaders are required to remain with the new entity?
– What are the plans to retain key customer contacts, including sales, customer support, and services? Are there short-term or long-term plans to consolidate these functions or replace these functions?
– What will change for implementation teams and support? Will there be a transition period that will impact implementation timeframes?
– What is the morale of the current employees at both companies? Are they excited about the announcement or concerned about their future?

Products
– Are there any plans to sunset the brand of one of the companies?
– What is the investment in research and development moving forward?
– What are the plans to integrate these products?
– What products will be the focus moving forward?
– What is the product roadmap for the next six months to a year?
– Will customers be involved in product development?

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New Research: Pre-Hire Assessments

Digital Transformation in Talent Acquisition
Digital Transformation in Talent Acquisition

I am excited about a new research report, that we published this week on the assessment market. It is an exciting time to consider assessments and today, companies have better options to make data-driven decisions around talent. One case study that we featured in the report is Proctor and Gamble ( a ModernHire client). I was impressed with the company’s ability to balance science and validity with the candidate experience. This year, P&G announced an initiative to donate a liter of water to every candidate who applies for a job. If you aren’t following P&G or the incredible work of their I/O psychologists and talent team (including Daniele Bologna), I highly recommend it.

Below is the case study from the Future of Pre-Hire Assessments report:

Procter & Gamble (P&G) is an American multinational consumer goods company headquartered in downtown Cincinnati, Ohio, founded in 1837 by English-American William Procter and Irish-American James Gamble. It specializes in a wide range of consumer products in six core categories: Beauty; Grooming; Health Care; Fabric & Home Care; Baby & Feminine Care, and Family Care.

As a Fortune 500 company with roughly 95,000 employees, P&G wanted to improve its talent acquisition process in order to reduce the number of steps and expand the use of assessments beyond campus recruiting. It embarked on a journey to improve selection with a more engaging assessment experience and improved reporting and scoring.

The Goals:

Procter & Gamble’s objectives were to deploy a new assessment for sales to reduce time-to-fill while providing an assessment that would enable quality hires. P&G also wanted to provide candidates with a “Day in the Life” experience.

The Strategy:

Through a partnership with Shaker, P&G was able to provide candidates with a Realistic Job Preview that would measure problem-solving, the ability to integrate information, customer service, teamwork, and relationship-building. Candidates were presented with a series of cognitive questions, scenarios, and prioritization sequences.

Beginning in July 2017, P&G began the job analysis that included focus group interviews and questionnaires, a pilot program to validate the assessment, and ongoing monitoring and refinement.

The Results:

P&G was able to achieve the following results:

Expand the funnel of diverse and highly qualified talent by 7%.

Shorten the interview process by ~2.5 months

Cost savings of 80% per assessment

Enhance candidate experience by reducing time needed

The report also features a case study from Comcast and new data and trends to think about in assessments.

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A Love Letter to Startups

Early in my career, I was great at taking briefings with startups, writing about startups, and advising startups. At one time, covering startups was my favorite part of being an analyst. I loved the innovation and the excitement that came with emerging providers.

Ten years ago, talent acquisition was very much a startup market. Jobs2Web created a new way of engaging with talent. HireVue and Montage (now Modern Hire) were introducing video to the hiring process. Jobfox was the premier partner for the ATS market. And, Veechi offered capabilities to take a picture of a resume and parse it into an ATS.

But at some point, I became cynical about startups. I was bothered by the “change the world” mentality, the failure rate, and the inability to carry out the product roadmap. I started cautioning companies about investing in startups, which I affectionately named “two guys in skinny jeans.”

I wasn’t wrong.

Sometimes startups don’t have the experience or expertise to be able to develop great technology. Sometimes they don’t care about what talent acquisition practitioners want from technology. Sometimes they take too much investment.. or the wrong investment… or too little investment. Sometimes investing in startups is risky.

But sometimes, startups get it right. They understand what buyers want, and they are committed to delivering great products. Sometimes, startups bring change and hope to a market. Recently, I realized that I don’t spend enough time with startups, and I need to change that for next year.

Below are some of the startups worth watching in 2020 (this not a complete list).

Zapinfo: Founded by Doug Berg, Zapinfo provides recruiting intelligence by automating how companies find contacts and candidate profiles from multiple sites, add contacts to an ATS or CRM, and communicate with candidates more consistently.

CandidateID: CandidateID provides marketing automation to recruitment and helps companies manage their talent pipelines to engage better, nurture, and hire talent. As companies move from requisitions to pipelines, CandidateID offers a solution that can automate this process and better engage with talent.

Survale: Improving the candidate experience is a priority for companies in every industry and every geography. Yet, most companies fail when collecting feedback. Survale helps companies collect feedback on the candidate experience, employee experience, quality of hire, and references.

Small Improvements: Small Improvements also enables continuous feedback and recognition by fueling a company’s ongoing feedback culture, and integrates with collaboration tools such as Slack and Gmail.

Pilot: Pilot is a software-based employee coaching platform that helps companies empower employees and improve performance through feedback that is consistent, frequent, and meaningful.

Talvista: TalVista offers optimized job descriptions, objective data points from redacted resume reviews, and structured interview evaluations to help companies to support a company’s diversity and inclusion efforts.

Moovila: Moovila is helping companies bring autonomy to work and project management through the use of critical path modeling and diagnostics, Real-life Capacity Management, AI, machine learning, and IoT integration.

In addition to taking more briefings with startups, one of my goals for the next year is to focus on conversational AI solutions. I am also planning a major research study in 2020, including providers such as Mya, AllyO, JobPal, Paradox, TalkPush, Karen, and XOR.

If you are a startup and interested in a briefing, please let me know!

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HR Technology Conference 2019: A More Sophisticated Buyer

The HR Technology Conference gives me the opportunity to reflect on the past year and look ahead to the future. In preparing for this year’s event, I decided to dig up old notes and presentations from the past 14 years. This landscape has changed dramatically. Integrated talent management has been replaced with employee experience. Big data is nowhere to be found. And talent acquisition and AI are at the center of it all.

When thinking about trends, the pendulum always seems to swing back and forth between start-ups driving innovation and traditional players enhancing products. As I tried to figure out where I would land, I began to realize that this year’s event wasn’t really about the technology. It was about the people.

HR professionals were driving innovation and change at this year’s event. They were asking the tough questions, aligning with business objectives, showing value in their investments, and evaluating providers that can stand-up as partners. Executives from P&G, Walmart and Spectrum openly shared their experience with AI and deep learning in talent acquisition. Fedex and Verizon questioned the CRM providers’ ability to support legal concerns. Oh, and McDonald’s announced that candidates can now apply for a job using Alexa or Google Home. The HR buyer at this year’s event was more sophisticated than ever before.  

Solution providers need to keep up with these expectations. They need to work  to establish partnerships across every layer of the organization from leadership to product teams to customer support. Below are a few of the providers making partnerships a priority.

Talent Acquisition

Beamery:  Beamery, a company founded in the UK, has had tremendous success expanding into the US market with significant brand awareness and customer acquisitions. It is a product company that continuously innovates while somehow mastering the art of customer success. It is helping companies clarify this market through its Talent Operating System model which helps companies at any stage of recruitment marketing. 

Cornerstone OnDemand: Cornerstone is making a commitment to talent acquisition this year. It has focused on improving the user experience for all stakeholders, improving speed to task and automation, and investing in internal mobility as well as personalization.

Jobvite and Talemetry: All eyes have been on Jobvite this year with K1’s acquisition of Jobvite, Talemetry, Canvas and Rolepoint. Over the past 16 months, Jobvite has continued to maintain its strong commitment to product and client support. Last week, it announced a fully integrated talent acquisition suite that uses smart automation to connect data, processes and interactions across the candidate journey. The big focus is to help clients get data from one place and consolidate all reporting and analytics.

Symphony Talent: Symphony Talent has continued to strengthen its deep functionality in career sites, candidate journey, and candidate communication. It has differentiated itself in a competitive market with an innovative product, global capabilities, and strong services.  

Entelo: Entelo acquired ConveyiQ this year and is in the process of combining two products to provide companies with better sourcing capabilities, automation and candidate communication.

Scout: Scout is a recruitment marketplace that connects search firms and corporations. Originally founded in 2012 as an agency, Scout is now a platform that uses machine learning to analyze billions of recruiting performance data points to predict recruiter success by specific job type. Scout’s AI then matches specific recruiters to specific jobs to ensure candidate quality while reducing fill times.

Yello: Aptitude has identified campus recruiting as a top area of investment for companies this year and Yello continues to be a leader in this market. Yello is enhancing its campus recruiting capabilities. It is focused on sourcing and the candidate experience. Its Passport product uses one code and a single point of entry for candidates to update their resumes for all jobs that they may want to apply.

Employee Experience Surveys

Willis Towers Watson: Willis Towers Watson’s differentiator is its deep domain expertise across services, data and technology. While many of its traditional competitors have not been able to expand into software, Willis Towers Watson has seen tremendous growth in its Employee Insights solutions including surveys, pulse surveys, and its HR portal. It helps clients ask questions in the right way, use data to drive decisions, and take action on findings.

Ultimate Software: Ultimate Software is a provider that has excelled through strong products, team and a focus on partnering with companies across every area of HR Technology. Its Perception product helps companies track, measure and improve the employee experience through better communication and AI that enables change.

Limeade: Limeade brings together employee well-being, inclusion, communication and engagement in one platform. My briefings with Limeade are always a highlight at HRTech because I get to spend time with its incredible team talking about the topics that matter in the workforce. Limeade has built a framework around care and the impact a culture of care has on the employee experience.

Moovila: If you have ever led a project or leveraged a project management tool, you know that projects are rarely delivered on time or on budget. Moovila is helping companies bring autonomy to work and project management through the use of critical path modeling and diagnostics, real-life capacity management, AI, machine learning, and IoT integration.

Conversational AI

IBM: IBM offers clients several AI solutions including Watson Candidate Assistant (WCA), Watson Recruiter Assistant and Watson Career Coach. WCA includes a wide range of capabilities from chatbots to messaging and is rolled-out to multiple sites and by geography. WRA partners with several of the larger ATS to offer capabilities that improve candidate communication and candidate match. WCC is a post-hire solution that enables career development and internal mobility.

Jobpal: Jobpal was founded in 2016 in Berlin and has some significant global customers including British Airways, DHL, and BSF. It is helping companies communicate with candidates and improve conversion rates and has strong integrations with messaging platforms. We can expect to see Jobpal emerge as a leading player over the next year with new partners, capabilities, and plans to develop internal mobility capabilities.

AllyO: It has been a big year for AllyO. This providers has raised $45 million and expanded capabilities beyond talent acquisition.  AllyO is tackling the employee experience and bringing its conversational AI solutions to help companies better engage and retain employees. AllyO Connect provides a SMS inbox for companies to engage with employees and candidates in one central way.

Mya: Mya is impressive on all fronts from its strong leadership team to its product vision to its customer success model. Mya has established a very strategic partnership with Workday as well as Bullhorn, SmartRecruiters, Avature, and SAP. This conversational AI platform enables customers to improve talent acquisition efforts including  93% screen completion rates, 79% time-to-interview reduction, 2.5x increase in funnel conversion, and 144% recruiter productivity gains. It is helping provide clarity to the role conversational AI plays in talent acquisition and the value it can deliver.

Assessments and Interviewing

Modern Hire: The lines between assessment and interviewing have blended. Earlier this year, Montage and Shaker merged companies to create what is now Modern Hire, a platform that combines science, technology, and predictive analytics to improve hiring and candidate communication. I have worked closely with both companies over the years and have always been impressed with the teams, clients and products. Combined, their clients include nearly half of the Fortune 100 companies.

Outmatch: The acquisition of Wepow last year proves to be a valuable investment for Outmatch as it expands its offering beyond assessments. Outmatch is seamlessly integrating these products to give customers the flexibility to use video and assessments together. Outmatch offers a simple user experience that helps companies identify quality hires through its solutions.

 The future of HR Technology is in the ability to partner,  stay flexible to what customers need, and deliver on what has been promised. Providers that will succeed will be those that understand and work closely with today’s more sophisticated buyer.

 It is a great time to be in HR Tech!

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New Research: Digital Transformation in Talent Acquisition

Eightfold AI: What’s Next?
Eightfold AI: What’s Next?

I have worked on some very exciting research projects over the past 15 years but our latest research on Digital Transformation in Talent Acquisition might be my favorite to date. Aptitude Research and Alexander Mann Solutions partnered together to create a report that would cover both the digital transformation roadmap as well as the digital transformation landscape. Below are some of the key highlights from the report (which is available now):

1. People are the Foundation of Success When it Comes to Transformation: Digital transformation is successful when companies are prepared and have the right support to ensure consistency and adoption. Too often, companies focus on the technology and ignore the role of change management and the impact of existing services to enable a successful digital strategy. The design of digital transformation has to have the user at its center. It takes strong leadership, planning and expertise to successfully implement real change, yet only 17% of companies in Aptitude Research’s study stated that senior leaders were confident in their current strategies to support digital journeys. Additionally, only 32% of companies have the internal resources they need and only 26% of organizations have the budget they need to support digital transformation (Aptitude Research, 2019 Talent Acquisition survey).

2. Companies Achieve Success When They Start Small: The greatest mistake organizations make with a digital transformation is starting out too big. Organizations should consider a focused approach with one or two areas of talent acquisition and even start within a single early adopter business unit. According to research conducted by McKinsey in 2018, only 16% of companies stated that digital transformation had successfully improved performance and 8 in 10 of organizations stated that digital transformation was too wide in scope. Organizations that are able to adopt agile project methodology, which has the user at its center, have a better chance of delivering a positive experience. Even more important than the initial project is ensuring that organizations have the budget and infrastructure to manage continual improvements, deliver incremental changes based on user feedback, and align business needs to a set of core design principles.

3. Brand is a Critical Component of a Digital Strategy: Digital transformation provides opportunities to show candidates and employees more about an organization and establish trust and partnerships. Yet, only 29% of companies believe that brand plays an important role in digital transformation (Aptitude Research, 2019 Talent Acquisition survey). When embracing digital technology, companies need to align their strategy with employer branding efforts and organizational culture, as well as consider the role of branding throughout the entire candidate’s journey from recruitment marketing to onboarding and new hire engagement. Consistency of messaging is critically important in a digital transformation.

4. Most Companies are at the Early Stages of Digital Transformation: Over 50% of companies in all regions said that they consider themselves to be in the early stages of digital transformation either just starting their journey or implementation process (Aptitude Research, 2019 Talent Acquisition survey). It is critical for these companies to develop a strategy to achieve success in adopting digital solutions. Industries that have the most mature digital transformation strategies in place include retail, technology and manufacturing according to Aptitude Research. Companies beginning the process should look at these industries for lessons learned and best practices. The true benefit and bi-product of digital is to enable relationships and human interactions.

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Shaker International Merges with Montage: Reshaping Talent Acquisition Technology

Today marks a significant shift in the talent acquisition technology landscape. Shaker International, a leading assessment provider, has merged with Montage, a leading provider of candidate interview and hiring solutions. The new company will be co-headquartered in Delafield, WI, and Cleveland, OH under the leadership of Kurt Heikkinen as CEO and Brian Stern as President. The merger is designed to enable organizations to make better decisions through the combination of science, data, and technology.

According to Aptitude Research’s 2019 Talent Acquisition survey, 58% of hiring managers stated that they don’t have the data they need to make decisions around talent. This announcement is helping to solve a critical need in the market.

The HCM market has undergone numerous mergers and acquisitions over the past decade. While some provide value to customers and prospects, others fall short. According to research by Harvard Business Review, the failure of mergers and acquisitions is  somewhere between 70% and 90%. A successful merger will require alignment of goals, a commitment to the customer, and a willingness to change the course when needed. Below are my early thoughts on what will make this merger successful and what customers can expect in the future.

–          Deep Understanding of the Partnership: In this case, the merger is based on mutual respect and a desire to expand both products and customer base. These providers do different things. So, they don’t have to manage conflicting interests or compete with each other internally. They have taken the time to truly understand each other’s businesses and share similar values and goals for the future.

–          Common Culture: Both Shaker and Montage are Midwestern companies that have sustained growth while innovating to meet the needs of the market. Montage has innovated through its scheduling and interview capabilities and Shaker through its predictive assessments and Virtual Job Tryout. After spending time with both companies over the past decade, I can say that this is a natural fit.

–          Similar Customer Base: Both providers target enterprise companies. The combined company has hundreds of customers and 47 of the Fortune 100. This combination will give these companies more options from a single provider.

–          Short-Term and Long-Term Goals: Establishing both short-term and long-term goals is a critical part of any merger. In the short-term, the providers will maintain separate brands, and the companies will remain intact with separate sales, customer support, and product teams. In the long-term, we can expect to see a holistic view of the company.

–          More Insights: Unlike acquisitions, mergers are successful when both providers thrive. This merger gives both companies better data and insights to help grow their products and support customers. The combined company has over 15 million candidates and enable over 1 million hires in over 20 languages in 200 countries and territories this year.

This merger is helping to reshape and reimagine how organizations hire. But, it also has the potential to change how organizations invest in technology. Companies can start to think less about filling a category and more about solving a business challenge. Over the next year, this combined company will need to adjust to changes along the way and carefully consider future branding and customer requests. We will keep you posted over the next few months.

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Startups in Silicon Valley: It is Time to Slow Down

I recently watched The Inventor: Out for Blood in Silicon Valley. The HBO Documentary which profiles Elizabeth Holmes and her blood-testing company, Theranos, is both horrifying and familiar. In 2014, Theranos was valued at $10 billion. Four years later, it was worth less than zero.

It is the story of a tech startup that pushes a product that hasn’t been properly (or scientifically) tested and manipulates every buyer and investor into believing something that does not exist. It is also the story of a tech startup that puts marketing and false advertising over the development of a viable product.

Sound familiar?

If you have spent any time in Silicon Valley or the tech world, Holmes’ story of fraud and deceit is not unique.  It just plays out on a much larger stage given Theranos’ growth, backing, and status. Many of the elements of this story are relevant to the HCM tech industry. We have all witnessed providers that have lost their integrity in the race to the top. Buyers today need to look beyond product capabilities and examine leadership, commitment to product and development, and transparency.

Below are a few quotes/themes from the movie that are relevant for some of the startups in our industry:

“We have to uphold a legacy in Silicon Valley of saving the world.”- The elitism that comes from Silicon Valley often undermines product strategy, customer support, and leadership style. Many leaders at startups get caught up in their egos that they forget to focus on building products that will work.

“We are part of something that is a revolution, and that will change our world.” I have heard this line from too many startups throughout my career. These blind statements damage both customer and employee loyalty. They give the false sense that these early startups know better than anyone else and shield them from any accountability.

“Data doesn’t sit in our mind as much as stories do. And even more important, stories have emotion and data does not.” – Many start-ups focus on their stories and messaging instead of the credibility of their products and data. Customers in many cases are buying a vision instead of a solution that will provide value.

“Getting results doesn’t mean it’s ready for primetime.”– Years ago, tech companies would spend years building and testing their products before they launched them. Today, it seems to happen overnight. A Stanford graduate or former Google employee will get an idea, and the next month, they start a talent acquisition company. Startups need to spend some time with customers and competitors to understand this market and what solutions will drive value.

“Honesty might cost them their jobs.” One of the most frightening aspects of the Theranos’ story is that employees that questioned the integrity of the company were fired. Collaboration needs to be an important part of a startup environment, and too often, early-stage companies shut down anything negative from their employees or customers. As a result, employees have little faith and confidence in these products.

For anyone that is buying new technology, investing in new technology, or just curious about HCM startups I highly recommend this movie. I think you will find many similarities between Theranos and many of the companies in this space.

 

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Key Takeaways from IBM Think

Two weeks ago, I had the privilege of attending IBM Think, an event focused on topics such as AI, blockchain, and cognitive computing. With nearly 40,000 attendees, this event is massive and spans all industries and company sizes. Think is not an HR event but talent was a central theme this year both in IBM’s messaging and in the level of attendees.

This event put two things in perspective for me:

  1. IBM is an innovator. When you think of IBM, traditional (or maybe even, “stuffy”) may come to mind. With a history of selling hardware and services, it is best known for its blue suit culture. Its nickname is “Big Blue” after all. But IBM is helping to define how we use AI in our personal and professional lives through Watson. Whether it is the weather app on your phone or the IBM candidate assistant (which partners with several ATS companies), you might be surprised about Watson’s growing presence in all things.
  2. AI is maturing. It is becoming more prevalent in enterprise technology. But, talent acquisition technology still lags behind. Companies are trying to understand AI’s role in recruitment and what providers they can trust. This reality is transparent when seeing how other parts of the business are embracing AI.

IBM is enhancing its products and addressing some critical challenges in recruiting and engaging talent. Yet, these changes and advancements are sometimes overlooked and lack the awareness that they deserve. I was surprised.

Here are some of the key takeaways from IBM Think:

–          Diversity and Inclusion: With Watson Recruitment’s Adverse Impact Analysis, companies can  identify whether unconscious bias is present in the hiring process and take action to eliminate it.

–          Partnerships: IBM has expanded its partnerships including Greenhouse last year and recently, announced a partnership with Workday to expand the use of AI among HR professionals. Select IBM Watson Recruitment features will now be available to Workday Recruiting users, helping to accelerate and improve the hiring process.

–          Assessments: IBM has transformed its assessment practice to include more candidate-friendly, game-based assessments. Its assessments include skills assessments, behavioral assessments and simulations. It is also committed to providing assessments for smaller organizations.

As IBM continues to expand its product suite, the value it provides to companies is in Watson. Moving forward, it will need to figure out how to include more Watson capabilities in more of its core talent acquisition and talent management solutions.

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Aptitude Weekly Update: Jobvite, TMP, Yello, Google and IBM

It is the end of another exciting week in HCM technology with some major acquisitions, product announcements, and new partnerships. The recruitment marketing landscape is changing while AI continues to define technology decisions in 2019.

Below are some of the highlights from this week:

–        K1 Investment Management (a private equity firm based out of Los Angeles) invested over $200 million in Jobvite. This funding will be used to acquire three distinct (and notably different) talent acquisition providers: Talemetry (Recruitment Marketing Platform), Rolepoint (Employee Referrals), and Canvas (Candidate Communication and Text). Each provider offers a unique set of products and capabilities that when (and if) integrated will provide one of the most robust talent acquisition suites available in the market. You can read my thoughts from Monday’s blog.

–          TMP Acquires CKR Interactive. TMP Worldwide also announced the acquisition of CKR Interactive, an employer branding and recruitment marketing firm founded in 2001. This acquisition expands TMP’s market share in the recruitment marketing space and gives CKR Interactive access to more creative services and technology (through the TalentBrew platform).

–          Yello Launches a New Interview Scheduling Product. Scheduling interviews is one of the greatest challenges facing talent acquisition professionals today. Ineffective scheduling can negatively impact recruiter productivity and the candidate experience. According to our recently survey, over 60% of companies have dedicated schedulers on their talent acquisition teams. Yello is helping companies manage the way interviews are scheduled with a new product that is powered by AI and can match and manage complicated schedules in one system.

–          Hire by Google Expands in the US and Canada: In 2017, Google launched its Hire product in the US and began to expand its products in the talent acquisition market. This week it announced expansion in Canada and the UK. I am guessing we will continue to see global expansion and a possible move up market in the next year or two.

–       IBM Announces Partnerships with Skillsoft and ServiceNow: I was at the IBM Think conference this week to learn more about AI, blockchain, automation and talent. I will post more from this event on Monday but two major announcements were IBM’s partnerships with ServiceNow and SkillSoft. These partnerships represent IBM’s commitment to areas like internal mobility and succession planning.

Have a great weekend!

 

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Talent Acquisition: The Next Wave of Acquisitions

Today, K1 Investment Management (a private equity firm based out of Los Angeles) invested over $200 million in Jobvite. This funding will be used to acquire three distinct (and notably different) talent acquisition providers: Talemetry (Recruitment Marketing Platform), Rolepoint (Employee Referrals), and Canvas (Candidate Communication and Text). Each provider offers a unique set of products and capabilities that when (and if) integrated will provide one of the most robust talent acquisition suites available in the market.

Without diminishing the value of Rolepoint and Canvas, this acquisition is significant for two main reasons:

–          Jobvite: Jobvite is here to stay. This announcement puts to rest any rumors about the future of Jobvite as an ATS and its’ staying power in a competitive market. Jobvite’s customers can expect more products, services, and support over the next few years.

–          Talemetry: This acquisition is the first significant announcement in the recruitment marketing landscape and it will not be the last. With many of these providers looking for an exit, is the future of recruitment marketing in a stand-alone solution or an integrated suite (ATS and Recruitment Marketing)? My bet is on the latter.

The ATS market is no stranger to acquisitions. In fact, it has gone through two major waves of acquisitions in the past 15 years. The first in 2005-2006 with acquisitions that included Virtual Edge by ADP and BrassRing by Kenexa. These providers were looking to complete a broader vision of their talent management suites. Smaller companies such as Cytiva (by Taleo) and HodesiQ (by Technomedia) followed suit a few years later. The second wave was in 2012 with the acquisitions of Taleo by Oracle, SuccessFactors by SAP, and Kenexa by IBM. These larger ERP companies were looking to check a box for recruitment technology. What followed was a de-prioritization of talent acquisition and very little innovation or product development.

This most recent announcement could spark the third-wave and possibly, the most significant. In this case, talent acquisition is not a piece of the puzzle. It is not an extra module that is getting acquired to fill some larger HCM story. In the case of this acquisition, talent acquisition IS the story.

Below are my early thoughts on what we know at this point, what we don’t know, and what this means for the market.

What We Know

–          Integration: In the short-term, K1 plans to keep the four providers separate with their own product, sales, and marketing teams. Each of these entities will roll-up under Jobvite with Dan Finnigan as the CEO. The goal in the long-term is to have an integrated platform.

–          Enterprise: Talemetry has been very successful at serving the global enterprise market through strong leadership and a product that was originally built for integration with Oracle customers. It is the unsung hero of the recruitment marketing world with high utilization and 70% year over year growth. It is the provider that can help support enterprise growth.

–          Services: Jobvite has strengthened its’ services and customer support over the past few years. Ultimately, services will be under one shared entity but it will take time and a commitment to the customer.

What We Don’t Know

–          Oracle Integration: Questions may arise around the future of Talemetry’s close partnership with Oracle. Overall, it should not have a major impact since Talemetry integrates with many of the ATS providers including Workday, iCIMS, and PeopleFluent. And ultimately, customer requests tend to drive partnerships more than providers’ decisions.

–          Timeframe: Acquisitions take time. As a result, delays can impact product strategies, support, and resources. Customers will not know the long-term goals until some of the short-term objectives have been met.

–          Target Customer: These providers serve different markets. Although there is some overlap, only time will tell where this new entity will thrive. What we do know is that the emphasis will be expanding in the enterprise market.

What It Means

This acquisition has the potential to change the talent acquisition landscape for a few reasons:

–          It will put pressure on other stand-alone recruitment marketing providers that are looking to get acquired or fearful that they won’t be able to compete against a larger firm. We can expect to see more acquisitions over the next year in recruitment marketing.

–          Providers that play in the larger ecosystem (such as Rolepoint and Canvas) may also get acquired by ATS companies or talent acquisition suite companies. These types of acquisitions can leave customers feeling uncertain about future investments in third-party providers.

–          ATS companies will need to enhance their capabilities. Most of these providers have some type of lightweight CRM in place. They will need to enhance these products or make future acquisitions. Expect more and ask for more from your existing providers.

It is an exciting time to be in talent acquisition. It is no longer a piece of the HCM puzzle. Solution providers feel pressure to do more and talent acquisition leaders are in a unique position to ask for more. We look forward to what the next few months will bring.

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