BlogERP: Jim Holincheck's HCM Software Blog

Innovation Around the Edges of HCM Software

Bill Kutik had a great article in HR Executive magazine about ongoing innovation in the E-Recruitment software market.  I agree with him.  We discussed a lot of the areas of innovation around the edges in recruiting in the Magic Quadrant for E-Recruitment Software (Gartner subscription required).  As Bill points out, there are new vendors popping up all of the time (even since we published our research).  There is always innovation occurring around the edges of established application areas.  E-Recruitment (formerly Applicant Tracking) solutions have been around for around 20 years.  It is clearly a well-established area. 

Yet, we have had profound changes driven by technology (the movement from applicant tracking to e-recruitment solutions driven by the internet and web-based solutions).  In addition, we have seen innovation because these solutions still have not solved all of the business challenges in the domain.  This is a common pattern that we see in many different business software application markets.

There are two implications from this.  First, there are a lot of new vendors that will pop up trying variations of the themes with a variety of different business models.  Most of these will not be successful (or will have limited success).  Few will change the world.  That is not necessarily bad, but it is important to make sure that you do not put all of your eggs in one basket (and make sure that you are easily able to end your relationships) as you try some of this innovation to solve your business challenges.  Second, once innovation starts to become accepted wisdom, it starts to get absorbed into the established solutions (either directly or through preferred partnerships with the "winning" vendors).  This cycle of assimilation occurs all of the time.  So, it becomes important to understand how your core/strategic vendors are moving related to innovations you find useful.

Remember your HCM application portfolio requires active management.  Technology will not solve all of your challenges today, but it is constantly evolving and you need to continually look at your priorities and what is possible to make sure you get the most from your investments, especially in these challenging economic times.

More on Kronos Acquiring Deploy Solutions

I had a conversation today with Jim Kizielewicz, SVP of Corporate Strategy and Chief Marketing Officer, from Kronos about the acquisition.  This is what I learned:

• Deploy's solution will become Workforce Acquisition for Field Hiring v8.  It is immediately available.  Workforce Acquisition for Field Hiring v8 will be the platform upgrade path for existing Unicru customers (Workforce Acquisition v6 and v7 customers).  Kronos will incorporate content from the Unicru solutions (assessment and analytics) into the Deploy platform.
• Kronos will continue to offer the Workforce Acquisition for Corporate Hiring solution through its recently announced partnership with MrTed.  There is some overlap with the Deploy as it supports requisition-based hiring.  However, according to Kronos, most of the salaried hiring customers for Deploy are on legacy solutions, not the new integrated salaried/hourly platform (called aTAO).
• It will be approximately 90 days before Kronos will be ready to start migrating existing Unicru customers to the new platform.  Kronos will continue to support both solutions, but Unicru customers should expect ultimately to migrate to the new platform.
• Kronos has reorganized the Talent Management division.  There will be a Talent Management - West (Unicru) which will continue to focus on content (assessment and analytics) and a Talent Management - East (Deploy) which will focus on the development of the platform.
• Kronos also is keen to leverage the platform to expand into performance management (initially through the performance scorecarding functionality that Deploy had built). 

I do not think I will be publishing a First Take on this, but if you are a Gartner client and have questions on the acquisition, please feel free to set up an inquiry.

Recruiting at Conferences

When you are trying to find scarce skills in the market, you have to innovate.  I am at the Gartner Business Intelligence Summit in Chicago (yes, I am home for a conference -- it is extremely nice).  It has been a good event thus far.  I was passing by the message board for conference attendees and I saw that one company posted a job opportunity.  I was taken a little aback, but when one thinks about it, it certainly makes sense.  It is a role where talent is scarce (Business Intelligence) and a conference where some of the best and brightest in the field are attending.  What better place to find scarce talent?  I am not recommending that everyone go to Gartner conferences as a recruiting exercise (there are other important reasons to go).  However, it does make sense to think outside of the box for your candidate sourcing strategies.

Google's Recruiting Practices

There has been a lot of commentary (a couple of examples are here and here) on Google in the blogosphere spurred on by the article in the New York Times (subscription required).  At first glance, I thought there was nothing that innovative about what they are doing.  Assessments are not new.  Assessments for knowledge workers are not a new concept (see my previous posts here and here on what Gartner is doing with assessments).  They may have built a slightly, better mousetrap, but that is about it. 

I found Dr. Sullivan's post on ERE enlightening though.  I think he put it in the proper perspective.  It is innovative because of the breadth of factors assessed (though again that is something that has been possible) and how they were leveraging the core competencies of Google in creating this assessment approach.  Also, one should not look at it the context of just this one thing that Google is doing in recruitment and talent management in general.  It is part of a broader innovation strategy to ensure that it can bring in quality talent to support the business strategy.  Is that not what we all want to do?

The Danger of Rumors

There has been a lot of traffic in the blogosphere about a hiring freeze/job cuts at Jobster.  The EXCELER8ion blog has a good summary of the rumor as well as some supposed internal Jobster communications.  Jobster also recently announced the appointment of a new CFO which has added fuel to the fire.

Jobster CEO, Jason Goldberg told GigaOM that 2006 revenues would be north of $20 million.  The rumors say that Jobster has 145 employees.  Let's do some simple math.  $20 million divided by 145 employees equals ~ $138,000 in revenue per employee.  There are many technology companies that break even at that level of revenue per employee.  Mature (and profitable) technology companies typically have more than $200,000 in revenue per employee.

However, Jobster is not a mature technology company.  It is a very new company (~ 3 years old) that has grown very quickly (expecting growth of more than 30% for Q406 over Q306).  It would seem unlikely that they would need dramatic cuts (the rumors indicate that potentially half of the staff would be cut) to reach profitability with even flat revenues in 2007.  

However, I would expect that they plan to continue to grow in 2007 and will, on net, add staff.  Jobster may still have job cuts or slow down the rate of hiring in certain areas.  It depends on where they think the growth will come from and the adequacy of staffing.  It may be overstaffed in some areas that are not contributing to growth and understaffed in others based on expected growth.  Jason says it himself in a blog posting about why Jobster cares about profitability; "... you cannot do everything all at once.  at least not well.  that requires tough choices". 

So, what is really going on here?  Did Jobster grow staff too quickly and now has to cut back to achieve profitability or did Jobster examine its market opportunities and decide to realign its staffing (including some job cuts) to go after the best ones?  I do not know.  I am sure we will find out soon enough.  

Often there is a desire in the media (and the blogosphere) to break a story, especially a negative story.  It attracts readers.  Negative stories do have a place.  There are certainly times when it is important to get a negative story out because it is in the public interest.  We publish research at Gartner that sometimes is viewed as negative by technology providers (I know it is hard to believe). 

However, gossip and rumors almost invariably lead to negative stories.  Bertrand Russell is quoted as saying "No one gossips about people's secret virtues".  It is easy to speculate based on gossip, rumor, and innuendo.  However, that speculation is based on information that is often wrong, incomplete, and/or misleading.  Maybe the Jobster rumors will turn out to be true.  Maybe they won't.  Whatever the case, we should all be careful of conclusions drawn from rumors.

My Recent HCM Research

Here are links to some of my most research notes (subscription required):

The Pace of Consolidation Accelerates in the E-Recruitment Software Market -- Large vendors that have not had a presence in talent management are buying their way in through increasing mergers and acquisitions. Talent management vendors are trying to get to a critical mass to compete with the larger, more-established organizations.

Magic Quadrant for E-Recruitment Software, 2006 -- Due to the maturing market for e-recruitment software, Gartner has produced a Magic Quadrant. The vendors included here provide Internet recruitment applications for the full requisition-to-hire process to companies with more than 2,500 employees.

SumTotal Aims to Lead Talent Management Market With MindSolve -- By acquiring MindSolve, SumTotal Systems gains a strong talent management offering, including e-learning, employee performance management, succession management and compensation management applications.

Predicts 2007: Software as a Service Provides a Viable Delivery Model -- Adopt SaaS first using a modular and incremental approach. SaaS predictions provide overall guidance for SaaS delivery adoption and specific market outlooks for human capital management, e-commerce and integration as a service.

Workday's Initial HCM Offering Is Intriguing but Unproven -- The startup Workday's Human Capital Management software-as-service solution includes innovative technology and has had some initial success. Prospective customers will face the usual risks of early adopters.

Case Study: Workforce Analytics at Sun -- Sun used workforce analytics to understand the financial impact of and to target its spending around its mentoring program.

SaaS Usage Increasing in Large Enterprises: Not New News

The Ponderings of Woodrow blog talks about an upcoming report based on a McKinsey survey of CIOs that reports that usage of SaaS is on the rise in large enterprises.  The survey found that 61% of North American companies with sales greater than $1 billion dollars plan to adopt one or more SaaS applications over the next year (2006) compared to 38% in 2005.  The Ponderings of Woodrow blog points out some potential issues with the survey.  However, for anyone in the HR world, this is not particularly new news.  Large enterprises have been readily adopting SaaS applications for e-recruitment and employee performance management many years.  Maybe CIOs have not been in the loop on these purchases?  However, anything the dispels the myth that SaaS solutions are only for the SMB market is probably a good thing.

A Couple of Things Caught My Eye Today

I would like to thank Alice Snell at the Taleo Blog for posting on McKinsey's new thinking on talent.  Here is the link directly to the McKinsey site. 

I agree with all of the "New Way".  I think if you asked most people in the HR profession today, they would agree too.  So, why does the "New Way" not happen and how can more organizations implement the "New Way"?  Let's consider each in turn:

Talent Mindset -- All managers -- starting with the CEO -- are accountable for strengthening their talent pool -- Of course, managers should be accountable.  However, why are they often not accountable?  Performance and compensation systems are not aligned to encourage accountability.  The culture does not support accountability.  It could be a number of things.  The important thing for HR professionals is that they need to support managers so that they know what they can do to strengthen their talent pool and help make sure that the accountability for this is institutionalized.

Employee Value Proposition -- We shape our company, even our strategy, to appeal to talented people -- I do not know if I agree with this entirely.  I think the strategy, what uniquely defines the competitive advantage in the marketplace, should shape the people I have in the organization.  I think it was put quite well in the book "Good to Great".  Great companies make sure that they have the right people in the right roles and that everyone is committed (i.e., engaged) to successfully executing on the strategy.  I am paraphrasing here, but I think you get the drift.  Having said that, it is still important to have a strong employee value proposition to attract and retain the best talent.  Dr. John Sullivan has done a great job of discussing this on ERE in many different ways.  I am not going to link to all of the posts.  Just visit ERE and see what he has written.

Recruiting -- Recruiting is like marketing -- It is like sales, marketing and supply chain management.  All of the disciplines are important to apply.  As I have said in previous posts, when was the last time your recruiting organization talked to people in those other parts of the organization to understand best practices.

Growing Leaders -- We fuel development through stretch jobs, coaching, and mentoring -- I agree that these can be important to developing future leaders.  How do you know what is having the most impact and where you should invest and what results you should expect?  C-level executives want to know.  See the case study I recently published (subscription required) on using Workforce Analytics to show the effectiveness of a mentoring program.

Differentiation -- We affirm all of our people, but invest differentially in our A, B, and C players -- Again, I agree, but have you truly differentiated your A, B, and C players?  Many organizations I talk to have grade inflation.  They do not do a good job of calibrating their performance appraisals.  This has a negative downstream impact on compensation (especially if you are not truly paying for performance), succession management (you do not have the right talent pools identified), and morale (employees do not trust the system and true "A" players feel less appreciated).  Technology is not a cure to these problems, but it can help.  Employee Performance Management systems that include integrated performance management, compensation management, and succession management can provide an infrastructure to help managers and executives differentiate their talent investments.  This is one of the reasons that updated MarketScope for Employee Performance Management Software will include performance, compensation, and succession management.

Random Thoughts, Upcoming Research, and Themes for Next Year

I was reading blog posts yesterday when it occurred to me how many recruiting-related blogs there are out there compared to other talent management areas.  There are a good number of learning-related blogs too, but where are the blogs on employee performance management, compensation management, and succession management?  It seems to me that there are a lot of good ideas out there that are not being shared as widely as they could be.  If you know of some good blogs on these areas, please feel free to comment or send me an e-mail.

The Magic Quadrant for E-Recruitment Software is in editing (still).  It is pretty long so it takes some time.  I have been getting some questions so I know it is in progress.  It should publish any day now.  I have also kicked off the update to the MarketScope for Employee Performance Management Software.  We have expanded the scope to include Compensation Management and Succession Management.  The initial contact list included 42 providers.  If you are a provider and did not get the initial e-mail, please let me know.

Once we complete the EPM MarketScope update, we will have a good set of vendor research across all of talent management.  We will continue to update this research in 2007, but we will also start to focus more on the user side. 

The two main themes I will be stressing in 2007 are Integrated Talent Management and Workforce Analytics.  I will be updating some of our 2005 research on these topics as well as publishing several case studies.  For Integrated Talent Management, I am interesting in companies that have a vision and strategy that cuts across all of the talent management domains.  These companies do not have to have had implemented technology across all of these areas, but should have started to implement technology in several talent management areas.  I am very interested in the business case/cost justification done for these initiatives as well as how these organizations have linked their integrated talent management initiatives into business priorities.

I published a case study on Workforce Analytics at Sun Microsystems a few weeks ago.  I want to do similar case studies next year that focus on workforce analytics help organizations make decisions about human capital management that lead to specific business outcomes.

If you know of companies that would be good candidates for these types of case studies, please contact me.

Update on Ongoing Research

I know I have not been posting as much as I should.  I am way behind on link posts (which means my inbox is pretty full of things I need to read -- one more thing to add to the to do list).  I will catch up hopefully next week.

I have been working feverishly on four projects.  The Magic Quadrant for E-Recruitment Software is nearly complete.  The vendor analysis is done and the positions on the MQ have been identified.  The next step is to write the rest of the note, primarily market trend-related information.  So, it is in pretty good shape.  For those vendors going to ERE next week, do not worry, fact checking is more than a week away.

We are also doing an update to the MarketScope for Retail Time and Labor Applications.  I am fortunate that another analyst Gale Daikoku is taking the lead on this.  However, there are many briefings and customer reference calls going on.  In addition, I am putting the finishing touches on a case study on workforce analytics.  It has gone through peer review at Gartner and I need to incorporate some feedback from the customer.  So, that is about done.  Finally, we just kicked off a big effort to look at Microsoft in business applications.

When the E-Recruitment project is completed, I will be turning my attention to Employee Performance Management software to update that MarketScope.