Update from TaleoWorld 2011: Talent Intelligence, Mobile, and LinkedIn Partnership

This week Taleo held their annual user conference and attracted more than 1,600 customers. As part of the event Taleo introduced two new product enhancements – one called Taleo Radar and the other a major announcement with LinkedIn.  In this blog I will discuss Taleo’s strategy and talent intelligence story, and overview the Radar and LinkedIn announcements.

Taleo Today

Taleo has made an amazing transition from a company that was primarily a recruiting software provider in 2008 to a full end-to-end SaaS-enabled talent management software company today.  Today approximately 32% of the company’s bookings come from non-recruiting business (and this is nearly triple the percentage of a year ago).  Interestingly, of the non-recruiting software Taleo sells, Performance is now its #2 by bookings and Learning Management is #3, but close to #2 .

Last year Taleo acquired Learn.com, a mid-market SaaS LMS company which has a highly flexible (but not necessarily enterprise class) learning system. Today, through the investment of R&D by Taleo (doubled the R&D team) and integration of its UI with other Taleo systems, it has become one of the company’s fastest growing segments – and I would estimate that Taleo’s LMS business is now probably $35-40M and growing rapidly.  The reason for this is not that the LMS itself is necessarily best-of-breed, but most LMS customers are very frustrated with their systems (and their vendors) and companies really trust Taleo.  Taleo’s customer loyalty and customer satisfaction over the years has been very high so companies who know Taleo as a recruiting vendor are now trusting Taleo for Learning.

Taleo’s Performance Management software business is growing, but only 12% of the company’s customers have deployed it so far – so while the company has attracted quite a few Fortune 50 clients (including Bank of America), this is still a big market opportunity for Taleo.  With 5,000+ customers, a major push for Taleo this year and next is to sell the additional talent management modules to as many current customers as possible.

Taleo’s acquisition of JobPartners also now gives the company an expanded footprint in Europe, where the company now has more than 200 employees. Taleo’s primary competition in Europe is Lumesse (which is a very well established recruiting and talent management software company) and Taleo is now ready to invest in that market. The European talent management software market has been very hot (despite the economy) because so many European companies already understand the need for end-to-end management practices and the software market is much less mature.  So there is a lot of fertile hunting ground there.

At a corporate level, Taleo has really gotten heavily behind the message of “Talent Intelligence.”  Not only is the new messaging focused on “making better people decisions,” the company has introduced a talent intelligence framework which shows how Taleo’s Talent Management Software fits into a broader world of mobile access (Radar mentioned below), integration with third party and non-Taleo data, social networks (LinkedIn, Facebook, Taleo Talent Grid), and other platforms (HRMS and others). This framework also shows how Taleo has deliberately decided not to compete directly with collaboration software companies like Jive, Microsoft, Salesforce-Chatter, Cisco, and IBM – a strategy which differs greatly from SuccessFactors, Saba, and Cornerstone – each of which are selling their own social software modules.  Taleo’s “interoperability” strategy reflects the company’s strong presence among the Fortune 500, all of whom have many of these embedded products in place and are unlikely to replace their enterprise collaboration software with a tool from Taleo.  (Mid-market companies are a different story entirely, and there I do believe Taleo would have an opportunity to sell collaborative applications.)

Taleo paints a very compelling vision of Social Recruiting, Social Performance Management, and Social Learning.  Each of these three talent management markets are being transformed by social networking in different ways – and Taleo understands the direction.  Social Recruiting means deep integration with LinkedIn, Facebook, and other referral recruiting networks and network mining companies.  Social Performance Management means changing the annual performance appraisal process to a continuous, transparent, peer-to-peer process (which Taleo has delivered to some degree).  Social Learning means enabling everyone on the company to share expertise and knowledge with everyone else – using affinity groups, tagging, and other tools to make social learning useful.  In social recruiting Taleo is considered a platform of choice. In the latter two areas Taleo is starting to deliver on the promise – but other vendors understand these areas and are also moving in the same direction.  Taleo’s key here is the company’s Universal Profile – which is an open, customizable employee profile which can be used for all these applications.

Taleo also cited some startling statistics about mobile systems.  Today more than 75% of all employees work in some mobile way, and 34% of all people under the age of 34 actually sleep with their mobile devices (hmm that is they sleep with them right next to the bed, that is).  There are 1.3 billion mobile devices out there and most research shows that we, as professionals, are spending far more time on our cell phones and iPads than we are on our PCs.  Hence if Taleo or any other enterprise software company wants to create a highly engaging product which is widely used by employees, managers, recruiters, and candidates – the application must run natively and be designed for mobile devices.

Taleo’s mobile offering today is Radar (described below) – the company does not yet have a native iPad application (PeopleFluent has by far the most exciting offering now, with Workday right behind) – but they understand the need to deliver this application.  Our experience with the PeopleFluent mobile application is that it truly “re-imagines” the way HR software works – and with a simple pinch and swipe you can now browse the organization, find people, collaborate, and take action.  This is a very exciting trend in this market and within a few years the mobile versions of talent management software will totally eclipse the PC versions in functionality and excitement.  Think about the opportunity to put “location awareness” into HR and talent management and your mind will spin.

Introduction of Radar and LinkedIn Partnership

In addition to all these discussions, Taleo announced two significant products:  Radar and the company’s LinkedIn partnership.

Radar is not Taleo’s mobile talent management application – rather it is an interesting mobile application that helps people find each other and easily apply for and find jobs.  It is a well developed mobile application that lets you check-in your location (similar to FourSquare and Facebook) and then find people and jobs near you.  A recruiter could use Radar to find candidates nearby (ie. you’re at a Starbucks looking for your interviewee).

It’s a fun and exciting application, but it was clear that the company is using this as an innovation project to see where mobile applications would go.  The downside of the application is that it only finds jobs which use Taleo for its recruiting engine (which by the way is around 10% of all the jobs in the US, so that is a lot of jobs).  As a standalone iPhone application, this is fairly limiting – but as a tool for Taleo customers and a potential OEM product for Taleo-based candidate websites it could be very exciting.

People at TaleoWorld were using the application to find each other – which in itself is a pretty cool application.  I walked away thinking that this could be an application which Taleo corporate customers use for their own internal employees and perhaps big employers like Starbucks who use Taleo software may give it away on their candidate website for marketing purposes. There are many other directions this could go, time will tell.

Taleo’s LinkedIn partnership is far more powerful.  Not only has Taleo now enabled LinkedIn’s “Apply with LinkedIn” functionality (which is hugely valuable for candidates and employers), Taleo has new features in its applicant tracking system which lets recruiters mine the LinkedIn-based candidates very easily. The candidate experience is now much better (applying with LinkedIn is hugely useful to job seekers) and recruiters can now manage the LinkedIn candidates in a much more integrated way.

Since Taleo has many of the features which LinkedIn Recruiter is starting to build (ie. forwarding resumes to managers for review, importing and storing LinkedIn candidates in the employee candidate database), this integration starts to bring these two powerhouse recruiting companies closer together – and even slightly in competition.

Ultimately, this partnership gives Taleo customers a much easier way to take advantage of LinkedIn applicants, and now sets the stage for the two companies to do much more together.

Taleo as a Business

Taleo continues to be one of the top talent management software providers and its management team has a comprehensive understanding of the HR and business buyer needs.  The company expects to grow by 20% or more this year and is making the investments it needs to grow its global presence and product footprint in major corporations. As the executive team mentioned at the conference, even in a recession approximately 22% of all workers change jobs every year – and every time a person changes their job or career, there is roughly a 10% chance they will use Taleo software to find or apply for their new position.  This means that Taleo’s business is very sound and the company will continue to grow through its intense focus on the needs of recruiters and job seekers, as well as its continued investment in end-to-end talent management.