Talent acquisition solutions provider Peopleclick says it had a successful 2006, with more than 170 new contracts signed, helping to grow the company’s backlog to the highest level in company history.
“Globally, we had a number of international expansions, which is another vote of confidence,” says Brenda Hodge, vice president of market solutions at Peopleclick. “We also had a number of key client renewals.”
Despite this confidence, the company says it has postponed its planned client conference in July 2007 until April 2008.
“The conference is coming together quite nicely, but we did make the decision to postpone until 2008,” she says. Instead, the company plans to offer clients a number of small user-group discussions throughout the United States and in a couple of locations in Europe.
It’s hoping these smaller sessions, along with a commitment to “customer-centric thinking” will remind companies of an issue that recruiters know all too well: bad hiring decisions can cost companies up to six figures.
“Talent acquisition is the cornerstone of the employee lifecycle,” says Hodge, adding that is the key reason the company remains focused on talent acquisition, despite other industry players diversifying.
“Succession planning isn’t going to matter and competency isn’t going to matter,” she says. “On the flip side, if you have a star employee, think about what you can do. That’s the upside of doing talent acquisition well.”
Questions About Growth
Despite its renewed focus on talent acquisition, ERE has heard industry observers question the company’s prospects for growth.
“The rumor is that they may be getting acquired soon,” says Rick Fletcher, president of HRchitect. “Something smells funny, and we’re seeing a lot of strange changes over there.”
Fletcher says the definition of talent management has been changing over the past year, and the Learning Management System vendors are now moving quickly into the Talent Management Systems space currently dominated by Authoria, Vurv, Success Factors, and Kenexa. Right now, he says, there are three leading LMS vendors, Saba, Sumtotal, and Plateau and they are all buying up additional TMS-related modules.
“All three are currently shopping for an ATS to acquire, but SAP or Kronos could also potentially be in the running,” he says. “I doubt that Vurv would move to acquire the company. It wouldn’t make as much sense. Peopleclick may have the strongest compliance management functionality of all the applicant-tracking systems. But I don’t think it’s a strong enough reason for Vurv to move to acquire them.”
In addition, IBM’s U.S. operations uses Peopleclick for both its internal employees and in their HRO practice. “That’s another potential firm that could acquire Peopleclick,” he says.
Peopleclick has a good compliance software and vendor management system, but the “biggest value would be in acquiring their ‘blue chip’ client list and selling additional products and services,” Fletcher adds.
However, Hodge says this is simply untrue and that this industry “is an interesting space that is very different than other spaces I’ve been in, and almost reminds me of a political mudsling campaign.”
“The bottom line is that I would continue to come back to the facts: we had 170 new signings, we’re excited about the future, we have the organization in place, and we will have an excellent 2007,” she says.
What has probably led to the rumors are the executive shakeups at the start of 2007. For example, Stephen Sasser, who resigned in late December as chief executive officer, is not involved with the company at all these days.
Hodge declines to offer more detail on his departure. “He resigned January 1, and that’s Steve’s story to tell,” she says.
On January 1, chairman of the board Ron Kupferman (and the company’s first chief executive) resumed his role as CEO.
Chief technology officer Tom Bright now serves as the company’s executive VP and chief operating officer, overseeing the technology and services divisions. This move bumped out senior VP of client success, Pat Salmonese. Salmonese and Bright were both hired in 2005, and Salmonese had been overseeing the services component.
Other changes include the promotion of Mike DeFrancesco from VP of finance to chief financial officer, replacing James Buchanan as CFO. Also, Geoffrey “Randy” Jesberg now serves as senior VP of the affirmative-action division.
Hodge says company morale during the past few months is doing well, but she admits that “in times of change, it’s always difficult for people.” Her philosophy is that it’s management’s job to “make sense of the chaos” and be willing to communicate.
“Ron has gotten the entire company together on multiple occasions over the last six weeks,” she notes.
Paring Down For Change?
Although Peopleclick is known for its strength in compliance, “in recent years their most visible weakness has been customer support,” says Fletcher.
“If customer support has been an issue, why would you combine that responsibility with the head of the technology division? They’ve claimed to be profitable, but why are you doing these cost-reduction moves? I can’t think of any other reason,” he says.
Fletcher also contends that it’s not uncommon to pare down a company to make it more profitable and attractive to acquiring companies.
“When ADP acquired VirtualEdge, I ran into one of the VirtualEdge execs, and they looked me in the eye and said, ‘Rick, we’re absolutely not being acquired.’ And then 24 hours later the announcement hit. You can’t always trust the misinformation campaigns.”
“Usually, where there’s smoke there’s fire. What will keep Peopleclick viable is their compliance software product line; it’s truly a ‘category killer.’ The rest of us are just questioning what’s going on over there,” he says.
Yet Hodge reiterates the company’s focus on customers and growing the business.
“Right now, a merger is not planned,” she says. “That’s always an option somewhere in the future, but that’s not where our focus is right now.”
Although “one-stop shopping” is alluring to many customers, Peopleclick remains committed to the idea of focusing on the talent-acquisition model.
“With talent acquisition, we are able to innovate faster, which will show up more and more over the next 12 months,” she says. The past year also saw the addition of two new markets: healthcare and state government.
The healthcare industry’s challenge is not creating a big influx of new candidates, but managing hard-to-fill specialist positions, Hodge explains. Meanwhile, she says Peopleclick’s relationship with state government is a good fit that helps states “get a handle on contract labor.”
Founded in 1997, the privately held company currently serves 1,800 clients in 192 countries, including 54 of the Fortune 100.