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HumanConcepts Grabs Software for Managing Layoffs

December 10, 2008
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Related Topics: Human Resources Management Systems (HRMS/HRIS), Staffing and the Law, Termination, Latest News
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At a time when many firms are cutting jobs, HR software company HumanConcepts is acquiring a software tool from Taleo designed to help companies conduct layoffs.

HumanConcepts says the product, renamed Transition Manager, will work with its organizational charting software to help companies plan and carry out corporate restructurings. Rick Fletcher, president of consulting firm HRchitect, calls the software a “gem” that is a good fit for HumanConcepts. Terms of the deal were not disclosed.

“Every organization is considering what their organization chart needs to look like to weather the current economic downturn, and many organizations are in the position where they have to reduce their workforces to match market realities,” Fletcher said.

The troubled U.S. economy is awash in layoffs these days. Payroll employment plunged by 533,000 jobs in November as the unemployment rate rose to 6.7 percent.

Sausalito, California-based HumanConcepts said December 4 that it had concluded an agreement to acquire the software.

Taleo called the software Optimize. It is designed to make sure layoffs are done in keeping with laws, union agreements and company policies. The software allows managers to rank employees according to factors including salary and seniority. And it generates customized separation packages for each employee.

The tool allows firms to avoid a common pitfall of layoffs, according to HumanConcepts chief executive Martin Sacks: “The good people get laid off along with the less good people.”

Sacks dismisses the concern that the software is anti-worker in that it greases the way to pink slips. Instead, he said, it steers companies away from ad-hoc layoff procedures and makes downsizing “much fairer and much more transparent.”

About 10 customers currently use the software, Sacks said.

HumanConcepts’ flagship software product is OrgPlus. The company says it is used by thousands of large organizations to plan and budget for future workforce scenarios, including reorganizations and corporate mergers.

Taleo obtained the Optimize product when it purchased software vendor Vurv Technology this year. Vurv, in turn, had snapped up the software when it acquired People Business Network—a deal announced in January 2007.

Taleo has been pushing hard to be at the center of technology for talent management, which refers to key HR tasks such as recruiting and performance management. Fletcher argues the Optimize product was not optimal for Taleo.

“Taleo is the category killer in talent acquisition systems right now, and they are becoming one of the top players in overall talent management,” he said. “Their plate is really full right now, including executing the conversion of Vurv customers, so they need to stay focused on core competencies.”

—Ed Frauenheim

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