Vendors offering just one or a few talent management functions could be candidates to gobble up—or be gobbled up—in the quest for more comprehensive product lines, consultant Karen Beaman says.
“I do expect this consolidation to continue,” says Beaman, who heads advisory firm Jeitosa Group International. “In order to be competitive, they have to have more well-rounded suites.”
OnJanuary 5, private equity firm Bedford Funding said it had acquired talent acquisition specialist Peopleclick for $100 million. Bedford Funding said it was creating a new firm by combining Peopleclick with Authoria, the HR software company that Bedford acquired in 2008 for $63 million. Authoria brings with it recruiting software capabilities, along with other functions such as benefits communication and performance management.
Together, Peopleclick and Authoria boast as customers nearly 60 percent of the Fortune 100. Their combined annual revenue is close to $100 million, says Charles Jones, chief executive of the new firm, Peopleclick Authoria. Jones is the founder of Bedford Funding. He also served as CEO of software firm Geac Computer Corp.
Ron Kupferman, former CEO of Peopleclick, and Jim McDevitt, former CEO of Authoria, will operate as vice chairmen, working on business development, the company said.
The Peopleclick Authoria news is the latest example of tie-ups in talent management software, which refers to applications for key HR tasks such as recruiting, employee performance management and compensation management. Other deals in recent years include Taleo’s acquisitions of compensation specialist Worldwide Compensation and recruiting software firm Vurv Technology, as well as Kenexa’s swallowing up of recruiting software provider BrassRing.
In September, research firm Bersin & Associates projected sales of talent management software would reach $2.2 billion by the end of 2009 and grow 15 percent in 2010.
Josh Bersin, the firm’s CEO, called the Peopleclick Authoria deal the union of “two strong players” in the talent management systems market. “Both companies are product and market leaders in their segments,” he said in a statement.
But meshing technologies could be a challenge for the new firm, says Jason Corsello, vice president at consulting firm Knowledge Infusion. Although Peopleclick and Authoria “have arguably some of the deepest, best-of-breed solutions for talent acquisition and talent management, the two products couldn’t be more different,” Corsello wrote in a recent blog item. (Corsello’s blog, The Human Capitalist, is featured at Workforce.com.)
Jones, though, says that integration hurdles are not new in the software world. He says the secret to successful mergers has more to do with culture than software code.
“It’s about the people,” he says. Jones plans to be busy ensuring happiness among the troops—more than 300 from Peopleclick and more than 200 from Authoria.
Jones, 61, lives outside of New York City but expects to work three days a week in Raleigh, North Carolina, where Peopleclick has had operations, and two days a week in the Boston area, where Authoria has had its corporate headquarters.
Workforce Management, January 2010, p. 11-12 -- Subscribe Now!