Firms Growth Plan Gives Talent Management Suite a Workout

January 14, 2009
Work with world-class athletes, and striving to be the best often rubs off. So when Athletes’ Performance unveiled plans last year to expand its business of training professional athletes and open a nationwide chain of upscale gyms to the public, the company looked for a recruiting major leaguer to head up hiring.

The privately held Norwell, Massachusetts, company found the pro it sought in John Leech, the former head of talent management at FedEx. The company’s plan, which so far hasn’t been altered by a shaky economy, calls for Leech to hire 5,000 people to work in 125 fitness centers expected to open by 2013. To do it, Leech picked the equivalent of his own all-star lineup in the form of a Web-based talent management system that can grow along with the company’s staff.

Athletes’ Performance is one of an increasing number of midsize companies using talent management suites to manage pre- and post-hiring HR functions. Midsize companies represent the fastest-growing market for human resource management software, in many cases because they’re automating processes for the first time.

Since many midsize companies like Athletes’ Performance are starting from scratch, they’re more likely to opt for economical, software-as-a-service applications instead of more expensive server-based software that many large enterprises now find themselves stuck with, say recruiting industry observers. Some are using talent management suites as full-blown HRIS platforms, handling everything from applicant tracking to performance reviews to exit interviews.

To kick off its expansion, Athletes’ Performance opened its first Core Performance high-end gym in Santa Monica, California, in October. The fitness center features the same high-tech equipment that company founder Michael Verstegen developed to train pro athletes when he started the business in 1999.

Leech, who joined the business in July, started recruiting employees in December for fitness centers the company plans to open in 2009. He is using the applicant tracking functions of talent management software from iCIMS for that and is also phasing in the company’s other HRIS functions such as performance reviews, work streams and succession planning.

Having a single system do everything eliminates the awkward handoff that can happen when a company uses one program for recruiting and then turns the data over to a different HRIS system, according to Leech. Having one system is like a pro athlete who has the same agent throughout their career—it makes for better continuity, he says.

Leech could have chosen talent management software from any of a dozen or more vendors targeting midmarket businesses. But he knew iCIMS from his days at FedEx, which he joined in 2003 when the $37 billion delivery giant was looking to revamp hiring practices for its 290,000 employees to comply with new regulations governing federal contractors.

Leech initially used iCIMS, which also counts Liz Claiborne, Re/Max and Enterprise Rent-A-Car among its clients, in an applicant tracking pilot project in FedEx’s IT and operations department before rolling it out companywide. By the time he left last summer, the applicant tracking system had helped reduce the time it took to fill jobs by 10 days—and in certain areas, 30 days, Leech says.

FedEx was the biggest company iCIMS had worked with until then and proved the company’s platform could handle an enterprise-level customer, according to CEO Colin Day. Athletes’ Performance is another milestone client for the privately held New Jersey vendor, becoming the first to use its entire talent management suite as a de facto HRIS platform, a feat that Day hopes will persuade more customers to follow suit.

Growing midtier companies like Athletes’ Performance are hot properties, Day says. Talent management vendors like Taleo, SuccessFactors and Kenexa are in a dogfight for Fortune 500 customers, but that market is tapped out and there are exponentially more midsize companies in the country, he says.

"The midmarket is exciting not only because of the volume but because of those companies’ ability to move" faster than larger enterprises when it comes to implementing new technology, Day says. "They can get arguably better technology at pennies on the price."

Athletes’ Performance’s talent management software is tied into an online career center that went live in late October Potential employees can use the Web site to search openings, apply for jobs or set up alerts to be notified when positions they’re interested in are available. In 2009, Leech expects to have videos on the site that show what jobs are like.

The retention rate for the 150 people who currently work at Athletes’ Performance is already "through the roof," and adding things like the online career center and integrated talent management system should keep it that way as the company opens its new division, Leech says. He declined to disclose what the company is spending on those efforts except to say the Web site is being developed internally and iCIMS software, which is sold on a per-user basis, provides a strong return on investment for companies that use all of its features.

"Many organizations don’t understand the full potential of talent management. If you’re just using it to post jobs, it would be expensive," he says.