IDC MarketScape: Worldwide Recruiting in Integrated Talent Management 2015 Vendor Assessment

IDC MarketScape IDC MarketScape: Worldwide Recruiting in Integrated Talent Management 2015 Vendor Assessment Lisa Rowan IDC MARKETSCAPE FIGURE FIGURE 1 IDC MarketScape Worldwide Recruiting in Integrated Talent Management Vendor Assessment Source: IDC, 2015 Please see the Appendix for detailed methodology, market definition, and scoring criteria. January 2015, IDC #253855

IDC OPINION This IDC study represents a vendor assessment of the recruiting capabilities offered as part of an integrated talent management solution through the IDC MarketScape model. This research is a quantitative and qualitative assessment of the characteristics that explain a vendor's success in the marketplace and help anticipate the vendor's ascendancy. The evaluation is based on a comprehensive and rigorous framework that assesses vendors relative to the criteria and one another and highlights the factors expected to be the most influential to success in the market, both short and long term. Key findings include: The majority of clients are at least slightly satisfied, if not very satisfied, with their recruiting system. Smaller firms are the least satisfied, while the largest firms report being most satisfied. Of the various criteria, buyers are most satisfied overall with the modern technology in use. Buyers are least satisfied overall with the cost of solutions. As with talent management overall, differentiation is more difficult to qualify than ever before. All of the vendors covered here have solutions that appeal to buyers. But with talent acquisition, the emphasis is moving away from merely tracking candidates to offering better methods for sourcing talent. Sourcing, especially with social networks, will become table stakes down the road but is emerging as a differentiator now. IDC MARKETSCAPE VENDOR INCLUSION CRITERIA The criteria for inclusion of vendors in this IDC MarketScape analysis are as follows: Vendors must have solutions for a minimum of four of the five major talent management functions of recruiting, learning, performance management, career and succession planning, and compensation in general release as of March 31, 2014. Vendors must have a minimum of 250,000 employees/users live on the recruiting module, which is part of the talent management suite as of March 31, 2014. ESSENTIAL BUYER GUIDANCE The vendors covered here all offer viable alternatives. Given a fairly equitable competitive landscape, human resources (HR) buyers are advised to examine areas that resonate for them to make a decision that makes most sense to their unique circumstances: Begin any talent project by assessing your organization's talent culture and maturity. Your organization may lean toward being a recruiting culture if your industry is characterized by regular high turnover or a learning culture if regular training to maintain skills is of topmost concern. Talent maturity can be established by assessing what holes exist in current coverage of the various talent functions and by how well various stakeholder functions integrate (e.g., recruiting and HR administration). Knowing culture and maturity can help the team establish key pain points and priorities for where to begin. 2015 IDC #253855 1

Consider incumbent solutions already in place. Are those colleagues using that incumbent vendor's solution satisfied? If you are using a vendor for one or more talent areas such as recruiting or learning and users of that solution are satisfied, look to see whether that vendor offers the other functionality you need. If there are multiple incumbents, which one is bringing the highest level of satisfaction? Think big talent picture. Rather than considering a point solution for a single pain point, look at your full talent management portfolio. Acquiring a set of disparate talent management modules may solve today's immediate need, but such a decision will yield multiple talent profiles and a disconnected flow of talent information. Bring in all the stakeholders to drive toward a solution that will open up a fluid exchange for talent management. VENDOR SUMMARY PROFILES This section briefly explains IDC's key observations resulting in a vendor's position in the IDC MarketScape. While every vendor is evaluated against each of the criteria outlined in the Appendix, the description here provides a summary of each vendor's strengths and challenges. ADP According to IDC analysis and buyer perception, Automatic Data Processing (ADP) is an IDC MarketScape Major Player worldwide in this assessment. ADP, with approximately 610,000 clients, is one of the world's largest providers of human capital management (HCM) and business outsourcing services. Leveraging over 60 years of experience, ADP offers a wide range of human capital management solutions designed to help companies of all sizes find, manage, grow, and keep talent. Since entering the talent market in 2006, ADP has grown both organically and via acquisition. ADP now offers a fully integrated suite of talent solutions, including recruiting, performance, learning, compensation, and succession, to more than 700 clients. ADP offers different solutions for organizations of different sizes/levels of complexity. This analysis considers ADP Talent Management, a solution focused on larger and more complex organizations (typically those with 1,000+ employees). ADP Talent Management is most frequently sold integrated with ADP Vantage HCM or in conjunction with other ADP offerings. ADP is continuing to redesign the user experience (UX) for both ease of use and consistency across the suite. ADP has also launched a new recruiting solution, ADP Recruiting Management, based on assets acquired through bringing on The RightThing several years ago. The ADP Recruiting Management offering replaces ADP VirtualEdge as the recruiting system. ADP has also launched an advisory practice offering higher-level HCM consulting to clients and prospects. The ADP HCM marketplace is now available through the development of open APIs for developers and partners. ADP is also looking to deliver social onboarding in the coming year. 2015 IDC #253855 2

Strengths ADP receives high marks for its own internal talent management, financial stability, and R&D investments. ADP also has the advantage of offering end-to-end solutions that bring together talent with core HR. Challenges ADP's recruiting offering is newer having been brought forward from The RightThing acquisition. ADP's clients evaluate recruiting well on features and customer service but lower on pricing and release cadence. ADP is publicly traded on Nasdaq: ADP. Cornerstone OnDemand According to IDC analysis and buyer perception, Cornerstone OnDemand is an IDC MarketScape Major Player worldwide in this assessment. Cornerstone OnDemand was founded in 1999 and launched its initial public offering in March 2011. While the company's roots are in learning and competency management, Cornerstone has since built out other talent management components organically and now offers all functions. Historically, the Cornerstone portfolio was targeted at large enterprises, but the company offers specific content, pricing, and service to the midmarket. In 2012, to meet the needs of the SMB market, Cornerstone acquired New Zealand based Sonar6 and has rebranded this line as Cornerstone Growth Edition. The company further extends its reach through an extended enterprise product aimed at training and enabling customer and partner networks as well as productized integrations with vendors like salesforce.com and Workday. Cornerstone also offers pro bono software and services to nonprofits through its foundation (e.g., disasterready.org, a free learning Web site targeted at relief workers), and it has also rolled out a solution for volunteer management. In the past year, Cornerstone has beefed up its both presale and postsale consulting as not every deal calls for a big third-party consultant, yet clients need good guidance. Like other vendors in the market, Cornerstone has streamlined the user experience, making it very attractive and usable. Of particular note on the UX front is Cornerstone's Universal Profile. The Universal Profile is not just a single repository for all employee data but a single point from which employees and managers can do just about every talent function without having to think about module. On the business side, in the past year, Cornerstone has made big inroads globally and has beefed up coverage in key verticals including government, healthcare, and higher education. In October 2014, Cornerstone acquired big data and analytics platform company Evolv Inc. for $43 million in an all-cash deal. Strengths Cornerstone has strong functional capabilities, true multitenant SaaS for scalability, and solid customer references. Other strengths of Cornerstone include customer service, depth of capability of individual 2015 IDC #253855 3

modules, and timeliness of releases. While learning was Cornerstone's entry point, the company's other modules are equally robust and capable of being offered alone. Cornerstone remains one of very few companies whose talent platform is entirely organically built. Challenges Cornerstone's recruiting solution is newer but is feature rich for the age of the solution. Both the technology employed and release cadence of Cornerstone please its clients. Clients are less pleased with the cost and with the integration of recruiting with other HR systems. The latter integration challenge is not unexpected, given Cornerstone's focus on talent only but needs to be overcome as so many end-to-end solution vendors are beefing up talent offerings. Cornerstone OnDemand is publicly traded on Nasdaq: CSOD. Halogen Software According to IDC analysis and buyer perception, Halogen Software is an IDC MarketScape Major Player worldwide in this assessment. Halogen Software introduced performance management solutions as its initial entrée into talent management in 2002 and now offers an organically built suite of cloud-based solutions for all talent management functions. Halogen tailors its go-to-market offerings to vertical industries, starting with healthcare and now including professional services, financial services, manufacturing, education, hospitality, and the public sector. Halogen primarily targets midmarket enterprises (those with 100 10,000 employees). The company has expanded beyond the North American market, with offices in the United Kingdom and Australia. In the past year, Halogen has put a focus on the employee-manager relationship. Halogen points to the critical role that such managers hold in ensuring employee satisfaction and retention, citing that 70% of its workforce reports to a frontline manager. Halogen is offering a number of capabilities, with the employee-manager connection top of mind. Among the capabilities offered is the introduction of the Myers-Briggs assessment methodology into the Halogen suite. Such assessments can serve to help managers better understand how to best approach, motivate, and coach their team members. In addition, Halogen has built a very effective tool to automatically build 1:1 agendas. Often, managers and employees alike are at a loss on what to discuss on a regular basis, and a tool like this takes the awkwardness out of ongoing interactions and therefore encourages more regular communication. Strengths Halogen's strengths include a verticalized go-to-market strategy, integration of the various functions through all organic development, and very strong client satisfaction. Halogen was rated well by its clients than its competitors in almost every category, including completeness of product, costeffectiveness, and customer service. 2015 IDC #253855 4

Challenges Halogen focuses exclusively on talent management and does not offer other HCM functionality. This may inhibit Halogen in sales situations where buyers seek an end-to-end solution. Recruiting is lesser entrenched than Halogen's other offerings, but clients are well pleased with it. The challenge will be for Halogen to gain greater penetration in its base for recruiting. Halogen is publicly traded on the Toronto Stock Exchange: HGN. IBM According to IDC analysis and buyer perception, IBM is an IDC MarketScape Leader worldwide in this assessment. IBM provides business solutions for human resources and serves as the platform for IBM Smarter Workforce. To IBM, business is about making the workforce smarter. The company views this from two angles empowering people and transforming business. IBM's tools enable businesses to attract and keep top talent, develop skills, cultivate new leaders, and capitalize on collective intelligence by applying human insights, social tools, and workforce analytics. IBM provides insight and experience in employee engagement, talent management, and leadership development combined with technology and social platforms to help companies build the Smarter Workforce. Portions of the IBM talent solution stem from the 2012 acquisition of Kenexa. Kenexa began operations in 1987 as a provider of recruitment services to a wide variety of industries. In 1993, Kenexa offered its first automated recruitment technology system, and by 1997, the company had expanded to provide employee research, employee performance management technology, and consulting services. Also in 1997, Kenexa, responding to growing demand from customers, embarked on a strategy to provide comprehensive human capital management services integrated with on-demand software. Today, IBM offers all major talent management solutions. Strengths The talent management portfolio of IBM benefits from the global IBM infrastructure, sales team, business partner ecosystem, products, services, customer base, technology, and financial resources. IBM's ability to fund R&D and business growth plays a large role in the talent management portfolio's growth. In addition, the IBM Smarter Workforce has pulled together many existing solutions and services (i.e., social, analytics, portal, and global business services) with the enhanced Kenexa portfolio to offer the ability to drive employee performance and business results. Challenges IBM's recruiting offering is one of the industry stalwarts in the market and has garnered high client evaluations. The main challenge for IBM is one of unification within the Smarter Workforce portfolio. The various elements making up the Smarter Workforce portfolio have historically had different user experiences. IBM is working to unify the experiences and should keep this endeavor as a top priority. IBM is publicly traded on the NYSE: IBM. 2015 IDC #253855 5

Infor According to IDC analysis and buyer perception, Infor is an IDC MarketScape Major Player worldwide in this assessment. In 2013, Infor launched Unified HCM to address five key end-to-end HR business challenges for the Fortune 1000: talent selection, development, deployment, measurement, and rewards. With the acquisition of CERTPOINT Systems, Infor HCM now offers the full range of talent management, workforce management, learning management, HR service delivery, and HR management technologies offered on-premise or via SaaS. Infor goes to market by key industries that are run as focused business units. It continues to have strong market share in the healthcare, retail/hospitality, financial, and manufacturing sectors and the public sector. In early 2014, Infor acquired PeopleAnswers, a cloud-based talent science platform. As a result of the acquisition, Infor has been rolling out behavioral science, assessments, and analytics throughout the talent suite. In addition, utilizing Infor's own design firm, Hook & Loop, Infor has rolled out a new modern user experience. Infor has been retooling the mobile experience to run on HTML5 to more broadly support device types. Future plans include building a science division with further utilization of talent science applied to talent comparative plotting among other use cases. In addition, Infor plans to focus on facets of its compensation management product related to external data. Strengths Infor has strengths in global reach, and clients give it high marks for integration across talent and with core HR. With the acquisitions of CERTPOINT in learning and PeopleAnswers in talent science along with innovative design resources, Infor has assets that will help the company compete in this tight market. Challenges The Infor suite is not yet a multitenant SaaS offering, which puts the company at a disadvantage against the majority of its competitors whose suites are multitenant when competing for those buyers for whom it is a requirement. Infor is working on this with plans to overcome the challenge. Specific to Infor's recruiting clients are less satisfied with features and underlying technology. These are opportunities for Infor to educate its clients on what is new and possible with the recruiting offering. Infor is privately held. Lumesse According to IDC analysis and buyer perception, Lumesse is an IDC MarketScape Major Player worldwide in this assessment. Europe-based Lumesse was historically a dominant player in Western Europe in the erecruiting market. It broadened its talent management footprint by acquiring talent management vendor ExecuTRACK in 2007. Lumesse was rebranded from StepStone Solutions in May 2011 following a management buyout backed by HgCapital from the Axel Springer owned StepStone in 2010. Lumesse 2015 IDC #253855 6

offers products in all of the major talent management areas, including learning, following the acquisition of Edvantage Group in late 2011. In the past year, Lumesse has put a new management team in place. Lumesse is building out an open platform, an innovative solution that allows customers to integrate core Lumesse modules as well as components from third-party vendors (e.g., video interviewing). This approach allows customers to access the latest innovations in the marketplace without customers having the challenge of integrating them and managing multiple contracts. Strengths Lumesse's strengths are the company's global footprint, cost competitiveness, and focus on internal talent. Lumesse's pricing is quite a bit below the aggregate norm. Lumesse has a strong European presence, and its affordable solution will likely be attractive in this market. Challenges Recruiting is Lumesse' flagship product so not surprisingly the company garners high marks from clients. However, Lumesse has struggled to break into the U.S. market in a meaningful way. Lumesse looks to surmount this challenge in the year ahead. Lumesse is privately held. PeopleFluent According to IDC analysis and buyer perception, PeopleFluent is an IDC MarketScape Leader worldwide in this assessment. With roots dating back to 1997, PeopleFluent is a provider of a comprehensive talent management suite that consists of employee performance management, compensation management, recruiting, learning, workforce planning and analytics, workforce compliance and diversity, social collaboration, and contingent vendor and services procurement solutions. PeopleFluent offers its integrated suite on a multitenant platform (version 11.x). PeopleFluent is owned, debt free, by Bedford Funding, a $1.4 billion investment firm, which purchased Authoria (2008) and Peopleclick (2010) along with several other companies, all of which have been integrated into PeopleFluent. Following these transactions, Bedford Funding has continued to make organic investments into PeopleFluent to drive innovation for the benefit of its customers. Jeff Carr is the CEO of PeopleFluent. PeopleFluent filled out its portfolio to include learning through the 2012 acquisition of Strategia and offers the complete suite. In fall 2013, PeopleFluent launched the Mirror, combining its collaboration and video products into a continuous engagement platform that provides candidates and employees alike with a personalized, central workspace. Built around people and not HR processes, Mirror integrates video and social 2015 IDC #253855 7

technologies into all talent applications. The system delivers a personalized and collaborative experience that drives improved talent engagement and business performance. Also in fall 2013, PeopleFluent launched its cloud-based data integration service called Colossus that connects talent data with a company's HR, ERP, or payroll data application, providing one source of truth to support talent analytics while reducing implementation time and costs. Strengths PeopleFluent's strengths include great depth in recruiting and compensation. PeopleFluent continues to innovate and received high client ratings because of its feature-rich products, customer service, and reporting and analytics. Challenges PeopleFluent has a lower profile than others with comparable offerings. New marketing programs and content currently under way will help raise awareness of the brand. Specific to recruiting, the PeopleFluent offering is a long-standing industry leader. Client marks are very high, with minor challenges in perceived cost and update frequency. PeopleFluent is privately held. Oracle Talent Cloud According to IDC analysis and buyer perception, Oracle Talent Cloud is an IDC MarketScape Leader worldwide in this assessment. Oracle Talent Cloud includes a full set of cloud-based talent management offerings such as recruiting and onboarding, learning, performance and goal management, succession and development planning, talent reviews, and compensation planning. IDC estimates Oracle Talent Cloud has 5,500+ customers. Special lightweight versions of some products are offered for SMB customers with <3,000 employees (not covered in this analysis). Oracle Talent Cloud leverages underlying technology from Oracle and Taleo, which Oracle acquired in April 2012. Taleo established itself as a frontrunner in cloud recruiting after its founding in 1998; six years ago, it built a robust suite of performance management products and, in 2010, the company acquired Learn.com. Meanwhile, Oracle has delivered a broad set of core HR and talent management solutions in the cloud using its Fusion technology. Oracle brought these teams together, and the teams are now harmonizing the user experience and incorporating Oracle's strong offerings for mobile and tablets (Oracle HCM Cloud Mobile), social collaboration (Oracle Social Network), and business intelligence (Oracle Business Intelligence), as well as Taleo's strong integration platform (HCM Connect). Oracle offers these products through its expanded, dedicated global field teams, and it collaborates with its network of partners providing integrated solutions (via Oracle Validated Integrations [OVI]) as well as systems integration and consulting services. 2015 IDC #253855 8

Strengths Oracle's strengths include strong integration with core HR, clear vendor viability, global reach, and R&D. Oracle Cloud received positive client feedback for richness of functionality and reporting and analytics. Challenges Oracle Talent Cloud is built for multitenancy; however, it is offered as a single tenant. From a messaging standpoint, this could be a challenge when competing against those vendors offering multitenancy. Oracle is publicly traded on Nasdaq: ORCL. SilkRoad According to IDC analysis and buyer perception, SilkRoad is an IDC MarketScape Major Player worldwide in this assessment. SilkRoad is a global provider of cloud-based talent management solutions. The company launched in 2005, with RedCarpet as its flagship onboarding solution; today, SilkRoad offers an integrated set of employee-centered core HR, talent acquisition, and talent development software solutions that are delivered through a single talent portal to drive greater engagement, collaboration, and user adoption. SilkRoad built out the balance of its talent management solutions largely through acquisitions and now covers the full suite. The suite is well integrated to the user despite the inorganic origins of the modules. John Shackleton took over as CEO in July 2013 from Andrew "Flip" Filipowski, who started the company in 2003. The transition to Shackleton, who became co-ceo in January 2013, had been planned well in advance. Shackleton brought with him extensive software management expertise having headed up several other firms, most recently OpenText. SilkRoad's social capabilities are collectively called Point, and these capabilities have been integrated through the company's new Talent Portal social platform that serves as the hub for all talent management functions. Point uniquely measures social interaction and lays the groundwork for collaboration from an employee-centric perspective. SilkRoad is focusing in three areas: simplicity in deployment and usage, deeper integration across SilkRoad applications and with partner applications, and more robust functionality in key areas such as reporting and analytics. Strengths SilkRoad dominates in onboarding and has strengths in serving the midmarket and in global reach. SilkRoad has done more with the intersection of social and talent than most competitors. 2015 IDC #253855 9

Challenges SilkRoad's clients evaluated the company's recruiting solution well across the board. One area for improvement is in the integration with other vendor HRIS and talent offerings. SilkRoad is privately held. SuccessFactors According to IDC analysis and buyer perception, SuccessFactors is an IDC MarketScape Leader worldwide in this assessment. SuccessFactors an SAP company, is a provider of cloud-based HCM software, and in addition to comprehensive talent solutions including performance and goals, recruiting, onboarding, compensation, succession and development, and learning, it also delivers core HR and payroll (employee central) as well as workforce analytics and planning. Employee Central is garnering much new industry attention for both clients converting from SAP onpremise solutions and from clients new to SAP. In addition, SuccessFactors has made many updates to learning management and continues to deploy SAP Jam throughout its talent to up social utility. SuccessFactors also has introduced dynamic organization charting and has rolled out a new onboarding module. On the services side, SuccessFactors has dramatically grown the cloud support team. In March 2014, SAP announced the hiring of Mike Ettling as president, HR Line of Business. A seasoned executive with global experience in human capital and financial management, Ettling oversees the HR line of business, which includes cloud solutions from SuccessFactors and the SAP ERP Human Capital Management solution. SuccessFactors has established significant relationships with the cream of the crop in industry sales, consulting, and complementary business solutions through the acquisition by SAP and the SAP PartnerEdge Partner Program. By working together, SuccessFactors and its partners develop, market, sell, and deliver a comprehensive suite of HCM software solutions. Strengths SuccessFactors' key strengths include market momentum, depth of the portfolio, and global reach. SuccessFactors received praise from clients in the categories of features, technology, and reporting. Challenges SuccessFactors has consistently thrived in the talent-only market. Recruiting is a newer market for SuccessFactors, but the module is evaluated well by clients. There is room to improve client perceptions on cost as some competitors were evaluated better on this criteria by clients. SAP is publicly traded on the NYSE: SAP. 2015 IDC #253855 10

SumTotal According to IDC analysis and buyer perception, SumTotal is an IDC MarketScape Major Player worldwide in this assessment. Founded in 1985, SumTotal has a long-established, solid, positive reputation in the learning management market. Like other vendors, SumTotal's first nonlearning market offering was performance management, followed by compensation. SumTotal was publicly traded until mid-2009, when it was brought private by Vista Equity Partners ("Vista"), owner of HR industry veteran Accero, formerly known as Cyborg. Through its acquisitions of Softscape in 2010 and GeoLearning in 2011, along with subsequent acquisitions in recruiting, payroll, and workforce management, SumTotal distinguished itself early as one of the few vendors whose solutions span all of human capital management, including core HR, and the spectrum of talent management functions, including performance, succession, and learning. SumTotal has integrated its HCM modules on its elixhr platform, which leverages hub technology and master data management to support integrations with disparate or distributed internal or external systems (e.g., HRIS, ERP, and LinkedIn) and for cross-suite analytics. SumTotal has productized several connectors into its HCM suite. Cloud, private cloud, on-premise, and hybrid deployment options are supported. SumTotal's mobile applications support Android, iphone, BlackBerry, and ipad; online/offline learning; and audio and video integration. In August 2014, Skillsoft Corp. entered into a definitive agreement for the acquisition of SumTotal Systems LLC from affiliates of Vista Equity Partners, a United States based private equity firm. Terms of the transaction were not disclosed. The acquisition completed on October 1, 2014. Skillsoft will benefit from a robust learning management platform in addition to SumTotal's other talent offerings. SumTotal will benefit from the broad reach into the learning community that Skillsoft offers. Strengths SumTotal's strengths include the breadth of solutions to encompass core HR, the depth of the various talent modules, and an R&D focus on innovations like elixhr. Clients give SumTotal high marks for reporting and analytics. Challenges SumTotal will need to feel its way under new ownership. With the deal now finalized, plans for the post-acquisition road map are under way. Skillsoft is privately held. 2015 IDC #253855 11

Technomedia According to IDC analysis and buyer perception, Technomedia is an IDC MarketScape Contender worldwide in this assessment. Founded in 1996, Technomedia offers integrated global talent management solutions that enable organizations to drive high-performance business results by unifying the collaboration between employees, managers, and candidates. Technomedia works with hundreds of companies around the world to simplify talent management and align talent with their business objectives. The company's comprehensive talent management suite is designed to complement existing systems while bringing rich functionality to critical aspects of talent acquisition, performance management, succession planning, compensation, talent profile management, and learning and development. Technomedia acquired Hodes iq from Bernard Hodes Group in 2011, which allowed initially for deeper talent acquisition functionality to the recruiting module. In late 2012, Technomedia released a new version of its talent acquisition module, which combines and utilizes the best parts of the recruiting offering and now part of the unified code base and single architecture. Customers may deploy Technomedia's solutions as an enterprise suite, individually as best-of-breed point solutions in any of these core HR practices or in any combination that fits their organization's key talent management technology gaps. Strengths Clients give Technomedia good marks for reporting and analytics. Challenges Clients rate the features of Technomedia's recruiting as being less complete than do clients of competitive offerings. Key areas for improvement are in depth of feature/function and in perceived cost. Technomedia is privately held. APPENDIX Reading an IDC MarketScape Graph For the purposes of this analysis, IDC divided potential key measures for success into two primary categories: capabilities and strategies. Positioning on the y-axis reflects the vendor's current capabilities and menu of services and how well aligned the vendor is to customer needs. The capabilities category focuses on the capabilities of the 2015 IDC #253855 12

company and product today, here and now. Under this category, IDC analysts will look at how well a vendor is building/delivering capabilities that enable it to execute its chosen strategy in the market. Positioning on the x-axis, or strategies axis, indicates how well the vendor's future strategy aligns with what customers will require in the next three to five years. The strategies category focuses on highlevel decisions and underlying assumptions about offerings, customer segments, and business and go-to-market plans for the next three to five years. The size of the individual vendor markers in the IDC MarketScape represents the market share of each individual vendor within the specific market segment being assessed. Share is determined by vendorsupplied number of client lives served. Current capabilities in recruiting are close among the vendors covered, as indicated by the clustering on both axes. However, those vendors with greater longevity in the recruiting market have an edge over newer market entrants. IDC MarketScape Methodology IDC MarketScape criteria selection, weightings, and vendor scores represent well-researched IDC judgment about the market and specific vendors. IDC analysts tailor the range of standard characteristics by which vendors are measured through structured discussions, surveys, and interviews with market leaders, participants, and end users. Market weightings are based on user interviews, buyer surveys, and the input of a review board of IDC experts in each market. IDC analysts base individual vendor scores, and ultimately vendor positions on the IDC MarketScape, on detailed surveys and interviews with the vendors, publicly available information, and end-user experiences in an effort to provide an accurate and consistent assessment of each vendor's characteristics, behavior, and capability. IDC conducted an end-user survey, completed in March 2014, of 503 HR executives of firms with 100+ employees. Included in the survey were specific questions about vendors covered in this analysis. Questions included satisfaction with a variety of factors including, but not limited to, depth and completeness of solution, appropriateness of delivery model, comfort with upgrade release schedules, integration, and customer service. Note: All numbers in this document may not be exact due to rounding. Market Definition IDC defines talent management as those functions that serve to attract, develop, reward, and retain the workforce. Made up of a variety of functions, talent management includes the areas of recruiting and staffing, learning and development, performance management, compensation management, and career and succession planning, all supported by a base of competency management and assessment (see Figure 2). IDC depicts talent management as a continuous circle to represent the interdependency of the various functions. 2015 IDC #253855 13

This IDC MarketScape focuses on the market for solutions and services comprising the attract/recruiting function shown in Figure 2 that serves as part of the integrated end-to-end market. While talent management is still a young market, it is beginning to mature, with greater market penetration. It is a market that has gained and continues to gain a lot of attention and is of interest to both buyers and suppliers. Subsequent sections of this document offer definitions and the characteristics IDC identifies as important for success in this market. While talent management is a newer market, solutions for managing recruiting are far more mature, dating back as many as 20 years. What is newer is the emphasis on bringing other facets of talent management into use and harmony with recruiting. FIGURE 2 Talent Management Value Cycle Source: IDC, 2015 Background The market for talent management has evolved from one that largely focused on a single function, such as recruiting, to a more mature one that considers the many facets of talent. Both senior-line management and HR executives are considering how talent strategies might affect business outcomes such as improved customer satisfaction. To answer such a question, one needs to think about all facets of talent. Improving customer satisfaction may entail choosing the right job candidates from a 2015 IDC #253855 14

"success profile" formed from assessing those doing the job well today. It may mean that key skills are lacking and need to be improved, or it may mean sharpening retention strategies for high performers. The market for recruiting/talent acquisition solutions is very mature but we have just recently begun to enjoy the benefits of formal linking of recruiting with the other talent management functions. While there are standalone systems from vendors that offer only recruiting, this IDC MarketScape looks at recruiting from vendors offering a broader suite. There is a market for standalone solutions but IDC's research points to greater buyer interest in integrated talent. Overview of Recruiting in the Integrated Talent Management Market The business imperative to tie talent strategies to business objectives and outcomes has created a market category for integrated talent management solutions. Providers come to this market from a variety of backgrounds some from learning and development, some from talent acquisition, some from the broader HR systems market, and some from compensation and performance each looking to meet the end-to-end talent management need. Most but not all of the integrated talent management vendors offer their own recruiting module. Recruiting applications are designed to automate the recruitment process through better tracking of applicants, screening and skills assessment, profiling and resume processing, and identifying talents inside or outside the organization. Key features include: Managing skills inventories Creating and managing job requisitions Identifying appropriate employment candidates Coordinating team collaboration within hiring processes Facilitating resource planning Deploying workers to appropriate jobs, projects, or teams Each of the talent functions is important in its own right, but bringing them together provides even greater value to each and in total. The potential benefits are too numerous to cover, but as examples, consider the integration of recruiting with other talent functions and the resulting use cases: Expose open position searches to both internal and external candidates Provide a talent success profile with which to seek the right candidates in the future Determine a quality-of-hire metric that is truly performance based Build succession scenarios that compare internal and external resources Figure 3 shows the results of IDC's 2014 survey of 503 HR executives where IDC asked the respondents to indicate their satisfaction with their current recruiting solution. The chart depicts satisfaction by company size on a five-point scale. Note that the larger the company, the higher the level of satisfaction. 2015 IDC #253855 15

FIGURE 3 Satisfaction with Recruiting Solutions in Place by Company Size Q. Indicate your overall level of satisfaction with the solution or service. n = 503 Note: Respondents those who expressed "no opinion" or said "don't know" were not included. Source: IDC's Survey of HR Executives, 2014 Strategies and Capabilities Criteria The importance of a firm's characteristics to project success and relevance of the particular issue combined with IDC's opinion about the impact those elements have on the selection of firms implies a unique weighting of these elements when evaluating a firm's overall strategies and capabilities to address market opportunity and realizing market success (see Tables 1 and 2). 2015 IDC #253855 16

TABLE 1 Key Strategy Measures for Success: Recruiting in Integrated Talent Management Vendor Strategies Criteria Criteria for Success Subcriteria Weighting Offering strategy Strategies reflect the current development of offerings that will be relevant and attractive to customers over the next three to five years. Functionality or offering road map Success in integrated talent management is marked by plans to offer a complete and integrated suite through either organic development, partnership, or acquisition. Success is further demonstrated by each offering's depth of capability and whether each offering can be marketed as a standalone offering. 1.00 Delivery model Excellence is marked by plans to support emerging architectures such as SOA. 1.00 Cost management Superior service calls for ways by which the vendor can help clients justify expenditures, including ROI models, and provide clear paths by which the client can lower costs. 0.50 Portfolio strategy A true portfolio strategy ensures that the client makes the most effective use of the technology for business transformation. So this focuses on services offered in support of talent transformation. 3.00 New release/revisions strategy This explores the extensibility of the offering and ease of upgrades. It also explores client options for accepting, rejecting, or deferring options. 2.00 Scalability strategy (Not used in this assessment) NA Other offering strategies (globalization) Talent management is moving to a global scale. Excellence is determined by existing presence of and plans for global reach to serve both North America based multinationals and foreign-headquartered firms. 2.50 Offering strategy total 10.00 Go-to-market strategy Strategies include those that maximize the connection between offerings and customers, including choosing to target customer segments that offer the greatest opportunity over the next three to five years. Pricing model Superior planning for future pricing alignment with market direction and pricing plans that will encourage adoption of full suite are integral to success, especially in a troubled economy. 3.00 Sales/distribution channel strategy Buyers in different vertical industries and of various client sizes are interested in investment in talent management solutions that service their unique needs. Excellence is demonstrated by plans to serve new markets such as SMB for enterprise suppliers or enterprise for SMB suppliers or specific industries. 2.00 2015 IDC #253855 17

TABLE 1 Key Strategy Measures for Success: Recruiting in Integrated Talent Management Vendor Strategies Criteria Criteria for Success Subcriteria Weighting Marketing strategy Successful firms have an eye toward and-well articulated plans for how they will grow the firm in the future through either acquisition or unique competitive positioning. 2.00 Customer service strategy Whatever the current client retention rate is today, superior firms have a well-articulated plan for lowering client churn. 3.00 Other go-to-market strategy (Not used in this assessment) NA Go-to-market strategy total 10.00 Business strategy To be successful, vendors need to have strategies to grow the business that is aligned with market trends and future opportunities over the next three to five years. Growth strategy Success is based on the viability and specificity of strategic plans for growth over the next three to five years. 3.00 Innovation/R&D pace and productivity Strength is demonstrated by strategic plans for attaining or retaining functional superiority over competition. The release schedule for the next 12 18 months reflects understanding of market need. 3.00 Financial/funding model Buyers should and do concern themselves with vendor viability. Success requires vendors to have a viable funding strategy for the next three to five years, along with good revenue per employee and plans to improve upon it. 2.00 Employee strategy It is important that a company involved in offering talent management solutions have a clearly articulated plan for developing and retaining its own talent. 2.00 Other business strategies (Not used in this assessment) NA Business strategy total 10.00 Source: IDC, 2014 2015 IDC #253855 18

TABLE 2 Key Capability Measures for Success: Recruiting in Integrated Talent Management Vendor Capabilities Criteria Offering capabilities Functionality/offering delivered Delivery model appropriateness and execution Cost competitiveness Portfolio benefits delivered Criteria for Success The ideal solution offers all of the functions natively without partnerships, and these are fully integrated on a single database and underlying architecture (recruiting, learning, compensation, performance management, and succession/career planning). Success is further demonstrated by each offering's depth of capability and whether each offering can be marketed as a standalone offering. Buyers are given flexibility in delivery to meet their culture and needs with options including software as a service, hosting both on-premise and off-premise, and behind the firewall. The hosting site is well protected and has disaster recovery plans well articulated. Pricing must reflect volume discounts in terms of both the number of modules and the number of employees served and must be competitive with the market. This speaks to the depth of capability offered by each module in the suite. Each separate function could and does stand alone and has been sold as a best-of-breed module on its own merits. Subcriteria Weighting 3.00 1.00 1.00 3.00 New releases/revisions (Not used in this assessment) NA Scalability Other offering capabilities (integration) This criterion explores vendors' support of multitenancy and ability to affordably scale to support many clients. It also explores client experience in both response times and uptime availability. It is important that all talent functions be fully integrated for buyers to realize the benefits of seamless process flow and data exchange. Minimally, modules flow from one to another without reinitiation or additional authentication. Ideally, all modules share a common database and architecture and are developed on the same platform. Also important is strong linkage to the HR system of record. 1.00 1.00 Offering capabilities total 10.00 Go-to-market capabilities Pricing model options and alignment Capabilities include those that maximize the connection between the offerings and customers, such as delivery, partnerships, pricing, marketing, sales, and service. Options include flexible arrangements such that the client can choose to be billed up front, monthly, quarterly, or yearly. Implementation fees are reasonable for work required and are important to market success. 3.00 2015 IDC #253855 19

TABLE 2 Key Capability Measures for Success: Recruiting in Integrated Talent Management Vendor Capabilities Criteria Sales/distribution channel structure, capabilities Marketing Customer service Criteria for Success No one vendor can meet all of its customers' needs. Excellence is shown by having the right partners and a strong system that engages partners at the right time. Excellence is also shown by having a strong partner ecosystem. The right partners for talent management include firms that have strong consulting expertise in a up-front talent strategy, strong technical skills around talent system implementation, strong expertise in a particular talent area, or demonstrated the ability to market talent management technology as part of a larger talent consulting engagement. It is important to have a clear view of the ideal client. Successful vendors offer solutions that are geared toward well-defined target markets. The message to the target audience needs to be concise and appropriate for each of the target markets. Customer service excellence is marked by high client satisfaction and retention and a good ratio of client services staff to clients. Subcriteria Weighting 2.00 0.00 5.00 Other go-to-market capabilities (Not used in this assessment) NA Go-to-market capabilities total 10.00 Business capabilities Growth strategy execution Innovation/R&D pace and productivity Financial/funding management Employee management Other business capabilities (using what one sells) Financial, employee, partner, and R&D management (among others) are in agreement with current market opportunities. Market momentum and growth are shown through acquisition of new clients. This will be measured by market growth in integrated talent management. Success requires that sufficient new development is taking place to stay ahead of or in line with competition. Technology in use should be open and not proprietary. Excellence is marked by strong cash flow and financial acumen and restraint. Strength in managing talent is a key factor for firms in the talent management market. Success is in part demonstrated by a high employee retention rate. Using what one sells is a strong indicator of a well-run business. Excellence can be demonstrated through the degree to which solutions offered are used internally. 2.00 3.00 0.00 2.00 3.00 Business capabilities total 10.00 Source: IDC, 2014 2015 IDC #253855 20

LEARN MORE Related Research IDC MarketScape: Worldwide Integrated Talent Management 2014 Vendor Assessment (IDC #252213, October 2014) 2014 Human Capital Management Survey: HCM Buyer Actions and Plans (IDC #250389, August 2014) Worldwide Human Capital Management Applications 2013 Vendor Shares: Total Market, Core HR, Workforce Management, Recruiting, Learning Management, Performance Management, and Compensation Management (IDC #248742, May 2014) Worldwide and U.S. Human Capital Management Applications 2014 2018 Forecast (IDC #248745, May 2014) Worldwide and U.S. HR Management Services 2014 2018 Forecast (IDC #247912, April 2014) IDC MarketScape: Worldwide Integrated Talent Management 2013 Vendor Analysis (IDC #242562, August 2013) Worldwide and U.S. Talent Acquisition and Staffing Services 2013 2017 Forecast and 2012 Vendor Shares: Market Flattens as New Models Emerge (IDC #240576, April 2013) Synopsis This IDC study represents a vendor assessment of recruiting capabilities offered as part of an integrated talent management solution through the IDC MarketScape model. This assessment discusses both quantitative and qualitative characteristics that explain a vendor's success in this market. "The vendors serving the market for recruiting as part of an integrated talent management suite have advanced their offerings in features and functions through both organic development and acquisition," says Lisa Rowan, research vice president, HR, Talent, and Learning Strategies for IDC. "Through buyer research, IDC sees that buyers are generally pleased with the depth of their vendor offerings. The majority of vendors could improve the recruiter experience by offering more sourcing functionality." 2015 IDC #253855 21

About IDC International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make factbased decisions on technology purchases and business strategy. More than 1,100 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries worldwide. For 50 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. Global Headquarters 5 Speen Street Framingham, MA 01701 USA 508.872.8200 Twitter: @IDC idc-insights-community.com www.idc.com Copyright Notice This IDC research document was published as part of an IDC continuous intelligence service, providing written research, analyst interactions, telebriefings, and conferences. Visit www.idc.com to learn more about IDC subscription and consulting services. To view a list of IDC offices worldwide, visit www.idc.com/offices. Please contact the IDC Hotline at 800.343.4952, ext. 7988 (or +1.508.988.7988) or sales@idc.com for information on applying the price of this document toward the purchase of an IDC service or for information on additional copies or Web rights. Copyright 2015 IDC. Reproduction is forbidden unless authorized. All rights reserved.