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Oracle talent management software gets a boost from SelectMinds

Experts say Oracle's plan to acquire social recruitment software company SelectMinds will improve and extend its human capital management platform.

As the talent management software market heats up, analysts say that it will continue to consolidate. Oracle Corp.'s announcement of its plan to acquire SelectMinds Inc., a New York-based social recruitment software company, was only the latest in a string of acquisitions intended to strengthen the mega-vendor's human resources offerings.

"The whole cloud space is consolidating heavily, and social functionality is really hot," said Michael Fauscette, a group vice president at IDC, a market research firm based in Framingham, Mass. "So, any [product] in the realm of social recruiting, social learning and some adjacent areas like community management will definitely continue to be acquired. They're generally cloud-based and already socially enabled, which is an area that a lot of larger vendors need help with."

Analysts are generally calling the Oracle-SelectMinds deal a positive move for both companies. Not only does SelectMinds improve and broaden the functionality of Oracle's human capital management (HCM) platform, it also helps Oracle gain competitive traction against SAP, according to one expert.

Social recruitment software allows Oracle to explore social channels

SelectMinds has three major strengths -- social sourcing and referrals, alumni management and analytics -- that Oracle will benefit from, according to Katherine Jones, director and principal analyst in the HCM Technology division of Oakland, Calif.-based consultancy Bersin & Associates.

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While Oracle is already harnessing the power of Taleo to post openings to job boards, SelectMinds takes that function one step further by enabling posting to a variety of social media outlets, Jones said.

"Social recruiting is recruiting," she said. "Within your applicant tracking system, SelectMinds will post a job to your Facebook page, tweet it and automatically put it on LinkedIn."

Fauscette said this aspect of SelectMinds will address a gap in Oracle's talent management software. "Oracle has a very full and rich set of products in the HCM space, but one thing they never addressed that's emerging as a new way to acquire talent is through the social channel," he said. "I think in this case they get a social framework that they can plug into their HCM suite, and it adds a lot of value."

Another aspect of SelectMinds' social recruitment software is a referral system. Jones underscored the significance of leveraging recommendations from the workforce. "Internal social sourcing and using your network of employees is really important," she said. "We often find that the best employees are those referred by another employee."

SelectMinds' alumni management helps businesses to foster a community of past and present workers. Jones said this function is especially important because the Millennials entering the workforce do not have the same expertise as employees on the verge of retirement. "Managing a talent community is a very useful part of SelectMinds," she said. "We're having problems with the stream of applicants right out of college having the skill sets for a lot of advanced jobs -- they just don't have them. At the same time, we have boomers who have experience and corporate knowledge who are close to retiring, so companies can't just let them go because the business might fall apart."

With alumni management built into talent management software, Jones explained that companies can maintain a relationship with former employees and enlist their counsel if need be.

Ray Wang, principal analyst and CEO at Constellation Research Inc. in Monta Vista, Calif., agreed that alumni management is an attractive feature of the recruitment software. "You want to be able to create internal and external communities," he said. "It's going to strengthen Oracle's overall HR."

Jones said the analytics component helps companies keep track of which channels are bringing in candidates. "It'll tell you how many people you found on Facebook, how many completed the application, how many you made offers to who came from Facebook and how many you ended up hiring. That's information worth having," she said. She suspects these analytics will eventually be integrated with Oracle's performance management module so HR managers also can assess the quality of hires who are recruited via social channels.

Acquisition keeps Oracle in step with SAP HCM

Oracle and SAP are neck and neck in the race to build out their talent management software offerings. SAP's high profile acquisition of SuccessFactors was followed by Oracle's acquisition of Taleo and later, IBM's acquisition of Kenexa.

The competition was another motivating factor behind the SelectMinds deal, Jones said. SuccessFactors announced plans to acquire Jobs2web, recruitment software that focuses on social channels, in December 2011. By acquiring SelectMinds, Oracle now can offer similar social recruiting functionality. "The competition with SuccessFactors and SAP isn't the only reason for the SelectMinds acquisition, but it's up there," she said.

As for how the recruitment system will fit in with Oracle's other HCM products, these analysts don't expect any functional overlap, mainly because SelectMinds already had a partnership with Taleo. "If you're a Taleo user, you may already have been using SelectMinds -- and now you know that that integration will continue," Jones said.

The analysts also agreed that SelectMinds users -- including eBay, Visa and the U.S. Federal Reserve System -- don't have cause for concern. Quite the opposite.

"Oracle's good at dealing with the acquired product, and there's no reason why they'd want to put SelectMinds' customer base at risk," IDC's Fauscette said. "They tend to be very good at transitioning that base and keeping people on."

Jones said the deal would benefit both Oracle and SelectMinds clients. "There's no downside for users no matter how you look at it," she said.

And this won't be the last acquisition in the talent management software market. "There's going to be a lot more acquisitions in this area, because the innovations are happening outside the traditional vendors, and at a more rapid pace," Constellation Research's Wang said.

"The next bright idea is likely to be scooped up as soon as anybody can make sure it's a viable idea," Jones said.

Emma Snider is the associate site editor for Follow her on Twitter: @emmajs24.

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