Kenexa


Last week Kenexa reached out to analyst press and influencers and hosted a number of us to a wonderful evening at Rudy’s house, followed by an overview of the product lines and business strategy the next day. There are several things that differentiate Kenexa from the rest of the pack, which are very important when looking for a provider of integrated talent management solutions.

1)       They are one of the very few firms, and the only firm in the publicly traded HCM space, that has over 20% growth per year and 20% profitability. In fact, most of the other firms have neither 20% growth nor profitability. These numbers indicate that Rudy and his team have truly built a sustainable business over the long term.

2)       They do have an integrated talent management strategy. With performance management, succession planning, employee surveys, assessments, and three talent acquisition engines, they have had good success selling across platform and driving real business results to the HR department.

3)       With $35 million ear marked for research this year, they are sure to outspend 95% of all the other vendors in the space. This will create a lot more integration of products as well as future generation of products. Keep in mind this included the majority of the work being done in India so in fact, it’s like spending $70 million plus in the US on development.

4)       They have a rock solid management team. Rudy Karan, Troy Kantar, Sarah Teen, Becky Sterling and Russ Becker have all been with the organization for 10+ years. New to the team are Jim Restivo (IT) and Phil Stewart (RPO and Chief People Person).

5)       They are not an overnight success story. Although they are now a clear market leader, it has been 10+ solid years of growing this business from what was predominately a content (assessment) and consulting business to what I would call a technology enabled solution provider.

Ironically, the highlight of the morning was Troy’s talk to finally being able to show business outcomes and metrics from HR. Being able to tie metrics like cost of food to quality of hire for restaurants or number of customer accounts to quality of hire for banks are what will really drive this business. Localizing the Kenexa suite based on industry verticals - healthcare, retail, financials services, etc. - are essential in helping Kenexa articulate its value proposition to their client base who then can articulate HR’s value proposition back to their business. We are hoping that the next version of Kenexa tools will have more of these metrics back in. Right now this is predominately done with consulting.
In terms of further mergers and acquisitions, Kenexa will continue to expand their footprint with acquisitions that add product line, distribution (additional locations and sales opportunities) and intellectual property.

What I did find interesting is that firms like Kenexa do not spend enough time looking at the future and what some of the more innovative firms in the space are doing. Although Kenexa is committed to redefining itself and building applications that will put itself out of business before someone else does, a quick glance at the new 2.0 platform was very Blah and uneventful … hardly worth attaching Web 2.0 to it.
Most of the functionality addressed in accommodated common objects is just good business sense but this is the basis required to compete. Someone else may figure a way to combine the business metrics into a WOW interface and beat them to the punch for the Web 3.0 interface.

On the personal home front my oldest daughter Hailey (15) started her first job on the weekend. She is working at the local golf course in the landscaping department. She works all week ends for now and when school finishes for the summer, will work 12 days on and 2 days off, starting at 6 a.m. each day. After the first day, she firmly declared that working for a living was interfering with her social life and could be problematic. All this before she even gets her first pay check. At least there is hope that I will get reimbursed for her iphone bill.

The process of looking for your first-time job is very overwhelming for high school kids. They do not have a resume, they have very little work experience if any, and they have no clue on how to go about even applying. We filled out applications for the local Wal-mart - a new store that had recently opened and has been advertising and were surprised to get a call back within 24 hours. On the other hand, we applied in person to Tim Hortons, who are desperate for help, and got a dumb glazed over look as to what to do with the application when we handed it to the counter person. There’s been no call back yet they are still hiring and we even had a referral into this store. Very poor process for Tim Hortons.

In reality most kids get jobs from friends or family. Hailey’s experience was very similar. A local family who owns the golf course has been friends of ours for years. The interview apparently went something like this….Playing hockey on Wednesday? Nope. Can Hailey come in for orientation on Saturday? Yes. Great, see you then. No idea of hours, pay, expectations … just a teenager who was thrilled to have her first job until she got the 5:30 am wake up call.