So Workstream.com
has an offer out to Webhire.com clients to convert them at a “significant discount.”
Ok – that’s not really what I wanted to talk about. Let’s start from the beginning. Kenexa purchases WebHire which I think is a brilliant move. Why you ask? (you were going to ask, right?)
- Does WebHire have the best software out there? Nope.
- Are they old and sometimes considered legacy software? Yes – not to say they are not pretty decent.
- So Kenexa makes a move to supplement it’s TMS (talent management) with a mediocre TAS (talent acquisition) ? Pretty much.
Ok – here’s the brilliance. For all the hype with modern, cutting edge TAS systems, I’m guessing that WebHire was among the healthiest.
- WebHire had a huge subscriber base. True, they may not have ever upgraded from ResTrac, and also true that fees were not what Taleo charges, but they had FAR more clients than anyone else (kinda an educated guess – I don’t have money riding on this one). What does this mean? It means that Kenexa bout into a huge base of clients to market to.
- Due to WebHire’s rather low comparative costs, they were among the healthiest of the TAS’s out there. So these two factors combined, and this was actually one of the smarter moves of the year.
Workstream’s offer also makes sense. Sure, they might be buying the business (losing $$$ up front), but the potential for future gain is incredible. For each WebHire client they convert, if they can sell an additional performance module, things are looking up. Personally I think Webhire has tons clients from the good ‘ol days, so this is a ripe market.
Add to that the fact that Kenexa can’t possibly integrate the WebHire system any time soon (next few quarters) and a few conversions to a fully integrated WorkStream solution starts sounding pretty good. Anyway, for once I like how a couple vendors are marketing in this space. There’s a window of opportunity and both Kenexa and Workstream are trying to jump through.
Read Jason’s take here.
2 responses to “HR Marketing that actually makes sense!!!”
As Ron Burgundy stated, “I agree to disagree”. Webhire customer count is somewhere in the range of 200, less than Taleo, Recruitmax, Authoria, etc. Restrac was a great product and Webhire still has a large pool of loyal customers. The problem is that in a market that is growing in excess of 15% per year, Webhire’s growth has remained relatively flat. Having said all that, Kenexa gets what they want, a loyal customer base, an onboarding product (which they needed) and a profitable revenue stream.
Regarding Workstream’s trade-in offer, I would be less inclined to call it brilliant. Here is why. The immediately are cutting their margins on all of these deals in half…a confusing strategy because they continue to bleed money as their investors continue to demand margin improvement. Secondly, those Restrac/Webhire customer looking to switch, and there are a few, and what I would consider highly educated buyers looking for “the next thing”. As a result, these deals would become highly competitive, focusing less on cost and more on capabilities. From my understanding of current market conditions, Workstream continues to struggle in these types of highly competitive opportunities.
Yes – my evaluation is not really based on facts. I’m very surprised that the combined Webhire/Restrac customer base has diluted to fewer than 200. If true, that really does change the perspective on the deal.
Workstreat is is struggling with at least a couple of issues right now. How to grow and add revenues, and how to get to profitability. The first might require “buying business” but that does not help with the second issue. They are in a tight spot as RecruitMax, Successfactors and Authoria (along with other emerging vendors like Kenexa) are making significant plays. I think using this as a growth strategy is a good move, the market probably doesn’t expect players in this segment to be profitable quite yet.