By: Jennifer King

HR Analyst for Software Advice

Acquisitions of talent management vendors present new challenges for customers and the HR software industry. Even as companies make statements and reveal details for how they plan to align the two product lines, customers still have concerns about how, or whether, they will benefit, particularly in the areas of product integration and innovation.


In terms of product integration, customers who made investments in a talent management system that happened to get bought by a competing HRMS vendor are probably crying for help. These customers are stuck wondering how the acquisition will affect their contract with the acquired vendor and if they’ll be able to continue supporting its integration throughout the duration of that contract.


Another downside of large ERP vendors acquiring talent management providers is slower innovation for these product lines. Even though the acquired talent management products may find support through more developer and financial resources, innovation will likely slow down because the vendors have to support multiple product lines in addition to the recently acquired ones.


But while large companies are busy trying to figure out how to integrate their talent management acquisitions with their existing product lines and deliver those to customers, more standalone solutions from smaller vendors will begin to pop up and proliferate.


According to Ed Newman, chief analyst and HR consultant for Talent Management Technology, these acquisitions “create a spur of new, up-and-coming best-of-breed vendors in the market. This is just going to open up more room for innovation that will eventually serve as bolt-on products. That’s not necessarily bad for the customer. More innovation is good.”


I look forward to the new wave of standalone talent and performance management solutions. Their proliferation will be the driving force behind innovations in strategic areas like recruiting and employee evaluation software.


Jennifer King is an HR Analyst at Software Advice, an online resource for reviewing and comparing human resources software. Located in Austin, Texas, she reports on news and trends related to HR Software, employee evaluation software, and the HR industry. Read her full analysis of the recent talent management software acquisitions on the Software Advice blog: