Cornerstone Improves Employee Engagement through Talent Management

Cornerstone OnDemand is a large pure-play vendor of talent management software, with more than 1,700 clients, more than 14.5 million users and more than 60 percent growth in revenue over the past 12 months. At the company’s annual customer conference this year, CEO Adam Miller talked about a trend in the market of talent management applications going beyond automating a series of processes to help engage employees within organizations. I agree with this analysis and would extend the trend to cover the full range of human capital management (HCM) applications.

From our benchmark research and discussions with vendors in this market, I see four main fronts vendors like Cornerstone must focus on. These are usability (and accessibility) of the applications, collaboration among users, the value of a suite over a collection of individual products, and advanced analytics. Considering the first, usability is the top criterion for technology product selection in our business technology innovation benchmark research and also in our two most recent HCM research projects, on payroll management and human capital analytics. The second, collaboration, is the area in which most research participants want improvement by vendors of human capital analytics.

Cornerstone’s recent product announcements indicate recent investments in advancing usability and the value of the suite. At the conference, it announced two new products: Cornerstone Onboarding and Cornerstone Marketplace. Both connect parts of the Cornerstone Talent Management platform and provide the framework for extending the platform. Onboarding links its recruiting, learning and performance management products, providing a more seamless experience for users as well as including standard capabilities for onboarding new hires, such as forms automation and task management. Marketplace provides a framework for purchasing and working with Cornerstone’s partners, whose products and services supplement the suite, and it makes integration and management of partner products easier for customers to manage.

The company also announced an update to the suite that includes several enhancements to improve usability. Specifically, the June ’14 Product Release improves the user interface for Cornerstone Learning and streamlines the performance review system of Cornerstone Performance. The release also adds a high-volume hiring capability to Cornerstone Recruiting. Together these enhancements show Cornerstone investing in building a talent management system that promotes employee engagement.

In addition, in the past year or so Cornerstone integrated collaborative and mobile capabilities into the suite; these are competitive with what others have done, as I have written.  Nevertheless, there are still more areas where Cornerstone should work to create a complete system that impacts employee engagement.

Specifically it should invest in analytics and its Universal Profile, which provides a substitute for a human resources management system (HRMS). Our benchmark research on human capital analytics finds that the benefit organizations realize from these products second-most often in over half of organizations (52%) is better engagement and retention of the workforce. Toward that end, Cornerstone said it is developing analytics that it will release later this year as a stand-alone product. That should fill some of its gap in analytics, though there is still more to do.

Cornerstone Universal Profile has some strong capabilities, but in my view the market favors having an integrated HRMS in a suite as do Oracle, SuccessFactors an SAP company, SumTotal Systems, Workday as well as others, which competes with Cornerstone on learning management. All these vendors have strong talent management products to go with an integrated HRMS.

Another trend that may affect Cornerstone is the entry into talent management of vendors that are strong in HRMS and payroll. Among them are Ceridian and Ultimate Software, both of which I have written about recently. While presently these vendors don’t have talent management products to equal Cornerstone’s, both are well-funded and have started to invest strongly in this area.

I think Cornerstone’s management understands what is required to provide a talent management system that supports employee engagement. The product enhancements released over the past year show a consistent focus on areas needing improvement to achieve that goal. But competitors are also releasing products that offer the same value proposition. Cornerstone will need to continue to execute well to maintain its leading position in the talent management market. I recommend that if your organization is evaluating talent management products it should consider Cornerstone’s.

Regards,

Ventana Research