Is Workforce Engagement the New Relationship Marketing?: Interview with Stephan Schmitt, CMO at Lumesse
During Dreamforce we spoke to Lumesse CMO Stephan Schmitt about how Lumesse is partnering with Salesforce to re-think the talent management user experience. Their new TalentObjects portfolio, available on the app cloud, anticipates the growing importance of talent to business strategy, and the need to develop better relationships with a skilled workforce. Schmitt explained that Lumesse is shifting the “workforce management” paradigm toward “workforce engagement,” with an emphasis on convenience and consumer-grad usability. The new platform is totally mobile, intuitively modulized, and designed to foster continuous engagement with talent communities.
Give us some background on Lumesse—who are you as a company, and what is your grand vision?
Lumesse is a talent management company. Our solution includes talent acquisition and talent management—performance, succession planning and development, learning, and onboarding. Our four-product suite covers the entire talent management space. We’ve been on the market for about 15 years, primarily in Europe. We have customers in the U.S. and in Asia Pacific, but about 80% of our customer base is made up of European companies. We believe that the talent management space will radically change in the next 5-10 years, and we want to lead the market in preparing customers for those changing business needs.
How do you see talent management changing and where is the market headed?
In order to achieve, maintain, and develop talent, a very different experience will be required than the traditional software approach has allowed. Traditionally, talent management software has been more or less an automation, efficiency, and cost-reduction opportunity, from an HR perspective. As the HR community has less and less resources, it started to automate its processes. The processes themselves are therefore very complex, not very user-friendly, and typically not very engaging. So hiring managers, employees, and candidates don’t like using HR software. It’s not easy to use and it’s too difficult to understand.
The modern world, with modern tools like social and mobile, offers an opportunity for a very different type of engagement. We believe in a more continuous relationship dialogue between the hiring manager and the candidates, between employees or even consultants. Our technology enables this very, very, different style of engagement.
Also, it’s becoming a market for highly skilled people. All of the developing and developed countries worldwide will actually have a skills shortage within the next 10-20 years. We’re going to go through significant disruptions with robotics and other innovations. This will fundamentally change the business process for so many industries that not only they will have a skills shortage but their C-level agendas will depend on whether they have access to the right talent. Talent will become synonymous with business strategy and their ability to grow.
Employee attraction and retention will become a much, much bigger topic, and everyone realizes that the current software doesn’t address this. That’s why we’re here at Dreamforce. We have a new partnership and joint development with Salesforce around talent management. We’re developing talent management modules with a very different user experience on the Salesforce App Cloud. The portfolio we developed on Salesforce is called TalentObjects. This new suite is built on a very different paradigm—actually, we’re branding it not as workforce management but as workforce engagement.
Can you give us some specific details into how your products address those changes in the space?
When you think about how to attract and engage a workforce of candidates differently in the future, thinking about recruiting becomes like a marketing challenge. You want to brand your company out there; you want to engage with candidates who are actively looking for you. This is even more importantly with the passive candidates that are already in jobs but are fundamentally willing to change for a better opportunity.
We’re building TalentObjects to be mobile first—everything is mobile, whether you’re looking for a job, applying for a job, processing a job, even posting jobs. Employees and candidates are able to use the platform independent of where they are. So that’s one element: it’s totally mobile.
We also divided the actual talent management tasks into very small discreet modules. It’s similar to the consumer experience of using a set of apps on a smartphone. Each app is responsible for a different task, and you can combine capabilities for your personal needs. This makes the system very intuitive to use.
The other aspect is the community. Instead of having infrequent engagement with your candidate—once, twice, three times a year—we developed talent communities, candidate communities. It’s more like relationship marketing; what Salesforce does with customers, we are going to do with employees. We give managers and recruiters the toolsets to build talent communities within the company and outside the company, such that they can engage a talent pool continuously.
How do you help managers and recruiters drive continuous engagement?
We believe that in order to engage the talent pool continuously, companies need to drive much better insights through analytics. Hiring managers and recruiters need some guidance in this massive environment. Analytics can help them answer questions like: “Where do I post jobs? Where do I look for talent? How do I engage talent?” Companies need predictive analytics that use market data, data from the application, and data from other parts of the enterprise. For example, if a manager wants to know which of a batch of hires were particular well-qualified and have made good long-term assets for the company, they need to look into sales data, finance data, training data and combine that with extra knowledge. This will help them understand how well employees are performing over time and which of their sources, by all measures, are actually successful.
Analytics is becoming increasingly important. Managers and recruiters need to have data almost on their fingertips when they’re about to hire or recruit. When teams are about to post a job, they need to know where to do that and how to most effectively do it in order to achieve the business goals.
What kind of external data do you look at with that?
Typically the external data is around things like how big a certain market is in a particular region. We can also incorporate data on certain criteria of that regional market, such as average salary levels for a certain job profile. We also incorporate the locations of universities that are being sourced for talent. All of that data is available from third parties. Lumesse allows companies to incorporate the data in their talent management practices, and correlate it strategically with whatever they are actually looking for. Users can choose the kind of job profiles and previous experience data they want to use.
You mentioned that Lumesse has a product built on the Salesforce platform—has that always been the case?
We actually have a full suite of products that were developed around the HR process, and not everything was built on Salesforce. We have TalentLink, which is a recruiting solution focused on large multi-national companies that have multiple divisions operating in different countries. Those customers have a very complex recruiting process that they want to drive centrally but manage locally. In addition, we have an Onboarding solution that is integrated with TalentLink. Then we have ETWeb, which is a talent management system for enterprises, with Learning Gateway and CourseBuilder. That’s the portfolio we have had on the market for 15 years.
Our strategic partnership with Salesforce (where the related product suite is branded as TalentObjects) started about a year ago. We brought our first product, TalentObjects:Recruit, to market last March. We’re building that out very rapidly. We are using the Salesforce data capability in order to build the talent communities. We’re establishing a common data marble such that the Salesforce state among actually allows you to capture all the relevant data like company structures and other. We can fully integrate into the Salesforce platform as the ecosystem builds out; we’ll plug into compatible solutions on the App Exchange.
What does your customer base look like, particularly with TalentObjects?
We have almost two and a half thousand enterprise customers worldwide. With TalentObjects, we want to build our presence in North America more. Overall, we have about a hundred customers in North America. For TalentObjects, we have a very strong funnel but not a single customer yet, since we’re fairly new to the market and the category itself is fairly new. Salesforce has been very much a customer-focused IT organization, and it is increasingly becoming very relevant for other parts of the business. But for the HR community, it’s rather new to be on the Salesforce platform. So we’re basically creating this marketplace in partnership with Salesforce, because they’re very strongly represented with CRM to everyone in marketing, support, and sales. But not so much in other areas yet; therefore through strategic partnerships with key application providers like MS, HR, finance, etc. they are broadening their value to the enterprise.
So would a primary competitor for TalentObjects be something like financialforce.com with their HCM product?
Yes and no. Well, they wouldn’t be a direct competitor, but we do operate like FinancialForce.com—except we are very much focused on the HR and talent management space. We do see Cornerstone for standby solutions but I believe they are not native to Salesforce, so they can’t provide compatible solutions that are truly plug-and-play. In order to get the full value from a talent management solution, companies need to leverage all the data and integrate it into their broader ecosystem analytics. The apps all need to be plug-and-play; that’s when our customers get all the benefits of being in the platform. Fairsail is another competitor that’s on Salesforce. But in general, recruiting and talent management is a rather new and emerging application space for Salesforce.
Are your customers using individual products, or taking a suite approach?
I would say it’s about half-half right now. Some customers have a total suite from Lumesse. Other customers have ‘best-of-breed’ implementations because they were looking just for a recruiting solution. But it’s starting to change a little bit. The suite market is growing faster than the best-of-breed market. So, there’s a tendency for customers to consolidate with the broader end-to-end suites. Talking fast forward now, we believe the suite conversation will become an enterprise platform conversation. IT communities will not only focus on suites but also, which overall enterprise platform they have. Salesforce, SAP, Oracle, Microsoft, and Workday are big enterprise platform providers. I think that the challenge of the future for enterprise application providers will be which platforms they work with, and how compatible they are with those platforms. So, the future consolidation will progress from suites to platforms. In another five or six years, we’re probably going to see that as a major trend across the market, including for HR. We’re coming in early with that particular conversation, and that’s why we are building out with a very long-term strategic market vision. We want to be one the first companies to enter with an allying solution that connects Salesforce to talent management.
What drove Lumesse to make the decision to build TalentObjects on Salesforce in particular?
Our decision to work with Salesforce specifically was based on customer feedback, as well as development insights from analysts. In general, our decision to build a modular, integrated solution on another platform was based on our view of the category.
We see talent management as a very innovative category, with tons of new technology constantly coming out: social, mobile, the separation of the platform and the application, video interviewing, etc. It’s so innovative that I don’t think any single vendor can satisfy the broad needs of the market. Any provider who attempts to take care of everything individually will ultimately lack the innovation that the market needs. When we’re on the Salesforce platform, we don’t need to worry about enterprise skill ability, security, or data protection—all of that is provided through Salesforce or Salesforce App Cloud. All we need to do is to build the talent management modules. We can focus on our main expertise, hence the strategic partnership.
So it was a very conscious decision to go with the platform provider and Salesforce is the only one that truly establishes a broad app exchange. Frankly, they had to compete with the Oracle masterpiece, and the result was that they opened up a marketplace with lots of options and opportunities. That approach really benefits their customers.
Is there a particular type of customer that’s a good fit for TalentObjects versus your other offerings?
It naturally fits customers that already have the Salesforce platform, because they don’t have to integrate platforms or adopt a new platform—it’s all there. Our first target customers are those that have specific recruiting needs. There are two profiles:
1. Companies that have seen high workforce attrition and tend to fluctuate, like call centers, retail, and manufacturing. Those environments hire employees by the thousands; they need data on universities, internship recruiting, RPO’s, etc. They require high volume recruiting. They want to optimize recruiting and the candidate relationship—our candidate marketing aspect is particularly interesting for them.
2. Companies that need very, very specialized employees. They need to tap into the broad market space, and quickly narrow it to a very specific profile. It’s like finding the needle in the haystack. This group often includes consulting companies, church companies, and software companies. Typically, these are the more innovative markets, and the markets with a scarcity of knowledgeable workers.
Overall, we will be focusing right now on the North American market because it’s the most innovative.
Who are the buyers for Lumesse?
The HR team. Head of HR, Chief HR Officers, and Head of Recruiting are our primary buyers. However, the notion of “buyers” becomes more complex in the enterprise market because there are other people who influence the purchasing decision. These include the CIO, and the Salesforce administrator, who becomes an ally because the conversation with the CIO is pretty straightforward and simple if you’re on his platform already. It makes everything much less complex, because it’s easy to integrate, so business decisions are very quick to support. Chief Financial Officers are occasionally involved as well, but primarily we talk to the HR community.
Now, the community that will become increasingly relevant is management, because their level of frustration with traditional HR tools is obvious. The more they become aware of our very different approach to recruiting and engagement, the more interested they are in Lumesse. We’re offering a different way to use the tool, and we’re offering to drive analytics for the hiring manager in an environment he’s already familiar with. So if they know how to use Salesforce, they can use any of our talent management. Our analytics have that same user experience. It’s easy software—almost like an embedded app, but the user doesn’t feel like he has to go through a different application. So increasingly, the hiring manager will become a very important stakeholder. In the future he will drive the conversation, but today it’s all the HR community.
What is your view on best practices and the marketplace, and how does this differentiate Lumesse within the space?
That’s a good question. We have a very unique view of the market, which is not always in line with the key analysts or the other key players. Lumesse was formed and founded by HR professionals. So we see ourselves as an HR solution provider and not as an IT company. We are very much recognized for our HR expertise and our professional services—our best practices capabilities are really helping customers to first understand the talent management challenge and then figure out the optimal solution to their needs. We want to give them the best advice for their use case. So, our philosophy is that there isn’t a single best practice for all recruiting operations.
That goes against the market trend of standardizing throughout. When we made the step to work with Salesforce, the reason we did that was because of their App Exchange, because they make everything modular. By modulizing tasks, our customers have the flexibility to configure those tasks and at the same time the platform provides the standards and norms that drive efficiency. But that structural belief that you need to be flexible and configurable is something very core to Lumesse, and this is why we’re particular strong in the market.
Now, most of the analysts actually drive towards a consolidative approach, and we fundamentally disagree. We believe customer flexibility is a very important requirement if you really want to build leading HR practices. If you want to have average HR practices, you can buy off-the-shelf solutions and use the best practices that are already established in the industry. If you want to build a competitive advantage, then you want to build the best practices yourselves. We’re after the very configurable environment that adopts and grows with the market innovation. These are the kind of customers we are looking for: HR leaders that will use us to make a strategic difference, where HR and talent is part of the CEO’s agenda. The company objectives should include at least one talent objective, and Lumesse offers the solution that will help them optimize.
Megan champions research at TrustRadius. Her mission is to ensure we gather the highest quality data from authenticated reviewers, and provide useful curated reports for prospective software buyers. Prior to joining TrustRadius, Megan was Director of Sales and Marketing at a media company. She holds MA degrees in Journalism and Latin American Studies from the University of Texas.