Reaching for the Stars

With its new job-applicant tracking solution, Bond International Software is making its first channel play.

• By Lee Pender
• July 01, 2006

Because if the shortage of educated workers that experts have long predicted does hit -- or is already hitting -- corporate America, the company he works for, Bond International Software, might just have found a niche that will be profitable for years to come. To stake a claim to that specialty area, Bond is unveiling a new division, of which Giehll is CEO, and a new product during Microsoft's Worldwide Partner Conference in Boston this month.

The new division, StarSearcher, offers a product called StarSearcherATS, or Applicant Tracking System, which automates the processes that recruiting firms and corporate HR departments use to locate and lure job candidates.

Managing a Scarce Resource
Wit h the U.S. economy set to create far more jobs than there will be workers to fill them, recruiting is about to become more important -- and more challenging -- than ever, especially for smaller companies and recruiting firms, Giehll says. That's where he sees an opportunity. He's well aware of the U.S. Labor Department's statistics that say that, with the first wave of Baby Boomers reaching retirement age during a period of projected economic growth, American companies will have nearly 55 million jobs to fill by 2014. And with far fewer members of the younger "Generation X" following those retiring Baby Boomers, there's likely to be a serious shortfall in the numbers of people available for all those open positions. That means that companies -- and the firms that find employees for them -- will have to work harder and more efficiently than ever to get the right people into the right jobs for the right price.

Although large corporations have been investing in applicant-tracking systems for a few years, many small and midsize business (SMBs) and recruiting firms still use paper-based systems. In fact, in a recent Bond survey of 180 Microsoft partners, 80 percent reported that their customers are still using paper-based methods to track job applications.

Giehll believes that this traditional method of record keeping won't be sufficient in the years to come, and that smaller companies will have to automate to remain competitive. For that reason, StarSearcherATS will primarily target smaller companies with fewer than 500 employees as well as recruiting firms.

"Many of the applicant-tracking technologies that bigger companies use haven't filtered down [to smaller businesses] yet," Giehll says. In his view, companies serious about winning employment wars need to make talent management as high a priority as financial management.

An Early Arrival on the Scene
Analysts agree that there's money to be made by selling applicant-tracking systems to SMBs. Lisa Rowan, program manager for human resources management and staffing at International Data Corp., the Framingham, Mass.-based IT research company, estimates the domestic hiring-process automation market -- into which StarSearcherATS falls -- at $750 million this year. Rowan expects that number to nearly double over the next three years, reaching $1.6 billion by 2009.

"It's a pretty strong growth area," Rowan says of applicant tracking for SMBs, although she warns that StarSearcher won't be staking a claim to uncharted territory. iCIMS Inc., in Hazlet, N.J., and HRSmart Inc., of Richardson, Texas, among others, are already players in the SMB space.

Still, it isn't a crowded market. Judy Sweeney, research director at Boston-based AMR Research Inc., says SMBs -- especially small recruiting firms -- are unders erved for applicant-tracking systems. "There aren't a lot of packaged solutions for those recruiters on the market today," Sweeney says.

First-Time Channel Play
Giehll hopes his new division will experience success similar to that of the other Bond division he heads. He became CEO of eEmpACT, a Bloomington, Minn.-based, then-independent maker of staffing software, in 1998.

EmpACT's growth was slow prior to Giehll's arrival, but the company has rocketed from $1 million to $5 million in annual revenues over the last five years. In February 2005, Giehll agreed to merge eEmpACT with Bond, a U.K.-based HR software vendor; eEmpACT, like StarSearcher, is now a division of the British company. Giehll is CEO of both divisions, and both divisions' products carry the Bond name.

StarSearcher, however, won't be sold as an integrated application with the eEmpACT product, which includes some overlapping features but also offers functionality for timesheets, invoicing and payroll. That's because Giehll and Bond are charting a new course with the StarSearcher division -- one that leads directly to the Microsoft sales channel. Bond, itself a Gold Certified Partner, has always been a direct-sales company. (eEmpACT was, too, as an independent company and still is as a division of Bond.)

But Microsoft channel partners, and only Microsoft channel partners, will sell StarSearcherATS. Giehll is building a network, consisting of primarily Gold Certified Partners, to take the new product to market. His new division studied 12 partner programs from independent software vendors and brought the best practices of each into the StarSearcher partner model.

Going the channel route made sense for StarSearcher given how quickly potential customers are likely to need an ATS, Giehll says. There was further synergy in the fact that StarSearcher plans to integrate the ATS product with the HR modules in Microsoft's Dynamics ERP suites, with the first basic integration available by the end of 2006. The new product also integrates with SQL Server, Outlook and Office.

"We knew that for us to go and build from scratch a global sales force would just take too long," Giehll says. "We looked at the effectiveness of the Microsoft channel and the fact that our solution was based on Microsoft technology, and it made sense for us to develop the channel for it. That allows us to get that product out there for a lot of people right when they're going to need it. These businesses don't have four or five years to figure this out; they're going to feel the pain [now]."

The Pitch to Partners
Although StarSearcherATS represents the company's first channel play, Giehll says that the new division won't cut partners' legs out from underneath them by selling directly into StarSearcher accounts. Bond has gone a s far as giving StarSearcherATS a completely different look and feel from the eEmpACT product: The interfaces of the products are different, and the applications don't interface with each other.

Giehll believes that the partner channel will provide StarSearcher with an advantage over its competitors -- many of whom only offer hosted models of their applications, and most of whom don't sell through the channel -- because customers will be able to get their applicant-tracking solutions from Microsoft partners they already know rather than through direct sales from a separate vendor.

"In the end, these companies don't want all these different systems -- they want integrated systems," Giehll says. "They want to be able to go to one single partner."

StarSearcher's pitch to partners is clear. Ultimately, Giehll says, each of those partners faces the following choice: "Either I stand on the sidelines and let that money go to all those direct-sales teams, or I get involved and make sure all that money is coming my way."