Archive for January, 2011

Hot News: Thoughts on the PreVisor and SHL merger

Friday, January 14th, 2011

In what is is surely the biggest move in the history of the pre-employment assessment space, PreVisor and SHL have joined forces to create the largest and most far reaching assessment company in the global market. Note this is a true merger with both companies’ private equity owners coming together such that one entity does not “own” the other.

So, why did this merger occur? Its actually pretty simple. Both organizations, while being quite strong in many areas, are less strong in others. True to the idea behind most mergers, the combined entity allows for a whole is greater than the sum of its parts scenario. For example, PreVisor offers the best technology platform in the business and leads the market in driving innovation but they lack a truly global reach. Furthermore, PreVisor’s approach to creating modular scales that can be “stacked” into situationally customized tests means they are always hungry for quality content. On the other hand, SHL while less competitive here in the US, is a powerhouse when it comes to assessment in other countries around the globe. Furthermore, SHL, while having a very sound stable of great content, has traditionally not been a strong technology player or a force in innovation. You do the math and see that these strengths and weaknesses are highly complimentary and will allow the bigger entity to be a serious player in global technology based assessments of the highest quality.

So what does this mean for the assessment space? We can’t know for sure but I expect that it will continue to drive the major trends we have been seeing unfold over the past few years. Namely increased aggregation within the HCM space, increases in the uptake of assessments, the continued commoditization of assessment content, an increase in assessment innovation, and an increase in the global use of assessment, including an increase in the presence of unified assessment programs amongst multinational corporations.

You may wonder what the drawbacks of this deal may be. Besides the obvious need for some time to get all the details sorted out with merging all aspects of the companies while removing duplication, I think the movement here is towards the ability to offer easily tweaked content in a very transactional manner. While this is not a bad thing at all, I wonder how such a big company will ensure the highest levels of customer service and how they will align to create high touch custom work. I’m sure these things will be sorted out but going for the gold globally is bound to make keeping the high touch element something to work on.

Overall, I feel good about this merger. I know both companies well and have a lot of respect for each of them. They are both innovators in their own way and now they have a chance to combine forces to really accelerate the cache and value of pre-employment testing