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Cornerstone OnDemand thinks big data can tell you who to hire

May 12, 2015

Imagine this scenario: Acme Corporation, a maker of farming tools, is looking to hire a salesperson for an important new role spearheading its fertilizer supply business.

Ralph, a long-time employee, is the No. 1 choice based on his seniority and tenure. But the search is incomplete. The company just doesn't know it. Right under its nose is Cynthia, a relatively new employee who has consistently closed deals since starting her job and who previously worked for a big-time fertilizer company.

Cornerstone OnDemand thinks it has the solution to this employee-hiring problem facing Acme as well as the thousands of real companies that deal with similar issues. Its software helps companies sift through data to pinpoint people like Cynthia for job openings that would otherwise slip under the radar.

Founded in 1999, Cornerstone sells customers human-resources software that they can access via its cloud data centers on a subscription basis, and takes in $280 million in annual revenue. The company currently counts Hitachi, Princess Cruise lines, The Ohio State University, and Fruit of the Loom among its roughly 2,100 clients.

On Tuesday, the Santa Monica, Calif. company is slated to unveil a new data analytics service that essentially automates an organization’s hiring process and helps companies ensure that their staff is being adequately trained. The basic premise behind the new service is that companies generate lots of data about their staff, but have little time to actually parse through the information to learn anything meaningful.

For example, a company may track certain worker performance metrics like how well a particular employee’s last three sales negotiations turned out. Companies that fail to go through the information can miss out on learning how effective their workers are.

Cornerstone (csod) claims its new data service is much quicker and reliable way to sift through all the data companies retain about their employees. The technology can, in theory, recommend different jobs for certain employees based on their skills and flag anyone who needs more training.

At the heart of Cornerstone’s new service are machine-learning algorithms that the company acquired when it bought out the big data startup Evolv in October for $42.5 million. The concept of using machine-learning algorithms within the workplace is now a hot niche as businesses increasingly turn to algorithms and huge data sets to help their management make better decisions.

Evolv, which sold data-analysis software for recruiters at companies like Xerox (xrx), bragged that its technology would help cut down on worker attrition and reveal the qualities that make for the best call-center workers. That technology is now incorporated into Cornerstone's tools.

Using historical internal data, companies using the service can get information about 25 common employee-related issues and compare them against Cornerstone's large data sets, explained Cornerstone vice president Jason Corsello. Workplace attrition rates, the best time of the week for employee training, and the kinds of potential hires who are likely to fail are just some of the topics that can be explored.

“This is a way to understand who your people are and how to make them more effective,” said Cornerstone CEO Adam Miller.

Businesses and their HR departments are increasingly interested in the type of data-analyzing services offered by Cornerstone and other companies as a way to hire better and maintain a well-trained staff, explained analyst Josh Bersin of Bersin & Associates, part of Deloitte Consulting. Companies maintain tons of data about their employees stored in their HR systems, but they don’t have any way to analyze that data without having to do it manually.

Cornerstone isn’t the only company touting the benefits of predictive analytics to help make businesses run better. For example, Santa Clara-based Palerra markets software that it says can recognize when an employee is up to no good. If workers peek into a particular sales database that they weren't assigned to, Palerra’s software records the fact and warns management about the potential thievery.

What makes Cornerstone stand out, however, is the company’s enormous vats of client data that it’s obtained throughout the years. Miller believes this stored data will aid Evolv’s technology in learning new patterns and generating better predictions.

Still, we are a way’s away from being able to ask the software a specific set of questions and receive instantaneous answers, like something out of Star Trek. Users must choose from the set of predetermined queries.

“It’s a bit ambitious,” said Miller about eventually being able to ping the data on the fly and get an immediate answer about just anything. “I don’t think we are there now. Potentially over time, absolutely.”

The new data service is currently only available to select customers to test. But the company plans to roll out the service to the public later on this year. Cornerstone will charge companies based on how many employees they have and will be comparable to the company's other products, although it will be a “little bit of a premium to what we generally do,” said Miller.

This article was updated with additional information.

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