We attended the Corporate Executive Board’s SHL LINK Conference this week, which is the main user event hosted every 12-18 months in the United States for SHL. While we did not get a lot of insights about near-term sales trends or a significant update on the ramp up of the company’s salesforce (which we believe is a critical issue for SHL), the event provided an update on some post-hire products from SHL, drove home for us how CEB is using content from its legacy research operations to differentiate SHL’s products, and reinforced how CEB is trying to create a broader talent analytics platform for clients (i.e., its soon-to-be-released Talent Central platform was an area of focus at the event). As we have written about in the past, we believe the stock market is ascribing a fairly low valuation to the SHL business at this point. While salesforce investments have dampened profit margins more than we would have expected during the last two years, we believe this is an overly skeptical view. This conference did not provide any insights into near-term sales trends, but SHL employees generally expressed optimism about how the business is positioned and clients that we talked to talked positively about the products (although we recognize that those in attendance at the user conference represent a selection bias). Overall, we walked away from the event modestly more comfortable with the longerterm growth potential of SHL.
LINK is a two-day conference that SHL hosts every 18 months or so in the United States (they also host a separate one in Europe). There were a little more than 180 different clients in attendance. Most of the people attending tend to be midlevel HR managers that are in charge of assessment solutions, although we also saw some higher-level HR managers that are in charge of broader talent management.
The biggest highlight following the event was that SHL is really trying to differentiate its solutions by leveraging the research and intellectual property being created by CEB’s research. This has always been part of the reason that CEB said that it acquired SHL. We attended the last SHL LINK conference in May 2013, which fell less than a year after CEB had acquired SHL. At that conference, the message at last year’s SHL conference was that legacy CEB can help companies identify “what good employees look like,” while SHL can help the companies find those employees. This year’s conference really drove home for us how important this appears to be to its strategy. The vast majority of the content at the conference was from CEB’s research or was focused on why HR and talent issues are critical for corporations to get right, not the science behind SHL or significant changes in the technology solutions provided by SHL. To be fair, there was some discussion of the return on investment from SHL’s programs and some references to new products, but our view was that the vast majority of the content was from the legacy CEB operations.