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A new study released today by Taleo Research, part of Taleo Corporation (NASDAQ: TLEO), in conjunction with Business Intelligence, shows that talent management is becoming even more critical for UK businesses as the credit crunch continues, especially when it comes to top performers and employee retention. 89% of respondents indicate that talent shortages are impacting or highly impacting leadership development in their organisations, with 76% of those surveyed expecting the current talent shortage to remain the same or increase (40%) over the next 12 months.

The research report entitled, ‘Unified Talent Management: Critical to UK Business’, shows that during the current economic downturn, 74% of respondents are seeing an increased need to retain top performers by driving the focus on performance management and career planning. 67% think succession planning and internal mobility programmes can maximise the value from current employees, while 63% report the importance of quality of hire increases in this current climate compared to a high growth period (53%).

Alice Snell, Vice President at Taleo Research comments, “The war for talent is intensifying even as the economic downturn continues. In the last ten years staffing and business challenges have changed dramatically. Talent shortages are now much greater than they were in previous economic slowdowns. Today, companies realise how important employees are in enabling them to reach their business goals, especially if they are to prosper in more testing times. Companies are looking for better ways to gain a competitive advantage through talent management processes.”

The research examines the detailed views of 186 UK businesses towards talent management, its impact on business performance, especially in the context of high-pressure economic conditions, and the challenges associated with executing a talent management strategy.

Key findings from the research indicate:

1. The impact of talent shortages continues in an economic downturn

· 83% are experiencing a strong impact on the business’ ability to innovate
· 80% report an impact from talent shortages on their growth plans
· Talent shortages are impacting the productivity for 72%.
· Customer satisfaction is being impacted for nearly two-thirds (63%)

2. Lack of planning still exists

· The majority of UK businesses (60%) consider talent management essential for business success
· But less than one-third has a documented talent management strategy in place, and 34% have no strategy or plans for one in the next year

3. Taking responsibility

· In most cases, talent management strategy is being driven by the executive leadership (44%)
· Despite the importance attached to talent management for achieving business goals, only 21% of respondents have a strategy that encompassed the whole workforce. For most, 69%, it is HR and line management that execute talent management strategies, but it is solely HR’s responsibility for 21%
· A large majority also regard getting managers to accept responsibility for talent management as challenging (53%) or very challenging (41%)

Snell concludes, “It is of no surprise that a company’s lack of a talent management strategy is harming businesses development and innovation. What is more worrying is the lack of talent management strategies and unified talent management systems in place, particularly those that encompass the whole workforce and address all of a company’s recruitment and performance management requirements. The executive leadership clearly realises that talent management is an important issue. But they, and the HR function need to bring all the aspects of talent management together into a documented strategy that will get buy-in from every area of the business, if organisations are going to meet their business goals.”

NOTES TO EDITORS:

Methodology

The survey was conducted between February and April of 2008. A total of 186 responses came from HR executives in a variety of industries and company sizes.

About Taleo

Taleo (NASDAQ: TLEO) is the leader in on demand unified talent management solutions that empower organisations of all sizes, around the world to assess, acquire, develop and align their workforce for improved business performance. More than 1,700 organisations use Taleo, including 35 of the Fortune 100, for talent acquisition and performance management, with over 1.2 million users hiring 3.6 million employees from 86 million candidates in more than 190 countries and territories. Known for its strong configurability and usability, Taleo's talent management platform runs on a world-class infrastructure and offers 99.9% availability.

About Taleo Research

Taleo Research analyzes the best practices and economics of talent management for organisations of all sizes, worldwide. The specialty research practice focuses on business analytics that tie talent management technology and process improvements to financial results.

Forward-looking Statements

This release contains forward-looking statements, including statements regarding the demand for Taleo’s solutions and results from use of Taleo’s solutions. Any forward-looking statements contained in this press release are based upon Taleo's historical performance and its current plans, estimates and expectations and are not a representation that such plans, estimates, or expectations will be achieved. These forward-looking statements represent Taleo's expectations as of the date of this press announcement. Subsequent events may cause these expectations to change, and Taleo disclaims any obligation to update the forward-looking statements in the future. These forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially. Further information on potential factors that could affect actual results is included in Part I, Item 1A of Taleo’s Annual Report on Form 10-K, as filed with the SEC on March 14, 2008, Part I, Item 1A of Taleo’s Quarterly Report on Form 10-Q, as filed with the SEC on May 12, 2008, and in other reports filed by Taleo with the SEC

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Media Contact:

Lorna Thompson / James Warnette
Octopus Communications for Taleo
T: +44 (0)8453 700 655
E: taleo@octopuscomms.net

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