On-demand recruitment management firm Taleo has released a new version of its internet-based service that uses Web 2.0 bells and whistles to attract and retain the interest of job-seeking candidates.

Enterprise Edition 7.5 is the latest version of Taleo’s hosted service that targets recruiters, hiring managers and candidates for large enterprises paying a subscription tariff. New features include the ability for candidates to apply for positions by phone and to speed up interview scheduling, as well as a more consumer-like experience, the firm said. Taleo’s customers include HP, Dell and Procter & Gamble.

Taleo has emerged as one of the leaders in the burgeoning sector of on-demand software and the recruitment function appears, like CRM and salesforce automation, to offer some users a better model than traditional client/server-based enterprise applications.

“The traditional enterprise applications were, frankly, unsuccessful but now on-demand is becoming pretty much the standard [for new enterprise recruitment systems],” said Chris Phillips, Taleo senior director of international marketing. “There has been huge pressure on skills, driven by demographic changes, with a lot of people retiring and fewer people coming in, so there’s a business problem about how you recruit and retain people.”

Phillips said that an 8.0 release scheduled for late this year will add tools for staff retention, including performance management, succession planning and goals management.

That plan is likely to take Taleo squarely into competition with fellow on-demand firm SuccessFactors, as well as Workday, the startup that, like Taleo, features former executives of PeopleSoft.