HRExaminer v3.35 August 31, 2012
Table of Contents
Our laws are based on people, places and things. But technology and the Internet aren’t. The Internet is not a place. It’s everywhere and nowhere in particular. Digital information is not a thing. It flows in tiny packets and exists in multiple copies just to be seen and used. And people are becoming great files of data as companies track everywhere we go online, how long we stay, what we look at and buy, where we go in the world, who our friends are and how we interact with them.
Technology and the ways we use it will change the role of law and lawyers.
Courts and legislatures are struggling to keep up with the fast pace of technology. New laws and cases are quickly outdated. For example in 2007, the Ninth Circuit issued Perfect 10 v. Google, a copyright case with a cutting-edge description of how the Internet works. That description is now wrong and so is most of the basis for the holding.
Recently, a jury awarded Apple $1billion in a patent infringement case. The complaint was filed in April 2011. Since then, Apple has released new versions of the Macbook Pro, iMac, Macbook Air, iPad, iPhone, and at least two operating systems.
State legislatures have rushed bills into law to protect employees and job applicants from having to give employers their social media passwords. But even that took months. Neither Congress nor legislatures are capable of keeping up with how fast technology is moving. Most pending bills are older than the original iPad.
Here are some of the ways that technology is changing law.
Motor Vehicle Accidents- Soon car manufacturers and insurers will install a black box in your car that tracks how you drive, where you go and when. There will be video of any accident including precise data on speed, driver actions and timing. Software will determine fault. (This is currently being challenged by the ACLU under California’s right to privacy.) But car wreck lawsuits will be a thing of the past.
Privacy—There will be a huge push to try to figure out technology companies’ and governments’ interests in data about you. The US and Europe have very different laws and views about an individual’s interest in privacy. In Europe, there is a right to be forgotten. In the US, sometimes companies are required to let you know how they collect and use your data. But as soon as a laws are written, technology will just route around them. The way to deal with technology is with technology. Privacy won’t be a legal right. It will be an app.
Crimes/Accidents- Everyone is a videographer and surveillance cameras are everywhere. So getting eyewitness technology will be easy. So is changing it. Digital images are easily manipulated and inherently unreliable evidence. So trials will become about the manipulation of proof rather than what happened.
Business Relationships—Contracts are entered, performed and breached in multiple places at the same instant. Employees work in different states and countries. Transactions are global. And any time the Internet is involved, the data moves through servers all over the world including under the ocean. How do you enforce a contract that is potentially governed by many different laws? Courts are currently struggling with jurisdiction issues. Forum shopping based on the laws most favorable to the case is already common. Where can and should lawsuits be filed? Will it be malpractice if attorneys don’t consider the foreign jurisdiction that would benefit the client?
Intellectual Property- Should individuals have rights to their digital likeness? Who owns the data about you? How do you enforce copyright in a digital world where unlimited copies are possible, and multiple copies are required for any copy to function? Will patent law create monopolies that violate other laws?
Damages- Law is generally based on physical injury and quantifiable loss. What are the damages for digital injuries—cyberbullying where no one gets touched, copyright violations where there are unlimited copies and no way to prove that having one less copy caused any harm?
Companies and their attorneys need to start thinking about how to make a difference in a digital and data driven world. Chances are it will be through contracts and licenses rather then courts and legislatures.
WealthHabit: Embedded Learning and Quantification:
The New Architecture of Work IV
A significant portion of the workforce is underwater on their houses (11Million), behind on their monthly payments, drowning in college debt, subsidizing other family members or simply recovering from bad habits with credit cards. Financial stress absorbs time and attention during the workday (particular if it’s a crisis). One statistic suggests that financially stressed employees spend five hours a week at work on their personal finances.
While it’s grand to talk about ‘engagement’ as if everyone in the organization comes with matched baggage, the truth is different. Age, marital status, finances, sexual preference, ethnicity, gender and a host of other regional and professional variables make it unlikely that there is much in the way of uniformity in the needs of the team. Generational issues, status differences, specialization, mission criticality all give an edge to this employee’s needs versus that one’s. And, don’t forget personal; quirks.
Financial literacy may be a singular exception.
As pensions become as mythical as unicorns, every worker has to come to terms with the long financial view. That whole ‘continuing to eat after you’ve stopped working’ thing gets more important to everyone with each day that passes’s. If the Millennials ever hope to have anything like career mobility, they’ll need to somehow ensure that the boomers can save enough money to get out of the way.
WealthHabit is an Austin based provider of educational and management services for individual workers who want to take charge of their financial reality. They’re a little hard to pigeonhole because they use new tools to accomplish things that weren’t possible before. The service sits somewhere on a spectrum that ranges from wellness to benefits decision making.
Like Alex, the Benefits Counselor, WealthHabit marries contemporary technology, sophisticated simplification and a smidgen of entertainment to solve long-term vexing problems. Alex guides the employee through the maze of benefits choices with grace and humor. WealthHabit gives that same employee better means to deal with the aftermath of those decisions.
WealthHabit says that its tools are not so much about accounting as they are about behavior modification. Built on key principles of gamification and quantified-self style feedback, WealthHabit’s synchronizes and employees financial data stream and creates a way to make smart choices. Rather than an endless spreadsheet of budget items, minutia and detail, the main tool works off of a single number: this weeks disposable income.
Since the user feeds WealthHabit account details for banking, credit card and other financial arrangements, the tool can open with a single framework: you have X dollars to spend this week. The rest of the machinations are automated and appropriately hidden. The user is given education, feedback, coaching, and ways to build a leader board.
The opportunity is astonishing.
The combination of goal reinforcement, real time mobile data streams, clear choices and driving societal and personal motivations make plays like WealthHabit’s powerfully interesting to watch
Like much of the re imagination of work that we’ve begun, WealthHabit points to an emerging set of disciplines that combine personal data, training and planning for the future into a single toolset. The subjects range naturally and easily from work projects to fitness, nutrition and wellness and stretch all the way to financial well being.
The same tools that make for great project management, are the foundations of a smart, 21st century approach to life’s issues. With the data fully automated, mobile, intuitive and easy to set up, employees can focus on making the right decisions and not on getting the administrative details right. It works here for financial management, with Alex for benefits choices and will easily be translated into other aspects of work life.
The New Architecture of Work Series
The Shifting Landscape: IBM Joins Buyers’ Club
I want to start by trying to enumerate my biases on this one. I’ve gotten to know the management team at Kenexa over the past couple of years at Analyst confabs and industry events. Prior to that, I was on the Board of Directors at Salary.com when we sold the company to Kenexa. Huge numbers of my friends and colleagues are Kenexa veterans. I’ve hired, worked for and collaborated with lots of people who were either bought by or worked for the company
At the heart if the Kenexa juggernaut is a fellow named Rudy Karsan. Rudy has made an enormous number of people wealthy in the years since he first started the company that became Kenexa. Generous and visionary, Rudy earned the deal with IBM over the course of almost 25 years.
So, you can be sure that I am happy to see that the company and the man had a big success this week.
This is the third shoe to drop in the top level consolidation of the HRTech Industry. I’m sure you can recite the litany: SAP Bought SuccessFactors; Oracle bought Taleo; IBM buys Kenexa; Workday’s IPO is scheduled for October (maybe during the HRTech conference).
So, what’s going on and what does the new landscape look like?
It bears remembering that 70% of acquisitions fail. (The figure is somewhat higher if you eliminate private companies from the calculation.) Acquisitions fail (don’t end up adding value to the buyer) for reasons ranging from cultural fit to product mix complexity.
In each of the three major acquisitions, the actual purchase was a relative rounding error. The purchaser in each transaction could do the deal with pocket change. While the $1Beelion figure is substantial in HR Circles, it’s chickenfeed to the buyers.
There will be more acquisitions. Likely targets include large HR Consultancies like Mercer. Hefty HRIT companies like Ceridian or ADP also seem like interesting potential acquisitions. You can’t really claim to do all of HR without the core HR Functionality and a broad base of core customers.
Workday will need to really make hay in order to expand its footprint to remain competitive with IBM, Oracle and SAP.
You could be forgiven for understanding these three acquisitions as a way of limiting Workday’s access to the market. While the company possess admittedly superior technology, one look at the operations of any of the three acquirers will let you know that technology is secondary in the enterprise software business.
It’s a bad time to be a large customer in the HR universe.
Can you imagine the headaches IBM will face as it tries to sort out the cats and dogs that make up Kenexa’s business. There’s an Applicant Tracking System, an Assessment Business, a Talent Management Suite, a consumer website for salary information, a number of emerging strategy services, a significant in house employment branding agency and a large RPO.
You can be sure that they won’t all be left standing a year from now. The operation is so complex (Taleo has the same issues) that keeping track of who does what to whom is liable to become strategic (just because you can’t do much till you figure this out.)
Meanwhile, the predictable reorganizations and reshuffles are liable to misunderstand the real value creators in the mix. It’s going to be a great time to be an industry analyst. A little bit of insight will go a very long way.
But, it’s going to be really, really good to be Workday if they can quickly acquire the functionality required to satisfy unhappy customers who are fleeing from the competition. (Can you spell Lumesse?) It’s going to be good to be in the Workday ecosystem.
All of this makes it even more important that you plan on being at this year’s HRTech Conference. More industry resumes will be cycled between colleagues this year than in all of the years past put together. Expect frenzied networking to be the norm.
I’m writing this sitting on a balcony just off Bourbon Street in New Orleans, which in the middle of August is almost entirely devoid of tourists. It’s an interesting time to see it.
The last time I took a vacation, my company had zero employees and only a few more customers. Seven years later, those numbers had grown to nine and almost 250 respectively, and my business partner told me I was long past due and insisted I take the month of August off. With limited time or appetite for elaborate planning, I decided to hop in my car and take off from Boston, bound for Los Angeles by the southern route, then head up the coast to Portland before turning back east. It’s to vacations what eloping in Vegas is to weddings. I’m one week in, which is just long enough for my perspective to have shifted from daily work to my trip, even if I have answered a few emails along the way.
I set out one week ago with the hope to not only see the country, but also to meet some people outside of the northeastern upper-middle class professional milieu that I’d happily dwelled in since heading to Boston for college 18 years ago. In the ensuing years, I’d put hundreds of thousands of airline miles on, but it’s easy to go to New York, Chicago, London, Berlin, Tokyo, and San Francisco without ever really leaving that bubble. You get glimpses of what’s outside reading the news, and to be sure, nobody except bankruptcy lawyers and short-sale specialists has had a particularly easy time of it the past few years. But it takes time to really get outside of it. I’m not about to pretend that after a few days and a half-dozen conversations with strangers with new accents I suddenly understand it all. Yet, it’s already giving new urgency to some things that have been on my mind for a while.
It’s not news that this past recession is amounting to more than a temporary dip in the long march to ever-greater prosperity, to a shift to some new configuration of the economy. While the housing market continues to dominate discussion, I’m becoming convinced that more than any other single factor, what lies at the heart of this is our system of higher education. The line from education to the fundamental distribution of wealth and opportunity runs straight through your HR department.
To put it bluntly, I’m starting to think that college, which since WWII has functioned in America as a gateway to higher prosperity for children of working- and middle-class parents, is becoming the enforcer of a class system the impenetrability of which would impress the residents of Downton Abbey. I’ve been fortunate enough to have had a business that’s grown for eight consecutive years, and for the past two I’ve hired a number of entry-level people, mostly one or two years out of college. Like many companies, we focused our recruiting on a handful of alumni networks that have consistently delivered excellent candidates who’ve succeeded as part of our team.
I have no regrets about a single one of those hires, but along the way, I’ve also wondered about the people who would never show up on our radar screen, not because they had no talent or potential, but because they couldn’t afford it. I met one of those people in a laundromat in Asheville, NC, a funky and vibrant miniature city that feels more like Cambridge, Mass. or Portland, Ore. than some place nestled deep in the heart of the hillbilly country. He was in his late twenties, and worked in hospitality, but he really wanted to be a recording engineer and producer. He’d managed to talk his way into a few internships which gained him experience that led to paying work. But with recording budgets in the music industry dropping for all but the Lady Gagas and Trace Adkins of the world, long-term work was scarce. “But I’m one of the lucky ones,” he said. “I never went to college for it, so I don’t have any debt to pay off.”
The cost to attend my alma mater, where we’ve sourced many great candidates, today amounts to nearly a quarter of a million dollars, roughly double what it was when I entered in 1994. While that’s an example drawn from the top of the pyramid, costs have inflated similarly all the way down. While colleges may make sincere attempts to provide scholarships and recruit a racially- and ethnically-diverse student body, prices like that are inevitably building a system that strongly advantages students from wealthy families.
Colleges, for their part, have thus far proven to be like obese diabetics heading for a Vegas buffet. If the growth in costs beyond inflation came from hiring more or better faculty it might be excusable, but the truth is almost the opposite, as multiple studies have shown that administrative costs per student have grown far faster than instructional costs over the past 10-20 years. Meanwhile, a visit to almost any “better” college will likely reveal a cornucopia of grand new buildings, whose main purpose is to attract the sort of students whose parents can afford the tuition. When pressed on the issue, colleges have mostly responded by calling for more financial aid, which at this point is beginning to sound like realtors calling for the Fed to keep rates low.
None of this would matter if not for the fact that while ambition and persistence can get your foot in many doors, a college degree is still the gateway to employment in a vast swathe of the professional workforce, in the sort of companies and roles that help to build a strong resume for future growth. For companies, the reason is simple: with an entry-level candidate it’s often all you have to go on, and all things considered equal, people who persist to get good grades and complete degrees are displaying traits that suggest they might be equally driven and diligent about their jobs. But as the cost of college grows, it’s also becoming a selector for the socioeconomic status of ones’ parents. And if the only way you get into white-collar America is by being the child of white-collar parents, then we will have lost what makes America special, as surely as if a politician put match to the Constitution.
Fortunately, we are beginning to see signs of new solutions. At one end, Texas governor Rick Perry called last year for his state’s schools to find ways to offer bachelor’s degrees for $10,000–total–and at least one has found a way, with a variety of other Texas colleges offering degrees for slightly more. At the other end, a rapidly-growing field of startups (http://gigaom.com/2012/06/22/
But all of this innovation will be for naught unless recruiters and hiring managers adapt with it. A 4-year degree, particularly from a well-known school, is something everyone understands. The alternatives to that extremely-costly sheepskin are likely to come from institutions that are less well-known, and in new forms than a bachelor’s degree. Nor is a healthy skepticism entirely misplaced: a number of early online degree programs have come under fire for offering bogus degrees based on tests of “lifetime experience,” and these are scams against students as much as employers. But as an employer, are you looking for a new hire who spent four years of his or her life sitting in the shade of old trees and brick buildings draped with ivy, or are you looking for someone smart, trainable, and persistent? Soon, the best candidate may come from a place you least expected–and if you don’t hire them, then one of your competitors surely will.