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Hosts Stacey Harris and John Sumser discuss important news and topics in recruiting and HR technology. Listen live every Thursday at 8AM Pacific – 11AM Eastern, or catch up on full episodes here.

HR Tech Weekly

Episode: 20
Air Date: May 14, 2015


This Week

This week John and Stacey discuss:

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Hosts Stacey Harris and John Sumser discuss important news and topics in recruiting and HR technology. Listen live every Thursday at 8AM Pacific – 11AM Eastern, or catch up on full episodes here.

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John Sumser:            Good morning and welcome to HR Tech Weekly, One Step Closer with Stacey Harris and John Sumser. This is our twentieth episode and this week we’re coming to you live from beautiful downtown San Francisco where Stacey and I both are sitting in at the Cornerstone on Demand Analyst Day and we’ve just moved this morning up to the GuideSpark analyst day. We’re getting a good look at what’s going on around the world. I’ve been thinking a lot about how… Oh, hang on a second, there’s Stacey. Hi Stacey, how are you?

Stacey Harris:            Hi John, I’m doing well, I’m doing well. Sorry for running a little bit late. I’m on the road again as usual, so it’s good to get a chance to chat with you.

John Sumser:            I think it’s funny that we’re sitting in the same hotel calling each other through [inaudible 01:07]. This is the stuff movies are made out of.

Stacey Harris:            This is how it works, yes I know. We were asked last night if we needed a studio to do this in. We said no, two cellphones and a wire, that’s all we need, right?

John Sumser:            What have you seen this week? I know you got to see Lenny Kravitz in LA. [crosstalk 01:24] and that you threw yourself at him.

Stacey Harris:            I don’t know about throwing myself, but we were quite very close up front. I was there with a couple of other journalists. We had a nice time, but we were at the Cornerstone Convergence Conference, which is their annual user conference, which has grown tremendously in the last ten, fifteen years since the organization came about. It’s just fabulous to watch it grow and that last event was actually a very nice event from the entertainment perspective, along with a series of food trucks and some other things that they were doing. We also [crosstalk 02:03].

John Sumser:            I love food trucks.

Stacey Harris: Oh, yeah, how can you pass up food trucks when it comes to, and they had everything from sushi rolls to really good pulled pork, beef, and all of the famous stuff. We also end up [inaudible 02:16] hear a little bit about what Cornerstone on Demand is doing right now from both a release perspective and a opportunity around some of their new technologies. Underlying their solution and then also this week we’re here at GuideSpark which is another event we just came in town for last night, which is another small organization which is somewhat new to the scene. I think any of us was talking about that they’d been around since early 2008 did some rebranding in 2012. We can talk a little bit about what we’re doing here this weekend at their event.

Do you want to start off talking a little bit about Cornerstone and some of their [crosstalk 02:56].

John Sumser:            Yeah, yeah, what did they announce?

Stacey Harris:            I think for them the biggest announcement was the Cornerstone Edge launch. Now this is their platform as a service technology and it really is probably the first real platform as a service that I think comes from a talent management solution. I could be wrong and that system. Somebody else has some [inaudible 03:24] send me some comments, but I think-

John Sumser:            No, no, I think you’re right. I think it’s remarkable. It’s remarkable.

Stacey Harris:            Yeah, and it’s not just a platform as a service with a programming language behind it, right, like many of them have been. It truly is platform as a service with a Gooey interface for developing the elements that you can’t get from the SAS-based solution. The very first things that they showed, which I thought was just ingenious, is not a talent management need, right? What they showed was a payroll time off request tool. Again, it’s a few pages, it’s somewhere between a forum and a true app, right, when you’re developing it, but it was developed in minutes on the stage in the demo. It was just a Gooey interface. It reminded me a lot of when Adam was talking about it, the early days of e-learning, if anybody was around in those days where people were hand programming all of what was e-learning at the time.

E-learning was going to sit inside other shells, but they were all hand programming the code and someone came up with this really cool tool, primarily Macromedia, that had Gooey interfaces where you could drop and drag [inaudible 04:41]. That was basically what Adam was showing on the screen. The other analysis which they had, which I thought was good to be. They weren’t anything quite as full blown as the Edge announcement, was the Cornerstone inside panel [inaudible 04:56] tools and it still isn’t generally available. I don’t think they’re going to have really anything from it generally available ’til the end of 2015. That comes from their purchase last year of the evolved analytics organization, which is what’s primarily focused on talent acquisition, analytics and predictive analytics.

They’ve now taken all the data that came from new evolved last five, ten years. Probably five years. Five years gathering data and making some predictions about what’s happening in talent acquisition and see who can keep these based on characteristics in your organization. They’re now embedding that into the data that Cornerstone has on their entire platform, which is that’s the positive of them being a single platform. They’ve been able to pull all their data together fairly easy for this tool. Now they’re going to start in the fall by offering first talent analytics selections, predictive dashboard. They only issued a couple of their predictive capabilities. Then they’re going to move into learning predictive dashboard.

That’s probably the most unique is that they’re starting in some different places than other people along with their analytics and predictive analytics solutions. The other thing then that they rolled out along with that, and they’ve had this now probably for about two years, but they put a harder emphasis on it this year with the Cornerstone marketplace, which was the opportunity for the vendors to get in. Had a relationship with their clients and also be able to use some of this platform as a service development work. Those are probably the biggest announcements. They doubled down on learning which you expected. They made the case that there might be a record for all the employees in your company, so for small organizations.

They showed Louis Vuitton, who had basically replaced the idea of a [inaudible 06:48] with their system primarily as a record of all employees with the payroll being the primary data gathering tool. That was an interesting twist for [inaudible 06:57] but it wasn’t a launch.

John Sumser:            Cool, so let me drag you back through that and go platform as a service sound to me like it means … Remember that stuff about you can only configure a [SAS 07:18] solution? Here’s how you [inaudible 07:19]. Is that the platform as a service [crosstalk 07:21] actually means is key to customizing the SAS purchase?

Stacey Harris:            It really is. That’s what it comes down to and we were all sitting there talking, because we’ve seen other organizations put this in place and the biggest challenge of this is see how this works on the upgrade process. I don’t think we’ve seen anybody yet who has leveraged platform as a service. Really, really, it was a lot of things and we’ve seen the [inaudible 07:48] case how well that works when you do update the release update. I do think this is going to be tested to see how well it really works within the environment, but generally the idea that you can create separate little apps that are stand alone. Cornerstone was very careful to say that their perspective on this is that this is for those minor industries [inaudible 08:12] they’re never going to get to.

The reason they did this was because they could not meet all of the demands of their clients to make changes to the system. You’re exactly correct. It was interesting, because we did some beta testing of our server this week. I had a gentleman come back with the, we always ask the question of the [inaudible 08:29] environment. What percentage of your HR technology or HR [inaudible 08:36] is customized? He came back and asked what’s the difference between customizations and modification? He gave me his definition that modification was putting new fields and edits and pages to come up with. That’s actually in some cases harder in an upgrade than it is to do true full time customization.

I think what we’re seeing here with the staff technology is that they’re now creating something like that where you can do customization.

John Sumser:            That’s interesting. That certainly pokes a hole in the business model somewhere because somewhere, somehow, the vendor, Cornerstone, has to keep track of all that app now. The cost effectiveness model of SAS assumes that you don’t have to do all that silly configuration management for multiple iterations of the product, right? Cleverly disguising it as platform as service, it’s interesting and I don’t mean to discount it. It’s going to be what happens when you pull up the SAS business model and [crosstalk 09:52]. Great.

Stacey Harris:            Yeah, and a big one for [inaudible 09:57] I don’t think have ever done this route as far as I know.

John Sumser:            Yep and it won’t surprise me to discover that this has implications in the financial [inaudible 10:08]. This has stock price implications, because unless I misunderstand something, what happens when you do this is you increase the hard labor cost that are associated with maintaining the system over time for the vendor. Once you do that, then that means that there’s a hit that’s going to happen in margin unless you somehow correct the price.

Stacey Harris:            The [inaudible 10:37] is some interesting conversations, so we went and on the analyst meeting there was a lot of deep trying to understand how they were going to charge for this. Cornerstone doesn’t expect to give this away completely. If I understand it and [inaudible 10:55] help them out I think we’ll get some better understanding of it. I’m going to share that ultimately the platform itself is open and free to the market but what they’re going to basically charge for over time is certain levels of elements connected to a person Cornerstone subscription. The first five are going to be free, just like when you download your free game app, right?

The first API connector that you automatically have built, the first app so that you build to connect to the system. Then as you move up and like maybe five different applets or a more robust applet that’s pulling more data or you have six API calls now instead of this. Then they’re going to start charging like a thirty or so percent premium on top of your subscription model. It’ll be interesting to see, but I think they are looking at that issue. How do they make a cost adjustment based off of the investment, because what we were talking about. It was a lot of investment in a lot of other areas this year. It looked like most of there heavy innovation and research and programming effort went into the [inaudible 12:11] last year.

John Sumser:            When they introduced the analytics, were there any interesting practical examples of analytics? Are they measuring something or monitoring something that nobody else is measuring and monitoring?

Stacey Harris:            They gave us six core things that they said that they could answer by the end of the time they rolled this out, which were very traditional questions. Such as what courses are going to have the highest outcomes in your organization, right? Who’s at most risk in the organization? It’s a lot of things we’ve seen in the other analytics. I wouldn’t say that they gave really interesting examples. They had them, I think, a little more clearly defined than what I’ve seen some of the other analytics roll out, right, but they didn’t do anything ground shaking as far as the analytics component goes. Now I think what was interesting was the focus on learning.

We’ve seen some good examples of analytics and learning with other solutions, particularly if you’re working with some of the stand alone solutions like [Savira 13:28] and those type of organizations. This is the first time I’ve seen a complete focus on the learning phase as predictive analytics. Focused areas show, they were showing things like not only which courses to predict people were going to take but which courses will add to the outcomes of your business and which combination of courses works better than another combination of courses for certain type of people with certain types of background. That was interesting and we’re seeing that done in different ways through recommendations of courses in other technologies with behind it machine learning.

This was definitely very instructor learner friendly, the way it was presented. The other thing they were really mentioning was how many seats would you expect in a course? Which courses are going to be the most popular prediction? That seems a little bit overkill, [inaudible 14:21] and they were saying would they really get down to that level? Having been in a learning base previously the answer’s yes. You used to do multiples of spreadsheets to figure out how many offering you would have in a certain catalog. Then you would have to publish it and everyone hated to publish a catalog and then not be able to fill up the seats on the courses. Even if that was e-learning you didn’t want to see that only one person had clicked on the e-learning element that you had spent a hundred and twenty hours in development on.

That I thought was very interesting is that they were building some algorithms based off of what people’s backgrounds were, what their experiences were. What they were trying to accomplish and their goal. Which courses would be the most valuable in an organization. Those I think were some unique things. I’ve seen them in other ways but this is the first time I’ve seen them in a suite environment.

John Sumser:            That all interests me. I think with [inaudible 15:19] is trying to do is capture the smaller incremental twenty-first century learning modules, which instead of being an entire course of three or four minutes are perhaps informally generative. Does the Cornerstone offer a account for YouTube mentoring and Instagram courses and podcasts and that sort of stuff? Or are we back at the area where there is a learning and development department that gives classes, that develops classes? That this is management for that?

Stacey Harris:            Yeah, I think the question has always been a full-blown [inaudible 16:08]. Even in the early days I think they provided a solution that you could do the adjusted time learning that you’re talking about. Or the podcast chat event learning. They now have the capability to even take notes within environments or ask questions at certain points and video programs. I think the system is so robust that it was built that the structural designer or the training function. If they knew how to make it work that way they could get it to work that way, right. It wasn’t built with the idea of small snippets and video as it’s primary. It was built with a course and a curriculum and certification as it’s primary. Those pieces could be embedded in it, but it wasn’t the focus initially.

What I’m seeing with [inaudible 17:00] already is that’s the focus for that, right, is the idea of learning as you go as you need it. I just think it’s a different ship. I don’t think they can do it as something like a Cornerstone. I just think that it’s not tailored to start that way.

John Sumser:            Got it, covered, covered. That brings me to another topic, which is with a company like [inaudible 17:27] had this great run. They went public, lots of buzz, lots of growth and never turning into a mature company and mature companies don’t give aid in the same way. They’re not as exciting to watch, even though they deliver astonishing value and maybe increasing the value that they deliver at extraordinary rates. It’s hard to see it as companies mature. It’s way more exciting to see young companies do young company stuff than it is to see older companies try to get their entire user base to adopt a new way of doing things. Did you see any of that while you were there?

Stacey Harris:            Yeah, this is an area that I think every large suite organization goes through, right, which is that point at which they stop becoming what, at least I would call, I’m sure everyone has their own terms, but the cool kid on the block. They start becoming the organization that fundamentally offers everything that you’re looking for or at least most of everything that you’re looking for in a package that you really have to think about it as a mature package now, right? Definitely Cornerstone has entered that point. I think their client base is definitely, looking at the tool it can do so much. Sometimes it may not be the easiest to access all of those steps.

That’s not a bad place to be. We’ve seen a lot of the vendors in that space right now, right? That they have made that turn from mature organization to a [inaudible 19:14] to putting some overlays and some tools on top that allow people to access the information and the activities a lot more quickly. I also think it’s a fundamental shift that you and I were talking about, John. That most of the suite systems all have to make a [inaudible 19:30] which is that HR and learning technology have been built on the idea of employees inputting information into a person that HR or the business requires of them to get data out of there, right?

Can I think fundamentally of shifting, because what the world wants, what the consumer technology is, is that and you just want to be able to get something immediately for themselves out of any interaction they take, where they’re going to enter data. I think that’s actually the bigger issue for Cornerstone and many of the technologies right now, which is that the system isn’t built to automatically deliver something to the end user while they’re trying to put in all their information.

John Sumser:            Stacey, I think you’re absolutely right. I can tell you that I’ve said this in conversations in the last week or so about engagement. It makes my head explode because this thing that you’re talking about, which is that the data interaction between systems and human beings has become give to get and every transaction is a give to get transaction. That doesn’t have anything to do with whether or not employees are engaged in their job. It has to do with the user interface and the experience of being the user of the system. To call something that does give to get a system of engagement is the buzz word nonsense that embarrasses everybody in a couple years.

What we need are tools that allow HR to do what it does, which is take in data and deliver back insight and to do that on a molecular basis relatively quickly when people interact with the system. I don’t see a lot of that actually happening. I’m starting to see people talk about it but I’m not seeing user experience coming to mean joy at the moment of interaction [crosstalk 21:54] which is what the consumer markets are all about. You have to deliver joy at the moment of interaction and I think it’s such a hard thing for enterprise scale companies to figure out how to do.

Stacey Harris:            It’s not only hard for them to figure out how to do it, I think it fundamentally requires a shift in the whole psyche of how they’ve been building their technologies. That’s actually changing a culture of almost development, right? When you ask any of these system designers, right, what they’re doing to build their user interfaces they almost always go back to the HR user. To the HR administrator, to the learning instructor, back to their audience’s primary design for write in. We want to understand what they need, what process is, what details, what do they go through to get the transactions done, right? That was fundamentally where they started building the technology for. When they move out to the end user they can take that same model.

We want to ask them what they need, follow their processes, look at how they do their job every day. That’s actually not all that helpful, because how someone does their job today is because they don’t have available the kind of things that you can offer in the new technology, right? There was an interesting event just the other day where they were talking about the fact that what they had discovered was that after all of their observations of this one organization it wasn’t the interface that they were struggling with. That was never [inaudible 23:42] they were trying to do the experiment on.

It was the fact that the people had to go across the room to dig into a file box to get a bunch of information and they never once mentioned that file box full of information. The problem was actually getting the transactions at night, because it was just always assumed that it had to go into that filing cabinet to get that information separately. [crosstalk 24:02]

John Sumser:            Those things are really hard to see, really hard to see.

Stacey Harris:            It takes a very different, I think, approach to looking at user design and user interface. It is not about how you interact with the screen or your mobile device. It’s about how you interact with your work environment, right?

John Sumser:            Right, that’s interesting in and of itself. I think you’re articulating the place where all of the value in HR technology’s going to be created for the next decade or so. Which just at the very, very [naissant 24:40] era in that new thing, which is how do you embed HR into work so that it’s unobtrusive and produces the results that everybody needs? The truth is no matter what you do people aren’t going to want to engage with HR.

Stacey Harris:            To be [crosstalk 25:05] that might make the HR technology platform developer, that is very true. I don’t think you’ll find anybody [inaudible 25:15] HR system. Now they will all, it’s interesting, they will often read it and research the employee analysis last year that we do every two years. We found that they are very excited to look at their paycheck, right? That’s a very exciting thing for them. They’re very interested at looking at work charts, because they want to find where people fit in the organization, and those are the starting points at which most of them are leveraging the technology right now. When they want to look at information they are being told to look at it, right?

John Sumser:            Right, but nobody wakes up in the morning and goes, “I can’t wait to record my time card today.” Nobody wakes up in the morning and says, “I can hardly wait to go to the mandatory safety class.” You know? This is the bread and butter in HR. Nobody don’t need the benefits today, the idea that you’re going to take the time to understand them, this silliness, right? The demands are an instant gratification thing. The closer you get to retirement the more you care about that and the less you get vacation, the more you care about that. When you’re far back from those things you don’t care about them at all.

Stacey Harris:            I think there’s another layer on top of this, John. Not just that end users are focused on what’s important to them through in the moment and through the things that are farther away or are something they’re less going to be excited about accessing. Also to that end users today are more aware of the value of their own time and data, right? They know that if I’m going to give you my time, if I’m going to give you information in that time, then I want something back in return for that. We had a really good conversation with the advisory board over at the Cornerstone event about the new concept of transparency. Are we really getting to a point where we’re going to be able to be transparent about all of our information in the HR organization or the businesses?

Will end users really want that? Do they really want transparent information about engagement scores, those type of things being out on the market? I said at least from what we’re seeing, right? [inaudible 27:54] that they’re willing to share that stuff if they get something in return that they feel that’s valuable with the time they’ve invested in giving it to you. The transparency thing is all about that I’m not going to have any repercussions from it and that I’m going to get something from it. Not just that it’s going to be an honorer, and I think that’s the other part of what you’re talking about.

Which is if I give you my time, and by giving you data, by taking the time to invest in doing something for you, what am I going to get back out of it too? That’s what’s going to drive the excitement on some level, wouldn’t you say?

John Sumser:            Right, I think that’s right. It’s going to be fascinating to watch this evolve, because what you’re talking about is workers who have a better grasp of what their value is. People in that position can do interesting stuff when the unemployment rate is low enough. We’re coming into a time where the emphasis shifts towards workers who are in short supply and that should accelerate some of these things. We’ve blown through our half hour as we usually do and there’s been another great conversation. Anything particularly stick out that you want to be sure people remember on the way the door?

Stacey Harris:            No, I think we’ve had a good conversation about what’s happening with the user interface design and the concept around where the organizations are at with leveraging these platforms and leveraging analytics and insights. I think the only thing I [inaudible 29:35] maybe it would be great if maybe next week we can talk a little bit more about how does all of this connect with what’s happening in the space around compliance? That’s the other side of what’s driving a lot of these changes and I think we’ll get more information on that from [inaudible 29:54] this week because they’re heavily playing in that space [inaudible 29:58] ACA and compliance driven decisions pushing organizations to make some changes in their system. Looking forward to maybe talking about that in connection to the compliance [inaudible 30:08] next week.

John Sumser:            That’s great, so we’re about to learn a lot about that today. As usual it was a real treat to do this with you and thanks everybody for listening in. See you on campus, Stacey and have a great weekend everybody.

Stacey Harris:            Yeah, thanks everyone, bye.

John Sumser:            Bye-bye.

End transcript

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