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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: 23
Air Date: June 4, 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. I’m John Sumser coming to you from beautiful Occidental, California where the roses are exploding off the trees. And Stacy, how are you and how is life in North Carolina?

Stacey Harris:            Life’s good in North Carolina, a little rainy this week but that’s okay we’ll put up with that to get some more flowers out this summer. Other than that, we’re doing well.

Dealing with chicken pox in my house and one thing I found out this week is that a sixteen year old with chicken pox, is just as miserable as a five year old. So, that’s been a fun thing. But, other than that we’re doing quite well this week. So it’s a good week, not a lot of news though, so I think we’ve got some interesting stuff to talk about but, not a lot of ground breaking news.

John Sumser:            Well the ground has been breaking for a while so it’s nice to have a little reprieve from it. There are some interesting things happening, I was at a conference this week a not very successful conference. And then there’s a story about why not very successful conferences are great. But, at this conference I happen to see the people from Greenhouse talking about their recruiting system again, and one of the things that’s very interesting to understand is that the recruiting technology marketplace grew so rapidly that a company like Greenhouse can effectively come out of nowhere and have the kind of momentum that changes the market within a couple of short years. It’s very exciting to watch that kind of change happen.

Stacey Harris:            And Greenhouse was mentioned in Meeker’s internet … I was just reading up on that this morning, and I haven’t seen Greenhouse yet, I know you have, but it does seem like they’re definitely kind of taking the market by storm a bit.

John Sumser:            Mary Meeker’s internet report which has been coming out every year for 15 years, if you’re in the audience and you haven’t read Mary Meeker’s report you must read it, it is the single annual analysis that consistently drives internet trends. It’s a product of Kleiner Perkins, Mary is a partner at Kleiner Perkins and so it’s got the biased of Kleiner Perkins investments in embedded in it. But, Kleiner Perkins has successful over the years invested in internet trends before they happened, and so it’s a good place to see what the future is going to look like.

Stacey Harris:            It was interesting, I know I haven’t seen the entire report yet but I’ve caught a couple of pieces off of it, I know China Gorman wrote a nice piece I thought, which was pretty good giving some explanation of how to read that report which I thought was probably very valuable considering there’s a lot of acronyms in it. So yeah, it’s probably well the worth the read this week if someone hasn’t had a chance to put it down and read it.

John Sumser:            You know Stacy that’s something that we probably have been, noticing people who have been doing great work like China Gorman and if you’re not following China Gorman, and her name spells just like it sounds China Gorman, you should. Every Tuesday she puts out a piece of analysis about the latest surveys and data and it’s very sensitive, and she’s providing a tremendous service. China was the chief operating officer at SHRM(Society for Human Resource Management) for a very very long time and is one of the, if not the, most competent women executives in our industry.

Stacey Harris:            Yeah and I’ve always found her commentary very, not only sort of well developed and well read knowing that she’s a really good [inaudible 00:04:26], but I think what she does, I think very nicely it breaks it down into a way that sort of everyone can understand, and that’s a hard skill you can’t find that in a lot of writers. And I think she does that very very nicely, so I would agree.

I didn’t know that her articles came out every Tuesday, I just know that I catch them and get a chance to read them every once in a while so, nice to know that there’s a schedule to that, she does better than I do on that.

John Sumser:            Yup, she is amazing she is just amazing. So well else have you seen out there besides bad conferences and China Gorman?

Stacey Harris:            Yeah well, the things I picked up this week in the news when I went going through all the details this week, there was a lot of details and information about what I would call mid market sort of payroll/HCM. So one of them is Paycor, they’re sort of on my radar, I get updates on them regularly; they’re a smaller organization although they have in the range of  twenty seven thousand companies that leverage their payroll/HCM solution, I’ve had an opportunity to see them at HR Tech previously.

They announced they were doing some updates this week to their product, which included more talent management elements. Employee development tools along with things that they’re covering with HR payroll on time keeping. They also updated some ACA (Affordable Care Act) reportings, e-signature and biometric stuff. Which is things that I think for me is always an interesting jex to position when you’re seeing a news release that talks about talent management and development, and just a few moments later it starts talking about ACA reporting, e-signatures and biometric clocks.

Which goes to show that there’s some real big conversations to be had about the role of these mid market payroll/HCM organizations and how much they may have an impact the market as they start to do more talent and development. Will people be more likely to stay with these type of organizations, then they were say a talent management organization.

The other one that came out around the same time I think with this commentary is FairSail partners with Sage, they did a partnership. FairSail is out of the UK (United Kingdoms), they are a global HRMS that’s built off of sale’s force platform. And they partnered with Sage which is finance payroll business ERP(Enterprise Resource Planning ) system built off the sale’s force platform. Again, Sage says they have around six million customers, so just to get a size and scale of what these organizations are dealing with, in twenty four countries.

Interesting dynamics taking place with the financial payroll side of things in the market. John, do you think that these ven market payroll organizations are going to be competition for some of the traditional HR talent management vendors in this base?

John Sumser:            So this is a gateway to a pretty long interesting conversation, there are a couple dynamics that we have to explore. The first one is that when companies start to have initial growth slope, they look to expand their [inaudible 00:07:50] so that they can grow more. And in HR, people move into the adjacent silos of HR and are counting that there may be plenty of observable silos inside of HR at the largest scale, so people move into those things.

But, you gotta ask yourself whether the people who are in charge of having really good discipline about time and attendance or payroll, are the kind of people you want to have involved coaching high performance out of your employees. What seems counter intuitive to me. Sure, the buyer that the person with the resources and the check and the signature, controls all of these things. But the actual people who do payroll, seem like their not the people who you want to have doing the succession planning. And so, you get to this question of does a company that’s really good at payroll know anything at all about success and planning, and could they put together a good product that other instincts could?

Stacey Harris:            Well, I think it’s a valid question, although, I would push that a little bit on that because … And I think it depends on who they’re dealing with in the company right? Now a traditional large global organization the payroll functions very siloed to sort of very separated. But, in my experience in mid market and small organizations, payroll is part of the broader HR function. And that HR function is often more of an operations function than it is a separate entity in the organization. Or sometimes it’s more likely to be connected with finance which deals with things like the account management within the organization.

I find that when you talk to operations people and even in some cases the finance people. What they have is a deeper understanding of how important talent is to the company. When they know things like skill gaps that the organization has, or how much turn over actually cost the organization. Now whether they can translate that into language that we’re used to in the HR space, I think might be difficult but I think they speak very well to the operators side of the house. To me that is more interesting their connection there.

John Sumser:            I hear you, but I don’t buy it. The idea that people … So, HR exist on this spectrum, there’s some things about HR that are very very very tactical. And there’s some things about HR that are very very strategic. On the tactical end, it’s about executing administrative processes without error. And at the strategic end its about coaching optimal performance out of a work force. There’s nothing that makes optimal work force performance fail faster than rigid administrative standards. So the thing that it takes to be great at one end of the spectrum is exactly the thing that it takes, that causes failure at the other end of the spectrum.

If you go with a great coaching mentality into a payroll shop, you can’t allow nuance to drive payroll. You have to have extremely precise administration to get payroll right. So, I don’t believe that I have ever met a human being who embodies both of those things simultaneously.

Stacey Harris:            I’ll give you that a little bit. But, I do think that if you can find that operations meets the two in the middle … I had a great company that I worked with long time ago called Oceaneering. They did some amazing case studies on sort of their work within the operations space. How they sort of built talent management without even knowing that they were calling it talent management and it started with their sort of need to scale up the organization and find skill sets at the …

From a payroll perspective, they were struggling with it. So, I get what you’re saying that those two things probably don’t sit in the same house very comfortably. I think that the connecting point is often times operations and if you’re dealing with workforce management at all you’re probably dealing with operations. So I think it just depends on who you’re dealing with in the organization. That I think is a good point to maybe discuss further as to where it is that operations fit into that picture.

John Sumser:            I think that’s right and I’m not saying that it’s not possible to do it, I’m saying that when you have a company that’s really good at building the software to serve the market. It’s really hard to go from the … Think about workforce software, and how amazing they are at getting the details of very complicated regulatory stuff into their material on a routine basis. They’re fantastic at that, that skill is astonishing and I think it’s fair to ask whether or not that skill set translates readily into talent management kind of skills.

Stacey Harris:            Sorry go ahead John … I was just going to say that something like what FairSail’s done with their partnership with Sage does that maybe make more sense. FairSail is more of a talent management focus HRMS, if you sort of look at the things they have in their HRMS modules, more talent modules I would say. Where Sage brings to the table the finance and the payroll component, which I thought was sort of interesting. Is that sort of a better model, and it’s a model we’ve seen work with the big ERP’s as well right? That’s the direction they’ve approached it.

John Sumser:            So I don’t know, I think what I know about sweets is that the convenience of having a single belly button, and a single support segment and a integrated interface, the convenience associates with those things, almost universally means a lower quality solution then the best agreed plain solution. So, it’s always going to be a trade off. It’s always always going to be a trade off; companies that do one thing always do that one thing better than companies that do a lot of things.

Stacey Harris:            Yeah, I mean I think we’re finding, and I think you’ve seen this in your research because I know I see it in my research, that even though the best of breed might have some really really positive outcomes with sort of the newer more innovative technologies. We are seeing though that, that the data is showing anyways, that more people are interested in buying in the sweet model at least. Whether that’s a complete sweet, finance, ERP, and HRMS versus talent, HRMS and other HR functions. But, the sweet model seems to be winning I think in all the research data points that both you and I are seeing, is that true John on your part?

John Sumser:            So winning is not the work that I’d use. Winning is not the word that I’d use. I would say, I’m going to hop on my little lovely computer and see if I can pull up some data. So, let me read you this because this is in our latest report. When things are purchased as part of a sweet, I’m going to give you some stuff. So success and management is purchased as part of a sweet seventy five percent of the time, onboarding sixty two percent, HRIS (Human Resource Information System) fifty six percent, analytics system fifty four percent, compensation fifty two, recruiting fifty two, payroll forty nine, time and attendance forty seven, performance management forty six, total rewards forty four, wellness forty two, learning forty, and benefits management thirty eight percent.

So what that tells me in those thirteen areas is that genetically about half of people buy stuff when it’s part of a sweet and half of people don’t, that’s the first thing. The second thing is that the more emergent the tool is, the more likely it is to be purchased as part of a sweet. So there are not any great success in management software companies that I am aware of.

Stacey Harris:            No one who is doing it totally different right? Is that what you’re kind of talking about emergent?

John Sumser:            Yeah, new people [inaudible 00:17:29] is our best agreed point solution in success and management I don’t think so. But, I could be wrong but, I don’t think so and so that that’s purchased seventy five percent of the time as part of the sweet, makes some sense. And by the way the other twenty five percent of the time it’s mostly done Homegrown Solutions.

Stacey Harris:            And the other side of that picture you showed there, the other conversation is how little benefits is part of the sweet. That one’s interesting, is that a that a content driving issue you think? Or is that more of a … Because your comment emerging technology or innovative technology, is that I’m not sure is benefits really an emerging or innovated technology area individually?

John Sumser:            It’s not an emerging or innovative area which is why the best of breed solutions predominate. There’s another piece there which is that benefits management solutions are largely provided by third parties who also sale the benefits. And so benefits management solutions are usually thrown in to benefits purchases.

Stacey Harris:            Yes, exactly.

John Sumser:            And so you don’t need to buy it as part of the sweet because someone gives it to you.

Stacey Harris:            Which goes to show that content, I think makes a big differentiator in some of these decisions as well. What goes along with those technologies right? Both services and products, is a big part of it particularly in that space.

John Sumser:            What do you mean by content?

Stacey Harris:            So well … And I had this conversation, just the other day I was talking to someone who’s doing relocation packaging. A great little company, they’re putting their relocation tools sets on an immobile environment and generally if you know anything about relocation packaging and services is that it’s sort of a white collar, or I’m sorry, white glove industry right? It’s sort of all hands on because what you’re buying is this organization’s relationship’s with different service providers in each region or each country or each area that they cover. And so that seems to be a very interpersonal kind of conversation.

Well this organization is putting their whole package online and in a format that might not require so much hand holding. But, what they’re setting isn’t so much the technology, the technology is fairly basic for the market. It’s got some algorithms and things built in that are unique to them. But, what they’re selling to some extent is their relationship with all the various vendors and relocation providers in each of the regions and groups locations they have services. And so that’s the service and that’s the content basically to me that they’re selling, not so much the technology right?

John Sumser:            Okay that makes some sense, and so what I’d want from a vendor is to get the job done. I don’t want a tool I want the job done, and so what you’re calling content, I’d probably call services. And, I want my vendors to give me services, I don’t want them to give me tools and then tell me how I’m doing it wrong.

Stacey Harris:            Yeah, we had this conversation actually I think at the latest oracle event we went to. There are vendors on one spectrum who will give you a lots of capabilities. And then there’s vendors on another spectrum who give you more services but less capabilities. And there’s really a question as to which of those are going to get more buy in the market. Some of that’s driven industry, certain industries I think really look for more services then they do technology. Some of it’s driven by the size of the organization and how much complexity they have inside each of those organizations.

John Sumser:            Yeah, the third piece is the customer themselves choose to be involved in certain things and choose not to be involved in other things. So that’s the degree to which the entire function is outsourced, is part of what you’re talking here. Smart companies I think don’t want to be expert in things that aren’t directly related to them as this.

Stacey Harris:            Like relocation packages right? That seems like it would be an area where it would be much harder to spend an awful lot of your time, unless you’re maybe relocating to two or three areas all the time. But if you’re relocating all over the world, or all over the country, you’re probably going to rethink that process a bit so, very true.

John Sumser:            That’s right.

Stacey Harris:            What do … Do you think mobile’s going to change this discussion at all? Because we’ve had some conversation before we started the call today about mobile. And mobile’s going to make more of these tools and technologies more accessible. It’s also going to make them more service oriented in some ways, so you expect when you sort of access your mobile phone that you’re not only getting a tool that’s going to be sort of be a spreadsheet but that within that tool you’re getting reviews, and feedback, and commentary from the community as a whole. That’s the whole app industry at some level, do you think that’s going to change the need for more services or content inside these technologies versus less?

John Sumser:            So I don’t we know yet what’s gonna happen with mobile, I don’t think we have the slightest idea. Most of what I see is an answer to the question, how do you take a rich deloused complicated process and dumb it down so that you can do it with a single button on a phone. Because you certainly can’t use a phone repeatedly long term data entry. I know people who are great at e-mail on phones but, most of the people I know would rather not do their communications in volume, in that way over time. They just don’t want to do it. And so do you really want your big complicated workflow to be reduced to a single click of a phone that you can do while you’re changing lanes at seventy five miles an hour.

Stacey Harris:            Please please, let’s not be doing that at seventy five miles. We are not advocated that people use their phones out while driving.

John Sumser:            Hold it, we’re gonna make it portable so that you can use it on a phone then we’re gonna tell you, you can’t use it on a phone. That doesn’t seem very likely to me, it seems more likely that we’re going to be dealing with workman’s comp cases that have to do with fatalities on the highway.

Stacey Harris:            Yes, unfortunately … No I would agree that it’s a big challenge rate when you can work everywhere and anywhere where do you work right? And what does that entail. It was interesting I think Catherine Jones over at Bersin put out a nice report, I think it was this week or last week but, her report was about who in the HCM (Human Capital Management) space actually supported mobile. And it was ninety three percent, and I thought what, it was a nice report because I think it sort of evaluated what we all just sort of assumed in the market that all the vendors are sort of going more mobile.

But, I can remember back and it seems to be … I’d have to go back and see the [inaudible 00:25:12] date. But it’s not been very long, maybe three years maybe four years when one of the first reports came out I think it was Amy Wilson of the time [inaudible 00:25:19] report. Saying how many vendors actually supported mobile and it was a very small amount compared to [inaudible 00:25:27] that was in the space about it. And now we’ve gotten to the point where most of the HCM providers are supporting mobile but, is that actually … Is it actually being adopted in organizations that I think is the real question. And what you’re saying is that if it’s being adopted, is it being adopted the right way, right?

John Sumser:            Yeah, I’m sure you could … The number of VCR’s with clocks in them is another thing that pretty soon is about to be one hundred percent of all VCR’s had clocks in them. No one used them.

Stacey Harris:            Yeah.

John Sumser:            And so the fact that, this is what’s changing about our industry, the fact that there’s a feature of some kind is very interesting. Sort of, maybe. The question of whether or not people are using the feature and getting value from using the feature is a much harder question to answer. And it actually matters, it doesn’t really matter if all vendors have mobile unless you’re trying irritate the vendors and make them compete with each other. Because that doesn’t tell you whether or not it’s a valuable thing for users.

Stacey Harris:            Well, and whether or not they’ve built it into a a process model that’s works right? We know … You know when we look at mobile we’re looking at across whether it can be done in the mobile environment and whether it’s responsive technology. As well as whether or not it’s been sort of rethought, the process has been rethought, so that it’s more mobile enabled processes right? I think our data, and anybody else’s data out there if you look at has various numbers, but ours says it was thirteen percent last year of organizations who’re using some sort of mobile HR technology across the data said, that was one of the most …

And the fact that we basically saw that those organizations also said that in the next twelve months they were also planning to sort of double that number. So more than double the thirteen percent, which they were going to go up to twenty five or twenty six percent next year. We’re planning to use mobile next year, still that’s only a quarter of the market and yet that was one of the most highly quoted comments from our report which sort of surprised me because I do track a lot where people are quoting the research.

And I was like that did not seem to be such a big deal but yet it seems to be the commentary that’s being picked up the most. I think it’s to your point which is there is a lot big fuss about the fact things are going mobile. But the real question is are they using it right?

John Sumser:            Well, I challenge you to go look at your data and see what percentage of the people who are citing that research are practitioners.

Stacey Harris:            I want to say, that I will very much acknowledge that it’s probably mostly vendors because that’s generally where you see the citing there online … So I’ll be honest on that one yeah.

John Sumser:            So the vendors are busy, they love what you have to say because they can now go out and say look it’s the thing. It’s the thing it’s the thing it’s the thing, you need to buy one you need to buy one and still there’s no proof that there is actual value in terms of decision making, the quality of the performance. The kinds of things that you actually care about when you are trying to figure out whether or not something is good for a company. That’s adoption … It doesn’t tell you whether it’s good or not for a company adoption tells you, oh wait more of the lemmings are walking off the cliff.

Stacey Harris:            More people are doing it, yes. I’ll never forget when our company first … Back when I was in the day, shows just sort of how long along it was but, when the blackberries first came out and were first sort of given out to everybody at the organization where I was heading up organizational effectiveness. I remember trying to explain to the organization that we might want to have a session about how poorly decisions can be made if you have that much information in front of you at all times.

And, they were like oh no we don’t need that, we don’t need that, we’re a retail organization it’s good to have as much information as possible in front of us at all times. And then veritably there was a situation where someone got an e-mail two o’clock in the morning made some rash decision and moved into doing something they probably should’ve waited to. Take an extra couple thoughts about so, more data does not always mean good data.

John Sumser:            And well fast data doesn’t mean good data … And so we’re going to see some interesting things in this area over time. Well Stacey we have lasted through another half hour.

Stacey Harris:            Yeah.

John Sumser:            And what a great conversation.

Stacey Harris:            No, this has been a good conversation I think there’s a lot of topics, just some times a slow news week is a good news week I think so …

John Sumser:            It’s like a bad conference that’s a good conference, that’s exactly like a bad conference that’s a good conference.

Stacey Harris:            Gives us more time to have some interesting conversations. Well John, we’ll see you next week at the same time same place, looking forward to talking to everybody.

John Sumser:            See you next week Stacey, thanks very much for doing this.

Okay everybody, the roses are still exploding off the trees of Occidental and we will see you next week. Thanks for tuning in.

End transcript

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