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Hosts Stacey Harris and John Sumser discuss important news and topics in recruiting and HR technology. Listen live every Thursday or catch up on full episodes with transcriptions here.

HR Tech Weekly

Episode: 240
Air Date: October 24, 2019

 

 
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Transcript

 

Important: Our transcripts at HRExaminer are AI-powered (and fairly accurate) but there are still instances where the robots get confused (or extremely confused) and make errors. Please expect some inaccuracies as you read through the text of this conversation and let us know if you find something wrong and we’ll get it fixed right away. Thank you for your understanding.

SPEAKERS
John Sumser
Stacey Harris

FULL TRANSCRIPT

John Sumser 0:14
Good morning and welcome to HR Tech Weekly, One Step Closer With Stacey Harris and John Sumser. Hi Stacey. How are you?

Stacey Harris: Good morning John. I am doing well. I’m joining you from sunny Las Vegas as it is this time of year and how about you? How are you doing? You are in California but you were near where some of the forest fires are at right now?

John Sumser 0:34
Oh, you know, you look out the window and the sky is this sort of brown color and the smoke is everywhere. It’s interesting enough the fires are maybe I just looked they may be six or seven miles away from here and so it’s an interesting time we’ve got our bags packed in case we have to evacuate but they are right now they

Are evacuating everybody else to the community center across the street. So we’ll probably be more likely to be helping people then be in need of help. But we’ll see. We’ll see,

Stacey Harris 1:11
It’s always scary, and we should let our listeners know, I think you said that you have been having some power outages on this. So if something gets off in the middle of it this time, it may not be the technology. It’s very likely to be that you have some power lines down.

John Sumser 1:22
You mean, if you don’t like what I say, and you hang up on me, we can blame it on the fire and blame it on.

Stacey Harris 1:29
That’s right. We can even get into an argument today, John, just watch out.

John Sumser 1:34
There you go. Blame it on the fire.

Stacey Harris 1:39
So Well, hopefully you will be staying safe. We will be sending ours out for that. And then they can get into a position to hopefully stop the fire before anybody else in the area, put their houses and anybody gets hurt and they ensuing constant battle that I know you guys fight out there. But yeah, so while you’re dealing with that, you’re also sort of wrapping up all the stuff in your big reports.

You guys launched here a few weeks ago. Anything else new that we haven’t talked about that you’re finding out for your researcher or things you’ve launched last couple weeks?

John Sumser 2:09
I think things are kind of calming down the research is it’s really interesting. You know, we we do vendor neutral research and vendor neutral research means you can’t take it on a vendor partner in the execution of the research, lots of people license it and stuff but but in the early going, it’s a self financed research process. And so we rely on the sales of the research to keep the enterprise going. And there’s such an extraordinary flood of vendor sponsored research out there that that it’s difficult to get people’s attention. I was talking with somebody who described the amount of research that they go home with once a week as an 18 inch thick stack of paper, you know, so so if you are a citizen of our industry, the

degree to which you have to have to stay on top of research to stay ahead is extraordinary. just extraordinary. And so figuring out how to get the word out is part of what we’re doing right now.

Stacey Harris 3:15
It’s a difficult situation. I know for any of us, I mean, research is, you know, for those of us who it’s a passion and who you’re focused in on trying to be as vendor neutral as possible in all factors that you’re doing the research a, you know, that that big challenge between how does it get funded, you know, and where does the nose to the messaging come from? is always a conversation mean, you’ve had blind times on the radio show, right? For the various research groups that we talked about or talk to or who are colleagues in our in our area? I think you’re right, you know, you have to have enough funding in any one area to fund research so that then you can sell research and it’s really hard to get that up front piece, right. You know, knock on wood, as I always say with scalar cedar, we’ve been very blessed here that as an organization, they’ve just invested in this for so long as a part of

who they are in their DNA now, but I think you know, for any organization that’s getting started, it’s a very difficult challenge, right. And you like many others have been doing it for many years. And so think your brand carries over a lot with that. But it’s also a thing good comment about the challenge of sort of deciphering what’s good research. And you know, the amount of research people get and understanding the difference between what research is saying versus what sort of people are sort of, how do I best data, it’s working the research design, right? Because there’s a lot of people who take the data and use it in different ways. And so, you know, I was talking last night to nationally fascinating, fascinating gentleman. He was one of the, from a large financial organization and is one of the primary investors and turning which is why I’m at the Las Vegas it’s because I met the 30 men sites event, but we had managed to get that across from each other at a dinner table last night and he does similarly to what you were just talking about. His job is to just understand all the research about all the organizations that they invest in

going public perspective. And, you know, he had known about the research that I did. And he takes his research and he literally maps it on top of each other to see how similar the trends are and to see how similar the insights are that he’s gathering. And to him that probably the only valid way to look at research is to make sure that there’s sort of compelling research that says the same thing, and that you are getting sort of vendor neutral, and you’re getting that data. And so it was an interesting process to listen to him talk about how many hours he’s been looking at research from that perspective, right, and mapping it against each other. So yes, I think this is new, the market has a lot of noise on it, and you have to figure out what the negative value are for you as a person who’s reading the research an d using it. Right.

John Sumser 5:43
Right, right. I think I think what happens is that the overwhelming volume of information forces people to adopt a point of view that is sort of the least friction point of view. And so so like I say,

Significant trouble coming in the area of being actually ready to install AI sorts of technology in the workforce. And the reason I see a problem coming is that it doesn’t appear to me that the people who talk about the skills required to deploy a I actually understand what the skills are that are required to deploy a tie. That they’re they’re removed from it right because the the skills that are required to deploy a tie amount to being able to manage f fairly, in some ways a fairly ineffective Junior employee. This is not it’s going to save the day and make you rich and famous and you never gonna have to work hard again. In some ways work gets harder because you have intelligent assistance who can give you probabilistic information. So your

capacity to make decisions becomes the important capability that you need to manage this stuff. And that’s not what we’re saying you need to learn how to do. And, you know,

Stacey Harris 7:16
we’re emphasizing Yeah, I think skill areas that have to do with statistics and math and analysis, but we’re talking about it as if there’s a yes or no answer on that conversation. Right. And what you’re talking about is something that is also good judgment, right?

John Sumser 7:32
Yeah, the math part’s important. I’m in the middle I’m kicking yet another class this class is requires a little bit of calculus to get started. six or eight hours of classroom time of calculus to get started in this in this how do you deal with probabilistic information? I flunked the first test.

I’m glad it’s you and not me!

Stacey Harris 7:58
I just watched my son go through a couple of years of intro to Calc and and all I can say is that my head was spinning when I was listening to what he was talking about. So yeah

John Sumser 8:07
when I tell people about this it turns out that I learned the important parts of the math thing I just couldn’t do the homework. Right the actual details of it I couldn’t get right but I couldn’t get the Why do you Why do you look at things this way how things work this way part of it because because it was actually excellent class and when I went back and took the test again, I did fine, but you have to be willing to endure so it really even though it’s free. It’s online. And nobody’s looking. It still didn’t feel good to flunk th test

Stacey Harris 8:47
Yeah, I can imagine.

But But My bet is that you probably did better than a lot of us out here who have avoided math at that level. I would say you know for a while and but did those concepts

New went into probabilistic analysis. Did you find that understanding those math equation and those math underlying fundamental was that necessary to get to where they eventually wanted you to get to from your perspective?

John Sumser 9:14
I don’t know yet but I think so. I think so. So this is this is a, the reason that you need to know calculus for this particular class is that they’re trying to show the basic problem with AI is that as long as what you want is a prediction that the world will be the same yesterday as it is tomorrow. AI is really good at that. It is, as I’ve taken the saying, like hiring the best historian you ever hire, and as long as nothing changes, it’s really good at telling you what’s going to happen tomorrow. But as soon as something changes, it doesn’t do so well. And so the question is, how do you account for that, right? If you’ve got an output from an intelligent tool, and it says there’s an 80% likelihood that it’s going to be

Like this tomorrow, and you know that it’s generally right unless something’s changed. How do you when you make the decision? How do you make the decision so that you end up with the right decision, because it’s not going to get you 100% of the way there, it’s going to get to 80% of the way there. And it might be the 80%, that represents 20% of value, or it might be the 80%, that represents the bulk of value, and you don’t really have a good way of knowing that. And so you need additional concepts for thinking about what might happen that the that the machine can’t imagine. Right. And so that’s that’s good.

Stacey Harris 10:38
And the other side of this picture that I think that we’re forgetting is that when the machine tells you there’s an 80% probability of something and you choose to ignore it for one reason or another, because you know, of the underlying issues, right, and if the risk doesn’t pan out, something happens. There’s also this you know, a lot of what you’re talking about is making decisions that are

CEO or leader would make, right but if you are someone in a position like HR where those probabilities are put in front of you, and you make a decision that go against the higher end of the probability, do you take more risk? And that risk doesn’t pan out? Are we at a point in our industry or in our in our space where people are comfortable saying no to those risk levels? Because business leaders can come back now and say, Hey, this WN 80% probability, why didn’t you listen to it? So there’s some human elements that are built into this as well,

John Sumser 11:32
Oh, oh, it’s, it’s really interesting. You know, if you first of all, you must never take the recommendation of a machine at face value. It’s just a mistake.

But now if you don’t if you’re just, you know, sort of Mr. Grumpy pants, and you don’t ever take the recommendation of the machine, you’ll get fired. And, and if you’re unlucky, the probability, his probability there’s an 80%

chance that it is going to rain today. And there’s an 80% chance of it’s going to rain each and every one of the days between now and the first of November. But if it doesn’t rain on any of those days, it doesn’t mean that was in an 80% chance. Right? The a probability is not a certainty.

So people are going to make decisions that support the machine that are stupid. And they’re going to make decisions that disagree with the machine that are stupid. And and, and we don’t know how to manage that yet.

Stacey Harris 12:36
Yeah, we dont.

John Sumser 12:38
Right? We just we have a one throat to choke view of the world, which is I don’t care what the percentages are. Stacey, you made the decision. It’s our view.

Stacey Harris 12:49
This was a big part of the conversation this week here at 3am. Because a lot of what’s happening both at Ceridian but with every you know, organization that you and I have visited in the last couple of months in our travels, everybody

handed this level of insights, their probabilities or data, right about their organization that is meant to help them make better decisions. And we have this this ongoing conversation even here. Like if you’re handing out something like a flight risk number, are you educating your audience? And are you educating your organization on how they should use it and what it possibly could do for the organization? And then are you building in depth so that you’re leveraging it in ways that are not going to harm the organization? And I think every vendor is trying to address this in different ways. But they can’t stop the desire for that data or the fact that it’s part of the forward momentum that we’re facing right now that everybody wants that data, right.

John Sumser 13:37
Well, yeah, it’s going to be the case that we’re just making a shift. It’s a dramatic shift from what is essentially a 19th century way of managing to a 21st century way of managing and it’s inevitable. It’s not there’s not really a choice involved. It’s inevitable because we have so many monitoring devices, monitoring so many things that we don’t need

wait to the end of the month to see what’s going on anymore. And and when you change that you changed a lot of things. So so we should probably get to the news. But but this is a pretty interesting rabbit hole here, it turns out that a lot of work has to do with the way that the work is measured. And what we’re starting to do is introduce new ways of measuring the work. And that’s where the changes, right, the chang is, and you don’t know how to do your job anymore, the change is, you no longer have a monthly cycles to depend on.

Stacey Harris 14:35
And what you thought was your job. We’ve now tracked and figured out with something else correct. And there are different ways to do it. So yeah, no, this is these are valid, and actually, a lot of what we just talked about, is ties in really directly to what’s in the news right now. I mean, so just a quick update for everybody for the event that I’ve been attending for the last couple days is to really an inside. So they as many of you know last year, certainly

When IPL and so there was sort of a quiet zone particular for the analysts as to where they are at what they were doing. And so I’ve been able to sort of get a bit of an update on where they’re at this year and what their plans are and how they’re going to be moving forward for about 2900 people attending the session or attending the conference this week. So we’ll get a little bit about do that. It’s probably worth noting that it keeps we don’t get to everything. There’s definitely some news this week about what’s going on and leadership levels the various organizations there was many people may or may not know Oracle co CEO Mark Hurd passed away from cancer last week and obviously I thought to go out to his family and to his team members but definitely makes them I think adjustments and thinking about what’s going on over at the Oracle environment. We also had leadership changes this week in service now service now announced that they’re going to get a new year Bill McDermott there, EO john Donahoe is going over to 19 to run Nike there was a whole bunch of news about Armstrong VO stepping down and new CEOs and I consider

There’s obviously interesting stuff on the sports level but for us in the tech space Bill McDermott came from SA P and was one of the driving forces at si p for multiple years. And now coming over to service knowledge that is a big change. We also have going back das AT veteran enterprise executive Bob set for those of you followed through the sap story, who was then moved on to Facebook and Salesforce Now coming back to SAP to head up their sales approach to things and we do have some funding going on this week HR tech platform of firing minds, Mike is the word of the rumor air get acquired by UFHSHL for around 80 million. And then there’s some interesting new startups in the flexible career space called flex careers, which is raising 1.8 million so lots of different things going on. You want to start with Ceridian John.

John Sumser 16:49
Well, you know, Ceridian sort of went dark on me leading up to the IPO and they’ve been prominent analyst relations perspective.

They’re struggling. And so I had a very clear picture of what they were doing and where they were going up to about, I don’t know, 18 months ago, two years ago. And so it sounds like they’re coming back out of their Silent Retreat. What What did learn?

Stacey Harris 17:19
Very good way to put it.

Yeah. And they even had a conversation at this event about how they can do a better job speaking to the analysts reaching out to the analysts, because many of the people who were there previously in the analyst relations role in the in the sort of marketing function have turned over with the the new sort of leadership which happens when you go through these kinds of transitions. That was probably the most important thing for me this week was was getting a chance to get in and see the new leadership and action and getting a chance to get a feel for where their goals and opportunities are. And probably the most important thing is their new President Lee Turner and Ellie Turner came from multiple years, I think, almost 10 years over at SAP for self reading their various enterprises and the sort of clouds

And a couple others. And so her focus I think, is definitely was very clear at this event on the fact that they are going to invest more in vertical ization, which is definitely a model we see coming from the enterprise SAP environment, right. So a lot of focus on vertical ization and retail financial services, health and human services and manufacturing, they’re going to carve that out and increase their market share. They hope in the mid market, which is where 3d and has done well, for many, many years, they have a solid, very happy I would say in terms of user satisfaction, vendor satisfaction rating based in that and they’ve done service low, I always call them sort of like you can always depend on sort of dirty and to sort of gain just a little bit every year and what they were offering and what their customers were thinking. So now I think the goal is to grab that market share maybe a little bit faster, in sort of level of priority over the next couple of years. They also set to grow their enterprise opportunities for organizations over 6000 employees. So if you know Sweden’s been definitely much more known for mid market and SMB so like

sat down for lunch, there was two 800 employee companies that I sat down for lunch with right on either side of me, but they’re really looking to tackle the enterprise market and I think that’s a lot of what returners bring to the table. They’re definitely planning on growing globally, you and I talked about this but their acquisition of their Australian organization they did the growing global conversation definitely mentioned that they were looking at more mergers and acquisitions, I think so you will see them probably purchasing some more in that area. But the most important thing about their global growth was their goal to have 20 countries in basically programmed payroll environments. So for those who don’t sort of understand payroll, most of the larger vendors have chosen to only do six or seven of the big payroll where they basically program DA in country payroll for those areas, and they’re depending on what we would consider payroll aggregators, or in country payrolls to partner with or something like an ADP connection to partner with to build out their their total global payroll. Sounds like Ceridian has planned to compete at probably a pretty good level with ADP

With 20 different countries in the next three years for their payroll, so that was that was pretty big announcement. So yes, there, there wasn’t a lot of new stuff this week, there was a couple of new announcements about launching a de force intelligence tool which you get the exactly to what you’re talking about john was how people are being shown data and information and are they ready to require it. They also had a launch for a day for hub portal, which is very similar to what we felt with a couple other organizations this year, which is basically just a personalized portal environment that can be changed and edited by the HR function which is a big deal for Ceridian because they didn’t have as much flexibility and changing the environments that now they have the ability to change that environment a little bit more for their end users. And probably the most interesting thing that got the most conversation going was the launch of the de force wallet. So this is a pay on demand feature which particularly is interesting because there is a wallet, they are not partnering with the credit card but it is basically a like a credit card tool that they are actually paying directly because

They have the David offices there. They’re using their continuous calculation of the day force engine that every time an employee accesses their funds, they literally get a payment on that day. So they’re not loading the money per se. Like you might see you’re not putting it on a credit card basis. There’s no fees for the employees. And they’re not going to charge the companies either for this sounds like all of the funding for this will come out of transactions at the sort of purchase level by the merchants themselves. You’re different.

John Sumser 21:31
Yeah, hold on.

Stacey Harris 21:33
There you go.

John Sumser 21:34
Yeah. So the way that payroll has officially work is you collect the time and it’s, you know, Friday and your company is payday. So you collect the time from last week and it goes to the payroll company on Monday or Tuesday that you get a trial run and everything’s happy and then you have to have the money in the bank so that the payroll company can sweep it out.

And cut the checks, right this is the whole thing about how it works is you have to have the money in their bank so they can write the checks. Now, this idea that they’re going to put the money in the bank for you, I don’t believe and so so. So what this really means is if you want to offer pay on demand for your employees, you have to put the money in the bank on the day the employee earns the money rather than on payday. And that is a cash flow crunch that requires somebody to finance it

because companies don’t do that. Right. There’s no there’s a company in the world that pays people before they have to

Stacey Harris 22:40
I completely get this we had this conversation, my understanding and I get I I need to get some more clarification on this. But in the conversation

that we have. It sounds like to really get to finances that’s what it sounds like. Like Like they’re not going to require the money

John Sumser 22:58
Ceridian is going to provide

the cash flow for 4000 customers payroll, that is enormous amount of money. That is an enormous amount of money. I completely get it.

Stacey Harris 23:11
I’m not exactly sure how this is going to work. I have to get some more details on it. But

John Sumser 23:17
if you’re out there listening Ceridian we’d love to hear the story

Stacey Harris 23:21
Yeah.

Well, we’ll get some more details for everyone but I double check this like two or three times talking to people at dinner last night I’m like, you’re really going to like you’re going to pay them you’re you’re going to wait and then you’ll wait to get your your money. And that was the answer I got was Yeah, with from the two people who were heading up the program and from their head of strategy. Now, there is some some expectation that that they will make, I think some good financial outcomes from the merchant numbers. So like it like a credit card fee, that seems to be also part of this dialogue. And they were very adamant that they were trying that they were trying to do this as a benefit to the industry because they felt like the things that are happening in the payday.

loan environment was just nefarious and was causing continuous environments where people were sort of getting into cycles of not being able to pay everything and getting charged extreme amount for it. So there was a lot of conversation about that, which I know is generally a lot of what we get wrapped around these kind of conversations. But yes, it seems like that from their perspective, because they can do automatic calculations, because they know exactly what the taxes will be exactly everything is they feel like they can, they can cover that couple of days or week before the payday cycle run. I don’t know. I don’t know if that’s what that’s going to look like financially. I don’t know how long they’ll be able to do that. But they seem to think that they’ve got this financially covered. So yeah, we will get more detail.

John Sumser 24:38
Yeah. It’s an interesting question. And my mind is racing about all the ways that you could do this. It would be interesting to have them tell us more. So we got time for one last thing. What’s the one last thing?

Stacey Harris 24:52
Well, I think the other things that we probably should mention a little bit is the changes happening with ServiceNow. Announcing Bill McDermott, is their new CEO.

Service now has been on a growth trajectory of pretty aggressively over the last couple of years. Primarily, they are a help desk solution for the HR environment, their Help Desk solution from the IT environment versus HR has been added to that they’ve been growing rapidly in that space, you know, both on our server and everything else. But it looks like their goal is to become a $10 billion company with the help of Bill McDermott who increase revenues at a pretty conventional exponential amount of the last several years for SAP What do you think about this john law big of a change? Will this be for ServiceNow?

John Sumser 25:29
Well, Bill McDermott is

a big deal. Bill McDermott is a serious big deal. And so so the question is whether or not ServiceNow can carry him. Right. And, and, and I don’t, I don’t have enough insight to tell you, but it’d be great, you know, if ServiceNow became big enough to merit being run by Bill McDermott, right, it’s not now Bill McDermott just was running SAP, this is a step down for him, and so does he have what it

takes to run a smaller company is part of the question then is ServiceNow capable of growing into his leadership is the other side of that question. And we’ll have to watch and see.

Stacey Harris 26:11
Yeah, that’s a very good to them, I think breakdown of how the differences are going to going to break out. And this, we’re going to probably see him and then we’re going to see some changes, I think, in the other organizations who are competing with ServiceNow to see how that impacts them as well. Right. So I think this is going to be a shake up for the market, because if he turns to make them grow to a $10 billion company, he’s going to have to lash out more with ServiceNow offers and all functional areas, including HR, which will be a competition then to everybody else in the market.

John Sumser 26:40
Yep, every time I’ve talked to somebody from ServiceNow I walk away going this is a remarkable company. And so there’s every reason to think that this could work. But a 400% increase in revenue is a healthy aspiration.

Stacey Harris 26:58
That’s a good way to put it.

But, but if anybody can do it, I think the market seems to think Bill McDermott can do it. So we’ll see your valuations come out about next week, I’ll maybe get a couple more updates from Ceridian as well, because I’ll have another day or so of some of their announcement. So we’ll probably share that. But it’s probably all we’ve got time for this week. We have gone through our half hour already, John.

John Sumser 27:20
Yep. Well, another great call and the smoke is getting thicker here. So I think I’m going to get off and go if I need to pay attention to something more fundamental than then the HR tech industry.

Stacey Harris 27:33
Yeah. We’ll send you good thoughts and hope you stay safe.

Yeah, thanks Stacey.

John Sumser 27:38
This is another great half hour and thanks, everybody for tuning in. You’ve been listening to HR Tech Weekly One Step Closer with Stacey Harris and John Sumser

and we will see you back here next week.

 



 
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