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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: 26
Air Date: June 25, 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 Week. One step closer with Stacey Harris and John Sumser. This is our 26th show. Good morning Stacey. How are you?

Stacey Harris:            Good morning John. I’m doing well. Nice … I think we got rid of the echo there. I was just going to say we’re getting double John this morning.

John Sumser:            Well, what sort of good luck is that?

Stacey Harris:            Yeah. Exactly. It would’ve been a very interesting conversation back and forth.

John Sumser:            I heard somebody say something the other day. “There are many echos in the Grand Canyon.” I think they might have been talking about listening to our conversation but I’m not sure.

Stacey Harris:            Possibly. Possibly.

John Sumser:            So, how are you?

Stacey Harris:            I’m doing well. I’m doing well. We’re running up into the end of our annual HR technology survey in about a week and a half. So, it’s been a busy, busy time working with everyone who’s trying to finish it off at the last minute. But … And, I’m hopefully, just like everybody else, looking forward to a little vacation time the first week of July. So, really looking forward to where the rest of the year is going to take us after this survey gets done this week.

John Sumser:            Oh boy. It must feel great. That’s like getting the big boulder up over the top of the hill.

Stacey Harris:            It is. It is. And, we’re definitely hitting all the numbers the we had planned to hit. And, probably will get even more. I think we have more international data this year as well. So, I’m very, very pleased and just a big thank you to anybody who has helped me included yourself John in this year’s outreach with the survey. I’m always amazed by how this community comes together when there’s something they feel of value. And, that’s been a real big opportunity to see all of that come together. So thank you guys. And, thank everyone out there who’s helping out.

John Sumser:            That’s great. What you are you seeing that’s interesting? Anything pop up?

Stacey Harris:            Well, yeah. On the news it’s been a bit quiet. Everyone’s sort of wrapping up for the holidays and getting ready to go on vacation. But, there are a couple of interesting things. Obviously, you don’t really have vacation this year until next week after SHRM takes place. So, SHRM’s going to be taking place between June 28th through July 1st. It will be interesting to see what comes of that. I don’t think you or I are going to be there but we have a lot of friends who will be there. So, we’ll be able to sort of up tangentially through everybody else’s commentary on it.

But, we also had a couple of things in the news this week that were more, I think, articles than they were big news announcements. There was an interesting article put out by … Actually it was a New York Times article … Done on next month, some changes that are happening in the Department of Labor to the, basically the amount of money someone can make before they’re considered in a salary position to be able to make a claim for overtime and time and a half. So, we’re going to talk about that today. We also had some interesting data come out of our data project in the UK. that I thought was worth talking about. Which tracked their employees and workers and the amount of hours they were spending in different areas. I know we’re all a little worried about that. Me and you were just talking about what happens with all the wearable technology today and what does that mean when people are tracking their tasks and time.

And, then there’s probably two industry bits of information. One is that … It was just before we did last week’s show … About $150 million of VC money … Not a huge amount but a pretty big amount and I thought it was worth maybe having a conversation today about what does someone with a one plus virtual mean? They’re an HRO BPO … Sort of manage service organization for work day but they’re really picking up traction. And, they’ve got a much different model than a lot of other organizations out there. So, those were really the big news things I had pulled out today. Anything else on your radar?

John Sumser:            Oh you know … I spend some time at the end of last week at the Quantified Self Conference in San Francisco and so, it’s interesting in my … My brain is bubbling with ideas about what the future might hold with all the data we’re going to have. So, we might weave that in.

Stacey Harris:            I think that would be very interesting to weave in. We definitely should weave that in today John.

John Sumser:            Good. Good. So, Department of Labor. Tell me what you know about that. Tell me about the gauge for overtime.

Stacey Harris:            Yeah. This is the first time that I’d heard about it but I don’t cover the labor laws as much. Probably some other people in our circle would probably have some interesting commentary on this. This is the first article I’ve seen about it. And, I figured this would be a bigger topic. And, I went looking to see if there was anyone else really talking about it and so far no one else was. But, they basically the New York Times had noted that in the next month, they’re expecting that the Department of Labor is going to adjust this Fair Labor Standards Act to raise the salary threshold for overtime for those organization that … For those employees that are salaried. So, this is for salaried employees. Right now, the salary threshold is at about $23,660 and that, in 1975 when it was set, was about 60% of the salary work force. But, today, it’s only about 8% of the salaried work force. So, a lot of our labor laws got stuck somewhere in the ’70s and never really changed, including our minimum wages and all those things.

But, what’s really happening with this is if you double that amount for someone who could then claim overtime for anything they work over 40 hours as a salaried employee, that … At $40-some-thousand dollars, you’re starting to look at teachers. You’re starting to look at employees in your organization such as … You know, even work forces such as our police officers and our environments where there are managers maybe in union roles or managing union roles but they themselves don’t normally get overtime so a lot of extra hours are put on their plate. So, it’s going to be interesting to see one if it happens. We’ll have to wait to see if it happens next month. But, what that’s going to do both from a business perspective and from a work force perspective. Will people be more interested in staying at an organization in a salaried role where they can basically claim overtime. So, I don’t know John. Have you worked with a lot of organizations who have managed overtime at a salary level?

John Sumser:            So I wanted to be sure we got this right. So, they way that I understand this is currently if you make over $23,000 a year, you’re eligible for overtime? Or, is it that you’re not eligible for overtime?

Stacey Harris:            No. You’re not eligible for overtime.

John Sumser:            OK.

Stacey Harris:            So, currently, if you make over the $23,000 threshold you’re not eligible as a salaried employee. And, generally salaried employees aren’t eligible for overtime. But, they basically had a threshold that was set …

John Sumser:            Totally get it. I just wanted to be sure that I had that right. So then, my opinion is that the government is getting smart. And, so, if you can’t raise taxes … IF that’s pretty much impossible to do, then what you do is raise wages.

Stacey Harris:            Yep.

John Sumser:            And, what you … So I would tie this particular move directly to the emerging trend to declare Uber and Lift employees to be employees rather than contractors. Because, it’s all about the governments need for cash, right? And, contractors don’t pay payroll taxes. And so, there is … There’s going to be an increasing trend to see the government be responsible for the help and well being of people who are in that gray area. And, trying to get them onto the tax rolls.

Stacey Harris:            Yep.

John Sumser:            So, this is move to increase payroll taxes?

Stacey Harris:            It’s a move to increase payroll taxes and I think also it’s a interesting move to probably … The big thing here is increasing the wage earning capability of the bottom of the level of financial salaried employees. These are generally … When you look at the roles that fall into this, right? It’s generally employees in many cases that are state and government roles, like I said. There are going to be many case who are entry level roles in organizations, right? Because you don’t pay them hourly. You pay them salaried. And, a lot of organizations got away with basically getting an immense of hours out of salaried employees who were making in some cases less than hourly employees were making. So, I think it’s going to shift a little bit of the dynamics on the type of roles people are going to be taking as well. I get what you’re saying on the governmental side but I think it will have major impact on skill gap issues in these salaried roles at these levels.

John Sumser:            This is really interesting because a smart company will look at what the bottom level is that you have to pay somebody so that you don’t have to pay them overtime. And, start paying them.

Stacey Harris:            Yep.

John Sumser:            Right? So, everybody gets a raise is the essence of this. Everybody gets a raise.

Stacey Harris:            If there’s any fear that someone may be tracking 60 to 70 hours a week some of these people are putting in, right? To get the amount of work done as we sort of pound more and more work onto the shoulders of managers. So, it will be interesting to see, I think. How much of this has an impact of … And if it comes to fruition. This is just a story about what could happen and what might be announced but … I think it’s an area for us to watch.

John Sumser:            Oh, I would expect to see this. Yeah. It’s cool.

Stacey Harris:            The other one I think that I pulled out … Which is sort of along the lines but not … Is the UK study … I was trying to figure out who had done it. I will be very honest. I struggled to find it was a company who managed time tracking systems. That’s what I finally figured out. So, take that with a grain of salt as to how the study was done. But, it was done with 2,000 workers. It was requested by a couple of companies then it was done. And, it was a research study done out of the UK on how much employees were spending time doing something other than work in their work environment. And, what was causing their distraction.

Me and you just had this conversation about the quantified self and all the things that people can use to track their time and activities. This one particularly was saying that basically people were spending about 35 hours of what they consider gloss time on Facebook or personally things. At the very least. And, that most of the time they were doing it because they felt the environment was noisy or their systems were bad. It was sort of an interesting article.

John Sumser:            So, let me get that right. This research say of the 40 to 50 hours a week someone puts into a job they’re spending 35 doing personal tasks?

Stacey Harris:            Yeah. About an hour, an hour to an hour and a half a day. Yes.

John Sumser:            The research says …

Stacey Harris:            No, you’re right. That’s about 7 hours a week. Exactly. Yeah.

John Sumser:            Seven personal tasks a week for 35 hours worth of lost time. Holy moly. So, no one does any work?

Stacey Harris:            Well, I but see, here’s the issue I have. This one … This is a survey process as far as I can understand. So, they weren’t using trackable and things we all know about. Which, that might clear something up if someone used some device to track this stuff. But, I think too also the question of whether or not … If people are doing personal things at work, is that a bad thing in your organization? That’s a question that I have. Is that an area where you need to stop it if they’re getting their work done? Or, is it somethings that’s just part of the work environment that we live in today? Because, if you’ve got to make a doctor’s appointment or you’ve got to do something important, you know, what else do you do if there’s only those hours your can do it in? Not all of it was spent of good things. A lot of it was spent of surfing and other things. But, it was an interesting conversation into whether it was the role of the employer to track that and to manage that so closely.

John Sumser:            And, I’m going to suggest that we don’t have as a culture, we don’t have the slightest idea what work actually is and how people do it.

Stacey Harris:            Yep.

John Sumser:            We have this sort of “I Love Lucy” feel of where your on an assembly line trying to put chocolates into the thing. And, that’s all you do is stand on the assembly line and put chocolates into the thing. And, if you’re not doing that you’re not working. But, we live in an information economy. How we as human beings process information is sometimes they have to go for a walk. Sometimes they have to get really mad. Sometimes they have to twiddle their thumbs. Sometimes they have to get up and snack. Sometimes they have to come in late. Sometimes they have to go to the doctor. But, because the work is about the manipulation of information, you never get any time off. You can’t walk away from it. You know, the chocolates on the assembly line and at the end of the day you can walk away from that. The imaginations to understand the survey that you’re doing … Brains don’t shut off at 5 o’clock.

Stacey Harris:            I think it gets even worse on this. I had a dear friend who I visited with this week who’s a dear friend from high school and now she’s a 4th grade elementary teacher here in Ohio. She was walking me through her day. And, the fact that she has a 25 minute window to do anything personal … That’s the only window she has … And, yet at the beginning of the day and at the end of the day like you said, her mind doesn’t shut off with what she has to get done for the students. And, her mind doesn’t say “OK. I’m not going to take this student’s question if that question goes beyond my 8 or 10 hours.” Right? And, this idea that in any role and particularly in service roles as well, there is that lack of freedom. If someone’s doing something that’s not tied to that job, then they’re doing something wrong. I think it’s the biggest thing that frustrated me about this article.

John Sumser:            Yeah. It seems to be a little odd. But, it’s great to get a conversation started about how do we tell when people are actually creating value. And, does … Can you tell the difference between talking to people and refining the work they do? I think those are challenging areas when you live in such a communications rich environment and so much of the work has to do with the communication of ideas. I don’t know how you tell what work is.

Stacey Harris:            Yeah.

John Sumser:            I don’t know how you look at what people are doing because there’s not an assembly line and there are no chocolates.

Stacey Harris:            So, do we think that … You know you just came back from this conference where they were doing nothing but the quantified self topic, right? My thought in watching what’s happening in the quantified self world is that we’re changing our idea of what healthy is because of it, right? My hope would be that if we sort of got a sense of what work was … What good work was … How employees really did things differently … We might change how we think about work. I don’t know if that’s a case that would happen but it would be an interesting trial I think to see what might come about with some of this technology. From your take on your session, what do you think? Would it be an event that could show how it’s changing?

John Sumser:            So, it’s really interesting. A lot of the … You look at the Apple watch … A lot of stuff that people do with measurement of themselves right now is very goal oriented. It’s not process oriented. It’s about how do you use this information to achieve something. And, that is as silly as performance management. The idea that the only reason you need measurement is to achieve a goal and when you’re done with the goal, you don’t need measurement any more is nonsense.

What you want is a non-judgmental flow of data that shows you what the baseline is so that you can tell when there is a baseline. This is just simple statistical process control. And, you can’t do simple statistical process control until you have baseline measurements. And, that’s a little early for that to come. But, once it comes … Once it’s inescapable that you’re interesting in the feedback about your eye movements that your monitor’s going to give you, then you can start to do something with it. But, the first step is going to be helping people understand the value of collecting the baseline before you start to use the data. And, that’s not quite there yet. Once that’s there then our definition of what work is is going to be very free to move. Just like it was when people came off the farms and into the factories.

We had to change the way clocks worked in Daylight Savings Time so that people would be able navigate working in the fields versus working in the factories. And, we had to do all this stuff to make it OK to change the definition of work from this seasonal way that an agricultural society works to the time table work that the industrial society works. And, when we make this next shift, which we’re doing, it will involve a shift away from industrial ideas like time motion studies … Which was essential what most bald heaping systems are about is trying to manage the intersection of time and what we do.

Stacey Harris:            And, what I think is really fascinating about all this is we make this shift into the new world … It’s going to be painful, right? There were some people who weren’t able to make that transition previously. There will be some people who can’t make this transition in the new environment. And, there’s some roles and jobs that have to be completely, basically, taken apart to sort of rethink how they might get done and get accomplished. So, it think the whole study of jobs, organizational design, what management is, is all being changed because of this. But it’s going to start … I love your idea there about a baseline. And, it’s going to start in some sense with people being a little more comfortable with tracking material themselves … Their activities. Knowing that their … That it’s a transparent world we’re traveling into and not being afraid of it.

Another thing we talked about was fear. Fear drives a lot of how people do or do not make decisions about their employment and why employers make decisions about employees. Is that one of the things that might play a big role in this shift? The fear concept?

John Sumser:            Well I think that the forward process of this species has always been away from fear and towards security. And, it’s been kind of a slow code these past couple of thousands. Even though we’ve made great material progress, the core of human beings isn’t quite adjusted to the level of material corporations. We live today in ways that kings lived 150 years ago. We have everything that a king could imagine in under 10 generations. And, we’re going to see that same sort of advance in material progress. The question is, can people figure out what to do about abundance? We’re designed to function to grab our share and to worry about shortages and to survive as individuals. And, increasingly our survival depends on being able to behave as part of a larger collective than … And, that requires freedom from fears that individuals have. I think it will take a while. Maybe another 10 generations to go. But, we’re on the right track. It’s very cool to see us on the right track.

Stacey Harris:            Personally I’m hoping not another 10 generations. But, you might be right. I have to give you that. I’m hoping we’ll see more progress in the next couple of years.

John Sumser:            Well, it makes better news than the tech factor.

Stacey Harris:            Yeah. Exactly.

John Sumser:            If we get on it by Wednesday, then we can do it using somebody’s Enterprise software … Well, hell, that should be the real story we’re telling. But, I think we’re saving marketing for another time.

Stacey Harris:            Exactly. Exactly. Kind of … Not on the topic of reducing fear, I don’t think any set system or technology can do that … Although we did have some conversations about some technology that might down the road, but in the sort of short term, one of the stories I pulled out today was about that One Plus Virtual had gotten some venture capital. And, I only pulled out one. It was a pretty large sum of venture capital but not terribly large for the type of work they do.

But, I remember interviewing them … Gosh, it was probably 2010 because they got started in 2008, and they were this really interesting firm that started out doing work with just work data  That’s all their services. They were using the work data platform to do business process outsourcing, HR outsourcing, and then some managing service model, right? What there statement was, was they were going to take all the work off most of the HR plate. Manage it all, particularly payroll, benefits, as well as core HR elements. Manage it all in a single platform. Do it very effectively. And, make the HR function capable of doing more strategic work because they were capable of managing this.

You and I have talked about the fact that at the end of the day we think outsourcing HR … At least the technical side of HR … Is where some of this is going in the industry. To me, One Source has made that jump more than some of the other firms have been able to do at this point. Does it surprise you that they’re doing so well and we’re seeing outsourcing in other areas maybe not do as well right now? Do you think we truly are, if we’re able to outsource more HR functions, that we will … Not necessarily reduce fear but give us a more time for strategic work we were just talking about?

John Sumser:            So, I don’t see any evidence that outsourcing allows HR to be more strategic. I don’t see that. What I see is that outsourcing allows HR to be better at managing contracts. So, I’m not so optimistic about that. But, I am firmly of the believe that if you don’t need to be competent in an area, that it’s very important that you get somebody that is to do that work. So, if you’re mission doesn’t require you to be great at Solma R functions, then benefits administrations would do well. If your core mission doesn’t require you to be competent in that area, then the thing that you do is start outsourcing as fast as you can.

The problem right now for decision makers in HR is it’s really hard to tell what’s the right thing to outsource. So, if you don’t have people in your organization who are masters of the data that’s in your payroll system, you need to do whatever you can do to get that back under your control with all of the hassle. Because, the single most important chunks of information that you have anywhere in your organization have to do with what your people have and where they’re doing it. And if you give that all away because it’s hard to get that right, then you’re blind. Right? So, to me that means that there are pretty important feedback loops that are not coming back from outsourcers. And, it means that there’s some likelihood that there will be a shift in understanding of what can and should be outsourced and what shouldn’t be outsourced. That will evolve here fairly quickly.

You look at one source … I’m astonished they got $150,000 to expand their business because they are so dependent on workday. Right? So, I’m going to guess we’re going to hear from One Source Virtual that their going to expand their reach in terms of vendors and they’re going to have some sort of technical overlay. Right? So, they’re going to come to market as kind of a big middle man provider. We give you this thing that helps you implementation of your tool work better. I don’t know why VC’s are investing.

Stacey Harris:            It’s an interesting perspective. Right? I mean, it could either be that. The other commentary they made is they want to take this concept that they’re doing here in the states primarily, very global. And there are a lot of global, mid-market small organizations who might look at this as an interesting way to sort of ramp up HR quickly and move them out of some of the tactical work. But, you’ve got challenges there with where data is held and that has to be addressed. And in the international market.

Part of what I think might also be happening, and I don’t disagree with you … I think One Source might really have to think about distributing their approach, right? Because they’ll ultimately … The thing about most organizations is that their lives aren’t on a single platform, no matter what platform they’re using. There’s always something that’s separate. Something they’re bringing into the picture eventually. But, what I think really … I came away with when I had my talks with One Source is they’re providing a service rather than a technology. But, they’re using technology to make that service feasible at that level. A

nd, it’s the service side of this picture that I’m more interested in and intrigued in. Which is that, to your point earlier, what organizations are trying to do is off load some of the work. Right? And often time, in off loading the work, another VP will outsource a processing model but they’ve also lost control of the data and the ability to move quickly. Right? And, my sense in talking to the One Source Group, but I could be wrong on this … It’s been a while since I had this conversation, is the same sense I get from anybody who’s trying to move from a software service or cloud model. Which is that, if they can get to the right platform whatever that might be, they’re going to be able to get more data more quickly that’s more valuable.

And, to your point, they’re spending more time with the data then they are the processes and reports. And, the old HR BPO processing model there was an inordinate amount of time spent on running reports. Reports on this and reports on that. Not giving answers to specific questions. To me, I think this could change. I think we could change the outsourcing model if organizations are doing more focus on data and less focus on task and the cost of individual tasks. I could be wrong on that but that’s my take on that.

John Sumser:            I love it. I love it. I can’t wait to see. We should dig into what’s their spiritual and see what they have to say on that.

Stacey Harris:            It would be interesting to dig into to all the other outsourcers in the model. Because, I think outsourcing is a conversation topic. Although it seems that it’s going down in all the stats. It’s getting more attention today. And, I don’t know if that means people will be doing more of it or they’re just not aware that they’re calling it outsourcing and maybe it’s something else when they’re talking about it. So, I think it’s worth having that conversation about. We’ve hit the bottom of the half hour, John. Already.

John Sumser:            This has been another great conversation Stacey. I hope the people who are listening are having as much fun as we’re having. I hope it’s as useful to them as it is to me.

Stacey Harris:            Definitely. Always a pleasure chatting with you John. I guess we’ll be back next week just before the 4th of July holidays here in the states at least.

John Sumser:            Yes we will. Yes we will. So, thanks everybody for listening. Thank you as usual Stacey. And, this has been HR Tech Weekly. One step closer with Stacey Harris and John Sumser. Have a great rest of your day.

Stacey Harris:            Bye everyone.

End transcript


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