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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: 279
Air Date: August 13, 2020





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: Stacey Harris and John Sumser

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

Stacey Harris 0:21
Morning, I’m doing well John. I am home as we all are in North Carolina. We’ve got some sunshine I have got working on cleaning out my basement in anticipation of my parents moving down with me here so, been a busy week, and continuing to work on data cleaning in the Sapient insights and Sierra-Cedar research so I can’t complain. It’s been a been a quiet week, but how about you?

John Sumser 0:44
It’s been a great week. I am doing a ton of work with companies on their ethics programs. And it’s a really interesting thing. I am pretty persuaded that between clean health, safety and artificial intelligence, the the HR department of the future is going to have a strong emphasis on ethics as a way of problem solving. And what I mean by that is, up until 2020, HR made a lot of decisions and they were the place you went to, for a firm answer to questions. And today, what we’re having to learn how to do is give answers that turned out to be wrong six weeks later. And so the end, there’s no way around it. We don’t know a whole lot about the environment that we’re operating in. And we have to give answers, but the answers are always going to be based on what we know right now and what we think we’re going to learn. And that means that a lot of times we’re wrong. The classic example is the emphasis on ventilators at the beginning of this plague, turned out to be wrong because it’s not a respiratory disease. It’s a blood disease. But we’ve got all fussed up about ventilators for a while and it was the right thing to do because it was the best information that we had at the time. And so we’re in a world where we’re making decisions with the best information that we have at the time. And that’s how intelligent tools work. That’s how AI works. That’s how health and safety work in the workplace today. And so people are asking me to help them structure things that enable them to use a more flexible kind of decision making in their HR projects. So I’m having fun.

Stacey Harris 2:31
Yeah, definitely. And sounds like you’re jumping right into the middle of many HR professional’s nightmares. The conversation that you’re having about ethics and decision making with the idea that you’re making it on percentages of what you know, at that point in time and a level of comfort with it. I mean, you talk to the HR professionals who are dealing with this inside companies and you can just hear the weariness that’s the best way that I can explain it. So I think anybody can help them better prepare for this new wave of HR will be in high demand. So thank you for the effort. And what I’m hearing is that my ethics course in college might actually come in handy a little bit more so over the next couple of years, and I think it’s going to be a very interesting time to start thinking about how do you give guidance with the idea of probabilities versus the idea of a yes and the no or right or wrong?

John Sumser 3:18
Right. And there’s all sorts of stuff like, how do you give somebody the job of cleaning the bathroom? Because it is a COVID contagion hotspot? What are the ethics of asking somebody to do that job? Is that a good thing to do? Or is that a thing that you have to do because you think you need to open the office and so in order to open the office, you have to risk somebody’s life?

Stacey Harris 3:45

John Sumser 3:46
I wonder. You know, framed up one way it’s we need to do it to stay in business and framed up another way is some people are expendable, and we will pay them probably not as if they were expendable.

Stacey Harris 3:59
Well I think it’s an even more difficult decision. Do I make the decision about who goes to do that based off of who has the most likelihood of being affected by the disease, knowing that there’s a percentage that that may be more effective than others? So do I ask the younger workers to do that work versus the more elderly workers? And what kind of impact does that have on diversity and inclusion conversations inside of our organization? Or what kind of impact does that have on as you said, Hazard pay in our organization? Right. So I think all real conversations that aren’t new to HR professionals, we’ve had these kinds of conversations if you’ve been in any kind of a work environment that has dangerous work within its purview, but I think just now, an extreme heightened level of conversation

John Sumser 4:45
I tihnk this idea that we make probabilistic decisions based on risk factors. There’s been some of that nature. That’s true, but we’re headed into a time where most decisions are made on this basis. Most of what HR does will be delivered in a form of probabilities rather than certainties. So it used to be that you went to HR to find out a certain answer. HR were the people who would be able to sift through all of the conflicting policies and tell you what to actually do. And now, they’re going to tell you that, here’s what we think you should do, and there’s a 60% chance that we’re right or an 80% chance. And so that’s a different kind of answer that makes you want to have better and better questions before you give answers.

Stacey Harris 5:41
So it’s also about how I take that answer, right? As the person who’s getting that insight that I also have to think about how do I respond to it? That’s the other side of this conversation.

John Sumser 5:50
Yeah, exactly. Once you introduce probabilistic information into the organization, you have to have more conversations because the game To get to the best question, so that when you have the best problem definition, you can understand the likelihood that your answer is going to solve the problem. And that probably sounds dreary to a lot of people, but it makes for really robust solutions that are not bandaid. On the problem with HR over the years has been its solutions look like bandaids in hindsight.

Stacey Harris 6:27
Yeah, well, and a lot of the conversations that I think we’re going to get into today, based off of what’s going on in the news, is I think at reaction to that kind of test taking place in the market. We’ve got lots of organizations that are getting big investments, that some traditional HR organizations that are struggling a bit, we have expectations for how people are going to be handling artificial intelligence from a notification perspective again, so to even get to what you’re talking about. That means I have to be allowed to access the data to give the probabilities and then you know There is a conversation, I think about what does the new HR look like. And we have some interesting conversation around that put out by the Harvard Business Review. And our friend, Judy Meister, and some other authors about, you know, tomorrow’s HR jobs of the future. They have 100 different types of future expectations for what the HR professional will look like over the next 10 years. So all along this line of sort of shifting the thought process around HR, any of these topics be of most interest to you based on the conversation we just had, because I think that’s a big thing for a lot of organizations, which is, what is this new HR look like?

John Sumser 7:37
Well, I do want to get to one thing very quickly and that is Zap Info has been acquired by Indeed and Zap Info is a product of a guy named Doug Berg, who has been genius in the way he’s built companies. He’s from Minneapolis and at the heart of the Minneapolis tech scene, which is a phenomenal little microcosm and Doug’s tools are usually things that serve as middleware connecting a variety of systems to give a single result. The last product, I forget its name, but it was an advertising management solution that allowed you to wicker together multiple advertising sources. So you can distribute recruitment ads through their system, zap info, as I understand that integrates data about candidates and pipelines between various parts of the ecosystem and various sources out beyond the company. And so it wants to be the central switchboard for information about candidates contact information, that sort of stuff. And so they are now part of indeed, which is a great thing. It’s a fantastic thing and they deserve congratulations. Good work Doug.

Stacey Harris 8:57
And it’s interesting, I think, in the sense that there’s been a lot of conversation about whether or not the talent acquisition recruiting process is a separate suite of products or a single couple of data products. They’re just all merging together is this kind of an integration tool which help basically, and they’re planning to sort of release it as a free resource that can be used by nearly as they say, All he has is their CRM to automate the recruiting process between their ATS and serums. And Indeed’s product suite but they’re looking at as a great tool to connect indeed, to any kind of ATS and CRM. Does this make the case more so even that there is a separate suite of tools that you will connect into your ATS and CRM that is separate from for the recruiting process do you think this just means it’s more closely connected?

John Sumser 9:44
It’s a really good question. And at its most complex, recruiting is almost not related to HR. At its simplest recruiting is clearly a part of HR. And so there’s this thing that happens as you recruiting efforts get bigger, they become less and less like HR as the recruiting function begins it’s exactly what HR does at figuring out job descriptions and how people fit into the company. But when you get to scale, the recruiting and operations bit, which is what you’re talking about various sources, various contracts, various kinds of employees, various various destinations for ads, various ways of talking to subset groups and reporting process. It looks more like today in today’s model, it looks more like content marketing, like HubSpot, or something with the ATS and the CRM being a data source. And that makes it pretty much unlike the rest of the HR. But we’re about to go into a time when people are hiring in that volume. And so it’s interesting that Indeed is doing this right now because they’ve gotta by forcasting a massive downturn in revenue in 2021. So maybe this is a way of keeping the customers plugged into this, they weather the storm, what’s liable to be the really great depression,

Stacey Harris 11:12
I was gonna say, if you know that you’re going to be looking at reducing budgets in all areas of recruiting anytime you can get something that’s more tightly integrated, that will be the one item you might keep. So I can definitely see this as a play by indeed, to try and get these customers tied into them a little bit more tightly than some other tools. Integration continues to be one of the biggest challenges and organizations are looking for ways to reduce number of times they have to touch those integrations that sounds like this would do that.

John Sumser 11:39
Yeah, and this is also sort of evidence of the power of LinkedIn in the marketplace. That probably sounds off a little bit but LinkedIn recruiters at a certain scale, just use Linkedin. That doesn’t mean it works very well. But it is the very easy way to do recruiting that’s one stop shopping if you’re a little company. If you’re a big company, you run into all sorts of data problems with Linkedin because they’ve gotten bad management on enterprise level behavior. And so that’s where a company like Indeed, can step in and say, hey, we’ve got the capacity to manage organizer and acquire contact information for your recruiting efforts in a way that’s better than LinkedIn does. And that’s the position they’re putting Zap Info in.

Stacey Harris 12:30
Well, it will be good to see, you know, where some of these recruiting organizations invest over the next six months to a year to try and stay in line and connected to their businesses. And I think you said that connection with the data seems to be the biggest point of it, right?

John Sumser 12:44
Yeah. Do you know that Amazon has something like 3,500 recruiters on the staff?

Stacey Harris 12:50

John Sumser 12:51
I can think about what that means.

Stacey Harris 12:53

John Sumser 12:54
But Walmart and Target, you know, many of these monstrous retail companies have recruiting departments that match their employee counts. You know, Amazon, I think is up around 700,000 now. So you need all different kinds of recruiters to keep the attrition at bay. But it’s different when you’re operating in a world where you have that many recruiters and you’re trying to get the entire recruiting operation focused on a small number of KPIs. You have to do things very, very differently and it doesn’t look like recruiting at the 200 person company. Doesn’t look like it all. Procedurally it is so different than it may as well be a separate copy. And that’s hard to communicate when you want to talk about recruiting as a simple function inside of the HR silos. So.

Stacey Harris 13:47
Well, it’s very similar to other processes where I think they have created their own market. Learning is one of those processes, right where learning when you’ve got thousands and thousands of employees to train compared to Learning as an add on to the organization needs completely different applications and requirements, right? You could not use the same learning application for something that requires constant training in your organization versus an organization that only does development for leadership within an organization two very different environments. That would be the same thing with talent acquisition, correct.

John Sumser 14:20
Right. That’s exactly right.

Stacey Harris 14:23
Moving on to some of the other conversations that we’ve got out in the learning side, is probably worth noting that Skillsoft is continuing to work through a restructuring plan for debt. There was some news this week about them coming out of chapter 11. That threw me a little bit because I’d had really sort of quick chapter 11 and the restructuring of debt together, but it is the same thing as you had mentioned. As a buyer in the space. We’re hearing about all these other organizations with investments and growth, we are not seeing as much of the impact in the HR tech space. I think, as we’ve seen in some other spaces around the down economy. Does it surprise you that skillsoft and what used to be the remnants of the sum total brands are sort of having to go through this kind of restructuring process now or is this just been sort of a long time coming, and they’re in need of sort of rethinking their strategy a little bit.

John Sumser 15:09
I think it might be more common than you imagine that companies go through restructuring. Restructuring means their mortgage payments started to exceed their revenue. And so they had to do something to reduce the mortgage payments. Chapter 11 is refinancing. And in refinancing, you negotiate with your creditors about reducing your debt so that you’ve got more operating room so that you can make decisions to invest in this or that and start over again. And the reason that creditors agree to reduce debt load is they’d rather get paid something than nothing. Right? So chapter 11, is, if you work with us, we’ll be able to pay you something and then millworkers recap and so they restructuring the debt in the chapter 11 bankruptcy. And it’s not a common most of the airlines have done this multiple times. It’s bad news, if you are a small vendor that they owe money to a lot of that long time and you lose those invoices. But it’s kind of a normal thing. And Skillsoft has been doing an array of interesting things over the last couple of years. So I imagine they’ll come out of this healthier and more vibrant. And once you declare bankruptcy, you can’t declare bankruptcy again for some period of time. And so once they start to look stable, they’ll be a very good investment for people who are interested in their products.

Stacey Harris 16:45
It’ll be interesting, I think to see, Skillsoft is a story of I think an organization that grew very rapidly very quickly and had a lot of different arms in the market. I’m hoping they’ll come out of this with some more clarity about who they are because I do think that they’re an amazing organization when it comes to understanding learning and development in the market, and really being able to help organization think differently about how to develop a person with an environment that’s more flexible than we often see in a lot of other LMSs. I do you think they’ll have to get to this place where they’re a little too big, too bloated to sort of make the moves they need to move. So that would be nice to see come out of this.

Speaking of organizations that grow rapidly, another name has been in the news this week that we were just talking a little bit about. Maybe we’ll mention just a little bit Rippling, which is run and owned by someone many of us know, Parker Conrad, who used to own Zenefits, and had developed Zenefits, back in the day, just announced that he received $145 million in Series B funding. That’s a lot of money at this point in time in the market with everything that’s going on, $145 dollars. And it’s another competing product who what is now Zenefits which is his old company that he’s no longer part of offering HR talent management, payroll benefits, as well as offering some technical IT services around app management and stuff. What do you think about this, John? It just makes me cringe a little bit to know that someone who did so many things wrong in the HR space, including having people who are unlicensed selling benefits, creating macros to get through training quickly in the benefits space so that you know people could move faster. There’s some real ethics issues with how he approached the work in the HR space. Starting another HR company and getting another round of funding. Does this surprise you at all?

John Sumser 18:32
Well, I think where he got in trouble was doing something that I think we should encourage more, which is not waiting until you understand everything before you make the move. So this is the do you run your business by making sure that everybody gets permission and gets it right before they start early. Or do you run your business so that people ask forgiveness and make mistakes because they think something is logical and then they find out that there’s more to it than that. And I tend to be from the Go ahead, get it done and see what happens perspective most of the time, because it’s just faster to make progress with that. So you knock things over and make mistakes and you misunderstand the marketplace. If you don’t notice that you’re entering into a regulated area. Those are, I think, reasonable mistakes to make. If you are a small business dependent on these sorts of services, you need to carefully understand who you’re getting in bed with, but generally speaking, I think he probably made his investors money and so they’re giving him more and it’s hard to argue with that. The Zenefits thing was a disaster and he exited after having done a pretty good job of screwing some things up. But that makes him much more knowledgeable about these things than somebody who’s never had that experience,

Stacey Harris 20:02
I’ll go with you there.

John Sumser 20:04
So, if I’m an investor and I look at that the money that made this work, the guy made some mistakes that a seasoned person wouldn’t make. And guess what, that’s what makes him a seasoned person. Wisdom requires experience. And you can’t get experience by waiting to get permission, you get experience by doing stuff.

Stacey Harris 20:27
I’ll give you some of that. But I’ll have to say I [unintelligible] the arrogance that went along with some of the approach that he took back in the Zenefits days. I do remember many of the, I’m CEO, I can make the decisions I want to make, conversations that he had on podcasts because he did have a lot of small businesses that were depending on what he was doing. And the impact to them was pretty heavy when he wants to get in the small business space that he’s working with. So we might agree to disagree on this one. I think the, let’s run fast and make mistakes quickly, idea can have a huge impact on companies who don’t have the ability to recover from those kinds of mistakes. Good point though.

John Sumser 21:03
Well, you know, Silicon Valley produces this sort of innovation as a primary product. And it isn’t for everybody. Ultimately, they make things that are for everybody, but they don’t get there by making it for everybody in the beginning. And the marketing and sales people may not make that message really clear. They probably aren’t.

Stacey Harris 21:24
Yeah, they definitely don’t. If we get a little bit more conservative organization, one’s been around for a little bit longer. It’s also worth knowing this week that we got additional investment in a company that I don’t know if you’ve had a chance to configure the machine. I’ve had a lot of conversation with him, which is cloud a copyright is another 35 million and growth capital. They’re out of the UK market. They’re a global payroll, maybe we call them an aggregator, but they do provide some payroll on their own, and they really have created one of the early cloud based aggregation tools for multinational organizations being able to serve customers in 130 plus different countries, they have invested a lot over the last couple of years in creating a platform that allows large multinational to view their payroll in a more accurate way to deal with audit and stuff in a more aggregated way while still using global providers and connectors in each of the region. Definitely a space where you don’t want to take as much risk when it comes to payroll. Because each country each region has its own challenges and government regulations and requirements. But interesting that, you know, this week we’re seeing investments, large investments from recruiting to the whole HR system to just payroll aggregators, all the way through. We also saw investments in thriver, which is a $33 million in Series B funding, which is an organization that focuses on wellness and rewards and incentives. This is a wide mix of investments as we’ve done, do you think the market starting to face a little bit more about where HR could take us in this era of COVID and so they’re sort of investing a lot of different places.

John Sumser 22:58
I think this is just a very extension of the investment that we’ve been seeing over the last couple of years of the investors are getting smarter and making bigger bets. Much of what we’re seeing this week involves bets that have to do with how people think the workplace is gonna respond to pandemic. And that’s a great big question mark. I’m starting to hear many companies talking about opening back up in April. So we’re in this new mode for a while. And when we come out of whatever this time is that we’re in, we’re not going back to something older, we’re going back to something new. And so these bets that are being placed now or about what the new is going to be.

Stacey Harris 23:43
Yeah. Which is a pretty wide spectrum of cloud virtual and more IP focused and wellness focused or healthcare focused. So I think all the things we talked about earlier wrapped back around to what we’re talking about here today. So lots of expectations. I think that HR is going to own a broader have things in the organization, I think,

John Sumser 24:02
Yeah, maybe for the last note in the show, there was an article in the Harvard Business Review about the future of HR. And the first thing that I want to notice is this kind of junk was never published in the Harvard Business Review before Forbes started selling vendor slots and now Harvard Business Review i s selling vendor slots. And so the fact that it’s in the Harvard Business Review doesn’t mean what that would have been five years ago. But there’s this thing about future jobs in HR and at the top of the illustration, there is a Director Of Genetic Diversity. And that is the single most frightening job title I’ve ever seen.

Stacey Harris 24:52
Well, we’d had the conversation, it’s an interesting title and I hadn’t read it all the way thought that we’d discuss it. So when you pointed out that particular one, the genetic diversity officer, the hackles on the hackathon back of my neck did rise, because I was having a conversation earlier with someone about the fact that companies are going to have access to this kind of data, especially if they’re going through this probate conversation. You know, are you more or less likely to become infected at this point in time? That’s a genetic conversation on some level. Wow. Isn’t that just scary, right?

John Sumser 25:21
Yeah, yeah. Well, it’s also nonsense to believe that we’re going to have good enough information about Alexa the next 10 or 20 years to make hiring succession place with termination, challenge levels, assignments, delegation decisions based on genetics. That’s what the title implies, is that we’re going to use genetic information as foundational in management and that’s nonsense. It’s complete nonsense. It’s dumber than the idea that you can tell somebody’s personality by the way their moves in the video.

Stacey Harris 26:06
Yes. Thank you for reminding us that we once did that as human beings, right? That we will continue to make those kinds of very sad mistakes in throughout our human history. But let’s hope that HR is not the purviewer of that kind of mistake. That’s hope HR does not get to 2030 and have this title. There are a lot of other things I think that HR could be doing. Let’s hope it’s not where they’re spending their time in 2030. Which is really not that far off, that’s 10 years from now.

John Sumser 26:35
Less than. Yeah, so another great conversation. Thanks for doing this, Stacey. It’s always fun. And thanks everybody for listening in. We love having you here in our conversations. You’ve been listening to HR Tech Weekly with Stacey Harris and John Sumser. Take care.

Stacey Harris 26:51

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