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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: 28
Air Date: July 9, 2015

 

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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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Begin transcript

John Sumser:            Good morning and welcome to HRTech Weekly: One Step Closer with Stacey Harris and John Sumser. I am John Sumser. Stacey, how are you this morning?

Stacey Harris:            I’m doing good this morning John. How are you doing?

John Sumser:            Wishing that we had some of your North Carolina rain here. I’m sitting in this California tinder box.

Stacey Harris:            Yeah, I think it’s extremes on both ends, because we’ve got more rain than we know what to do with here in North Carolina. We were just talking about that. It might be causing some problems on the internet lines. Because everything’s sort of frizzled and frazzled here.

John Sumser:            It’d be nice to be wet for a little bit here. It’d be very nice to have that problem. What’s going on with you? How’s the survey coming along?

Stacey Harris:            Survey’s wonderful, we wrapped up last week. We got the numbers that we needed to meet our totals that we were looking for. We’re even going over slightly because we’ve got some people continuing to finish up this week. Just a big thank you to everyone who participated, so we really really appreciate it. All the data we’re getting ready to crunch and analyze, fun fun stuff. This is the fun part of the opportunity that I’ve gotten at working in this project. We’ll have everything released in October.

John Sumser:            Awesome, so it’s going to get busy in a different way. You have to go and look and see if there’s a way to think differently about the data that you’re getting.

Stacey Harris:            Very much so, yeah that’s the fun thing. I know you’ve been doing a lot of that, so today hopefully we’ll get a chance to talk a little bit about your report that came out, what about a week, two weeks ago? The Optimal Technical Stack, right?

John Sumser:            A week ago, the Optimal Technical Stack. It’s a very interesting bit of work. We’re really excited about it. We’ll weave that into the conversation today. What’s on the top of your radar?

Stacey Harris:            It wasn’t a huge news week this week, particularly in HR Technology. There was a lot of sort of HR news. We saw that there was a big report that came out from the Labor Department saying that May hit a fourteen year high in the number of job openings in the market since [inaudible 00:02:22] been tracking them in 2000. That was the highest they’d ever hit, so 5.4 million job openings. Now I was more shocked by the fact that we just started tracking job openings in 2000, but it was good to see the numbers come out that way.

There was some interesting I think data points on some conversations about big data analytics that we saw a couple of articles on. I think Walmart put a big article on about it that might be worth maybe talking a little bit about how they’re finding their big data analytics skills for the company as a whole using tools like the Kaggle Platform. I’m not even sure if I’m saying that correctly. You probably would say it better, but that’s where they do competition searches for programmers by putting them in competition programs, so that was sort of interesting.

I think probably the most interesting to the HR Tech community though was, actually just came out yesterday, was the news that KPMG is acquiring Towers Watson’s Human Resource Service Delivery Practice. Now the previous week we heard that Towers Watson was merging with an insurance company, an organization that deals with benefits and insurance. Now we’re hearing that Towers Watson is sort of selling off their, what we’d consider services side of the business, implementation, HR practices, those type of things, consulting, to KPMG Global. Which will be, and they’re selling off their US, China, Hong Kong, there’s a couple others they mentioned, but basically their total global HR services industry to KPMG. What was more interesting to me was what they said they were going to be left with at Towers Watson.

John Sumser:            What are they going to be left with?

Stacey Harris:            Well at least from what their, Max, and I don’t know Max Caldwell all that well. I know a couple other people over at Towers Watson, but I don’t know Max Caldwell that well, but Max Caldwell who manages their data surveys and technology group said that they’re going to be focusing and the business shift … Well here I’ll read the quote so it makes a little more sense. “As our focus in this business shifts to growth of Towers Watson’s proprietary HR software solutions, we are pleased the HRSD practice will continue to thrive at KPMG.” My take on that is Towers Watson is going to be doubling down as a software provider.

John Sumser:            They sell off the implementation to KPMG, so that they can focus on software. Do they not understand that in implementation is where you discover all of the requirements for software? Is this another blissed organization paying too much attention to its own management view of the world, and not enough attention to how the world actually works?

Stacey Harris:            You know not having talked to anybody over at Towers Watson, so not knowing anymore then that about where their goals are right now. I will have to say I was sort of shocked. You know we’ve seen other HR services firms go down this path. One of them being Mercer who had a solutions group, and still does have a solutions group, but I don’t think they’re emphasizing it quite as much as they have in the past.

Then we know that Deloitte has put out a couple of articles about them sort of launching various areas of software technology, particularly in the portal and self service areas from their side of the business. This is definitely a trend we’re seeing from these big consulting firms, but I think you’ve got a good question. Do they think that they know more than the existing software companies?

John Sumser:            I’m sure that the fantasy that you can get subscription revenue so that the only cost you have to manage are the variables in your delivery is what attracts everybody in these businesses to the idea that they could be a software company. Software companies, when it works right, have the delicious business of being able to know precisely what their revenue is, and being able to focus more exclusively on cost.

If you’re running a big consultancy that must look like the promise land. Because the problem in a consultancy is getting the workloads spread appropriately so that you don’t destroy the workforce by getting your work. Right, because all of consulting is so variable. A finance, somebody with PNO responsibility in a consulting shop has to balance workload and cost all the time. If you didn’t have to do that life would be groovy, so it must look like an amazing oasis in the middle of the desert, but it isn’t real. Large bureaucratic organizations of white men in suits don’t produce software. Right, look at IBM, right as soon as they call these white men in suits-

Stacey Harris:            I was just going to say IBM is an interesting example. IBM went sort of the opposite direction, right. They went from hardware to supposedly being a consulting services business. Which I think they made that transition fairly well, but I think they’ve never quite handled the software side of it very well. At least from what I’ve seen. Other people might have different perspective on that.

John Sumser:            Nope, nope, nope, IBM is amazing at service delivery and sales. IBM is amazing at service delivery and sales and you can’t seem to till that culture with bad business decisions. They’re no longer a software company. They’re no longer a software company. They haven’t been a software company in a million years. The idea that some of these operations that are really really good at servicing the bureaucratic layers of large organizations could turn around and become agile software geniuses. Clark Kent can go into the booth and come out super man, but organizations don’t usually do that.

Stacey Harris:            Well and again I don’t know enough about Towers Watson, so I’ll be very [inaudible 00:09:06] I think it’s worth us maybe doing a little investigation before we come back to the conversation a bit. Myself I think that a lot of their focus is probably on benefits and stuff [crosstalk 00:09:16].

John Sumser:            Investigates work [inaudible 00:09:16] solutions, come on Stacey.

Stacey Harris:            I know, not that analysts ever do that. There are some gaps in some solutions in these offering areas, right. I just had a conversation with Rhonda Marcucci who runs a big benefits sort of advising and consulting industry space. She was giving me a very interesting insight into what she sees as a complete gap in the HR technology sort of stack area. Which is in the benefits place. It’ll be interesting. You know we’ll wait and sort of see what they’re going to do, but I think that this commentary on the fact that these services organizations can do what the software organizations can’t do is I think a challenge not only to the software organizations, but also to a lot of the service organizations in the industry. Because really if you’re sort of following what’s happening outside of HR. If you’re seeing what’s happening in other technology spaces, it’s not the software that’s really making the news. It’s the data, and the data crunching. I think that’s pretty much where IBM is heading. Which is that we want to own the data. Now can you own the data without owning the software is the question.

John Sumser:            Yeah, it’s an interesting time. What this does is it makes the work of companies like OneSource Virtual very interesting all of the sudden. Because it seems to me that you could describe what’s going on in the incumbent consulting shops as packing up their tents and going home. If Towers Watson isn’t about implementation and on the ground HR consulting what does that have to do with Towers Watson? This is Towers Watson selling the heart of the their business to KPMG.

Stacey Harris:            Yeah, it was definitely something that surprised me.

John Sumser:            Yeah, very interesting, very interesting, so what else we got on the pile here? Oh you know what I wanted to talk to you about, there’s this new service called Network Monkey. [Java 00:11:47] Rate also has a similar service. It looks at your staff and their social media behavior, and alerts you when your staff is looking for a job, now besides creepy.

Stacey Harris:            I was trying to be polite about it John.

John Sumser:            Yeah, no no that’s just creepy. I mean there’s nothing you can say about that that isn’t creepy. We’re going to have automated spies checking whether or not you’re applying for work. Of course what we’ll do then is shower you with gifts so you’ll stay. Except anywhere that anybody works.

Stacey Harris:            I’m not quite sure which is the harder one to sort of swallow. Which is you know most of the HR systems right now their data analytics and their predictive analytics is focused on … The first thing they always come out of the door out of is who could be possibly in the zone of wanting to leave based off of things as different across all of their algorithms as how far someone lives away, how long they’ve been in the job, whether they have spouses in different roles, all kinds of different things that they’ve built into the various algorithms with these various systems. This I think if I understand you is taking it one step further. It’s actually going out there and saying, “Are you looking for a job based off of not only what you’re doing socially, but what you’re doing by clicks on your computer, what you’re Google searching.” Is that what it’s saying?

John Sumser:            I don’t know the details of the algorithm. I’m going to guess that it is described in the same predictive terms that if you look at the following hundred and forty-two characteristics and somebody picks off a hundred of those boxes they’re liable to be looking for work, or are looking for work. It’s the question that the companies are watching that. That’s the interesting thing I think. Yes, lots of people are selling that. This is a stand alone looks at external behavior service, and so it’s a littler creepier because it’s fully stalking rather than just combing your internal HR data. There’s a big interesting question about, it’s ahead of the law. There’s nothing that I’m going to say that anybody has declared illegal yet. If you aggregate all of your data about me you’re going to discover things about me that I don’t want you to know.

Stacey Harris:            That’s the scary … Well it’s not even just that they’re going to discover things about me that I don’t want you to know, but and you know is that legal or not? Then the real question becomes, what do you do with that data? There’s where the legal issues and ramifications come in, right?

John Sumser:            I don’t know. We should have an employment attorney on the show sometime. Because I don’t know if it’s, you know in the states where it’s at will employment most places, I don’t think it’s problematic if you fire somebody for looking for work. I think you can fire people for whatever reason you want to fire people. In fact, you’re not required to give a reason in the United States. You can fire people just because you want to fire them.

It happened to be the case that as I was reading about Network Monkey my daughter came home from her job and one of her coworkers had been fired for looking for work. I went, “Oh right, that happens all the time doesn’t it?” Of course it happens all the time. Putting tools out there so that employers can be more comfortable in their paranoia about staffing certainties, it’s the new age. It seems to be that we’re starting to cross some kind of a line. Right, because if you can see and infer my job hunting behavior, then you can see and infer my other kicks and peccadilloes. All of the sudden you have the capacity to make decisions about things that people don’t even know how to protect yet.

Stacey Harris:            Yeah definitely, and that’s the challenge. Which is, you know but what would be worse then maybe firing someone? That’s I think the other thing is you might be able to fire them at will, but if we’re in a market, as we just said right, where we have 5.4 million openings at least in the US here for the moment, and 2.7 million Americans quit their jobs in May. That’s as close to pre-recession numbers as we’ve gotten in the last, whatever eight years since the recession or so. What else could you be doing to people besides firing them that could be crossing the line as well? That to me is even more concerning. Which is how does this roll into any type of talent management strategy? What do you do with this data? There’s a lot more negative that you could do with it than positive, right?

John Sumser:            Well so I think what’s hard to get in this kind of conversation is that most people everywhere, but certainly in the United States, most people don’t really have career mobility. Most people live in a town of two hundred and fifty thousand people that’s two hours from every other town out in the middle of Kansas or something. Like eighty percent of the population lives in a town of two hundred and fifty thousand people that’s two hours in any direction from the next town. To suggest that everybody in those local employment markets has career mobility and trace in what they do is silliness, it’s silliness. Only a very select group of people have career mobility. Everybody else is lucky to have a job, and operates in a place where it’s quite difficult to move between companies. You don’t really do that unless you don’t have any choice.

If the boss who is an untrained manager, promoted probably because they were good at what they do, decides that they’re going to get you because they don’t like what you’re doing. I think that’s the reality for lots and lots of people. That’s certainly what the movie Office Space was all about. I tend to think that stories like this end badly for employees to become more and more constrained. You have to not only care about whether or not there are pictures of you drinking in your Facebook globe, but now you have to care about the implications of your focus, and the implications of your history, and [inaudible 00:19:53] that.

Stacey Harris:            Is there a space that where it also ends badly for HR? Because HR’s attention is on the wrong things. This is the question I had when you first showed me that site. Besides thinking was it a scam. I think kind of going, “Oh well this is sort of different?” Was where should HR be spending their time. If this is where they’re spending their time is this what HR has come down to, and this is the idea of what big data is supposed to be in HR?

John Sumser:            I think what’s interesting about that question is that HR is extremely expansive in what it actually is. If you go to a heavy manufacturing operation in northern Minnesota, what HR does is totally different from what HR does in a software company and a startup in Silicon Valley. There’s nothing in common. Because, you know at the most extreme level in northern Minnesota where safety is a massive issue, drug testing is to prevent. If there were such a thing as drug testing in Silicon Valley they’d be testing to see if you’d smoked enough pot.

Stacey Harris:            I’m sorry it just makes me laugh. My Ohio sensibilities have just been … Sorry.

John Sumser:            That’s okay, that’s okay. It was meant to be provocative. The difference between some place that runs on safety where HR must be a strident police force, and where HR runs on delighting employees so that they stay because the competition is so severe. You couldn’t have bigger differences in core mission than that. In the part of HR that’s about safety, that’s about making sure that you have a drug free workforce, that’s about a way of doing business that’s fundamentally surveillance already, this sort of thing will plug right in. The question is whether or not it will plug in with the other end of the spectrum.

Stacey Harris:            If this is the world we’re sort of shifting to … Well we’ve been there, by region each of these things looks very different, and how you would use these tools would be very different. At the end of the day certain roles, certain positions, no matter where you’re at in the US, internationally or not, right are still in high demand. The programming roles that have to do with big data and analysis, although they’re in higher demand East and West coast, they’re still in high demand in the middle of the states. They’re in high demand in other countries and industries trying to deal with this on slot of data in every company. If Walmart is looking for big data analytics people skills, and they’re in middle America, and where they’re hiring from, then they’ve got the same issues that we’re having on the East and West coast. Looking at the story from Walmart this week about how they’re sourcing using … Is Kaggle the right way to pronounce that word? Is that a platform you know?

John Sumser:            I think it’s Kaggle. Yeah, it’s tempting to call it Keggle, but I know that that’s the way to pronounce [inaudible 00:23:40].

Stacey Harris:            I was trying to take note, sort of wrap my head around this. Which is does someone being involved in a Kaggle event, right platform. I don’t know how all that works, but does that mean they’re looking for a job, or are they just trying to show how good they are at a certain project or initiative? What becomes the, “I’m looking for a job” tipping point? What becomes the tools we use to look for really good talent if we’re really looking at those really really rare talent skills?

John Sumser:            I’m not sure it’s just rare talent skills. This drives us back to the [inaudible 00:24:25] and blue suit organizations become software companies question. The deal with jobs at the cutting edge of the economy, so software development, product management, even advanced marketing jobs. When you get the job it’s never the job you signed up for, never, never. The moment you take the job the job becomes something different than it was when it was sold to you. Job descriptions create all sorts of unreasonable expectations in the process of getting people to join your company that having competitions is circumvent. If the idea is here’s a, let’s put it in masonary terms. Here’s a brick wall we need you to build, and we’re going to give the job to the person who builds the best brick wall. That’s easy to understand, yes?

Stacey Harris:            Yeah.

John Sumser:            What they’re looking for is work style and work output. Competition is great if you are the kind of employer who people will compete to go to work for. That probably means you have to really work hard on your employment brand and places where there are services. Because just because you have a competition doesn’t mean everybody’s going to show up to compete. You have to have the “I want to participate in that company” factor working in your favor. Walmart can do it. I probably couldn’t succeed very well having a competition for software developers. Because there are no software developers who want to come work for me.

Stacey Harris:            I don’t know John, Key Inter Valley you could make that name really resonate if you did the right things, right? Walmart-

John Sumser:            [inaudible 00:26:32] hire some employment branding people.

Stacey Harris:            Exactly, yeah yeah, Walmart mentioned that one of the things that they had done in their article, why they had done this in part was not just to find the programmers, but “Was to make Walmart sound cool.” I thought that was kind of an interesting quote.

John Sumser:            Think about that, think about, “We’re going to make Walmart sound cool by the way we hire people.”

Stacey Harris:            Yes.

John Sumser:            That hurts my head. I think it’s right. I think it’s right, but it hurts my head.

Stacey Harris:            Well and it gets back to the original issue that we were talking about. Which is that can a company change its stripes? Can a company rethink who they are, right? I mean Walmart probably has more data on, at least the US population, maybe not outside the US as much, but at least the US population of buyers than any other organization in the country at this point.

John Sumser:            Except Amazon, except Amazon.

Stacey Harris:            Well Amazon, that’s probably a good point, yeah.

John Sumser:            Who is now their largest competitor. That’s why they’re doing this. Because they don’t have any choice, but to become a software company. They’re getting their butts kicked by a twenty year old internet company that doesn’t have all of the bricks and mortar overhead.

Stacey Harris:            That makes sense. Yeah, well very true, yeah. Maybe that’s I guess the original conversation is that where the consulting companies are trying to head to right. Right, to become an in the cloud internet software company versus a people based company.

John Sumser:            That’s exactly what’s going on. The only question is, is there any there there? I think the way you persuade your boss to buy off on a strategy like that is you point to declining sales revenue and increasing variability in the cost. You say, “Look over there in software they don’t have to deal with that. Let’s go there.”

Stacey Harris:            Well I think this will be a space to watch.

John Sumser:            There’s probably six months of analysis in. Six months of analysis to get to that, but that’s the story. Is, “It’s better over there, let’s go do that.” Sometimes that’s exactly the right thing to do, and sometimes that’s exactly the wrong thing to do.

Stacey Harris:            It’ll be interesting to see how quickly some of these organizations can turn around. I’m not sure that I would make a bet in any direction yet. I would say, you know Mercer’s probably one of the few organizations who have gone through one of these transitions that probably worth having a conversation with a few people over there. To see which way, you know things have worked out for them. Because I can’t think of any other consulting organizations that have sort of moved in this direction. Can you, at least on the HR side?

John Sumser:            There’s always been talk at all of these companies about whether or not they’re technology companies. The actual formal moves have not emerged. I think if you talk to the right people in [inaudible 00:30:01] they’ll tell you a similar story.

Stacey Harris:            Yeah, that’s probably true yeah. Thinking about some of the moves they’ve made recently too. That’s a good point. Well it’ll be interesting to see. I don’t watch that space quite as closely as I watch some of the HR tech areas today, but I thought that was well worth having a conversation about today. I mean we’re right at the bottom of the half hour John. It’s been a good conversation as usual.

John Sumser:            Yeah, thanks Stacey. These are always fun. It was a great one today, so thanks. We’ll be back next week.

Stacey Harris:            Thanks everyone.

John Sumser:            Thanks everybody. I hope you have a great rest of your day. Thanks for tuning in.

End transcript

 

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