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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: 281
Air Date: August 27, 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 and John Sumser. Hi Stacey.

Stacey Harris 0:21
Morning John.

John Sumser 0:22
So, are you ‘hurricaned’ yet?

Stacey Harris 0:26
We are not ‘hurricaned’ yet. Here in North Carolina I think we’re gonna get hit with some big rain but we’re not going to get what they’re getting in Louisiana. Our thoughts are going out to everybody right now in the midst of it. Gosh, it’s just been a year no matter how you look at it. You know, we’re dealing with hurricanes coming these directions and you’re still fleeing right now. I think you know, at least up through the next couple of days, from massive wildfires in California that just seemed to have gotten, I think one of them they said was the biggest they’ve had in I don’t know a century or something like that. It was crazy numbers. What more can we say from 2020? It’s been a year.

Are you safe and someplace where you can at least talk about what’s going on with a little bit of relative ease right now and able to breathe the air?

John Sumser 1:08
Yeah, you know, it’s good to be me. We’re holed up in a cute little bed and breakfast way north in California on the ocean. The air is breathable. It’s a delightful high 50s foggy morning. So things are good. Things are good. Now the house is still standing. But you can’t breathe the air there yet. And so we’re going to give it a couple of days to settle down so we don’t kill ourselves for going home. All things considered, this is not the end of the world. It’s just a bump in the road. A little hard to get work done.

Stacey Harris 1:41
Yeah, I saw someone post this morning that you know, Hurricanes fire, and any natural disaster that is continuing to come but isn’t quite there, like you’ve got to kind of wait for that time when you’ve got to get ready. It’s really hard to sort of keep focused while you’re going through it. It’s even harder to stay focused afterwards when whatever has happened has happened and you might be in a different situation.

I think, you know, if there’s anything that we could all probably say that we’ve gone through in 2020 has been some level of productivity stopped in some place in our lives. Like whether that was from the pandemic, or from a job loss, or productivity for our own selves personally, has definitely been, you just have to stop sometimes and just think my mind’s just not moving anymore. It’s really what’s happening, right. But I think we’ve talked about that. There’s just a point once your brain says, I just need to stop and not focus on anything else right now. So, many of us are feeling that way these days it seems.

John Sumser 2:33
Yeah, I wonder though, you know, there’s all different kinds of work and what constitutes productivity. I think we’re going to talk about that a little bit today is the idea that productivity involves always moving one step forward. That’s like Lucy and Ethel on a chocolate line in the conveyor belt scene, in that old comedy. That’s what productivity used to be. But, when you and I stop and change our focus for a little bit the result is often greater insight and greater productivity in terms of idea generation. We may not get 70 phone calls in a row, but we get the opportunity to gel the things that we’ve been discovering. And it’s a different kind of productivity. I don’t think that people who talk about productivity really understand what it means to be a working producer in the 21st century. It doesn’t work like it did when we were making widgets.

Stacey Harris 3:33
Well, and I’m not even sure if that when we were making widgets it worked the way we thought it did. So I actually that was a great example is the Lucy and Ethel. You know, if you haven’t seen that I Love Lucy particular series episode, you really do need to look it up. It’s amazing. But you know, one of the things that I have noticed as we’ve gone to this machine optimization of hours and times and you see this and the pushback from the Amazon workers and you see this and what’s going on right now with our post office here in the United States.

The push for constantly automating, you know, treating a human, like an automated machine like productivity never stops, even in a more physical work environment. In the past, there was space for things like you had your breaks and your time off. And because everything wasn’t tracked to the minute to the hour, you would have people who would congregate and learn from each other, you would have time off to have conversations about how to improve something in the work environment. We’ve lost much of that because we’ve optimized so much. And so I do think that the concept of what is productivity has very much shifted to how much you are actually seeing you are doing right thing you’re getting out of a particular minute or hour versus this idea of innovation, which everybody seems to be seeking, but nobody really wants to invest the open air time to do.

John Sumser 4:46
Sort of. First of all, you’re completely right about what’s happened to workers in warehouse operations or large retail establishments, the attention to and monitoring of every breath is out of hand. And in this taking away the things that make companies great by focusing on extracting the maximum amount of, quote, productive work, you lose sight of what are the things that make a company strong. And so you build this kind of fragile ecosystem where people are combined the beat, but in coding or many other technical slash creative enterprises, you can’t make things go faster than they go. And that’s where I think the productivity measurement stuff gets in trouble because output for coders and problem solvers and managers and product managers is all lumpy. It happens in spurts rather than in a steady flow and the idea that it should happen in steady flow and that you should be able to measure it as a steady flow with an increase up to the right. That’s applying industrial ideas to post industrial methods. And it just doesn’t work. And so the stats get all weird when you start doing that. And the majority of the economy is now in some sort of service operation rather than machine operation.

Stacey Harris 6:18
Yeah. Most of the things of the conversation that we pulled this week out of what’s happening in the market is about this idea of work productivity, who’s losing job posting versus who’s not? This is the conversation that every organization should and needs to be having when they start talking about what if you want to call it, the next normal, is going to be. That’s one of the other things that I saw this week that I thought was done very well. One of the lead technologists over at Salesforce had written i thought was an interesting, you know, very salesy article, but a lot of it focused on what is the next normal meaning that what we had, we weren’t going to go back to which I think you and I’ve been talking about for quite some time that what the world looked like previously, we have now accelerated into something else. And a lot of it has to do I think with the conversation that you were just mentioning.

We have some really interesting stuff going on. You know, COVID-19 is dividing the American worker, great conversation that you and I were just having, but there’s some interesting charts that we should probably get into around that. There’s also some news this week about new job postings plummeting for white collar professional. There’s some industry news that probably worth mentioning, Modern Hire appoints Karin Borchert, I don’t know if I’m saying that correctly, as their new CEO. This is another big change for an organization that just went through a major change last year with the combination of two organizations creating ModernHire. TriNet if you don’t know the PEO base, the Small Business employment sort of space, TriNet is one of the biggest ones in the market, if not the biggest. I think it depends on them and ADP might be competitive as far as how big they are. They have over 313,000 worksite employees, 18,000 clients and they’re adding more technology to their offerings. So they’re creating themselves an environment where they have probably a technology conversation to go along with the services conversation.

Ceridian launched a secondary public offering not sure how interesting that is to many. But you know, it’s just another thing to know about what’s going on. And then we saw a couple of announcements where Ultimate (software) ranked as the number three in Fortune’s best workplace for millennials. They always get on those lists. But that one I thought was interesting because it was focused on millennials. And they noted some of the things they were doing even through COVID to keep that.

As we’re talking about the fact that organizations are trying and workers are trying to figure out how they stay focused in this market, the ex-Google employees formed a virtual tech school for Gap Year students amid college closures.

So, lots of I think, kind of all over the place, data and conversation points this week. But what catches your eye? I mean, is it the productivity conversation we should really focus on today or do you want to talk a little bit about some of the HR tech news, any of it interesting in its own respect?

John Sumser 8:51
Well just to put on the top David Ossip, the secondary offering at Ceridian is all about Thomas Lee partners and David Ossip cashing out a little bit. Ossip has done a tremendous job over what’s gonna be almost a decade now rowing DayForce into the thing that became all of Ceridian. And so the secondary offering is just the investors and the CEO cashing out. It’s a great thing. It’s a great thing.

So beyond that, we should say welcome to the community to Karin Borchert, it’ll be interesting to see how Modern Hire evolves. That strikes me as an interesting placement. She’s…her background is the background checking industry and moving deals around the background industry. So it’ll be interesting to see if Modern Hire heads down that path.

Stacey Harris 9:45
Yeah, for those who don’t know, Modern Hire has now got a video interviewing as well as what was Shaker Assessments which was onsite or developed jobs simulated assessments to help pick the right person for the right job and the right job for the right person kind of a thing. So now end of adding background checking to that seems to be where we’re seeing that direction of selection go, I would say,

John Sumser 10:08
Good so what’s got your attention?

Stacey Harris 10:10
I think it’s interesting to note, out of all of this that we were talking about this idea of what productivity is and what the new job roles are. I was kind of intrigued by the fact that we’ve got all these ex-Googlers. I mean, you know, Google has a huge amount of people who come and go through the organization, but focusing on the idea of putting out there some sort of a mini online schooling environment training regimen, particularly for kids who are taking gap years. This was a conversation I had with my kids who were heading off to college. Do you just wait this year out and work and learn some things online? There’s particularly making a very focused effort on giving this idea of additional training with the idea of they’re going to take other professionals as well as ex-Googlers. To train on very technology focused topics for people who are taking a gap year. Is this conversation about reskilling, you know, getting different skills in the middle of the pandemic environment? Part of the conversation you think about this next generation of work the idea of decentralizing work the idea of decentralizing learning, or is this just a reaction to the pandemic? Is there anything new about this do you think? Or, is this just more people trying to do something different while they’re in the midst of a pandemic?

John Sumser 11:21
You know, I think from what I can tell, the educational establishment is failing and there are not going to be as many colleges next year as they were this year by a significant number. A lot of colleges live month to month are paycheck to paycheck just like the people they graduate and going for a year, which it looks like now without full finances running through means they’re going to be wounded and they haven’t been able to consistently produce people coming out the door with the right skill set. Even though we know what the right skills are. We do know what the right skills are they involve data literacy and being better at math and understanding statistics and understanding how to operate in an environment with those things. And the folks in places like Google know all about that stuff. So they’re doing smart things to help people get headed in the right direction. So I think this is sort of the tip of the iceberg here.

Stacey Harris 12:19
You know, what you’re seeing a lot of this kind of conversation, learn from the experts, making experts more accessible to the market. And I think you and I have had this conversation in the past about how all areas of media journalism, education in general, has been going down the path of getting closer to the person who has the capability or the expertise to do the work with the education component of it. And I think that to your point, is a really big issue for universities because their whole model is based off of we will separate this world will teach you how to get prepared and then you’ll go and do an internship and then you’ll go and do some time working in a small company, but there’s a progressive idea about how you get educated in any kind of profession and some of tha’s being flipped on its head with these new models. Which I think affect this idea of what does this new world look like from both a job perspective, but also from a real productivity perspective? Like how quickly can you hit the ground running?

John Sumser 13:14
Well, it’s also a return to apprenticeship. It’s a total return of apprenticeship. Learning from the experts is apprenticeship. And you can do apprenticeship differently in a world where you can give lots of people the same course content at the same time. And so it wouldn’t surprise me at all to see lots of things pop up. There are substitutes for college degrees and to watch people build careers with those things.

Stacey Harris 13:41
Yeah, exactly. And, you know, part of getting back to the earlier conversation we were having about where where you’re at, from a professional perspective, what is the next generation of workers, the big conversation we started off with, which is about productivity started off for me and you because you had a tweet last week, which I thought was really interesting. It was an online conversation that came out of an article that was written in the Wall Street Journal about COVID-19 dividing the American worker and the stat they threw out, as you were talking about it is that you know, people with high school degrees are less in the U.S. But half of all Americans here have seen their real wages declined for the past 30 years. And the median wage of all workers has stagnated. And there was kind of a question about why. And they started showing some charts that I think we’ve all known it, but to see it in the red and yellow of the chart dynamic showed how effective tax rates for the US companies, by type of expenditure have gone up or down. And what you see is that taxing labor, the actual work that someone’s doing, so basically, your payroll check continues to the same or gone up over the last 20 years. While taxing things like software and equipment, which is all about automation has continued to decline and hit really low bottom numbers. Basically, automating is we’re subsidizing it we’re making it much cheaper to automate them to actually pay employees to work.

This blew the mind of anybody who sort of looked at the chart but also creates a big divide in this worker conversation we’re talking about because that taxing payroll hour is the same conversation we were just having about productivity. So for every hour you’re working, you’re getting taxed versus time spent leaping ahead to innovation or investing in automation. Do you think this plays a big role in that conversation of how people will get trained, where you’ll spend your time, what you’re willing to invest in companies?

John Sumser 15:26
I think what you can say is if that trend continues, we don’t need to worry very much about the relations between people in the two political parties. Because the people who we are standing on top of and starving to death won’t bother with polling places. If the trend continues, where we favor automation over workers with the tax structure, the tax structure favors automation over workers. As long as we keep doing that, then we’re going to continue to squeeze the people at the bottom of the social structure. And you can see, I think one way of reading much of the social unrest in the country is the people at the bottom of the social structure are not happy. And they’re not happy with being at the bottom of the social structure. They’re not happy feeling trapped at the bottom of the social structure. And I would say the tax policy that we’re talking about which penalizes companies for hiring workers and rewards them for automating workers out of existence, that’s as repressive a tax scheme as you can ever imagine, if you’re on the bottom of the social system. If we don’t fix it quickly, bad things will happen.

Stacey Harris 16:42

I think there would be some pushback in this saying that, well, are you saying we shouldn’t progress or we shouldn’t move forward? Because I know early on in the computer conversation in the shift from Agrarian to sort of, you know, industrial age, right was the idea that, well, yes, we would all love to be more outside. But working in a factory was better. We’re automating the world and you can’t stop progress. But I think this is different from that conversation about stopping progress. Because here in this particular case, you’re subsidizing what you might consider to be progress in a way. So, not taking into account the things you need the human capability to do inside your organization, or almost forcing, for example, our artificial intelligence and our automated role generators to make decisions prior to them being really ready to make them because it makes more cost effective to do that.

John Sumser 17:33
Right. So I don’t know how far to peal this one back. But the pro argument is that work always seems, historically work has always seemed to expand to include whatever tools we make, and I certainly believe that. But the net impact of the tax structure is to make it impossible for the people who are the primary consumers of the output of the economy to actually consume it. The whole key to the Industrial Revolution was pricing cars so that people could afford to buy them. And always keeping a clear view of the fact that new automation needed to produce things that people could consume. And seems like we’re running out of that stuff. I’m not sure. But it seems like we’re running out of that stuff. And if you look at the world, the new abnormal that we’re in, there’s nowhere near as much retail in stores and there’s nowhere near as much in the town square stuff, because you can’t. And it’s this perfect storm of economic stuff. It’s just to the fuel more social unrest as people start to be on the receiving end of it.

Stacey Harris 18:45
It’s very scary, and this idea of wages are always going up which is I think what everyone does in this type of environment. There’s a big article this week about Delta Airlines planning to furlough almost 2000 pilots, but they basically said in the article that if the pilots union chose to allow them to reduce everybody’s salary by 15%, they would not have to furlough as many. And that struck me a bit. You know, we’ve been talking about this really interesting thing that’s been happening in this pandemic, which is, instead of making across the board furloughs, many organizations are attempting to reduce payroll, and people are more accepting of that this day than they would have been, I think at any point in time in the past. And it’s an interesting dynamic in this new approach to addressing economic downturn is to say, well, we’ll just reduce your salary, which is also then creates the conversation about the value of work and skill, if we can reduce everybody’s pay by 15%. Does that have an impact on what the value of those skills and capabilities are in other organizations? So then the whole industry has that sort of reaction to it? Do you think that plays a role in what you’re talking about as well? Is that the way we’re looking at labor as the problem child to address and try and automate our ways out of it also play into this new focus on reducing salaries.

John Sumser 20:03
I don’t know if that’s exactly right. But it makes it possible. The largest cost in any business is its labor costs. And so there isn’t an executive who isn’t interested in reducing labor costs. It may be that the entire structure of management and how we think about managing enterprises is also coming under fire a little bit, because the idea that you make money by eliminating the people who in the long run buy your products is a little bit like circling around the Whirlpool as you go down the drain. Maybe that’ll get clear, but it’s time to make sense out of it, because the Dow Jones Industrial Average has become completely unhinged from what’s actually happening in the economy. And so there are people all over Wall Street claiming that this is a great economy just because the stock market continues to go up and.

Stacey Harris 20:59
Well yeah I mean.

John Sumser 21:00
If work is going up is a good way to buy votes.

Stacey Harris 21:02
If we’re following other public companies in our space I don’t think there’s a single one that has seen a stock market hit at a point at which we thought they would. Workday’s numbers are up. We’re seeing Successfactors numbers are up, expected for the next quarter as well. Salesforce just hit its highest stock price ever. I was like, wow, yeah, they’re not hurting on the stock market level at all, which is completely separated from the idea of what we’re seeing here with large layoffs and people being asked to decrease salaries and people being asked to do more work with less employees inside the organization that they’re canceling job reqs. So yeah, very separate perspectives on how you look at what is an economic downturn or an economic crisis.

John Sumser 21:20
Yep. Well, so another gloomy, gloomy, gloomy day here?

Stacey Harris 21:50
Yeah. Not gloomy. We were talking about important topics!

John Sumser 21:57
I think you win the doom and gloom award for this week.

Stacey Harris 22:02

John Sumser 22:02
I usually win that award. So, one of these days people will figure out that we’re both from Ohio and that’s the real problem.

Stacey Harris 22:07
Yeah, exactly. There’s pessimism built into our DNA.

John Sumser 22:02
There you go. So you’ve been listening to HR Tech Weekly, One Step Closer with Stacey Harris and John Sumser. We will see you back here again next week. Bye, bye now and thanks Stacey.

Stacey Harris 22:02
Yeah, thanks everyone. Bye!

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