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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: 30
Air Date: July 23, 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 with One Step Closer with Stacy Harris and John Sumser. This is our thirtieth show. How are you this morning Stacey?

Stacey Harris:            I am good John, thanks. Thirty shows, wow. I am actually kind of surprised I did not think we had done that many so far. That is a bit of a milestone.

John Sumser:            It is. It is. We have been at this for a while. We are starting to figure out, maybe, that we know what we are doing. Or at least that the news flows well enough, so that we always have something to talk about.

Stacey Harris:            Lots of stuff going on. Even in the quietest of moments, there is always something to talk about.

John Sumser:            So, what do you see out there?

Stacey Harris:            Well, there was a couple of new announcements that came out this week. Probably, the one that got the most, I guess if you call it “press” in the HR Tech space, is that Oracle released the Oracle HCN Cloud 10. That came out on July 20th, and they had some new updates with that. Those to both their products, and some of their plans around analytics. We also got an interesting announcement from Ultimate, about their ACA packages and capabilities. I think that is worth talking about in contrast of what is going on with Oracle, because there is kind of two different approaches to how organizations are sort of approaching the market.

There are some interesting topics that I think you highlighted on your personal accounts around Accenture. I had not seen this until you had highlighted it. Accenture is getting rid of their annual performances. There is a lot of conversation about, “Well, we have been talking about this for a long time, but this is a pretty big organization, at this point.” Microsoft did it two years ago, but they did it in a little different way. There was a couple other organizations that did it, but Accenture has made big news about getting rid of their annual performances. We have got some other small stories that, if we have time, to get into; About how both data analytics is changing for the retail space, and how that might hark-en what we are going to see on the employee space as well. Those are probably the biggest things, I think, this week.

John Sumser:            It was good to see you last week. Where were you, Las Vegas?

Stacey Harris:            We were in Las Vegas, at the Ceridian event. Yes. Ceridian’s user conference last week. That was actually really nice. I would not say it was a break, but it was nice to see everybody. During the summer months we do not generally get a chance to get out and see everyone.

John Sumser:            Yes. Everybody who has any sense at all, wants to be in Las Vegas in July. Breathing is so overrated.

Stacey Harris:            Exactly. I came home, and I said it was … Between the heat and the dust there, I had a massive migraine when I came home. I came home to my hot, and humid North Carolina, and I have never been so happy, I think. (laughs)

John Sumser:            Let’s talk about those two approaches to functionality. Oracle released its big release and it has got some stuff. Oracle is really busy reinventing itself, I think. At least in our arena. In the HR, HR Technologies arena, Oracle is doing amazing things reinventing itself. They have released this grand functionality and wellness and reputation management, and competitions internally to get things done, and career development. At the other end of the spectrum you have Ultimate who’s new offerings include different approaches to getting things done, rather than a new slug of functionality. What do you think about those two things?

Stacey Harris:            Those two things, this would be great announcements. Two organization that are sort of servicing … Not the same community. Ultimate definitely focuses a bit more mid-market, small organizations. Oracle HCM Cloud obviously has a larger focus on larger companies, but both of them meet in the middle. They are both serving that core HR mess, core talent management area from a technology perspective. Oracle is definitely taking the approach of, if we can get the most flexible system out there, as far as features, functionality, capabilities. We make that more user friendly, than it has been in the past, and we focus on the ability of people to do a lot of different things, in a lot of different ways. Not the customization, but configuration of what they offer, then we are going to be able to serve the needs of almost everyone in the market. Where Ultimate, and I think this is very telling, because we are not just seeing this from Ultimate, we are seeing this from a other vendors in this space. I think Ultimate’s announcement is a good example of this, this week. They came out of the gate with ACA capabilities. This would be … I can never remember “ACA”, what it stands for. I always want to say, “Obamacare” and I know that is not exactly it. It is the …

John Sumser:            It is the Affordable Care Act.

Stacey Harris:            The Affordable Care Act. Thank you John. For some reason the “Affordable” piece always slips by my head, when I am working on it. The ACA requirements really talk to organizations about what they need to have done for Twenty-Sixteen. Twenty-Sixteen, there is a lot of reporting that is going to be put in place. A lot of the regulations that we were ramping up for are coming into fruition in Twenty-Sixteen. What Ultimate has launched, is basically three ways to address the ACA requirements.

Basically, what they have said, is that we have a toolkit, which gives you all the reporting capabilities wrapped up in a single tool-kit. You still have to get the documents filled out. You still have to do the analysis. You still have to get it all sent off to the appropriate organizations. The second service offering, is the idea that we will do what they call, “not quite a full service package, but a distributed services. It basically means, you get everything filled out, you make sure you do all your own analysis, but we will make sure the paperwork will get to where it needs to get to. They have a complete managed services model, which basically means that they will take care of everything, for the most part, for you ACA requirements. To me, this is really interesting because the fact is, that they are not saying we have more capabilities in their system, what they are saying is that we are offering you more services, more content pre-packaged, ready-to-go, a solution all-in-one.

The system could probably do this already, it was just now their packaging up and away that made sense for the communities that they are working with. I think what you are seeing more of from Oracle, is we have got lots of capabilities, you go figure it out. This system has so much features and functionalities, and Ultimate is definitely saying, “We have these packaged solutions.” I do not know which one is of more value. I do not think there is an answer in that question, but I think there are definitely two different approaches to the market.

John Sumser:            I think, what is really interesting, and correct me if I am wrong, didn’t the Oracle core business model in the beginning, amount to you hire us, we bring the software, then we do the job for you?

Stacey Harris:            Yeah.

John Sumser:            There are legendary stories about the number of Oracle consultants living inside of the organization. The business of getting the software installed, and operating, in those days, required that thing. Now you see Oracle saying, “Oh, we want to be more like, packaged good software, delivered just the software. You do what you need to do from there. Where Ultimate is going, “Oh you know that old Oracle, well that was pretty good. Let’s put more bodies in the work.

Stacey Harris:            Possibly. The managed services model on the Ultimate side, I still don’t think is, “We are going to put people inside of your company”, but it is definitely, “We have kind of packaged up a solution, and our people will take work off your plate”, is generally how they are sort of looking at it. On the other hand, Oracle, still has people that they want, invested in the software, and helping you use the software. I think it is more on the technical side still, than it is on the content, and the solution side. That, I think, is the main difference. Oracle is leaving a big window for all of these implementation firms, all the big consulting firms, all the boutique HR consulting firms to basically go in and say, “No two systems are going to be alike, just based off of how I configure it, and content I put into it. Let’s help you do that, to your specific organization.

John Sumser:            This is the same approach that Workday is taking, which is that we only do one thing. It is that score off the eco system, but we don’t do other people’s work. In the work day environment, implementation … Something as important and intimate as implementation, is handled by third-party firms. The net effect of that, is that the ecosystem grows, and the customer gets extraordinary expanse in the functionality. It seems to be that Oracle is taking a cue from that. If you do not do the work, and you have someone else do the work for you, and you set that as the tone in the eco-system, then the amount of functionality and capability, available to customers expands … The ultimate model, which is a more closed eco-system kind of model, the amount of work that actually gets done that feels under control is what expands. You could look at this whole thing, as an argument about whether or not you need more functionality in your software, or if you are just need to get stuff done.

Stacey Harris:            Yeah. I think they is buyers for both sides of that. That is the piece of this that is a reality. When you talk to buyers, there are buyers who want a lot of open flexibility. They want the ability to do what is unique to them in their organization. There are many buyers, big and small, and I do not think this is relegated to small organizations, who would rather focus their attention on their core-business models, for them specifically. In their perspective, some of the things that happen in the HR realm, particularly on the compliance side, they are looking for an organization that can provide the solutions for this packaged all in one. Right?

John Sumser:            That is exactly right. The question is, how core to your business do you want HR functionality to be. I do not know anybody who went in the business to be good at HR functionality, except the companies that we monitor. There is at least some argument that says, while people are our most important asset, the HR associated with them is not.

Stacey Harris:            I think Accenture is a great example of this. Right? We were bringing up the story of Accenture, and part of what they have done, is they have not gotten rid of performance management. What they have gotten rid of is the annual performance review, and they have gotten rid of all the hours that invested in that annual performance review process, right? They have not really gotten rid of the technology they were using for that, but they are definitely looking at that technology as a different type of tool now. What they are doing is, they have gotten rid of stacked ranking, they have gotten rid of required curves. People are still doing performance conversations, and they have built those into the everyday work model, and they are just not getting an annual rating in that process. I actually have got a call out to a couple of friends in Accenture, to see what their plans are for making compensation raises, because they did not mention that in the article I was reading, and I could not find it in any of the other articles. That is the one piece that really gets lost in this conversation. They are basically saying, “We were investing too much time, energy, and it was not adding value to our bottom line to invest in this HR process.

John Sumser:            A couple things are going, I think, that are driving this. One is, do you know salary compression is Stacey? I think people out on this call, might know what salary compression is. It is what happens when young people coming into the job that get paid more than the people who have been there for a while. In order to recruit new people into the organization, you would have to pay them more than existing people. This has happened traditionally in engineering, over time, and it happens in other technical disciplines. Since most disciplines are becoming technical, it is happening, kind of, across the board. The idea of giving raises in the old-fashioned way, where you distributed a percentage across a curve, fails when that means that the dollar value of the new guys raise, is higher than the older person’s wage could ever possibly have been. If you do not solve it you get huge attrition problems.

Performance management, as a way to divvy up the wage pool, is broken. It is broken by the fact that the economy is doing really well in a time of demographic transition. That puts all this weird pressure on organizations. The other thing, is that performance reviews on an annual cycle, make this weird assumption that that is how anything happens. Pretty much the only thing that happens on an annual cycle, is budgeting. The best of most businesses, is more opportunistic than that. It is unusual to find somebody who has a job where annual goals make sense. Go ahead.

Stacey Harris:            I think that is a great way to explain it, John, because I think that is the challenge that organizations have been facing, if they are in a fast paced, fast growing market. I think where this also has some challenges, is that not every role is the engineer role. What does this mean for everyone in this organization?

John Sumser:            That is true. It is also the case, that every role in the organization has significant technical components, and significant requirements that you have to learn new technology on a regular basis. Don’t you think? Even way low-level retail workers have to learn new technology all the time, you know. Their jobs are technical. Their jobs involve interfacing with some sort of device.

Stacey Harris:            In this environment, and this is where, getting more details … You were talking about earlier, which is the idea that we are in a market where the employee, and their goals, and their approaches, are not an annual approaches. Which means the systems that were built, sort of manage those annually, do not quite work. How does the employee go about, the existing employees as well as … The new employees generally have a model for how they gain their salaries. They go out, rank, figure out where the market is at, right? In this market, what we are finding, what is the new model then for people, if they are in an organization for a long time, is it I have gained new skills? I have gained new capabilities, I have moved into a new role, I have gained more resources underneath me, whatever it might be. Is that the point at which you start to looking for more financial compensation, more benefits within an organization, and those one-off conversation all the time, is there a need for a process then?

John Sumser:            You can not really, effective manage the profitability of an enterprise without putting constraints on things. You can not just give people raises because you had a conversation with them, but there is this interesting thing. You were talking about, this only really applying to growing industries. What I realized when you said that, is if you are not in a growing industry, then somebody in your industry is busy figuring out how to outsource all of the jobs to places at a lower cost. You can only afford to do things this way in growing industries. When the growth stops, then the competition is about cost, and cost means getting the work done in different markets. If you are not in a growing industry, you do not need to be worried. You do not need to be looking for how to get into a growing industry. The same thing is true about your personal learning. If you are not learning and developing in an aggressive way, then your wages are going to go down, because the people you are competing with for the work are going to be increasingly lower wage people. This is a message for both organization and individuals, that we have entered a time where the advantage always goes to people with the latest knowledge.

Stacey Harris:            Mm-hmm (affirmative).

John Sumser:            Always goes to people with the latest knowledge, and our compensation systems are situated to deal with that. Zappos is trying an interesting system where they pay based on skills. It is a return to, what I remember, of union work in the factories in Ohio, and Michigan, where your ability to have the next job depended on mastering some skills that were pretty well laid out in contracts. Zappas is trying to build its compensation in a similar way around skills. As you acquire skills, your compensation grows.

Stacey Harris:            Yeah. I had read the article. They were doing badges, and they said their badges are not quite there yet. The badge concept is where they are hoping to go with that idea. That goes beyond I think even the union environment. That goes all the way back to military, right? The idea that at each level of training you get increases your overall ranking, which increases your overall compensation benefit.

John Sumser:            Exactly. That is exactly right. Zappos is in the military.

Stacey Harris:            I am not sure that they would like to be connected to that, but okay. The two holacracy, What do they call it? I can never quite say it right. Holacracy, is that how you say it?

John Sumser:            Holacracy.

Stacey Harris:            Holacracy.

John Sumser:            It is a way of talking about the exact same problem, which is that if you get high up enough in the organization … This is what we are finding, consistently, in our research, is that the buyer, and the user are disconnected from each other because they are too far apart in the organization. Managing down in a hierarchy does not make sense, and what is happening at the ground level is that people are learning in a dynamic way. It is no longer building a railroad. It is something different than building a railroad. In those old military-styled hierarchical structures, just don’t make any sense.

Stacey Harris:            One of the other articles that I pulled this week, which is really not on HR at all, but even I had this interesting conversation, which sort of relates to those … I pulled an article on retailers needing advances analytics to compete. It was something Gardner had written but there was some other commentary within that article. It caught my eye, not only because it was talking about advanced analytics, but because my background runs in retail. I was really intrigued as I was reading through it, on how they were basically describing that the consumer has taken over the shopping experience.

It has been about ten years since I had been in retail, but I can clearly remember the conversation with our floor planners about how you space your products on the floor, based off of historical data on how people walked around the floor. The candy went up because it had twenty-five percent margins, it was the last thing they saw, and it was an impulse buy, and that was what they wanted. They had predicted, based off of two years of history, that they would pick up this candy as they were walking out. It was the best place to put it. The new concept now, is that you have so much data on, if you have advanced analytics and you are using them appropriately, they shoppers that you can do better predictions. It is not about historical data, it is about all the different things you can get out of the big data environment. Are we sort saying that with employees now, that employees are taking over the hiring experience as well? If we are going this direction.

John Sumser:            That is an interesting way to frame the question. There is something that is shifting. There is something that is really shifting, what people do not understand yet. I do not know how, the employees can take over the hiring experience. What do you think that means that the employees are taking over the hiring experience? That somehow they are hiring themselves?

Stacey Harris:            I think they are relating it to the retail environment. The shoppers now are sort of creating a shopping experience that is very specific to them, and their needs, and their unique expectations of the shopping environment. Brick and mortar, online, wherever it is for them. It is based off, they are putting in the data about themselves. They are expecting that the market and the world will leverage, that will guide them to the products and things that are most important to them. If the stores do not pick up on that, then basically, shame on the stores. If understand what you are saying, is that the users, or the employees is a better way to put it … Are putting data out there about themselves. They are building their skills. They are saying, “Here is who I am. Here is what I want.” They are saying, “The right company should find me, or should put their information in front of me in a way that I can find them, so that then we have a good experience working together. Is that realistic, do you think?

John Sumser:            Maybe there are people who think like that, who have just graduated from college with 4.0’s out of the ivy’s. Most of the people that I know who look for work, do not have the slightest notion that a company is supposed to come and find them. Even highly competent technical people, I know everybody who thinks … Well there is a small group of really amazing programmers who do think that the world deserves to come find them, and certainly rock stars anywhere have that sort of behavior, but most people do not believe that about the world. That would be cool. At the same time, something is going on.

As I was listening to you talk, I was realizing that it has gotten easier to be a job applicant. It used to be that you had to fill out the form. Everywhere you went you had to fill out the form. Increasingly you only have to do that once. You have to have you Linked-In on file, and a resume, and the systems take care the rest of the form filling out stuff. It is easier, but the information you have to provide is the same information you used to have to provide. If you background check yourself, I do not think anyone would accept it. It is easier. I do not know how much of that was actually intentional. There was a lot of talk about candid experience, but when I talk to people, I mostly get question marks about that. I do not really get a deep embrace of the idea of, that what is happening, is we are building some sort of wonderful concierge for every employee. Are you seeing real significant changes in the way that people actually look for and get work?

Stacey Harris:            I think that I am trying to go through what I have both seen, and what the data is saying. If will be interesting to see where our data comes out this year, because I had a whole series of questions on emerging technologies on the survey this year. On the Sears [inaudible 00:27:00] survey, I should say, that really asked about what type of recruiting technologies are you leveraging, and in what ways are you leveraging them? Particularly I was looking at that exact thing. Are you using social aggregation tools? Are you really leveraging interviewing tools that are different and unique, versus the standard processes, and the standard word-flows. Whether that is to make the candidate experience easier, or better, or whether that is to make the recruiting process more streamlined, or whether that is to really improve the quality of hire. I do not know that I can tell from that data, what organizations are saying why they are doing it, but I will say that those are the three things that generally come out when you talk to people, about why they are using all these different tools and services. Right?

John Sumser:            Right. It will be really interesting to see the data. Maybe you will start bringing some to these conversations.

Stacey Harris:            The whole conversation we started around this, John, was the idea that … This actually was hinged off of, there was a blog that was written by Garris Jones, I think, which was a friend of yours. At least you highlighted some of the regular data about the idea of building your own portfolio, bringing your own content with you, and plugging that into each of the companies that you went to. This is a concept that is particularly very European. I think, in its centricity. I have seen it a lot on the learning side, for many years. You bring your own little work portfolio with you, and bring your own performance reviews with you. This idea that the employee has content and information that they own, that they capture, and that it should be leveraged outside of a company. You had mentioned that it  brought to mind for you, all the types of work that the people that you recently were talking to, had done to get to their current roles, and their current jobs. There is no one, direction that a person takes. Their history is very unique, and should be thought of, right?

John Sumser:            It is surprising to me that so much of the technology associated with careers, makes the assumption that people do the same thing. I simply do not know anybody. My grandfather worked for Hoover Vacuum Cleaners, and put the belts on the vacuum cleaner at the end of the assembly line. For forty years, he did one thing. I have not known anybody since my grandpa, who only ever … Well that is not true, I know one person who has done one thing for forty years, but I know a lot of people. She is the only one. Everybody else has had radical diversity in their careers, just like you, and figuring out how to understand that, and integrate that in the actual work is a major challenge, that is simply ignored, for the most part. If employees want that addressed, they have to address that themselves. If you went to go look for your next job, and it was in a big technology company, why would you talk about your retail experience there? Your experience might not be relevant to the job that you are looking at. If it is relevant it is kind of up to you to prove that.

Stacey Harris:            I think that gets back to what started this conversation. It might not be relevant to getting the job, but if our pay, if our performance is based off of our experience, our skills, our capabilities, over time it might be a value to the organizations. Right? It could add to my financial outcome, if the company values it.

John Sumser:            This is a great area for exploration, because the question … I am a supervisor. I am a supervisor with some sophistication. I put myself in the top twenty percent. I am a good supervisor with some sophistication. I, for whatever reason, in the middle of my busy work week, get interested in what else Stacey might be good at, it would be great if software could help me with that question. Frankly, I do not know how to understand the value of your [inaudible 00:31:51] stinking Ghana for five years, and how that applies to our work here in the big software company. It just looks like a dead spot to me. A software company could go, “Oh, you know. Because she has got this trans-cultural experience, she would probably be really good in customer-facing roles.” That kind of help, because it is not obvious to me, is something that software would be great for, but nobody is doing that.

Stacey Harris:            No. It will be interesting to see. Coming back to where we started the conversation today, do you need a more flexible system to be able to create that kind of environment. If you take your eye off of the compliance stuff, like performance management we are seeing by Accenture. Does having more flexibility in a system provide that, or do you need a system that has more content, and services, so you can create that environment in a different way? I think that is direction organizations are trying to have. I am not sure they are going to get there, and I am not sure that the business market will sustain that vision. It is definitely a vision we are all talking about, at least. It will be interesting to see. John, we have gone through, and have passed our thirty minutes today. We have really got a good conversation.

John Sumser:            Thanks, Stacey. This is amazing. It has left, as usual, more questions on the table than we answered. What could be better than that?

Stacey Harris:            Definitely.

John Sumser:            I am looking forward to doing this again next week. Thanks for being here, Stacey.

Stacey Harris:            Yup.

John Sumser:            Thanks, everybody, for tuning in. You have been listening HR Tech Weekly, One Step Closer with Stacey Harris, and John Sumser. Have a great weekend.

Stacey Harris:            Bye, everyone.

End transcript


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