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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: 31
Air Date: July 30, 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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Begin transcript

John Sumser:            Good morning and welcome to HR Trend Weekly: One Step Closer with Stacey Harris and John Sumser. I’m John Sumser and Stacey Harris is in North Carolina today. How are you, Stacey?

Stacey Harris:            I’m good, John, I’m good. We have beautiful weather so I can’t complain today. We have some interesting things to talk about, not a lot of real deep stuff, but a lot of different things across the board today, so it should be a fun conversation.

John Sumser:            That’s great, so what are you seeing?

Stacey Harris:            Well, like I said there’s not any ground breaking, news shattering news coming out of HR tech this week, at least none that came across my desk and I was up and looking quite a bit this morning to see if I could find anything. There was some articles that I thought are worth the conversation, me and you started a couple of conversations before the call today.

One is, there was a great article written by Bill Kutik in HR Executive magazine, about Marcus Buckinghams organization, TMBC and their pitch to create a new HR software. Me and you have actually talked about this, right after Jason Averbook moved there as CEO, so I think it’s worth maybe having a conversation about that, because I think it’s gaining more momentum.

There’s also some interesting conversations, I think today, around what is a health care benefit and what is not a health care benefit. There’s some articles that came out about IBM’s Watson and CBS partnering up to create some forward looking, algorithm based predictions about health care, and how does that fit into health care decisions in big data. There’s also some interesting articles about organizations that are offering the ability to schedule your doctors appointments right at your desk, through apps that are now being offered, and that’s being offered as a health care benefit.

Then we had a couple of other ones, I think, in the news around this topic. Then maybe wrapping up today, we can talk about unionization with Google Express workers. I thought that was a really interesting article about what’s happening in the HR space as far as unions go, the Google Express workers and their expectation for Google. Those are my big topics. Anything else you saw on the news that you might want to mention?

John Sumser:            No, I think you’ve got us covered. You want to start with the Google Express? What’s going on there?

Stacey Harris:            Yeah, that was really, really interesting when I was reading up on it. One hundred and forty workers, which isn’t a huge amount, but it’s a big amount depending on where you work, have asked the teamsters to represent them in negotiations for better working conditions. Google Express though, and I think this is the more interesting thing about the whole conversation, Google Express workers, the people who deliver, warehouse and shipping workers, they are actually hired by Adecco, which is a temporary services organization. They’re not truly Google employees, they’re Adecco employees.

What they’re told right off the bat is that they will only be working for two years, no matter what. After that, they have to leave the organization. They’re also looking for higher wages, they’re at 13 to 14 dollars an hour, which I assume where they’re at, in Palo Alto, California, is not sufficient living wages. They haven’t really mentioned any other environment or safety issues, but I think there are some of those listed in the broader perspective. I was kind of surprised by this. This is more out in your territory, John. Was this something you had heard a lot about? Any news on this in the California area at all?

John Sumser:            What you’re seeing is the divide between people who can afford to live in the San Francisco Bay area and the people who can’t afford to live here, is growing. I know an army of 30 year olds with great college degrees, who are making 13, 14, 15 dollars an hour, and it’s not possible to make ends meet in Northern California, on 30 thousand dollars a year. You’re significantly below the poverty line.

The housing situation is so bad, it’s so bad that people who make a 100 thousand dollars a year are sharing rooms in small apartments. It’s so distorted that you can’t even believe it, it sounds like another California fairy tale. A lot of money just doesn’t go very far here and so workers have to do something. There doesn’t seem to be any legislative will to make it so that workers can afford to work and employers have, generally speaking, ignored the wisdom of Henry Ford, which is that if your employees can’t afford your product, you’re in trouble.

This doesn’t surprise me, I think you’ll see more. I think the technology space is ripe for unionization. The technology space in California is even riper.

Stacey Harris:            Exactly. The other thing they mention in the article is that Facebook Shuttle drivers had just decided to go union in November 2014, that’s what, just last year. This is something that I think, it’s been building and it’ll be… Do you think it’s just a California, Silicon Valley issue or do you think this is a broader issue, at least in the technology space, that is going to go across other states and other regions?

John Sumser:            I don’t know a company, technology or otherwise, that isn’t busy trying to figure out how to become a technology company, because the business models are simpler, the profitability is greater. There’s a pretty reasonable view of the world that says every company is a software company. In a world where every company is a software company, there are going to be greater pay disparities between the people who generate the core value of the company and the people who are the support functions associated with the company, and that will cause this kind of tension, everywhere, everywhere. Because there’s an imbalance between what the high performers get and what the low performers get.

Stacey Harris:            I think what’s going to be interesting on this is, that different maybe from other industries where unionization has sort of grown rapidly, manufacturing, even in retail, there is more visibility to what’s happening at the top levels of these companies, because the idea of transparency in high tech has been so broad. Not that it actually is in many cases, but that idea. I do think there is a lot more visibility and there are lot bigger brand names in some sense. The idea that the Google Express was brought out as the brand name, even though they’re not actually working for Google. This is that they’re working for Adecco, do you think …

There was another comment in the article that I thought was quite interesting, which is that there was a group of security workers who were again, hired under a contract base, through a contract company, that were talking about going union, I think is how the article was wording it. Apple and Google decided to bring that group of people in as employees, because they could offer them benefits and perks that were not offered and they would have more conversations as employees with them. Do you think part of this is the temporary services hiring model as well, that’s pretty big in the high tech world?

John Sumser:            It’s no longer the case that the person who’s at a desk, inside of the front door of the company is obviously an employee in that category, which is people who are paid by the company and get W2s, that’s what an employees is. That category is declining in importance while other aspects of the supply chain are exercised to settle the problem.

There isn’t yet, a term for somebody who’s a member of the ecosystem, who’s work goes towards the brand, who’s compensation is a constant the brand has to swallow in order to be the brand, that isn’t an employee. There are a dozen different ways of having people in the mix and not have them be employees. We don’t have an idea, HR largely ignores everybody who doesn’t get a W2. That’s part of why HR’s relevance is to planning. If you go think about, one of the stories we’re going to talk about today is Marcus Buckingham and their interesting ideas about how to make the conversation about getting the job done becomes the heart of the HR transaction.

Of figuring out how to apply that question to a larger group than direct employees, is a powerfully important thing for getting companies to work. I think we’re right on the edge of something really important here, and it will have all sorts of manifestations.

Stacey Harris:            I think your point about the fact that there’s no real term for this group of employees is a really big, big issue in the HR market. I went out and just tried to do a little bit of research, early part of last year, on the different types of temporary, contract, contingent work forces that are tracked and managed. There’s no single location, whether that’s inside HR, but there’s no single location in the government either, that tracks all these various types of workers, underneath a single umbrella as well.

There’s definitely no consistent definition, particularly if you go global, as to what these variations of contingent work forces are. I think that’s a huge part of, just defining this, I think would give a lot more ability of both HR to wrap their arms around it and for organizations to basically mange it more effectively. By not managing it, they’re basically running into a lot of situations. This is just one example, but I think a lot of other ones.

John Sumser:            Her’s a great question for you. Let’s say you and I are in HR in great, big, giant company X. Maybe it’s a not-to be-named provider of cable television services and we are in the customer service department of that not-to-be-named cable provider service company. Inside of the customer service department, we work in India in a call center, owned and operated by and Indian company under contract to this bigger company. Who’s job is it to make the employees excited about their relationship with the company, so that when they say, “Hi, this Marvin at,” you get an enthusiastic player on the other end of the phone? You get somebody who’s engaged. Who’s responsible for the engagement of those people? Is it HR?

Stacey Harris:            I think today, HR would say no, I would say they don’t think that’s their job at all, because that’s a service that you’re purchasing through that outsourcing, so they would say it’s under management. That would be the conversation I think I would generally hear and have actually had some similar conversations with HR technology owners, who are trying to make decisions about where those people, those resources get listed in the HR technology system. Most of them say that they’re seeing this is under or as a service.

John Sumser:            That’s wild, so the experience of people who are the interface between the company and it’s customers, those people who sit between the company and it’s customers don’t benefit from the company’s HR system?

Stacey Harris:            Only, we did actually ask this question. I don’t know if this data would be as valid right now, I don’t know if you guys asked a similar question in your last survey, John, but we asked how many contingent workers were managing the HRS system, and only 42 percent of organizations were managing any level, any level. That means maybe 5, 10, any level of contingent work force was in their HRMS environment at all. Most of them were also managing the bulk of their contingent work forces outside of the HRMS. They might have some people in the HRMS, but the bulk of them were sitting outside of it. I thought that was just absolutely flabbergasting.

John Sumser:            That’s pretty interesting. That tells you why unionization is happening. If those people are not people, then they’re going to do things to let you know that they are too people. You can’t say they’re not people and not expect a response to it.

Stacey Harris:            I think that the union conversation isn’t just about contingent work forces and not contingent work forces. I think at least right now and what we’re seeing in the market, it is also about the visibility of what’s happening as far as both finances and outcomes, as well as generally where people are living and whether or not they can earn enough to make it in the environment that they’re in. I think that’s different across each region, group, area as well, so there’s some of that. Then if you go outside of the US, you’re talking a lot more issues that have to deal with safety and health requirements, as well.

John Sumser:            Yeah, but that makes it awfully complicated. If you stick to the unionization question, I disagree with it a little bit. Contingent work force can be contingent in that the hours are not fixed from paycheck to paycheck, or that you’re not guaranteed a job over time, that you’re under contract at will. That’s what contingent workers are like.

All of the cases of unionization involve a kind of worker who is marginalized in the major brand. If you’re not a software developer or a media professional in some kind of Yahoo, you’re a service worker and there’s a pay differential. That pay differential becomes easier to manage with a third party. You become a contingent worker even if you’re just at the bottom of the status rankings inside of a larger play, I think.

There are two classes of people, right? There’s just two classes of people. A contingent worker is code for the class of people who don’t get job security. The job security includes compensation.

Stacey Harris:            That’s expanding that, I think a bit broadly. There’s a lot of contingent workers in this market, particularly in, I think, of the new economy that are actually … Don’t get me wrong, there’s definitely a group or environment where we as a country and as a global community, need to really think differently about how we create a work environment that is sustainable for the group of, if you want to call them contingent workers, employees, work force. I also think there’s a group of contingent workers who enjoy being contingent workers. Who appreciate the ability to be able to work for multiple organizations and who don’t want to have that on-going contract with the employer. It’s a different, definitely a very different environment that they’re working in and they have a lot more security in their work because they know their skill sets. Their skill sets have set them apart.

John Sumser:            You know what, I think that’s a story that people tell. I’ve been working that way for 25 years and I have met all sorts of other people who are working that way. I don’t know any of those people who wouldn’t prefer to have a job. That’s extreme, I do know some who wouldn’t know what to do with a job, I wouldn’t know what to do with a job. A job in the sense that I’m working directly for a suitable company, but it’s not the norm, it’s not the norm. Most of the people I encounter who are working as continent, work, high paid contingent workers, are sort of in a very long job hunt.

Stacey Harris:            Some people get used to that and some people see it …. I think that’s a much longer conversation about …

John Sumser:            Yes, it is. Yes, it is.

Stacey Harris:            … this new economy. I think that bringing in what’s happening with Marcus Buckingham actually might shed some light on this. The conversation that Bill brought out in his article on TMBC and the Marcus Buckingham organizations platform, which is based off of their strengths assessment. Which is Marcus Buckinghams assessment tool that he created from his OD work in his previous work over at Gallup. That really is focused not on fixing competency issues or identifying performance issues, it’s focused on identifying the strengths of the people within your organization. With that identification of strengths then you can start to build development programs. You can start to have people make assessments about where people would go in an organization. This idea of identifying peoples skills, capabilities, and strengths, adds a lot more to this vision, I think, of contingent workers who have a set of skill sets that they can leverage over time.

It’s also the idea that maybe your free agents inside your own company as well. I do agree with you in one sense. I think if there’s the ability to work the way you want to work, make the finances you need to make, and you have a company that’s willing to create an environment that you want to work in, I would agree that people would, probably 9 times out of 10, probably go to work for that organization. The challenge is that most organizations don’t provide that, don’t give you that kind of flexibility. I think those are your people who do want that flexibility. There’s a lot of people who don’t have a choice and that’s the other side of the picture.

John Sumser:            It’s a complicated world and what we’re seeing, what we’re agreeing on is that it’s important in HR and HR technology that the entire problem gets solved, and partial solutions. Tell me more about what you know about Marcus Buckinghams approach.

Stacey Harris:            Have you had opportunity to brief with them or see their product at all, previously?

John Sumser:            I have, I have.

Stacey Harris:            Okay, so you may have seen the same thing I did. I had an opportunity probably bout a month, month-and-a-half ago to ,maybe a little bit longer than that, to actually speak with Heidi and her team. Heidi Spirgi who is their head of product now, who used to work with Jason over at Appirio. She walked me through their standout product and it’s a mixture of a product that is an assessment tool, that has little arms and legs that go off of it, as well as services. As well as content, content that goes along with the assessment models. That was how I saw it. Did yo see something different from that, John, when you went through it with them?

John Sumser:            No, no, but this tool is at the heart of a big conversation about changes in performance management and I’m not sure I get that all the way. I saw what they showed me, but it’s hard for me to understand how you take finding peoples strengths and turn it into doing what the company needs to do. That middle part, where you take this really interesting idea and actually apply it, that’s fuzzy to me. It seemed to me that you might have an interesting picture of how that works.

Stacey Harris:            I think it’s based, knowing Marcus Buckinghams background in organizational development, I think and organizational design, having been through that kind of training myself, it’s the underlying thing that if you can fix the problems, the initial core issues with an organization, that the rest of the world will sort of come in line with a little bit of change management.

Generally the biggest problems are an issue of communication and understanding peoples capabilities. If you can figure out how to communicate across organizations, you understand peoples capabilities, then you can align those with what the business is trying to do, the Polly Anna look at the world is that it will all come out in the end. I disagree a bit with the idea of what Jason and the Marcus Buckingham group is doing, in that I think it’s going to take more than just a single assessment to understand that for an organization. I think that they’re going to require a lot deeper look at the organizations. Yes, it provides a simple tool right now, but I think the bigger issues that organizations are struggling with are team challenges and organization restructures and business drivers. Some of that may not be captured in the way they’re approaching it. That would be my take on it.

John Sumser:            You’re talking about problems that large organizations, probably generally, publicly held companies with something more than 4 or 5 years worth of time as a company and something more than probably 5 thousand people, with some experience of the downturn under their belts. They know about layoffs, they know about deep restructuring and those sorts of things. You’re talking about the problems in that universe. Is that right?

Stacey Harris:            I would agree, yeah, definitely. They have a more complex organization, yes.

John Sumser:            It’ll be really interesting to see if that world changes, because this problem set doesn’t really exist in companies of less than 5 thousand people who haven’t been through a downturn, who are not done with their growth. Or who are firmly fixed in sort of a local environment. I believe that’s the majority of companies, by a lot, by a lot.

A question that we might be looking at is are the big companies, 10 or 12 percent of the population works in a Fortune 5000 company. Are those big companies with their big budgets going to start managing things differently than little companies do? Is that really where you think innovation is going to show its head?

Stacey Harris:            Are you asking is innovation going to show its head in the big companies or in the little companies? I think …

John Sumser:            Well this is, this approach to performance management that’s starting to really manifest itself now, is a big company approach to performance management.

Stacey Harris:            It’s a very big company approach to performance management. It’s based off the idea that, and I think a very solid idea, that we have spent a lot of time telling people what they’re doing wrong and what their gaps are. That didn’t seem to be working for a long time. That’s why performance management systems are being overlooked and why people are redoing their whole approach to gap analysis.

Let’s take a longer look at what people are good at and what we think they can do in our organization, the capabilities conversation. I do think it’s a very, very good conversation to have. I just think sometimes, the simplicity might leave out some of the challenges that go around it. To your point, in smaller companies, I think smaller companies can be just as complex and can have just as many issues. Particularly if they’re global organizations and if they’re fast growing. I think what they don’t have is some of the engagement, I’m saying engagement in the terms of, they don’t have the history of the ups and downs to deal with. In local organizations I think of 5 thousand and smaller, they still have, almost all of them that I’ve talked to, have many of these challenges that they’ve been around for 20, 30, 40 years.

John Sumser:            Yeah, but companies don’t last 20, 30, 40 years. It’s a small universe. What an interesting conversation this morning. We have whipped through our half hour again and as we do, we are talking about the edges where old HR practice turns into new HR practice with technology, and it’s exciting.

Stacey Harris:            It’s very exciting and maybe next week we can get into the benefits versus perks conversation. We started that out and we didn’t quite get into it today. There were some interesting articles on that. That might be a good conversation for next week, is what’s happening in that benefits space? Because that might be one of the biggest differences, maybe between small and large organizations, is the idea of what is a benefit and what is a perk? How does that play out with employees? That might be a real interesting conversation.

John Sumser:            That’s great, let’s do that next week.

Stacey Harris:            Sounds good, all right.

John Sumser:            Thanks, Stacey. It was great to have you, as usual. Thanks everybody for tuning in. You’ve been listening to HR Tech Weekly: One Step Closer with Stacey Harris and John Sumser. Bye- bye now.

Stacey Harris:            Thanks everyone. Bye.

End transcript


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