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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: 38
Air Date: September 17, 2015

 

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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:                       Where did those Irish gigs come from? Good morning. This is HR Tech Weekly, one step closer with Stacey Harris and John Sumser. Morning Stacey, how are you?

Stacey Harris:                      Good morning John. I’m doing well. I think the Irish music gives us a nice uplifting beat for the day. I’ve got sunshine here in Atlanta where I’m at, so you can’t start the day off better than that.

John Sumser:                       Yes, yes it is a good uplifting start. I am looking for my pot of gold at the end of the rainbow as we speak, because we are getting some rain here and the rain is really good because the forest fires are only about 30 miles away.

Stacey Harris:                      Goodness, it does sound scary.

John Sumser:                       We do love rain right now. You’re in Atlanta.

Stacey Harris:                      I’m in Atlanta at the IRAM annual technology conference and IRAM has been around as an association for 40 plus years I think someone was telling me. They’ve been around a long time. This is their annual event and they’ve got about 350 people at the event. A little bit more than last year, so it’s not a huge event, but it’s been nice to have a lot of good conversations with organizations, particularly mid-market. It seems to be their big focus is shifting to big market right now, so I’m in Atlanta and we’ll be here through Friday, today.

John Sumser:                       How big is the expo floor and which companies are there?

Stacey Harris:                      It’s a pretty decent size expo floor. I saw jforce here, Neocase is here. You’ve got Oracle doing some sponsorships, so it’s not all the same guys you see. A lot of the HR Smart and Dell Tech is here, those kind of organizations. The focus generally seems to be a bit more mid-market this year than I’ve seen of in previous years for them and we’ve been talking to their leadership which seems to be where they’re taking the IRAM association to is that idea of the next generation of HR technology education and focused on mid-market.

John Sumser:                       It was always a geek fest. IRAM was where the HR IT people went and the very cerebral technology people. Is it still like that, or are they shifting to be something other than that?

Stacey Harris:                      No, I do think there’s an HR IS and an HR technology roles, at least everyone that I’ve had an opportunity to speak with so far. It is … Most of the people who are on the ground doing the work, so there is a lot of focus here on one to get to the next level from a skills perspective, so it is very technically networky focused that way, from a technology perspective. They are starting to add some strategic sessions, I know, for the VPs and directors and I know that they’re trying to add some more incubator concepts as kind of a shark tank here for the HR Tech space and they’re trying to bring in some smaller new solutions that the influencers get a chance to see ahead of where the market’s at. I think they’re trying to broaden what they’re giving and providing that audience.

John Sumser:                       Happy to be there, or trying to figure out where the nightlife is in Atlanta?

Stacey Harris:                      No, no, it’s a good session. It’s a good session. I’m going to be on the panel tomorrow with the Kathryn Jones . Kathryn Jones from Bersin is here with me from [person 00:04:01] and Jason Averbook is co, or facilitating the panel on Is HR ready for the future, so that’ll be fun on Friday, and then I’m doing my [crosstalk 00:04:16].

John Sumser:                       Oh, wow. Is HR ready for the future?

Stacey Harris:                      Is HR ready for the future? There’s no nightlife for me, right now. I’m in the middle of data crunching right now for a report, so any extra time is spent on the computer.

John Sumser:                       Any little glimpses of the insights that you’re discovering as you get ready to deliver that report?

Stacey Harris:                      Yeah, yeah, just as a … I won’t spend too much time on this, but I am seeing … I do think there’s going to be some interesting stories around the mid-market space, so I’m not surprised to see IRAM going here and other vendors going that way, so I think we’re going to see some interesting data, because I’m slicing … I’m cutting up the data and I’m seeing some very interesting new things come out of that what we would consider 10,000 and below employees. We’re also seeing some very unique things around the … behind the analytics thing, and how those organizations are looking at different outcomes for their organizations, so I’m excited to share that data, hopefully in the next month. The other probably big thing that I think we’re going to see really has to do more with what’s happening in the payroll space which actually you and me were talking quite a bit about what’s happening in the payroll space and that’s coming up in a couple of weeks, right?

John Sumser:                       Right. The importance of data and the most rudimentary kinds of HR data, the importance of that data, probably can’t be overestimated. It’s kind of like silicon, the idea that silicon is the most valuable substance in the world, and that our world is wrapped around silicon is not something you’d ever figure out walking on the beach. All of that stuff you walk on on the beach, that’s silicon and so HR core data is just like that. It’s everywhere. It doesn’t look like it means very much, and it turns out that it’s the keys to the kingdom. So …

Stacey Harris:                      We can talk a little bit more about it after we do the panel on payroll, but yeah there’s a lot of other news that’s going on now we are in the event season. You were at Dreamforce last week, right? Or this week at the beginning of the week?

John Sumser:                       I was at Dreamforce yesterday. Dreamforce is the salesforce.com annual event and they do stuff like amazing music. Amazing music. The Foo Fighters and Stevie Wonder was doing the lunchtime music and bands that I haven’t heard of but it’s always astonishing and there’s always a surprise. There were 170,000 people registered for the event. 170,000 people. Unbelievable. That’s 20 times the size of HR Tech. 20 times the size. Probably 30 times the size of HR Tech and so people everywhere on the streets of San Francisco and they’re all sales people, so the joke is that it’s south by southwest for sales people and it’s just an astonishing thing to see. I got there yesterday in time for the kick off which was a keynote and the hall that they had people in for the keynote, only all but like 7,500 people so there were television screens the size of football monitors all over the streets of San Francisco with people gathered in huge clumps to watch the two hour keynote. It was not only very interesting … and I spent time with the people at Lumess and I spent some time with the people at fair sale.

Both Lumess and Fairsail are really well heeled British companies who are trying to build an American business using their relationship with salesforce as the foundation of that American business and it’s a challenging thing because that distribution channel, the salesforce platform, is heavily used by sales people and if you want to clear out a lunch room full of sales people, all you really need to do is bring the HR team in and the sales people will flee, because the HR people are the police and the sales people are the rogues who have to do whatever it takes to make money come in and so the relationship with HR is often antagonistic. There’s a challenge to using the sales force platform, which is called force.com, but if you use force.com, all sorts of things are really really interesting.

You would think about these two companies less as technical development houses and more as process sherpas because the force.com platform has all of the functionality you need. It has the Lego blocks that you need, and you just need to make a map of the castle that you’re going to build in order to use it. Functional development, fast, innovative, functional development is something that is very easy to do on a robust platform that’s all about hooks and not about specific outcomes. I’m going to guess that … and I don’t know if it’s Lumess and Fairsail but over time the force.com platform, because there isn’t anything else like it, will become a major competitor and we will be talking about them on a show like this five years from now.

Stacey Harris:                      Just along the lines, John, we’ve seen sales force get into HR and get out of HR and we’ve had this discussion before, particularly when there was the comments about them possibly being bought. Do you think it truly is the platform that makes the difference for them? Do you think that the fact that you can build multiple things on this … there won’t be one big player. Is that going to be the differentiator for them?

John Sumser:                       I think it’s getting close. One of the really interesting things that happened at the show. In the keynote, the chairman of Microsoft was in the keynote, because Microsoft is their launch partner and launch customer for their latest cloud offering, which is an internet of things based extension to the platform and so Microsoft who used to be kind of an allowed enemy … This is like seeing the Israeli prime minister and the Saudi king getting up onstage and talking about their big collaboration. It was an astonishing moment, astonishing, and part of the reason that the keynote took two hours is they had a love-in. What you get out of that is that the sales rumors had to do with this relationship with Microsoft …

Stacey Harris:                      Got you.

John Sumser:                       … this very deep integration with Microsoft. That means that the platform’s the thing. The platform’s the thing, and it really is. It really is, so if you think about work day or the other large scale enterprise operations, they have kind of a monolithic view of stuff. They have their internal platform capabilities but they generally still run on the model that says “If you need technical functionality, you have to build it from scratch.” The platform model is that if you need technical functionality, you should be able to cobble it together from the stuff we have, that there’s a library of Lego blocks and you simply put all those Lego blocks together in the shape that you want them to be. It certainly isn’t that easy, but it’s close to that easy.

Stacey Harris:                      It’s getting there, right?

John Sumser:                       For instance … Well, it’s so good that [lumess 00:13:34] was able to build a credible … it is not all bells and whistles but it is credible and usable applicant tracking system in 70 days. A hundred developers, but still they did it in 70 days and I swear the last time somebody did one of those things, it took three years at about the same level of staffing and they could do that because the force.com platform has all of the the stuff done, so they weren’t really coding, they were moving … The platform is to an application as object oriented programming is to current coding.

Stacey Harris:                      Do you think that this has any impact on … Oracle just released their fiscal year 2016 first quarter results. They’re sort of slightly up, slightly down, depending on what you’re looking but their client billings are up 70% year [o 00:14:35] year, which is a really bit thing, but when they kept mentioning their client billings they kept talking about SAS and their [past 00:14:41] platform of the service bookings being up 165% in billings and in everywhere they mentioned SAS, they mentioned [past 00:14:55]. SAS 612, new client 800 [past 00:14:57] clients. Do you think someone like Oracle’s going to be able to build out that platform in the same … with the same energy, is probably a better way to say, as sales force has?

John Sumser:                       The big guys, SAP, IBM, Oracle … The big guys move slowly, but they catch up. They catch up and so just in the last couple of years, partly as the result of consolidation, IBM, Oracle, and SAP moved out of the dark ages and into, ten years ago, very very gracefully and have become credible, conservative, operations that can take on big business problems in our arena and they weren’t for a while. My guess is that they will do this, but salesforce.com has had a decade to get this right. [fairsale 00:16:06] has been on the force.com platform since 2007, which means there was a force.com platform before 2007 and nobody else has that kind of experience. It’s a sales organization, fundamentally, so you know they’ve screwed up everything they could touch on their way to getting good at it and those bigger organizations don’t have that inherent capacity to fail and fail and fail and get back up and fail some more. Force.com is an interesting new energy in the whole arena of the theory of how you develop software, because they’re people who thrive on failure more than engineers do.

Stacey Harris:                      The software topic … I really like this conversation. I think it is a very important issue that a lot of organizations need to be paying attention to is that we are going through a true technological shift as big, if not bigger than anything else that we’ve gone through maybe before. The other shift we’re going through is … and this may not be a shift. This may be more of a cycle … is the need to do more outsource services, get as much of the technology conversation maybe off your company’s plate in some sense, so one of the other stories that I pulled this week was one source virtual receiving $150 million investment from technology crossover venture group, particularly to expand their services globally. They’re going to open up a new data center location in Ireland to meet current global US customers and new European customer needs, but one source virtual is an interesting business model that isn’t something brand new in the market that we’ve seen, because we’ve seen a lot of outsourcing on single platform models.

They outsource their … They basically outsource my using a work day HR [inaudible 00:18:20] and financial platform solution and their whole service model is built off of what level of outsourcing do you want? Do you want some, just a little bit, or all of it, and the idea that they can optimize and be more efficient in outsourcing, because they’re using a single platform. They’re also bringing in, I think, a lot more conversation about the fact that we really would like to get more of the technology issues off the plates of the HR and IT leaders and so their focused more on the strategic work. Do you think outsourcing is going to have an impact on the other things we were just talking about, platform as a service? Is that going to drive people to do more outsourcing or less outsourcing, do you think?

John Sumser:                       It’s always going to be a choice and outsourcing will grow in importance because unless you are some kind of nut case, being excellent in HR administration, for instance, is kind of off the beaten path if you’re a candy company, and so it’s hard to imagine a candy company that aspires to have excellence in it’s HR technology. What a candy company aspires to is to have as little HR technology as possible, because it doesn’t want to do HR. It wants to do candy. That fundamental dynamic is going to make outsourcing more powerful particularly as the outsourcers become technical lenders, which is the one source virtual thing. To me what’s so exciting about that is that they’re really a technology house, but they deliver it through people, so it doesn’t look like a technology house. It doesn’t feel like a techno …

Stacey Harris:                      Is that terribly different than the old service bureau models, though? Do you think, or do you think it’s just a new version of that?

John Sumser:                       It’s the same business, but the technical depth is significant enough so that it doesn’t look like the same business to most people, but it’s if you can’t do it, call somebody who can is the basic operation, it’s just that what you’re calling them to do is a much larger thing, because technology has gotten larger.

Stacey Harris:                      It’s a more strategic [well 00:21:07] too and the data that they’re leveraging and the tools they’re leveraging add a little more impact on [inaudible 00:21:12] strategically I think than it may have in the past in many cases, too. That’s a big sort of conversation on the outsourcing side. Interesting, when I was at another … I don’t know if you would call this oursourcing, but I guess you could if it’s more of a cloud solution [inaudible 00:21:29] … ERE and [jibe 00:21:32] announced a partnership … it was on the 10th, so it’s been the first part of this week … that they were putting together a talent acquisition benchmarking solution where you would connect or upload,

I think, if I understood that your data into the ERE platform, so it’s an engine being run by [jibe’s 00:21:54] data but it’s available through the ERE location or website and ERE is actually a publishing company, originally. Right? They’re a recruiting publishing company? That was my understanding. You probably know them better than I do, but now they’re offering metrics benchmarking for the recruiting industry. Do you know a little bit more about that, John, and do you think that [crosstalk 00:22:20] make it?

John Sumser:                       I do. You and I are in the research business and we’re in an era where data is exploding so lots of people are getting into research because there’s data to look at and what’s interesting … you know this. The fact that there’s data to look at doesn’t necessarily match up with people want to spend money to do it, and so everybody’s who’s in research business is looking for delivery models and financial models, and what’s interesting about this one is the financial model is clearly that this is a partnership where [jibe 00:23:12] writes the check and ERE does the publishing and that particular view of things, it’s very interesting, but it’s not credible to have a vendor as the champion of independent research data. That’s just not credible on its face. That’s like the fox is in charge or the hen house and we promise no chickens will be harmed in the filming of this movie, and you can’t overcome. Even if it’s the best fox in the whole world and it isn’t going to eat any chickens, it’s still a fox.

Stacey Harris:                      My understanding of what they’re doing and they may be putting research papers out on this. I don’t know, from a publishing perspective, which is sort of why I was trying to figure out what the model will be, but they’re also going to be publishing metric like is your quality of hire the same as this other industry person’s quality of hire. Right?

John Sumser:                       Right.

Stacey Harris:                      That’s the different type of, I guess, research in my mind, that their benchmarking my company from a metrics perspective to see if I can rate as high or as low as someone else through a very personal kind of benchmark. Do you think that there’s a risk that that could also be jaded towards the data’s coming from?

John Sumser:                       If the benchmark data supports the vendor’s view of the world, nobody’s going to believe it. If the benchmark data doesn’t support the vendor’s view of the world, they’re never going to pay for it. Of course it’s going to be skewed. Of course companies only invest in things that represent their interests. They do not spend money on things that do not represent their interests. The board of directors would clobber any CEO who spent money on stuff that made the competitors more successful. Wouldn’t you? [crosstalk 00:25:30] You can’t ever scrape that stink off of this, even if it isn’t there, because in ethics, the appearance of impropriety is impropriety. The appearance of corruption is corruption.

Stacey Harris:                      That’s what politicians are finding out these days on the campaign trail. Right?

John Sumser:                       Yes, exactly. We’re all discovering that who the publisher is and how that publisher makes their money … Did you see that Rupert Murdoch bought the National Geographic?

Stacey Harris:                      I did. Yes, we saw that. We were … I think that everyone who follows National Geographic was [inaudible 00:26:15] a bit with that one.

John Sumser:                       Holymoly. The world’s greatest climate change denier now owns the magazine that did so much to bring pictures to that topic. Really? Right? My opinion of the quality of the views of the National Geographic changed because the ownership changed, and that’s what we’re talking about is we now live in a world where if you’re going to consume information, you need to understand who’s paying the freight?

Stacey Harris:                      Let’s jump to another topic that I pulled and I really thought that this was an issue that was buried back in a Canadian HR magazine that I had found it in, but it was a project that [deloyd 00:27:06] had done and they had done it and St. John’s on … they had changed the office set up of their employees. They changed it to an open office environment from a closed cube environment and they had used a technology done by … I think that company’s called human design or something like that … but it was a badge tool that had sensors and tools inside of it that captured the amount of information from the employee about things like how often you pushed away from your desk, how often you spoke up in a meeting, how many meetings you had, where you went to, without being personal about it. It didn’t capture what you said. It didn’t capture pictures, or any of that stuff. It was more like a motion detector or sensor tool.

It was an opt in kind of thing and the employees signed something saying that they own data, but the data at the end of the day supposedly showed that people enjoyed their brighter more open office environment a great deal. The employees heard that when the data back that they saw immediately that they weren’t speaking up or taking leadership roles in meetings and that they changed their behavior the next day. Do you think know that data was something that [deloyd 00:28:28] was capturing for a specific purpose, but it was sort of owned by the employees, did that change how people were viewing that data, do you think? Is the capturing of our data is under the same perception that you were talking about?

John Sumser:                       That’s a really good question and let me tell you that we’re going to get very bright data and if the boss says “I’m going to pay you based on how much participation you do in meetings”, when you have this kind of feedback, it’ll really change your behavior. If the boss says “You know what? Meetings are a waste of time. I hate going to them”, then you could have all this data in the world that you wanted to, that’s going to change behavior. Data always operates inside of a context and its meaning is driven by the context, not by the data. The data fills in the context, rather than driving it, and so it’s the thing about benchmarking. You go back to the [jibe 00:29:36] and ERE thing is benchmarking is great if you agree that you’re benchmarking the same stuff, but the thing about HR is that the motives for HR are business related, not HR related, so benchmarking is always going to be problematic in HR because what’s important to leadership doesn’t have anything to do with HR and so HR’s importance varies there, not inside of HR theory.

Stacey Harris:                      That was my biggest struggle with it. I get that organizations want metrics, and I think there’s value in how organizations might leverage that in different ways but I do often times and I’ve said this before in the event that sometimes HR looks so much at benchmarks and what they’re doing and they don’t look enough at what business members are trying to be connecting to, and that’s the big issue is that if you have an impact on the business numbers, then your trying to hire numbers, your efficiency in hiring is probably not as big an issue, where your quality of hire which has an impact on the business probably is a much bigger issue. Right?

John Sumser:                       Yes.

Stacey Harris:                      Those are the conversations that we need to get into, probably.

John Sumser:                       My favorite business writer of all time is Peter Drucker and Drucker said over and over and over again that what happens inside the organization is cost. What happens outside the organization is business results so when you do the sort of naval gazing, how fast did we go, how much did it cost stuff, you’re not talking about the business. You’re talking about the insides of a department and while that’s interesting it’s like a tachometer on a car. What’s more important is where the car is going, not how fast is it going or what’s the RPMs? Those are internal measures and what matters is something bigger than that and that’s a harder thing to get your arms around for benchmarking purposes. So …

Stacey Harris:                      John, we have gone through our half hour already.

John Sumser:                       This is always so much fun. This is always so much fun. It’s been great to spend the half hour with you, and thank you everybody for listening today [crosstalk 00:32:17]

Stacey Harris:                      Good conversation on data analytics. I think we’ll definitely want to have more of those, John, so …

John Sumser:                       Okay, so have a great day, everybody. This is HR Tech Weekly, one step closer, with Stacey Harris and John Sumser. Bye, bye.

Stacey Harris:                      Thanks, everyone. Bye.

End transcript

 



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