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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: 41
Air Date: October 8, 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:                       Hey. Good morning. It’s HR Tech Weekly. One step closer with Stacey Harris and John Sumser. We’re coming to you live from both coasts today.

How are you, Stacey?

Stacey Harris:                      I’m good, John. I’m good. I’m coming from beautiful Atlanta where the sun is finally shining. I’m at the Mercer building here in Atlanta. They were kind enough to put me up in an office while I’m attending an HR technology users meeting that they have twice a year that they’ve asked me to speak at this week.

It’s been a great opportunity both to not only … Get the radio station going here in this beautiful tower with a beautiful view but also get a chance to hear a little bit of talk this week from a group of very senior HR technology practitioners about topics that we’re going to talk about today.

John Sumser:                       Well, that’s great. Do they refer to you as your royal highness when you get on the plane? It seems to me that you are … You must be one of the top travelers on whichever airline it is that you do business with.

Stacey Harris:                      I would really like to … That would be very, very nice. Not so much the your royal highness but just enough miles to have accumulated. All my trips are short trips, unfortunately. Now I’m too split between two airlines, Delta and United, because the two airlines go to the places I need to on direct flights. Unfortunately, no, I’m still with the rest of the travelers in the basic traveling section. I don’t get that first class experience too often anymore.

John Sumser:                       Well, maybe they’ll find that you get an extra dollop of living because your feet haven’t touched the ground as often as the rest of the south.

Stacey Harris:                      Exactly. There you go. You’ve been traveling as well? At least not traveling play wise but you’ve been going to a couple of events this week, right?

John Sumser:                       Yeah, this is good. I went to something called High Q Labs Elevate which was a gathering of very smart, very capable people looking at HR analytics and predictive analytics in HR. They’re about 300 of them. They all had suits and ties on which was a surprise. You don’t usually find that level of formality in the kinds of places that I haunt. It was in general a really interesting thing and we’ll talk some about it today.

Stacey Harris:                      Yeah. The news this week is all definitely about HR data and security. The stuff that I was pulling for our conversation today … Top of the list, both here at the Mercer meeting as well at all the news reports was the fact that the Safe Harbor guidelines have been basically disavowed or no longer marked as valid by the European’s top courts. They ruled that the fifteen year old agreement allowing American companies to handle European data was invalid. Which put everyone who is in the HR tech space into a bit of a tizzy.

I think that’s something we’ll definitely want to talk about today and that probably has a lot to do with the data analytics world. There’s also a couple really good articles about organization using big data inside their company to monitor what employees are doing from a customer perspective, along with sort of natural language checking.

We have a couple of news articles about some big acquisitions this week. One was a big acquisition by Randstad of RiseSmart for a $100 million. That has a lot to do about placement in the HR processes area and in the outsourcing area.

Then a shoutout to our friends who run the Candy awards. They did their big announcement for candidate experience awards for top 50 companies.

Those are just some of the big things on my list this week. Anything else, John, that you saw that you think we should include today?

John Sumser:                       You know we’re not going to get to all of that. That’s a big announcement and news week as we head into the heart of the conference season where the announcements will fly like crazy.

Let’s pick one and get started. How about the European news? What do you think about that?

Stacey Harris:                      That one I thought was … When it first came out my thoughts went directly to primarily the [inaudible 00:05:14] based, you know, cloud-based HR technology environments. Really what this is coming down to is … There are a couple of different regulations organizations could use and there are European regulations as well as the Safe Harbor regulations. I think any organization that had already been abiding by European regulations, which was set up by the EU council, is fine. I was actually just talking to Mercer and that sort of … They’re fine because they had been following those standards, as well as Safe Harbor. Many of the large organizations that do have large presences in Europe are probably okay with that. You can probably check with them on that if you’re worried about your client or HR organization.

I think the bigger issue here is that the reason it was marked as invalid was because the justice group over in Europe felt that although there was guidelines in the Safe Harbor statement about what could and could not be accessed by the various governments, in particularly the US government, they felt it wasn’t being followed very effectively. The US government could go in and access data on a country’s employees if it was sitting in US data warehouses. That’s sort of the simplest terms to explain it in.

It is sort of a big issue when it comes to data privacy, I think.

John Sumser:                       Let me see if I have that right. What you’re saying is that the European top court doesn’t believe that American companies, because of the way their government operates, are going to be able to abide by the Safe Harbor agreement so they suspended it because it wasn’t enforceable? Is that how this goes?

Stacey Harris:                      I think, yeah. I mean, reading it I’m not a legalese. It might be worth maybe getting some experts in legal groups that you might know, John, to give us the actual legal language around that but definitely that was the gist of the conversations that I’ve been hearing and the material that I’ve been reading.

John Sumser:                       That’s a pretty important thing, really. That suggests that anti-American sentiment is a pretty hot thing if it is interrupting commercial relationships with companies who have global businesses. That’s a big conflict to try to sort out. I guess it’s not dissimilar from our view of China.

Stacey Harris:                      Mm-hmm (affirmative)

John Sumser:                       There’s something happening isn’t there, amongst world governments to protect software markets.

Stacey Harris:                      There is and the quote that I found most interesting from the one article that I had pulled to put in our notes was from Jim Cunning who is a Paul Hastings at a DC-based law firm but this ruling could unintentionally tilt the global privacy and data protection landscape to make EU the global center of the gravity.

I thought that that’s a statement that’s worth paying attention to if you’re a US-based HR technology firm trying to make decisions about how you work in this environment. EU is definitely taking the leadership in this data privacy conversation.

Now that’s until something is found that may not be … People are comfortable within what they’re doing, right? I think every country needs to be careful with how they’re managing this idea of data so that these businesses can work across boundaries.

John Sumser:                       Well, you know, my operating premise about everything is that local is what matters. That recruiting is local, that HR is local, that all of these things are reflections of the intersection of the enterprise and it’s local culture.

When you have a government like the European government which is not quite the same as the federation here of the United States where there’s a clearly superior force in the federal government. The government of Europe has to deal with very strong constituents states. They know how to govern complexity in a way that that we’re pikers at. We’re just complete pikers at the idea that you could have fairly different cultural expressions in the member states of an overall nation state kind of thing.

It isn’t surprising that that Europe is more suited to manage these sorts of questions. What’s interesting about that is nobody would have predicted Europe become the center of anything. Except maybe vacations. A year ago. A year ago. Slowly but surely. Go ahead.

Stacey Harris:                      They have taken ownership of this conversation, I think, in a way that people had not expected. I think the other side of this picture, John, and you had just started touching on this before we got on the call, is that the whole market around data privacy in the EU space is an opt in model.

The market in probably the remainder of the world is much more of a “we’ll use it until a law or regulation or something requires us to have a lawsuit and then we’re going to sort of change the way we look at that data.”

I think that’s a big part of this conversation. The end user has much more control. That doesn’t mean they’re not going to give access to their data. At the end of the day the end users are looking for individualized conversations. Whether that’s with their marketing material or their commerce material or their HR and internal data. They do understand that if they don’t, at some level, give you access to their data they can’t get a personalized view back.

I don’t think people should be scared of this conversation. I think they just need to look at it differently. Don’t you think that’s part of the issue here? That we tend to look at it with a “until someone calls it into question, we’re going to do it the way we think we want to do it” versus opting in.

John Sumser:                       In the United States, the regulatory environment is such that it is really good advice to tell a company to hang onto every cent of data that is produces. It’s really good advice because when you’ve got all the data in the world what you don’t know is what you’re going to need five years from now. You just don’t know. You just don’t know what’s going to turn out to be important.

In the EU, the idea that that data is primarily owned by the people the data is about leads to a set of practices that has us throwing away as much data as you can throw away as fast as you can throw it away.

They are two radically different views of what you can do with and what you should do with data. While it’s true that the American model is the wild west, just like you described, we shoot people until someone forces us to stop … The possibilities that come from having extensive historical data are not trifles. They’re not trifles at all. There are significant advantages to the American approach and there are significant advantages to the European approach and they don’t reconcile.

Stacey Harris:                      Maybe that leads into the second article that I got, John, then which is the big data smaller risk. I pulled this because I was just intrigued. We’re talking about data management and data privacy and this is an article that comes out of … It’s an aggregate article so it doesn’t mention anyone or one particular organization but how computer science and natural language and the machine loading models are allowing companies to look into transcripts from their customer service groups or their transactions with customers in a way that allows them to identify for finance, banking, and customer service, you know, call centers and those types of things, to identify not by a person reading it but by the machine learning reading it risk and audit areas where an employee might be giving advice that’s not appropriate or might be maybe bullying a person on the other line into doing something inappropriate. Just all those things that you know you find out after the fact when there’s a lawsuit but now they’re looking at this as being a tool that allows them to manage risk upfront.

What do you think about that? Do you think that’s going to get called into court eventually? Or is that going to change how we think about the employee data? This is a different way of looking at it. It’s not about the employee and what they’re doing, per se, it’s what they’re doing with the customer.

John Sumser:                       I can’t imagine working for a company that thought of me in that way. That thought I needed to be monitored in that way. That said, I have been to … Am I allowed to name names on this show? I have been to Verizon, and Comcast, and I want to tell you about a little experience that I had because it’s [inaudible 00:16:21].

My iPhone broke and so I took my iPhone to one of the big vendors of iPhone stuff and said the phone’s broken and you get the general runaround when you go in with a broken phone. They treat you like you’re stupid. After a while in the conversation it took some twists and turns and the guy says to me, “You know, if you don’t do this the way that I want you to do this I’m not going to mark down in your file that we had this conversation so the next time that you come you’re going to have to start over from scratch.” Just like that. He threatened to not record the transaction in this file because he knew it would cost me three or four more hours. In order to get me to do what he wanted me to do.

I think that monitoring to see that that stuff doesn’t happen because people who are the providers of technology are in an extraordinary position to take advantage of customers who are overwhelmed by the technology and having some sort of monitoring in place given that there’s a high degree being passed out at those places, I’m not sure it’s a bad thing.

I wouldn’t want to work under those conditions.

Stacey Harris:                      I completely agree where you’re going with the trusting. That’s a conversation of … How do you use that information could be really telling into whether or not you’re using it to help maybe employees see that maybe they’re doing something that’s not as appropriate as they’re aware of versus we’re penalizing people, right?

John Sumser:                       That’s the thing about people and data. Thoughtful people look at data and have questions.

Stacey Harris:                      Mm-hmm (affirmative)

John Sumser:                       This will show you what a cynic I am about that. Thoughtful people look at data and have questions. Most people look at data and wonder where the answers are.

If you’ve got a system that identifies bullying, it’s not going to be used for coaching purposes. It’s going to be used for the assignment of blame. That’s what happens. You put somebody on a list and the world changes because they’re on the list.

Stacey Harris:                      Isn’t there the opportunity, though, with something like that and I get what you’re saying, human nature is to look at that and say how do I fix this by blaming or getting rid of someone but isn’t that the opportunity of data? I love your comment about the fact that it’s there to ask questions because if we ask questions then what we really should be asking is what’s incentivizing that and the user? That employee? Is it because if they spend the time with you and their name’s on it and it still’s not fixed they’re going to get penalized for not not helping you the right way?

Or is the incentive for doing the unethical thing that they get paid more so a week incentivizing the wrong thing? That’s what the question is, right? Not is that person doing a bad or good thing, wouldn’t you say?

John Sumser:                       I think that’s right but I’ve also noticed over the years that when something is caused by the system the employee is usually blamed. That’s the conundrum, right? That’s the complicated question is how do you shift that? It’s easy. It’s way easier for me to blame you than to look at how we do business together and the things that … A complex analysis. It’s way easier for me to go, “Well, Stacey, you screwed that up? Why did you do that?”

I don’t know how you get over that natural tendency to blame the other person when it’s the systems fault.

Stacey Harris:                      This is actually a great question that we’ve actually been talking about a little bit here at Mercer this week. You had mentioned that the event you went to they talked a little bit about this which is it comes down to the HR analytics role and if you look at some of this data in an aggregate level with the right skill sets to ask the right questions you can get a lot out of it.

I think you had mentioned and I think that this is actually … If you put this data in the hands of managers without guidance at operational levels without guidance you can end up causing as much damage as you can improving the outcomes that you’re trying to improve. Would you say that fits what you were talking about earlier, John?

John Sumser:                       Absolutely. I think it’s important to understand that some roles in the organization are reactive roles and some are proactive roles and much of operations and things like HR are about solving the next crisis. The kinds of people who excel in these areas are people who get information about a problem and then go solve it. They don’t … Reflection … Between problem identification and problem solution, the time for reflection is 0 in crisis-oriented occupations.

If you give somebody who is really good at that sort of stuff information that allows them to see a problem what they’re going to do is go try and fix the problem. That’s what you want them to do a lot of the time is go fix the problem. The issue here is that if you discover that I am an 80% retention risk and you start being extra nice to me I’m going to experience creepiness. I’m going to experience, “Why are you doing this?” If what happens is you look at me as an 80% flight risk and you say, “Oh, well, he’s going to go. Let’s get rid of him.” That defeats the purpose but that’s a decision that lots of people would make because you want to cut your losses and get on with the next thing.

What we don’t have now that we might be able to identify at least categories of flightiness, we don’t have interesting ways of harnessing that information and knowing what to do.

Stacey Harris:                      Yeah, that’s the conflict analysis that the data scientists and data analysts are required to do but it is hard in our HR industries to find that skillset. That’s the big conversation we had this week.

You know it’s interesting the other comment that I had here, or the other article I had, was about the Randstad picking up RiseSmart and although that that’s not maybe exactly in line with what we’re talking about but I think … The whole RiseSmart conversation about an outplacement service that Randstad is picking up and that they’re using technology to manage right finding outplacements … Doing outplacement in a way that you could find people a new job through that process which is oftentimes outplacement is a way to manage it so that people don’t feel like they’ve just been dropped off a cliff.

I think that the technology can be used in a sophisticated way to connect people with ideas. Just like we used that to connect people with jobs and connect people with opportunities, right? I think there is a place where this sort of gets worked out more in the future but we just haven’t gotten there yet is where my thoughts are at on this.

John Sumser:                       What does that look like? Tell me a little bit more about this.

Stacey Harris:                      I think, you know … We, you know … It’s been a long time where we’ve been sort of saying, “Well, we can use technology to match people off and match jobs off and match people with learning” and those types of things, right? We have a lot of data and researching tools that do just that. Sort of matching people with concepts and ideas.

What we don’t have a lot of is matching people with possible ways to deal with these situations that are appropriate, right? That’s the difference between just going to an outplacement program that sort of gives you the tools to just match things up and drop you off a cliff versus giving you the tools to match people up and give them options, right? Different ways to handle the six different paths that they can take. I think that to me is the direction all these technologies need to take. This idea that that we’re not giving you data and one answer but we’re giving you data and multiple answers and ways to use those pathways forward.

That’s what I’m thinking this would look like in the future.

John Sumser:                       The result is that everything I look at I have more questions about?

Stacey Harris:                      More questions, more possibilities.

John Sumser:                       Yeah, that seems hard, because I’m already busy and now you want me to think harder about everything I’m doing? That seems like you just created a world in which you need two managers for every employee because you have to think hard about everything, right?

The question starts to be what’s the most important thing to think about and how do you tell the difference between a personnel-related initiative and a business priority and who makes that decision and how does that information get put on the desk of the manager? I’ve got in my jacket a note that says Stacey’s a flight risk and I’ve got another note that says it’s the end of the quarter and you haven’t made your numbers and both of them come with insight on how to solve the problem. I’m probably not looking at the Stacey question. That kind of decision making, on the fly decision making by executives who are pressed for time is challenging, I guess. It’s challenging to imagine where all this information goes.

Stacey Harris:                      I was just going to say that I think the answer is someplace in the middle probably. Go ahead. That’s not nearly as eloquent as I’m sure what you were going to say was in that direction.

John Sumser:                       Oh, I don’t know about that. It does occur to me that one of the truths about privacy is there aren’t enough … They’re not enough spies to look at all the information. The question of whether or not there really is a privacy risk is a really big question. It may be true that it’s possible to see me in my underwear through the window but whose got the time to look? Am I interesting enough when they look to keep them looking? Probably not. Right? It’s like that. Now you can look at every window in the world. That’s a lot of windows.

Stacey Harris:                      Maybe that’s … When I’m looking at the two other stories I pulled this week was the Candy awards and the HR [inaudible 00:29:35] products of 2015. I thought both of these are award programs that are focused on sort of a candidate experience in one area and the newest technologies in the other area, right? What they require is a lot of data and someone to filter through those datas and make big decisions about whether or not the candidate experience was valuable enough from the Candy awards perspective, right?

I can give you the numbers here that they have 130,000 candidates responding to 200 different companies participants, right, for that particular award and I was thinking, “That’s a mess. Someone had to sit down and say ‘We know candidate experience is not well. We have to sit down and gather enough data and aggregate that data to make those decisions.”

With the top 10 HR products for HR someone has to sit through enough briefings and we know briefings are an hour, two hours at a time, to make a decision about what’s happening there, right? Some of our conversation, I guess, I think what you’re saying is that you have to trust the people making those decisions, right? That it isn’t just a technology process. It’s the analytic people who are making those decisions and how much you trust them.

John Sumser:                       Yeah. Yeah. That’s the burden here. This conference that I went to the average analytics group had a full-time person for every two thousand employees. Full-time for every two thousand employees. Now HR is something like a full-time person for every hundred employees so that means that 5% of the HR workforce has sort of a minimum threshold needs to be available with a budget to look at the intelligence available from the HR data.

That’s a big expense. That’s a really big expense. That’s a big addition to the budget. Something will have to go in order to do that.

Stacey Harris:                      That is actually really interesting. A sneak peek: we’re launching the [inaudible 00:32:01] data at HR tech here in two weeks so sneak peek is about roles that we asked about. Which roles are going to be increasing and decreasing. Nobody will be surprised, I think, but the number one role that people plan to increase, about 30% of organizations plan to increase their HR analytics roles.

I think but to do that there are roles that have to be decreased because the budgets aren’t expanding that much. The question is where are they going to get those roles from. We talked about payroll being one area. People who have some experience there could move into that role. HR general is sort of another areas we’re seeing decreasing and those might … Sort of if you’ve got some business sense, plus if you know enough about data analytics you could move into that role. Or they might just get these roles from completely different locations and places.

Those are great questions. That’s an interesting conversation.

John Sumser:                       Yup. One of the best parts of our time together in these shows is that we always end up with more questions than we started with. I love that part of this. We have exhausted our schedule and we’ve had another brisk run through the woods of HR technology.

Thanks so much for taking the time to be here, Stacey.

Stacey Harris:                      Yup. Thanks to John and thanks to everyone out there who continues to take the time to listen. We’re enjoying these conversations and hopefully they are as well.

John Sumser:                       Great. With that we will see same bad time, same bad channel next week and thanks for tuning in.

Bye Stacey.

Stacey Harris:                      Bye. Thank you, John.

End transcript


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HR Tech Weekly: Episode #40: Stacey Harris and John Sumser

HR Tech Weekly Episode 40 with Stacey Harris and John Sumser.