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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: 48
Air Date: December 3, 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:                        [music 00:00:03] Good morning, and welcome to HR Tech Weekly, One Step Closer, with Stacey Harris and John Sumser. This is our 48th episode, Stacey.

Stacey Harris:                        Hello, John. Hi. 48 episodes already? Wow. We’re almost hitting that 50-some mark there, so we’ve been at this more than a year almost at this point, right?

John Sumser:                        Yeah. Do you ever get the feeling that this sounds like a Saturday Night Live skit to people who are listening to it?

Stacey Harris:                        I don’t know that we’re quite that funny. I wouldn’t put myself on that pedestal. I was actually watching the holiday Saturday Night Live special last night. It’s hysterical. The commentary and the writing within those environments for so many years was fabulous but, yes, there’s probably some good laughs on that call.

John Sumser:                        Yes. We should dress up like cheerleaders.

Stacey Harris:                        Dress up like cheerleaders and talk about … Yeah, well, anyway this is a professional call. I won’t tell you all the things they were talking about last night. I’m too much of a good girl for that.

John Sumser:                        Good. So you had a good Thanksgiving?

Stacey Harris:                        I did. I did. We had a great Thanksgiving. Nice break here and hopefully everyone didn’t miss us last week, because it was well worth the time to just stay home and be with family, so definitely very nice.

John Sumser:                        Great. What’s in your mailbag?

Stacey Harris:                        What’s in the mailbag this week?

John Sumser:                        I think we can change the name of the show to What’s In Stacey’s Mailbag.

Stacey Harris:                        What does Stacey look at each Wednesday evening? There wasn’t a ton of stuff. Obviously, the holidays, I think, for everybody, yourself included, everybody got away a little bit and got a little bit of downtime. There was a couple of announcements that came out from Workday and ADP just actually yesterday, I believe. I think that’s worth talking a little bit about their expanded relationship, and then each of them had additional commentary within their news announcements about other things they were doing in their next releases.

There was some fun stuff from Mercer about what they’re doing with game-based career search platforms. Then some interesting news from GuideSpark that I think it worth commenting on, sort of their premium version of communications for the IRS form 1095-C. Those are probably the most interesting things, unless we want to get into conversations about Mark Zuckerberg giving away 99% of Facebook. Those are the other topics.

John Sumser:                        I love that he’s giving away 99% of his wealth 1% at a time over the next hundred years. I was thinking about it last night. He’s got so much money, that what will happen is for every 1% he gives away, 2% will come to replace it. It’s a great PR story, but there’s no substance to it.

Stacey Harris:                        It was. I was actually trying to read into it this morning because, of course, it came across all the other news wires, and I was like, oh, so he’s going to keep maturity control. He’s not giving that control to anybody else, and over the next 40 years, he’ll be sort of giving all the funds. But he’s commenting on it earlier … The whole comment on the article was he’s commenting earlier than we saw the other gentleman, like Warren Buffet, who waited until they were 85. That was a big comment.

John Sumser:                        Okay. I should have that problem. I think I aspire to having that problem.

Stacey Harris:                        I know. We all aspire to have that problem.

John Sumser:                        But in the more tangible world, we have this really interesting thing where the hottest, by Buzz, company in the space is building a partnership with what you could describe as the biggest and oldest player in this space. That’s interesting. That’s interesting on so many levels that I don’t even know where to start. Workday is doing extraordinary things building out their ecosystem. ADP is demonstrating transformative skills that you’d never imagine from a stodgy old payroll company with 500,000 customers. They’re showing a kind of flexibility that’s just astonishing.

To see the 2 of them working together and figuring out how to dance without stepping … ADP has 500,000 feet, and so when you dance with them it’s easy to step on toes. They’re navigating this relationship. It’s a very cool thing. What do you think?

Stacey Harris:                        Yeah, I know. I was actually quite intrigued when I got the announcement. It was sort of funny, because I got the announcement from both of the groups sort of separately. I got an ADP announcement earlier in the morning and then a Workday announcement came in the afternoon. Generally, when you see these partnerships, they’re sort of joint announcements. I think the first thing that I noticed was that these were separate announcements, at least on the paper that we get generally, and I think the commentary around them, the purposes behind them were sort of exactly what you were talking about. There was sort of this interplay of what’s happening between these 2 companies, but the understanding that they needed to work together. That was, I think, the biggest thing that came through, and they needed to work together because their customers were demanding it on some level.

Basically, fundamentally what we’re seeing is that Workday has announced they’ve got a deeper partnership with ADP so that they will be able to capture content in the Workday environment and pass it directly through to ADP’s GlobalView product. That content, vise versa, in the ADP GlobalView product will be able to pass cleanly into the Workday environment so that the end users, the administrators on the payroll side, don’t have to go into the ADP GlobalView product, is my understanding.

Basically, this has to do with fields and effective dating management and connectors and sort of getting this stuff to all sync up is not just a matter of technology. It’s also a matter of capturing the right information and making sure both sides are speaking to each other and know what information is being captured. It’s also an issue with security, because security, this data flow on a global level is really, really important.

The other thing that Workday announced in their announcement is that they also are offering a data privacy feature that’s launching at the same time that allows their European customers, and this is going to come in their Workday 27 release, but it’s going to allow their European customers to select that only European employees or European counterparts will work on data, or access data, that is European based.

It’s a very interesting sort of commentary on the fact that this is both a global issue and these 2 big technology giants working together.

John Sumser:                        I’m just starting to dig deeply into the technical details of privacy. I don’t understand this particular thing, so I’m going to see if you can help me understand a little bit better. When I see what Workday is saying, they’re saying Workday customers can choose to have their data supported by people based in Europe or other countries with data privacy adequacy. I’m trying to imagine what that means if I’m a global company and I have to abide by the current European privacy regulation. What does that look like? I get that you would end up having effectively the work done for France done in France, and the work done for Hungary done in Hungary, but at some point you need the systems to talk together. How does that happen? Do you have any feel for that?

Stacey Harris:                        I will have to say that the one commentary, and I think the reason Workday is able to offer some of this … My sense … I would have to double check on this, but my sense would be part of the reason they’re able to offer some of this is because ADP has done so much work in this space as well. I think part of this is the connection with ADP. ADP, at my last ADP analyst event, we did talk about this issue of privacy and security. Their commentary is that they’re still sort of … You bring the content up into the cloud to do some management of the content, but where it’s finally hosted and where it’s finally sort of entered into the system, sort of the entry and exit point of that content, is always in servers, if I understand this correctly, and someone can definitely call in and correct me. As I understand [inaudible 00:09:28] servers that are located in those countries.

So there’s a difference between where the content is entered and accessed and a difference where it is processed. All the processed information for ADP globally happens in, I think, I want to say their office is either [inaudible 00:09:45] or France. I could be wrong on that, but it’s somewhere in the European market space there.

The processing of information is different from where it’s accessed and where it’s actually held. I think that’s the difference. When it’s processed, that gives you the big view so you can sort of get the data that says, “Okay, on an aggregate level, we have 20,000 employees, and here’s all their payroll.” That’s all you see. But the individual employee’s data, you have to go back into the server that’s located in that country or location.

John Sumser:                        So the communication at the system level has all personal identifying information stripped out of it, and it’s just aggregate data that’s [inaudible 00:10:22] at the top of [inaudible 00:10:23]. Is that the gist … ?

Stacey Harris:                        That’s my understanding. I definitely would be open to someone sort of giving us some … But that was my understanding in the analyst conference, yes.

John Sumser:                        That makes sense. I believe what you said and, please, correct me. I believe what you said is that Workday is able to do this because of the relation … The reason that it’s announced as a part of the relationship with ADP is that ADP has worked really hard in this area and has the technical and security frameworks necessary to make this work properly. Is that … ?

Stacey Harris:                        That would be my understanding. We’ll get more data next week. Workday’s doing another analyst event themselves on the technical side, so we’ll probably have more to report next week, but that would be … I know in ADP’s analyst event, they were very specific about how they had set this up to make this work at a global level. Ultimately, it’s about where that data’s captured. If ADP’s capturing the data, which they would have to because they’re the regional host I guess you would call it, then that’s where you’d have to have that security at, I would assume.

John Sumser:                        Very interesting. We’re starting to see extremely technical stories at the top level of the HR technology pile, and usually the top level of the pile is more arm waving and smoke blowing than this. Do you think we’re going to see more? Is this the beginning of what it’s like to live in a world dominated by ecosystems?

Stacey Harris:                        I do. I think this conversation would’ve been more of a … There’s fear. Let’s everybody go back to an on-premise environment, if it would’ve been 2 years ago. If we would’ve had some of these mandates and the safe harbor regulations come down, say, 2 years ago. I think the fact that we have hit a certain point where there’s enough content, enough information in the cloud that now all these companies are saying, “Look. We just have to figure this out. There’s a way to get through this. There’s a way to do it. You just have to be smart about it.” I think that they’re just getting more technically savvy.

I had this conversation with a couple of organizations a few weeks ago that I was talking to, and they were saying, “Well, doesn’t that just make a better case for on-premise?” I said, “Not really. Actually, in on-premise environments, there’s a lot of security issues because you’re dealing with 1 company, 1 environment, 1 location, and all of your employees.” In a cloud environment like ADP, they have, like you said, 500,000 companies they have to manage data on, so their security is predictive, it’s multi firewalled, it’s multi double-checked, and I think they invest a lot more money than a single company can, so I think this is the type of technology conversations we’re going to get into more.

John Sumser:                        That’s really interesting. Not very long ago, in the heyday of [iram 00:13:21], people would’ve talked about stuff like this at [iram 00:13:21], and everybody else would’ve been happy to not go. Part of what you’re seeing is that in the end of the HR IT department, which is part of the consequence of cloud computing, practitioners have to start to be smart about these relatively technical conversations. They have to be able to understand not just at its privacy, but that the implementation in security technology is right, is working, is guaranteed, so they have to have more than a passing understanding of this stuff. That’s interesting.

Stacey Harris:                        Yes. That’s going to be a struggle for a lot of heads of HR and senior leaders who have delegated in many cases the IT and the security at an enterprise level and have not made it an HR conversation. I think this is very much an HR conversation because it’s a workforce conversation as much as it is an employee conversation.

John Sumser:                        There’s an interesting business, Stacey. There’s an entire business available to somebody who wants to teach executives everything you need to know about technology to actually make smart decisions.

Stacey Harris:                        I’m not sure that that would be very fun, but I think a lot of HR is in it and IT’s in it, yeah.

John Sumser:                        Hold it. That’s what we do. We’re already in that business.

Stacey Harris:                        I was just going to say 1 other comment I think on these announcements was that ADP also announced in their announcement that they were expanding their global view, multinational solution, to now offer workforce management and global benefits offering. That was sort of interesting, because up to this point, GlobalView has been primarily a payroll solution with some elements of [inaudible 00:15:23]; but expanding it to their Enterprise eTIME workforce management solution and a global benefits tool that can capture benefits data for, I believe, primarily centralized sort of relevant data that has to do with like a hundred different countries and 18 different languages. That announcement on sort of the same paper as the Workday announcement was sort of an interesting juxtaposition of content and information.

Have you done much with the global view product or multinational solutions with ADP? Does that surprise you that they’re expanding that, John?

John Sumser:                        Doesn’t this look like taking a club to Zenefits? This is … “Hey, Zenefits, we’re partnered with Workday. What are you doing?” Right? Because to follow up, it’s only been a couple of weeks since the armistice between the 2. To follow that up with this announcement, I think that’s more than just a little bit of signalling, and it’s probably an important decision from an investor perspective, that they go, “Oh, yeah, we saw that, and we responded.” The new ADP, which my friend Stacey Harris describes as a cloud computing company, just did that. The new ADP, the cloud computing company, is able to aggressively and rapidly turn around new functionality in response to market conditions. That’s not your mama’s ADP.

Stacey Harris:                        It isn’t, but at the same time, they’re not giving up the services side of what they’re doing. I actually just had an interesting conversation with an old friend who’s working in their RPO industry right now, and their RPO business is growing rapidly, their recruiting outsourcing model. That’s growing rapidly hand-in-hand with their ADP vantage product, as well. They’re still investing heavily in the services side. I think that this is going to be the interesting new conversation about vendors. What is their mix of services and systems? Can they manage both? Right now, ADP is one of the few that’s doing that.

John Sumser:                        I think it’s interesting that at scale, at an ADP level of scale, the idea that you can have a single narrative about the company is a broken idea. ADP is much better understood as a series of overlapping initiatives that serve the segments of 500,000 customers rather than a single piece of technology that solves a single problem. I believe that what’s happening in general is that we are in a time where the very nature of software’s being redefined. This is part of that thing, because ADP is saying, “We’re a software company,” and software companies productize some of their stuff, but they deliver software and technology in a variety of media in a variety of settings, and if you want to do know what to do, you actually have to go look at those individual cases.

Stacey Harris:                        Mercer’s another organization that this idea of services and software, but I think they’re heaving on the services side and picking up the software more slowly. Mercer did that same announcement this week around investing in Pymetrics, which is a game-based career search platform. They’ve really been investing headlong into what I’d call niche technology areas around the areas of metrics, career planning, and career management and, in some cases, trying to drive the conversation down to a consumer level.

I don’t think they’ve really cracked that, not yet figured out what that is, but in the product, all the products have an element that could be consumer based, and investing in Pymetrics … I think that’s how you pronounce it … which is a game-based tool, that sort of by taking games helps you figure out which careers might be a better fit for you versus just answering a resume that kind of says, a job-screening tool that kind of says, well these might be the right things for you. You’re actually taking a game that kind of says, “Hey, this is the right direction and, by the way, here’s 5 jobs for you that fit that.”

It’s interesting to see if someone like Mercer, who is totally a services company, will be able to go into the software side effectively as well.

John Sumser:                        For as long as I’ve known Mercer, which is only 5 or 6 years now, they’ve been trying to become a software company, at least some of their organizations. This is not a surprising thing. I’ve do got to say that when I hear the name Pymetrics, I imagine a bakery full of pie charts. I don’t know about the name, but it’s fun, so I guess that’s the game business. I think there is a world of learning to do in the arena of, if you play this game, we can tell you what you want to be when you grow up. That’s … Here. Eat some pie and we’ll tell you about your career. I’m not sure, but I appreciate the experiment, and it’s cool that Mercer’s investing in that.

Stacey Harris:                        They’re investing. This isn’t something they’re doing inside their company and they’re not … They haven’t bought the company yet, so I think it’s the hint towards where they see the opportunities at, and I think you’re right. It’s more of a sort of testing the waters, investigating if this is going to be an idea that’s going to play out. It’s definitely more along the lines of that sort of offering a benefit to someone while they’re going through the hiring process.

The other announcement that we had this week, which doesn’t really fit in all this but sort of does, was from GuideSpark, and they’re sort of [premium 00:22:02] offering, if you want to call it that, of a communications and education tool. GuideSpark’s another organization that does sort of a mixture of sort of games kind of tools along with sort of education and communication videos. Primarily, they’ve always done it in the benefits area, which is … They offer some of the same things as Mercer does. Those 2 companies are as far away from the big software companies we were just talking about as ADP and Workday as you can get, but they’re great partners with organizations like ADP and Workday.

Part of what they’re trying to capture is the audience, I think, that is trying to communicate and add value to the end user on a services side, more so, and the service that GuideSpark offers is communicating benefits and communicating onboarding and communicating all the value propositions of being an employee. They have captured onto this one pain point right now that’s going on in the market where the organizations are trying to figure out how to explain to employees the IRS form 1095-C that they will be getting in the mail, and I believe they’ll be getting it in the mail sort of in preparation for this year’s tax efforts, I believe, so next year’s sort of tax work.

The form needs to be sort of filled out and used with the tax sort of filing process, much like your W2 form is. It has to be filled out appropriately or you’re going to basically either not get the money you’re owed or pay more monies to government around the benefits that you’re being offered, and this all has to do with the Affordable Care Act. GuideSpark is offering a free video and free communication tools around this.

What are your thoughts on that, John? Do you think giving away things free is going to get people sort of more clients? Is that going to offer more services in the industry? Is that going to get people more take-up on services like this?

John Sumser:                        I don’t know. I don’t know, but it’s a smart move for GuideSpark, who needs to expand their reputation in the business. Giving away free value does get you introductions to people, and so the question will be is the GuideSpark marketing department good enough to convert this initiative into revenue?

I’m more interested in the idea that there is a government form that the company sends you that you have to fill out so that the company can be certified as having done their job. I would love to see completion rates against engagement scores as a study. Love to see that. Love to see that. Cause I could see that envelope sitting on my desk and not getting filled out.

Stacey Harris:                        Yes, yeah. I think that … And more so, I think, companies are worried about the questions they’ll get around it, because it’ll be coming along, I think, with or near or in conjunction with the W2 forms, so people are sort of used to getting their W2’s at this point every year, but this form will be different but will look somewhat like it but not exactly. The question will be … We’re talking about it, and we’re still questioning what it is, so can you imagine an hourly employee who is not in the HR space at all, not paying attention to what’s going on from a government regulations perspective, getting this new form in the mail that has something that looks sort of legal and requirement driven but doesn’t exactly tell you what you’re supposed to do with it. This, I think, is the big challenge for most companies coming up.

John Sumser:                        Right, and that will go. When I get that sort of mail, it goes in the pile, and that pile gets attended to when it’s time to attend to it. If it looks like it’s part of the income tax thing, I put it in a pile, and then I procrastinate it, which I think is what most people do.

Stacey Harris:                        What they’ll do, yeah.

John Sumser:                        For every day that that sits on the top of my desk, the likelihood that there’s going to be a response declines. I’m very curious about how the government intends to understand that information.

Stacey Harris:                        Yeah. I wasn’t around in the days of Cobra filing. I don’t know if you were in HR at that point in time, but my understanding was that the first few years after the Cobra regulations went into place and Cobra filing went into place, you know there’s some sort of legal entities about that, too, if you’re sort of not working but have Cobra benefits, that that was a very hard time to be in the benefits in HR space is during those changes. I would assume it would be even twice as bad as whatever was going on during the Cobra days.

My sense is if you have a memory that goes back to that … I don’t know when that was, I think in the 80’s or something, then this will be near to that type of pandemonium.

John Sumser:                        Great. Great. We have managed to exhaust our half hour again. Anything that sticks in your mind that we want to be sure the people take away from the conversation?

Stacey Harris:                        I think 2 things that we talked about that are probably pretty important right now, 1 is data privacy and data security. I think that’s an ongoing conversation, John, me and you should probably add to our list of things that we should be watching for, because I think it’s going to continue to be a bigger topic for organizations, and I do think that this idea of communicating with end users whether it’s on 1095-C forms or other things is going to start to become a bigger conversation as well. How do you communicate with your employees when they’re dispersed across multiple platforms, multiple tools, and different devices and not all in 1 location? That’s been a constant issue for organizations, but I think it’s become a bigger issue in the next few years as we start to add requirements and legalities around each region and benefits. 2 things that I think that are worth watching as far as numbers and data goes.

John Sumser:                        I agree. I’ve started doing the course work to get certified as a privacy professional just because I wanted to really, really understand the privacy and security issues. I’ll have some insights from the classroom there as we go forward.

Stacey Harris:                        About 46% of organizations are doing, I would say, data privacy processes in a shared service function right now, at least in the [inaudible 00:29:08] data, so I would be very interested as you go through that classroom to see what they say the processes are or what the work actually is, because we’ve been trying to figure out what that actually means if someone’s doing that in a shared service center. I think it would be great to get out of your class if you’re able to get it.

John Sumser:                        Oh, yeah, yeah. I think I could tell you that already. Let’s make that part of the conversation. Thanks again, Stacey. Another great conversation. Thanks everybody for tuning in. We will see you back here next week.

Stacey Harris:                        Thanks, everyone.

John Sumser:                        Have a great day. Thanks, Stacey. Bye-bye.

End Transcript

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