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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: 49
Air Date: December 10, 2015


This Week

This week John and Stacey discuss:

  • Workday Technology Summit updates (Workday site):
    • Walk through of their Infrastructure, data privacy plans
    • New products demoed for releases 26 and 27, Worksheets and Engagement Frameworks
    • Focus on Culture and Customer Satisfaction
    • Design Thinking models
  • Paycor buys Newton Software

About HR Tech Weekly

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 Tech Weekly, One Step Closer with Stacey Harris and John Sumser. I’m John Sumser of course. Stacey, how are you?

Stacey Harris:                        I’m good. I’m good this morning, John. I’m looking out over California’s somewhat foggy, rainy skyline this morning, which is not a bad thing. I think you guys needed the rain pretty bad out here. Doing well this morning.

John Sumser:                        We’re happy to have the rain. You’re in a great spot. You’re in Sausalito, right by the Golden Gate Bridge, looking out over the bay. Doesn’t get much prettier than that.

Stacey Harris:                        It is gorgeous. I did have to stop and take some pictures last night. For those on Facebook, I apologize. I was posting up a storm with nice pretty pictures. You don’t get to see that view too often, so I will take it.

John Sumser:                        What a great place. We were there together for the Workday Tech Summit, which was a fascinating look inside of the operations at work there. What’d you think?

Stacey Harris:                        This was my first Workday Tech Summit. I’ve been at Workday Rising. Generally when I go to these events I’m looking at it maybe a little bit different than other analysts because I’m looking at what type of questions would be most interesting, or what type of things should we start to think about changing in the research that I do for the end users. This was a deeper dive than I’ve generally gotten from authorizations on the architecture and infrastructure of the Workday product. That was very interesting because it definitely showed their … and you just sort of know when you talk to them that they’re very connected to the continuous change model. The fact that no technology stands still. They showed that on multiple levels the last two days that we were able to sort of see how they could change their infrastructure and at that point in time not affect what was going on their application layer and vice versa. Which is very similar to what you see with most cloud based technology today if it’s sort of architected correctly.

The other things that I thought were interesting is they were really very open about what they’re doing both on the application side and their plans around the application side, as well as what their challenges are and opportunities are with the data privacy issues and security right now. I think the home market’s struggling with that. We were talking a lot about that.

I thought it was a very, very good, very open session. I had a chance to talk to Neil and most of his technical director board at least at this event. What did you think, John. It was your first time as well, right?

John Sumser:                        It was my first time as well. I wasn’t prepared to like it as much as I liked it. I think that’s where to start. The thing that caught my attention that’s pretty interesting is Workday aggressively tries to live in a world where nothing is the same two days in a row. By that I mean, their customers are constantly battling change and Workday is constantly refining its offering to deliver change. You’ve got a change in product with a change in customer. I think a lot of the story that the competition tells has to do with being a stable basis for operations in a sea of change. It’s a very different story, but there’s also a very different culture that comes from believing that your job is to be at the heart of change and that whatever stability is available comes from changing, not from being fixed … I’ve never seen a culture like it. I think it’s really interesting.

Stacey Harris:                        It’s a great way of sort of capturing it. We had this conversation yesterday. We were sort of trying to pinpoint the differences amongst some other analyst events that we go to. We go to a lot of them. Most of the time the vendors trying to put on the best show, particularly with industry analysts … And financial analysts. And financial analysts in this industry get separated in two different ways, but the goal for them is to get you to see the growth, the opportunity, and in some cases to ask them the hard questions so they have an answer for them and they can make sure they can show where they’re at. I think it was very interesting to see the differences here.

Now this idea of a continuous culture change is something that is a newer concept in the market. We talk about it. We talk about everything’s in change, but when you really run your business as if there is always change and you build everything, your work processes, your org structure, your communications, your approach to the fact how people can fail or not fail, all of that is built around the idea of change. You also have to have a different mindset about what success looks like in that environment.

John Sumser:                        I think so. I think that the [inaudible 00:05:54] separating customer experience and user experience and managing them as different elements. I think it’s harder for users sometimes to work in an environment that doesn’t stay fixed, and it’s great for customers. Contradiction. The idea that customer and the user ambitions and passions are aligned is something that I think we just haven’t given enough thought to. It’s pretty obvious that those are two different groups with two different sets of agendas and while it would be great to imagine that they were the same thing, they’re generally not. I think that Workday is sort of pioneering managing the two things as different things.

Stacey Harris:                        One of the products that highlights what you’re talking about is, one thing they went deep in this week was their worksheets product. They had just highlighted that slightly. It’s coming out in version 26, if I’m correct, and some more aggressive elements of it in version 27 of Workday product. One of things that they had highlighted at Workday Rising, which is their client summit, was that the worksheets were going to allow an organization to do the things they do in Excel, but in a cloud environment with some controls over it. We all know that most people in HR, particularly if you’re working on the analytic side of HR and finance, they’ll use Excel at the end of their processes in some way.

Workday kind of said, instead of fighting that, we’re gonna embrace it. They bought a small company that had a very deep work sheeting capabilities and they integrated that small piece of technology into what they were doing. Here in front of us, they not only showed us that technology and what it would do to create a user experience that was a little more friendly, but they also talked about how on the customer level, if someone leveraged this appropriately, they could change the whole dynamic of collaboration in a company that needs to go very granular in their data. We think that they were looking at both levels at what you were talking. The user experience was sort of the worksheet as what everyone’s using. [inaudible 00:08:35] get them something that close what they’re using. The customer satisfaction side is how do we create additional value in the picture.

John Sumser:                        The worksheets product is potentially amazing. I also think there are some questions. The idea is that with a worksheets product that’s part of the system of record, you get data that has a guaranteed providence, so you actually know where the data comes from that’s in the spreadsheet. That is managed on a cell-by-cell basis in this particular approach. It sounds terribly complicated to think about and to execute, but once it’s in place and every cell, you know where the number comes from and you know who’s allowed to see it and you know who’s allowed to manipulate it, you start to have an answer to the question of which spreadsheet are we using … And what does it mean? That’s something that plagues everybody – which spreadsheet are we using?

Having said that, I have a hard time imagining that the beginning of a spreadsheet conversation, which is somebody like me sitting down with some data and diddling around with it ’til we have an idea of what’s going on, the idea that what I’m going to do is stop using Excel and start using somebody else’s product because the boss bought it … I don’t know how you get adoption there.

Stacey Harris:                        That was a big conversation this week. The difference between the buying of modules, the rolling out of modules, and Workday has some interesting things that they’re planning on actually managing that process over time. On the other side of it is the adoption of the end user level of any of these products. How do you track that without tracking users’ activities too closely but still create an environment where the users want to or need to, one of two options, go on a regular basis. I don’t know that that was answered every clearly this week. This was a technology summit, so I think some of that strategy conversation we didn’t get into as deeply as we maybe might have at other analyst events for Workday.

One of the topics that came up along that line was is Workday planning to go into past or platform as a service, to make their technology more extensible on multiple levels. So that operations elements can be built off of it, and other solutions that maybe are built by third-party environments or by their clients, if they want to do something that’s just not within the purview of Workday.

I think it was pretty clear, they said platform as a service, at least today, is not on their agenda, they have no plans to do it. They’re very careful about owning their user experience, their code, and not making this an environment that everybody is building onto. They are creating an experience. That idea of how you get adoption, is it by creating the best experience? Is it the Steve Jobs idea? Or is it by creating the best environment? Which is the application of and apps model. Which is it, or do you need both?

John Sumser:                        There’s a third approach there, too, which I believe is, what the trajectory of the Workdays are. That third approach is build a company that people love to be involved with. That’s neither best experience of the product, nor is it best product. It’s best company. It’s best culture. As a strategy for adoption. They’re doing some really interesting stuff there and the question starts to look like, if that’s their strategy, how do you scale it? Scaling experiences is really hard in spite of the fact that people in Silicon Valley talk about [inaudible 00:13:42] commodity. Making people feel like they’re part of something important in an enterprise environment is an extremely challenging thing to do and they’re making some very interesting strides doing it.

Stacey Harris:                        That [inaudible 00:14:03] question is one of the things that O’Neil said that he was very focused on is the culture and keeping the culture right, and he mentioned a big investment firm next year was going to be in what I would consider more development onboarding leadership. Those types of areas where to scale that type of a feeling you do need to make investments in how that feeling gets communicated and how that feeling gets structured. I would say we’ve seen from some of the large Silicon Valley organizations who have done that very effectively or at least have done it from that side looking in very effectively. The challenge for the HR community is, and I think what you’re saying, is that this isn’t just a culture within the company. It’s also a culture externally. It’s with the community that they’re [inaudible 00:14:56] community. That’s a big issue as well. How do you keep that community as excited and feeling connected to something that they’re doing too.

John Sumser:                        There’s a track record here, and you’re [inaudible 00:15:10]. You showed the enduring strength of the People Soft brand and this is the same crew that developed the People Soft brand in spite of a lot of pressure for that brand to disappear, it has remained resilient over many, many years, because this crew builds a really extraordinary level of loyalty into their products.

I don’t even know how to think about that, frankly.

Stacey Harris:                        There are a few products in the market today, except for the Enterprise Solutions. On the consumer side, we have very few technology products that we visually know and use today. Microsoft Office being one of them for the last twenty years. On the Enterprise side, those technologies, People Soft, the Oracle, the SAP, those brands have been around in their respective communities for twenty, twenty-five plus years now. People have been using them and they’re very vested in those brands and those cultures. The question becomes how long and how sustainable is that before some of the positive feelings start to turn into negative if you’ve been with them for a very long time.

John Sumser:                        Worksheets, as a part of an Enterprise tool, is anybody else doing that? I don’t think so.

Stacey Harris:                        I’ve seen not exactly the same thing, but I’ve seen cell-based worksheet type tools. Oracle has one but it’s more of an analytics products. I saw them demo [inaudible 00:17:11] last year. Obviously Google itself has their sort of worksheet tool, with some cloud capability with that. I don’t think that they’re the only ones. What was interesting to see on this Worksheet product was that they’re probably one of the only ones that are thinking about it with use cases in mind. They’re building it with the idea of use cases, verses building it with the idea of let’s create something that cloud, but replaces Excel … That was a difference that I noticed on this particular conversation. It’s a lot easier to easier to understand as a tool set for this audience, and the planning side and on the leadership side and on the management reporting side, which is a big focus that they mentioned.

The other things they talked a lot about this week, which was their approach to their design model, which is they’ve got a whole design thinking model. They had one of their design user experience experts come out and try and put their crotchety, grumpy analyst through a design thinking session, a very small one, which was the highlight of my day watching that.

John Sumser:                        Trying to a move a room full of cynics into an enthusiastic, smiley thing was very ambitious.

Stacey Harris:                        Yes, it was. But they made a really valiant effort at it. The design thinking models that they’re using, which are not unique in tech space these days, but I think they are more unique in the HR tech space. That drives a little bit different approach to some of their applications.

John Sumser:                        It’s an exciting show to watch over there, because they are doing the best of Silicon Valley brought to the HR space, and that’s a different and distinctive positioning that allows customers to say we’re leading edge customers. One of the things that I was really taken by was, when they do something, it seems like it’s always tied to improving the customer’s perception of the product of the work … Everything is about making the customer successful and happy.

Stacey Harris:                        It’s very fair to say that Workday selects their customers very carefully, too, on that front. They are not an organization that is going after market share for the sake of market share. I know organizations who probably wouldn’t be comfortable and wouldn’t be as ecstatic with the Workday product because of some of the gaps it has because it is not a fully developed solution in all areas. They’re building it out. They have specifically said if you join us, you have to be somebody who buys into our vision, and if you’re not someone who buys into our vision, this isn’t the right place for you. That gives them the ability to focus on those customers because they know the type of customers that they’ve brought into the mold.

The people who aren’t part of that picture, the organizations that don’t fit into that mold, they sometimes get frustrated because they are looking at what Workday has [inaudible 00:21:24]. They wouldn’t meet all my needs, but everybody seems to love them. There’s this challenging thing in the market with this group of people who are fanatics with them and another group of people saying why, what is it that makes them so great.

John Sumser:                        I think figuring out how to convert the skeptics is probably on the list of the next things that they need to do. Did you see this thing about Paycor buying Newton Software?

Stacey Harris:                        I did. Paycor is another sort of small SMB mid-market, depending on how you look at it, [inaudible 00:22:07] environment, which had built up the minor talent management components, they had the [inaudible 00:22:13] management pieces as well. They’re pretty well-rounded, but they were definitely lacking on the recruiting side. When they were looking to their clients’ SMB market. SMB Market is particularly focused on trying to get as much in a single platform as they can, for the HR space, because oftentimes they have fewer resources managing the HR environment. They’re looking more often for a [/swiːt/ 00:22:42] opportunity. Paycor was hearing their clients’ request and picked up Newton. I don’t know Newton Software very much. Do you know them, John, on the recruiting space? I don’t know well they fit in with Paycor’s culture at SMB and very user-experience conversations.

John Sumser:                        It’s a good fit for the market. My question tends to look like, how does anybody in a small business utilize enterprise software ideas? It seems to me that this particular acquisition is about expanding footprint in the very low end of the market. I’m not clear that it’s a proven thing that’s where people are going, God, what I really need is software for recruiting. I’m not sure that that’s a thing. I know that there a lot of people facing it. [crosstalk 00:23:50] My guess is that Paycor was feeling some pressure from places like Greenhouse, surprising places like Greenhouse, so there are new kids on the block operating shiny objects for sale, and the older, more established players may be feeling the need to respond, whether or not there’s an actual market there.

Stacey Harris:                        I get what you’re saying, but this is probably not a big part of their … This is an organization that has built their base and their financials off of payrolls, so anybody who can make the money off of doing payroll … Any margin beyond that is probably pretty good. They’re looking for the next step to get to a more strategic role with their clients, so that they aren’t just pigeonholed into payroll. Because just being payroll oftentimes leaves you with a very small piece of the overall funding pie. There has been consistently focusing on how they expand the tool set for their clients. I don’t think they saw recruiting as a big piece of that, but it was a piece they didn’t feel necessarily required them to build it out, is probably a better way to look at it. If they were gonna invest their money in their platform they probably had other areas that were more compliance driven, that probably could have used that time. That probably is more along the lines of what they were thinking about.

They’ve already gotten thirty-thousand of their clients, all probably mid-market … I believe Paycor averages somewhere in the range of five hundred to three hundred employees, we’re talking pretty small organization, but big enough to be on growth trajectories. To have recruiting challenges, to have challenges with payroll, to have challenges with workforce management. I think less likely is full talent [/swiːt/ 00:26:11] requirements for many of those small organizations. Performance management, succession planning, that kind of stuff. Seems less of a need for those organizations.

John Sumser:                        We’ll look and see what they’re up to. We’ll come back and look at them again. We are coming to the close of the year. Are you done traveling?

Stacey Harris:                        I am done traveling. I have one more week in the office. After that, I will probably … Many people will be on vacation for a weeks. I’m looking forward to a little bit of downtime, but research never ends. There’s always something out there that we’re looking at or some information that we’re gathering. Even while I’m on vacation, there’s a lot of reading planned. How about you, John? Will you be taking a little bit of a time off and spending some time re-energizing the batteries for the research level?

John Sumser:                        A little bit. I’ve got a bunch of projects that are due. I’m not going to be traveling ’til sometime in January. I’m happy to be locked in a closet with some research to do. We’re going to take a long, five or six day car ride around the [inaudible 00:27:31] Coast, right after Christmas. There’s a little bit of break, and a little bit of research, too.

Stacey Harris:                        Good. That probably means we only have one more … We have to wait to see where the holidays fall and where our regular radio show falls. We might maybe miss one or two here after the next couple of weeks.

Talking to many of the people in the industry, I think a lot of people are looking forward to this break. I don’t know why, but this year seems like it’s been a very robust year, as far as news from the HR tech front and a lot of people have been very busy, so I think people are looking forward to a little bit of break. Hopefully we’ll be able to catch up on most of the news come on the first year.

John Sumser:                        Cool. Another great conversation, Stacey. Looking forward to next week. Maybe we’ll wrap up the highlights of the year next week.

Stacey Harris:                        Sounds like a good idea. Let’s plan to do that. That will give us a little bit something we can go through. All of those emails we need to come back each week, here’s what we’re planning on talking about, we can go through and see which of those things really suck and didn’t suck from this year, and which had maybe made bigger waves than we thought. That would probably be a great conversation next week.

John Sumser:                        Perfect. Thanks for checking in, Stacey, and thanks everybody for listening. you’ve been listening to HR Tech Weekly, One Step Closer with Stacey Harris and John Sumser. This was our forty-ninth show. Have a great rest of your day. Thanks for tuning in. Bye-bye, Stacey.

Stacey Harris:                        Bye, John. Thanks, everyone.

End Transcript

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