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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: 50
Air Date: December 17, 2015


This Week

This week John and Stacey discuss:

  • GlobalHRU #hruAnalytics Event
  • Mercer forms Strategic Alliance with Vemo Link
  • Air Force deploys special team to fix HR technology systems Link
  • Korn Ferry Futurestep Predicts Top Talent Trends in 2016 Link

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 HRTech Weekly: One Step Closer, with Stacey Harris and John Sumser. This is our 50th show, Stacey.

Stacey Harris:                        It is. Wow. I guess we’re coming up on a little over a year now of doing this so I’m excited. I’m looking forward to another year of great conversations. Hopefully, we’ll all be in warm, sunny places most of the time. It’s raining here in North Carolina today.

John Sumser:                        Yeah, yeah, it is pitch black outside here. The fact that it’s the longest days of the year is not lost on me right now. What’s in your mailbag? We should change the name of the show to What’s in Stacey’s Mailbag?

Stacey Harris:                        No, no, no. We’ve mentioned that a couple of times. I don’t want to do that, but we do have some interesting good topics. You probably don’t remember. Remember Romper Room in the day, that used to have the mailbag they would open up.

John Sumser:                        I do. Do Bee and Do Bee and Don’t Bee and Don’t Bee, right? That was the Romper Room song.

Stacey Harris:                        Yep, that shows where I was at in 1970-something.

John Sumser:                        Oh yes, so my view of Romper Room is black-and-white. Miss Connie, Seattle, and it is 1958.

Stacey Harris:                        Okay, see?

John Sumser:                        That’s bad. That’s bad.

Stacey Harris:                        Just [crosstalk 00:01:46] extend it out to the ’70s.

John Sumser:                        That was [crosstalk 00:01:48] years before I was born.

Stacey Harris:                        There you go. Okay, well, let’s talk about what we’ve got going on in HR technology. We’ll bypass the Romper Room conversation for today. I’m sure it fits in some other conversations with HRTech but today, we’ve got some interesting updates. We probably want to talk a little bit about an event that you spoke and I had a chance to attend. There was a global HRU Analytics event just last week in San Francisco. We have some interesting insights about what’s happening in the HR analytics space a whole. Mercer just recently created a strategic alliance with Vemo. We’ll talk a little bit about that today.

There was a just slipped under the wire, a email that was sent to me by someone but I don’t know that they’re doing a lot promotion about this, about  soft Corporation, which for those of you in the learning space, you know them very well. They also picked up some total last year. Their CEO, Chuck Moran, is not really stepping down. He’s moving into a chairman role but Bill Donahue is taking over as chief executive officer and that’s worth having a conversation about. If we have a little bit of time today, there’s some articles this week about the Air Force. [They’re 00:03:09] pulling a special team to fix HR technology systems and about Korn Ferry’s predictions for candidates and talent acquisition, which I thought you’d have some fun maybe commenting on.

Where do you want to start, John? What do you think is the most interesting this week?

John Sumser:                        Let’s start by talking about the HRU Analytics event last week and what I think is interesting there is that there’s an explosion of new events associated with the analytics question. At the same time as there’s an explosion of events, people aren’t buying this stuff and so there’s a kind of an interesting conundrum. People are trying to figure out how to make sense out of analytics. HR as a staff function, it’s really very hard to take on new responsibilities because people are already swamped and so, the curiosity from innovative practitioners is high. This thing this week was a very low-to-the-ground, you might call it an underground conference built on the unconference model, which is everybody in the room is the expert rather than the person talking. It was interesting.

This particular model is European, which means that the setting isn’t fancy. We were, it seemed like 3 or 4 levels down from street level in a conference room that could have passed for a utility closet and that’s part of the charm because people are not there for the food and they’re not there for the luxurious setting and they’re not there for the tony people. They are there to talk about the subject at hand and so …

Stacey Harris:                        I was impressed with the attendees. Obviously you’re in San Francisco so you’re going to get a lot of companies but there was a lot of [inaudible 00:05:27] representatives from I think the general influencer space, those of us who talk about these things as well as companies like Google and Tesla and Facebook and others that had some really great stories about what they were doing in analytics. I thought that was a good mix.

John Sumser:                        Yeah, and the event itself is run by a small western investor and so it’s got an international flavor from the get-go. I’m tempted to say that the European universe has a better grasp on analytics than we do here in the United States and that’s one of the things I took away from that.

Stacey Harris:                        One of the things I was most intrigued by when we were having the conversations was how often the conversations about HR analytics started with, “Where should we start in our company?” which meant that there was a lot of organizations who were just getting into this journey. I think time and time again, it kept coming back to operations, partnering with your business leaders, business drivers, and I’m hit with this fact that organizations are still … that still isn’t an automatic that when you’re going to start analytics, you’re going to start with the business question or you’re going to start an operations conversation, not an HR conversation. Does that surprise you or did you have a different take on that, John, when you were listening?

John Sumser:                        I think that if you dig around a little bit, where the work is being done right now is on retention, which is an attempt to align the analytics initiative with business interests but retention is not juicy enough. You can talk about retention all day and you won’t get people in the business jumping up and down until the retention problem is very, very severe. While I do see that the really big successes are aligned deeply with business functions, it’s really hard to generalize about how to do that because it’s a different question in retail than it is in a large consulting business.

Stacey Harris:                        Without a doubt. One of the things …

John Sumser:                        [crosstalk 00:07:57] large. Go ahead.

Stacey Harris:                        Go ahead. I was just going to say we could maybe talk about a little bit about why Mercer’s picking up Vemo. Did you have any additional thoughts you had from the conference though before we jump into that?

John Sumser:                        That was exactly where I was going. If you look at Mercer’s acquisition of Vemo, what you see is …

Stacey Harris:                        It was an acquisition. It’s a partnership. It’s a partnership. We don’t want to get anybody all worried about buying Vemo. They’ve partnered. They’ve made a strategic alliance.

John Sumser:                        Oh rats. I was trying to enrich a couple guys at Vemo. Rats.

Stacey Harris:                        I know.

John Sumser:                        Yes, that probably would be a mistake. The fact that they’re working with Vemo says that the internal initiative at Mercer to build an analytics function hit some rocky shoals. I find it interesting. I’m not sure what it is about analytics that didn’t work at Mercer but they had a pretty well-tooled initiative going and this says that they’ve decided somebody on the outside can do it better than they can do it internally.

Stacey Harris:                        Yeah, and I had a conversation with the gentleman who heads up what is now called Mercer Analytics at HRTech and he walked me through that he was very excited about what they were doing as a process model and as a questions model, which is a lot of what I think they had probably built into their thinking probably back in the days when Brian Kelly was with them. What my understanding is that they’re doing with Vemo is they wanted a technology to underpin that Mercer analytics to support it.

My sense would be that probably what they’re doing is they’re taking their consulting thought process and they’re using Vemo as the engine behind that. Vemo also brings, as far as I recall, my early-day conversation with them, also brings some of their own advisory roles around how to think about HR analytics. It’ll be interesting to see whether this is more of a Mercer picture or more of a joint-effort picture when they go to clients.

John Sumser:                        One of the things that’s interesting about this is that consulting is changing. The big dollar blue-suit consulting houses and Mercer is one of a half-dozen, is changing and what people are trying to do is identify repeatable processes so that the head count can be reduced. There’s a significant and sustained initiative in the consulting jobs to move towards a subscription model and away from a pure labor-hours model because subscription models have more balanced cash flow and the customer wants more packaged answers I think. This is another attempt by the incumbent to deal with the disruption that is coming to the big-dollar consulting business.

Stacey Harris:                        I think the other news piece that I picked out this week about Skillsoft changing, moving over their CEO, that probably fall a little bit along those same lines. One of the things that Skillsoft, for those of you who don’t know Skillsoft Corporation, they’re the largest I think at this point in the world probably content developer and content deliverer on the learning side. They have built a complete library of e-learning content in the days when that was early and then they bought out almost all of their competition in this space over the last 5 to 10 years.

I think what’s really interesting about Skillsoft is that they were originally a content-creation house, which is a very … That’s very similar to consulting. It’s a job that’s very labor intensive, very hourly driven and they turned their model into something that they could get repeatable money off their subscription. They did this concept, taking what was at one point in time a very labor-intensive project and process to create all this content on an ongoing basis and they turned it into subscription-based content that could be bought and could be monetized on a much larger level.

They bought all their competition up in some sense I think along the lines because to do this, you’re really going to do to it at the largest scales possible to make it financially feasible. Now interestingly last year, they also acquired SumTotal and we haven’t hear a whole lot from them since they’ve done that acquisition as to where they’re planning to take SumTotal. SumTotal was one of the leading learning management system providers in this space. They also had a very large talent-management suite along with that product and some very interesting components around core HR [inaudible 00:13:00] as well, as well as components that were in the workforce management space and payroll solution space.

Their new CEO doesn’t come from a talent or business background. He’s from TES Global, which is from a group that did education solutions for the market. I think you’re seeing another mix, particularly in the learning space where sheer just content, subscription-based content isn’t doing the job anymore so now they’ve also got to take a change into where they’re at and think about their role and how do they expand it into other systems, very similar to what we’re seeing in the consulting space as well.

John Sumser:                        I think this is important for us as analysts to understand and it’s something that we’ve run into in KeyInterval very significantly. That’s that practice there’s other management don’t actually have the time or the capacity to read lengthy reports that they then have to think about before they execute. A research function or a content function isn’t very interesting unless you can slice and dice it so that it provides actionable material for the person who’s reading it. Given the information overload, it’s very, very hard for the people who are clients in HR departments of analyst houses to really make sense out of what they’re getting and so what you have to do is have content plus some sort of slicing process.

The other thing that’s interesting about this announcement is in the quote in the press release, the new CEO says, “Skillsoft is part of a universe with sister companies, sister companies SumTotal and Vodeclic.” That means to me, that this CEO is not the CEO of all of that stuff. He’s just the CEO of Skillsoft and that the model for this overall company looks like a private equity model of a rollup of a variety of consolidated functions and so Chuck Moran becomes the chairman of the board of a company that’s got a bunch of CEOs reporting to him.

Stacey Harris:                        That might be interesting and I hadn’t really read deep enough into all that, just get a sense of how they were going try and structure all this but that quote definitely does stand in the commentary. Maybe it’ll be interesting to see, so maybe I did just see an announcement that another person that we know is taking over a key role in SumTotal, so they might be trying to make these businesses run separately, which will be interesting to see how that then works out and if SumTotal can regain some of their market share through that process.

John Sumser:                        I had the most interesting conversation in a while with the people at Findly this week. Findly, if you don’t know, is a merger of a rollout. It’s something that’s very similar to what Skillsoft has been doing, with an advertising agency. You blend the two things together and you get a technology story that doesn’t have deep technology as the story, that has the effectiveness of the offering as the story.

At Findly, they described functionality that’s very similar to other offerings but they describe it as being about the experience of the candidate where the competitor is described services that are about administrative efficiency. They’re kind of talking about the same thing. There’s little bits of difference of emphasis but the underlying technology is very close and I think we’re starting to see something happen in the market that has to do with the fact that the underlying technology is a commodity and what matters is the story that you get wrapped around it.

Stacey Harris:                        The story conversation I think is actually becoming a bigger part of the total picture of the buying psyche of the HR buyer. Actually we did an internal presentation just recently on the [inaudible 00:17:49] data that we had presented to the market as a whole back at HRTech. One of the things they threw into it differently for our internal group was an understanding of how the HR community was changing because as we move into a more SaaS environment, we’re moving also forward with changes in who’s going to be your buyers. It’s not your head of IT in many cases. It’s not your maybe chief financial officer in many cases. A lot of cases now, it’s your functional lead in whatever area is doing the selection and that functional lead will be, at least for the HR systems, your senior head of HR and predominately going to be 75% probably female. We’re now seeing a lot more millennials as well from a buying perspective and the story becomes much more important when it’s a functional person buying the technology versus a technical person buying the technology. Would you say that’s also part of the change?

John Sumser:                        Yeah and this is the change that the automobile industry went through when they stopped talking about how big the engine was and started noticing how pretty the girl was standing next to the car.

Stacey Harris:                        How many cup holders it had, right?

John Sumser:                        Yeah, yeah, so the story is not about how fast it goes or how rapidly it stops or how safe it is. Sometimes it’s about how safe it is but generally car marketing and advertising has to do with status and the story of how important you are or aren’t, then it has to do with the underlying product because all don’t break anymore. All cars get you where you’re going and so the difference is whether the seats get warm and cool and whether the stereo’s good and whether it’s quiet enough to have the bluetooth on and have phone conversations in the car.

They don’t talk about how big the engine is and they don’t talk about how the difference between the suspension in this system is from the suspension and that’s … They no longer differentiate on functionality. They differentiate on the story you tell about owning the car and that kind of marketing is now front and center in software.

Stacey Harris:                        Yeah, no, and I think it’s a big part of what we’re seeing with the Workday and Oracle and SAP right now. I know what story is resonating right now. I think it’s a big part of what we’re seeing in the talent management suites as well. Can they tell a story that fits with the bigger picture of the entire HR technology environment? Those are all, I think, stories that right now aren’t quite clear to the buyer at this point. They’re all trying to figure out what’s the most interesting one to them. The buyer is definitely going to be a different buyer right now than it has been, say, in the last 5, 10 years, particularly at the enterprise level, maybe not if you’re doing a divisional buy but if you’re doing an enterprise-level buy, the buyer’s going to be a different person these days.

John Sumser:                        I believe this will be the story in our conversation in 2016. I believe that the definition is and isn’t is in flux right now and it’s changing away from what it used to be, which is a litany of functionality and moving onto, “Right, here’s the model that does that and here’s the experience that you get there.” It’s an action experience view rather than a which one has 5 light bulbs in it point of view.

Stacey Harris:                        I think there’s a great story that actually highlight this all in one piece. The Air Force story that I had pulled out and I would recommend anybody has a few minutes, read this. On the DOD news network radio federal news network, there’s this great story about the Air Force deploying a special team to fix their HR technology systems. I was just fascinated. I almost copied the whole story into our email that we send back and forth but I thought one of the most important quotes in the whole big changeover that they’re making is that they’ve been on this journey for … I think they said somewhere in the range of maybe 2 years or something and they didn’t hit their targets for when they wanted to start doing their transition.

The official said that they’re committed to a commercial off-the-shelf approach to modernizing the systems but it would be more appropriate to view the AFIPPS, which is the project as a strategy rather than a single system. I think this last couple of years and all the money they invested in making this move to basically simplify and consolidate their Air Force technology systems for the HR side has brought them to the idea that they’re not going to get a single platform which I think we’ve all been talking about it.

Anyways, and they’re talking about it’s about building an entire ecosystem of life-cycle support for the HR world in a way that is consistent, repeatable, and agile. Now a lot of those are consulting buzzwords but I think it goes exactly to what you were saying, John, which is that they know that all these systems can do the same thing. The question is can we get the experience right? Can we get it in a way in which we can make changes. Would you say that what that’s saying? You had some interesting comments about Air Force doing HR tech versus our commercial businesses.

John Sumser:                        I think there are a couple of stories here. One of them is that the government, the military in particular, has been a leader in the idea that software should be identical and repeatable and scale appropriately. What’s funny about that is the problems that the military has to solve with software or the 5 Excel version of double Excel, triple Excel, quadruple Excel. The government is 5 times the size of anybody else and so when they talk about using a tool that is commercial and off the shelves, they’re kidding themselves.

There is no commercial tool that comes off the shelf that fits something that is that gargantuan and so of course, they run into trouble and of course they proliferate systems. What they’re great at doing is imagining 20-year initiatives. The military has a better long-term planning function. It’s not often right but it’s a better planning function than anybody else in the world has. They tend to see things in an ecosystem way and they tend to see things in a how do we get the maximum result with systems that are strung together because there isn’t anything big enough. I think that’s what you’re seeing here.

I do love the sentence you called out because it is better than any consulting buzz speak that I’ve heard. “We’re building an entire ecosystem of life-cycle support for HR in a way that’s consistent, repeatable, and agile.” That is a lot of words that don’t say anything. Good, good. It’s nice to have that sort of thing. They will, because the Air Force is amazing with this sort of problem. They will develop something that will make your eyes pop out of your head, partly because in the government, HR owns the people, where in industry, HR is just an administrative function. In the government, HR is a muscular and powerful function and so when the HR system goes down and the government work stops and they’re having trouble keeping it up.

Stacey Harris:                        Yeah, the one comment they made is that if their system goes down, they don’t lose a few hours of time. They lose productivity that could be measured in man years, not man hours. I thought that was really a statement that … Because they’re just so large. You’re just talking about massive amounts of people and resources they’re managing because they were talking about both their civilian and their service members. Every minute, every additional minute it takes to process information, to get to information, means that they are impacting thousands of people around the world in their ability to get their job done, like you were saying, which is something we oftentimes forget how important the HR system is when it comes to that level of detail. That 10 minutes can mean the world to some people.

John Sumser:                        You know what’s really interesting? There’ve been a number of notable large-scale failures and problems of HR systems in government settings. The great big privacy breach was in an HR system. The 4 million people whose personal details were disclosed was an HR system and here’s another HR initiative, huge, a $570 million program HR initiative and you know there are only a handful of companies who could be doing it. The government is insanely disciplined about not naming names so you have this big article and the article is about a train wreck. The train wreck is the HR system that costs a half billion dollars isn’t working the way that it’s supposed to or when it was supposed to and the bad guy is that company. None of that. None of that and they’re in a position to destroy somebody’s reputation. I find the level of restraint to be very interesting and not something that you’d necessary find in the commercial setting.

Stacey Harris:                        I agree but I also think they’re very aware that … I think your point that this is uncharted territories for any large company, right? That you’re just not going to get this level of magnitude in anything else. One of the things there is that they’re talking about this as a simplification project so I think they’re almost in what would be the consulting stage of some of this. This is probably not even a tech company right now they’re working with. What they’re commenting on is that this process right now as it stands that they have 120 separate systems, 86 of which duplicate other ones that provide similar capabilities at 213 sites around the world.

The numbers are mind boggling and that it’s costing $1.3 billion per year and one HR specialist for every 22 airmen. Those are numbers that, on the consumer side, would be unimaginable in most companies to manage, to think about a solution trying to simplify that, to try and come up to even a single solution that can meet all those needs. I think you’re right in the fact that they have to think about it as an ecosystem but I think it also gets down to a little bit … We were talking about this idea of the story and the marketing and the features and functions and how important are they. The features and functions don’t really become important until you get to this size and scale, right?

John Sumser:                        Right. You’ve got to understand, with 5 HR specialists for every 100 airmen, you’re talking about an HR department that’s got 5 or 10,000 people in it. This is a scale of HR that is unimaginable in a commercial setting.

Stacey Harris:                        Now the one thing it seems pretty adamant about I think that part of this movement is moving everything to the cloud. I think part of what this story was meant to highlight is that they are trying to modernize and they’re filling that by moving to the cloud. They’re going to make a lot of that movement, just moving their architecture to the cloud and it seems like they’re succeeding. I think that the end story is if we can do it, anybody should be able to do it. That might be the final statement on why they invest in putting this story out in the markets.

John Sumser:                        It’s interesting. It’s interesting and the question of whether or not things that the government does are usually private industry so can they invent something here or can they demonstrate a practice here that actually makes sense in the commercial setting? That’s a great question. We should have a conversation in one of our shows that’s simply about that. Is government HR the same thing as commercial HR? I’d argue that it isn’t.

Stacey Harris:                        That would be interesting to see. I’ve seen a lot innovations that come out of the government, that come out of … particularly the military that have been applied maybe more so on the learning side than on other areas of HR but yeah, that would definitely be a well-worth conversation. John, we’ve blown through our 30 minutes and we probably want to let everybody that at least next week, we’re probably going to take a break off for the holidays but we’re going to be back again on the 31st to do a wrap-up of the year, right? Is that the plan?

John Sumser:                        That’s the plan. Santa is getting in the way of us talking next week. That mean guy that’s going to give me coal and take away the radio show for a week because I was bad [crosstalk 00:31:36].

Stacey Harris:                        For a week.

John Sumser:                        For a week. Yeah, it’s a timeout. It’s a timeout. Happy 50th show and it’s been another great conversation, Stacey. Thank you so much for taking the time to do this.

Stacey Harris:                        Yep, definitely. Thanks everyone and happy holidays, depending on where you’re at and what holiday that you’re celebrating. Hopefully, everybody is at least getting a break from work a little bit in the next week of so. Thanks everyone.

John Sumser:                        That’d be nice show. You’ve been listening to HRTech Weekly: One Step Closer, with Stacey Harris and John Sumser. We’ll see you on the 31st with a wrap-up of the year. Have a great day.

Stacey Harris:                        Bye everyone.

End Transcript

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