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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: 51
Air Date: December 31, 2015


This Week

This week John and Stacey discuss:

  • 2015 Year End Review Edition

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. This is the year-end show. You are definitely one step closer with Stacey Harris and John Sumser and this is our 51st show. Good morning Stacey. How are you?

Stacey Harris:                        Good morning, John. I’m doing good. It’s the last day of the year. I’m up in Ohio visiting family. It’s not beautiful sunshiney skies. It’s gray and cold outside, but that’s okay. It’s a good way to end the year with some good conversation today.

John Sumser:                        Yeah. Just imagine there’s a nice warm fire sitting in front of you. We’re going to have our early morning fireside chat to close out the year.

Stacey Harris:                        [crosstalk 00:00:58]

John Sumser:                        Crazy year this year. Crazy year this year. The big human capital vendors of consulting and insight are trying to become technology firms. The biggest new employers are busy trying to invent new employee classifications. The bad guys are stealing spreadsheets full of data from big companies. Every senior leader who had an Ashley Madison account shriveled in terror for weeks as they tried to figure out whether or not they were going to be exposed. The learning environment is changing. What an amazing, rich year we’ve had.

Stacey Harris:                        It really has been. I was going back through all of our notes about all of the different things that happened this year and there wasn’t a lot of big mergers and acquisitions this year. Not things that rocked the HR technology space. There was a lot of interesting broad technology things that happened this year. Some big, big companies that broke up and some larger companies that acquired. Facebook was acquiring companies and you saw acquiring companies. A lot of acquisition of smaller technologies this year, both in the broader tech space as well as the HR technology space. A lot of conversation this year about data and who owns the data. Those are some of the things. I pulled out a full list of all the things we talked about this year and you mentioned most of them.

The one thing I think that we can’t get away from this year either is talking about things like regulations, the affordable care act has had a big impact here in the states and a lot of people have been working towards preparing for that. A lot of changes with payroll vendors and their role, I think, and their value proposition as part of the HR technology data management model. Those were big things I saw. Then, the one thing me and you were talking about this year that I thought was just huge was, this was the year that the cloud conversation became less about, “Should we go to the cloud?” and more of a done deal and just a conversation about how we get to the next step. Those were the big things that I pulled out as well.

John Sumser:                        [inaudible 00:03:31]. It’s hard to know where to start except maybe here’s a thread. If you look at what regulation has done and how regulation has, in the small to medium sized company in particular, made the role of the HR person more critical and more painful at the same time. The HR person becomes the interpreter of regulation inside of the organization and that regulation binds some pretty important decision making for the company as a whole. How you deploy your people has a direct cost impact now. If you deploy them more than 30 hours you’re in a different league than if you deploy them less than 30 hours, so the HR team was thrown into the middle of pretty important policy decisions because of regulatory requirements.

Stacey Harris:                        I think that regulation conversation expanded to a global conversation when we started talking about things like employee data and who had access to it, and who could see it, and where it could be viewed from. Many HR professionals, I think, who, in global organizations you’re always dealing with regulations at a country-by-country level, but I think there’s always been an understanding that you could [inaudible 00:04:59] roll up the data and not have too many challenges if you managed your data gathering process appropriately in each region and country. I think today we’re also seeing, as you said, particularly for small HR functions in these smaller businesses, this idea of data management and where their data is allowed to sit if they have employees now who are located in Russia or in Europe. That has become a big issue as well, along with the other regulations you talked about.

John Sumser:                        Maybe a way of saying this is that the biggest thing that happened in 2016 is that the most mundane parts of HR reasserted themselves as the most critical. Nobody wants to do payroll. Absolutely nobody wants to do payroll, because you can never get it right and as soon as you get it wrong, somebody who you care about is mad at you. What a horrible job to have. It’s just very, very difficult. But that data turns out to be hyper-strategic and that data turns out to be data that is almost instantaneously evidence of the company’s compliance or lack of compliance. The position of lowly HR people changes now because they are the ones who are responsible for the generation and consumption of that data. That’s a big change.

Another question that I end up having here is, I know a lot of 20 and 30 person organizations who have employees all over the world. That’s the new normal. I have no idea how they deal with regulation. They certainly couldn’t comply, let alone understand, all of the things that they’re supposed to comply with. My 5 Russian employees, you think, “What are 5 Russian employees?” [Meet 00:07:21] Russian regulations. That doesn’t happen anywhere. [inaudible 00:07:23]

Stacey Harris:                        That’s the challenge. I think the other question me and you came up with when we were talking about some of these topics this year is that, not only has all these regulations and challenges changed this year, as you said, the most primary HR technology has become the biggest topics of conversation. We’ve also seen that who the HR professional is is changing in many of these organizations. HR professionals who are managing these primary systems generally tend to be people who have been with the organization for a very long time.

Then we also have a new generation of HR professionals who are coming into their own management styles and their own expectations about what HR technology should do and provide to the market. You have almost what I’d say is a conflict happening in many HR organizations, particularly if they’re small or mid-market organizations where you’ve got someone that’s been there for a very long time who’s trying to manage all these regulations who’s dealing with a lot of this risk issues from an HR perspective, trying to explain to someone maybe who is wanting all of their data in a single location, everything in a cloud technology with a better user experience, why that can’t happen tomorrow.

John Sumser:                        Yeah. The expectations are weird. We’ve burdened those people with the view that their HR technology should feel like an iPhone. When it doesn’t, they get frustrated. It’s probably unrealistic to think that HR technology is going to look like an iPhone. So, where do you think the new crowd, the people who are moving into HR and HR technology, where do they come from?

Stacey Harris:                        That’s I think an interesting question. I’ve been having this conversation with a couple of senior leaders in organizations who are working on recruiting around HR technology or just HR Generalist or HR professional roles in the organization. Their approach to finding HR professionals seems very different than what I’m hearing from the universities and the business development groups that are developing or managing curriculums for HR professionals, as well as the SHRM community.

I think what we’re seeing is that many businesses who are looking for their HR professionals are often times still looking in areas that are generally not, how do I put this, it’s not the higher education locations, it’s not the professional service organizations, it’s not the SHRM entity. They’re still looking for people who know their business who can learn HR, which I think is a different paradigm from what we’ve seen in a lot of other industries. Yet there’s a big conversation happening at universities right now about where does HR fit. Is it its own industry? Is it its own education space? Is it just under the business administration space? Should it be connected to something that’s happening in marketing, when you talk about recruiting as part of it.

There’s a lot of conversation happening about how you educate the next generation of HR professionals, but I don’t think the companies themselves, particularly mid-market and small organizations, are actually looking at getting their HR professionals from many of these locations. Many of them are still thinking about, “How do I take a business person or someone within my organization and get them the skills they need to be HR,” or Finance in many places.

John Sumser:                        What do they do? You’re a small organization. You’ve got a thousand or two employees, and you want to hire or you want to implement some modern HR function, so you get your best business development [guy 00:11:53] and you put her in charge of HR. How does she learn how to do her thing?

Stacey Harris:                        I think that’s the question. We could answer that, we do it quite well. I don’t think there’s a good answer out there right now.

John Sumser:                        I don’t see how you do that. I don’t see how you could make that work. I know people are trying. I just don’t see how you make that work. Then you look at the other sources and it’s not obvious what you do. As the requirement for more HR people driven by increased regulation grows, we start facing our own skills shortage, don’t we?

Stacey Harris:                        Yeah. Very much so. I think we’re seeing this very clearly when we look at the type of role that organizations are looking to hire. Large organizations are generally looking right now to hire more analytics roles and talent management roles as well as HR tech infrastructure and support roles when they’re looking within their organization. If you go to mid-market and small organizations, which is generally where we see a lot more of the growth right now, those organizations are still very focused on HR Generalist roles and they’re still very focused on compliance HR driven roles. That’s their primary focus. The question becomes do you find someone who has all these skills, or do you find somebody who can manage an external firm or external function who can navigate all of these regulations for you. That’s I think the big question right now.

John Sumser:                        One of the things that sparked this, as we head into the new year, lots of people are trying to figure out how to continue to expand the good news of HR technology and its reach into smaller and smaller niches. How do you suppose they’re going to be able to do that? You’ve got this growing cadre of people who don’t really have good access to information about the very profession that they’ve discovered themselves in. Do you think that the role of the vendor as educator increases?

Stacey Harris:                        I think it already is increasing. I think the question is what role is it playing right now? One of the questions we had on the survey this year is where are people getting their insights in education from as far as events go. We just asked about events at this point. It was very clear that the most likely event that organizations plan to attend was vendor driven events or vendor associated events. Some of that might be because they’re feeling that their commentary or their conversations are much more about technology and that’s generally our audience, so that definitely makes a lot of sense from the HR technology space.

I have not talked to the SHRM group to see how they’re growing here in the states. I think globally their numbers are up considerably. There’s a lot of opportunity internationally for organizations like SRHM, HRPSS, and HCI and some of the other ones. I haven’t seen that the associations are taking ownership quite yet of the role of the HR professional, whether that’s technology, generalist, business partner, specialist in talent management. It still feels like, at least at this point, that organizations are looking to a mixture of groups, associations, vendors, and their peer networks to get this information.

John Sumser:                        That’s interesting. It seems to me that it would be a hard time to be an HR leader in a smaller setting. It would be a very hard time to be an HR leader in a smaller setting.

Stacey Harris:                        I think it would be a hard time, but I also think it’s an exciting time because I think more so than ever, as much as compliance, regulations and risk is not a fun topic, it does put you in front of your business leadership a lot more often. I think we are seeing the elevation of HR’s role as a critical component of how an organization manages its business, more so than maybe we’ve seen in the last 10 years. I think particularly with the change of the workforce and the definition of what a workforce is, we are seeing a lot of business-based conversations that are involving HR. I think that’s a very exciting thing to be [inaudible 00:17:01]. My question just becomes who is going to take ownership of developing the next generation of HR, then?

John Sumser:                        Maybe that’s the question that we’re asking here. I wonder if it means that there is a mid-market opportunity for the existing consulting firms. Mercer, Towers Watson, Deloitte, GED, like that. That group. Is there a mid-market gain here, and is that mid-market gain like the Old Navy of consulting?

Stacey Harris:                        That’s an interesting take. Deloitte picked up Bersin I think with some of that possibly in mind, although I think they’re moving upstream in their approach to how they’re doing some of that. I know Mercer has invested in some heavy education components, particularly on benefits and compensation from an education perspective for the market. I can’t say that I know what Towers or PwC or KPMG are doing in this space but it’s an interesting commentary on whose role is it. Is there enough financial outcome for those organizations to go downstream and have, as you said, the Old Navy model of education, or does this become a university or a association component working together, which seems a bit formal and seems a little bit out of step with where I think the market is at. Is that where people are thinking some of this will come from? I don’t know. I think both of those are options.

John Sumser:                        If it was a university answer, it would take years to get it in place. Years and years. That suggests to me that it will be either direct vendors or consulting houses like Mercer. There’s always some change that there is going to be an explosion of the kind of communities that the internet has promised, but I haven’t really seen that.

Stacey Harris:                        With all of this conversation about where HR is headed and what we saw over 2015, we might want to take a look at what we think might be coming for 2016. Some of the interesting articles that I pulled this week into the little bag of what’s interesting in Stacey’s internet search really centered on I think what we can look forward to for big topics for next year. One is that we’re going to see an extension of the ACA deadline. I don’t think anybody didn’t expect that, but I think that goes to show that as harsh as the regulations are and as much as we can see them as high-risk issues, I don’t think any of the bodies that are putting those regulations in place are going to come down with hammers. I think they’re all going to be coming down with options or directions or ways that organizations can work through some of these challenges.

I think I always look at the regulation environment, particularly I think for 2016, we will want to look at it as an opportunity versus a scare tactic. I know a lot organizations go, “If I can’t get my data in the right places, I’m not going to do anything with data. I’m just going to close everything off. We’re going to put everything in our internal solution,” or “I can’t get ACA, I’m just going to outsource everything and get it to someone else.” I think the fact that we’ve got those regulation bodies giving some time here, this is an opportunity for the companies to work more closely with their vendors, to be more strategic about how they’re thinking about these things, and they should take advantage of that. That, I think, is going to be an interesting thing in 2016. You’ve been through more regulation changes in your past history than I have, John. Do you think that that’s a reality? Will there be a little bit of breathing room?

John Sumser:                        You know, you can’t put everybody in jail and you can’t fine everybody. If everybody is getting a parking ticket, there will be amnesty for everybody who gets a parking ticket. I should mention that I’m not enough of an expert for anybody to take a bet on that, but it seems to me that if everybody is having a hard time, the rules relax. That said, I think you’re talking about 2016 as the year that a new kind of HR kind of starts to stick its head up. This new kind of HR primarily is a purchasing function and has lots of relationships with vendors, because you can’t outsource everything, but once you start to understand how to outsource things, it’s silly to do things more expensively just so you can have them in-house, except in a very few specific circumstances. I think this is the year where the fact that HR is a vendor management discipline is going to start to really, really resonate as a message. It resonates because the only way that you can do analytics well is if you have control of your vendors.

Stacey Harris:                        Exactly, and you’re very clear about what and how your data works with those vendors. If you just outsource everything without a really good service level agreement and a really good conversation about what that data is owned, and where that data goes and how you have access to that data, it’s a very difficult conversation to manage after the contracts are signed.

John Sumser:                        That’s right, so we’re back to whether or not there’s a need for a consulting Old Navy. If what we’re talking about is business people who have been put in HR slots, that level of complexity about the data is not going to come naturally. It’s just not going to come naturally. Go ahead. Yours.

Stacey Harris:                        I was moving on to the next article, so if you had one additional comment on this one, please go ahead and add it.

John Sumser:                        Nope. You’re all set.

Stacey Harris:                        I think the other side of the picture is where I was heading is that organizations, as their dealing with all of the, what I would say is compliance based, regulation based decisions about HR technology and HR data and HR management, they’re also going to be faced, here in the states particularly but I think you’re seeing it a little bit globally, depends on which region you’re talking about though, with the challenges of dealing with a workforce that is not at crisis level. There’s big articles that came out this week about worker salaries poised to climb in 2016. That data that came out of both ADP and some research done by a couple of organizations who were leveraging ADP data and also data that came out of the Bureau of Labor data.

Also, I thought there was an interesting article that I just think is well worth maybe a few reads about a small lingerie company called Adore Me that is offering $10,000 to select employees when they leave. What caught my eye about this story is that it’s very closely tied to the idea that we’re going to have workers who have more choices in the future, at least the skilled workers who have more choices. Wages are going to start to increase and people are going to start to move more often probably in 2016. What this organization is doing is, as people leave their organization, and it’s not everybody, this is those people who, through some sort of a leadership numeric number that they’re calculating have invested heavily in the company, have worked very hard, they’re giving them $10,000 as they walk out the door as a thank you for all their hard work.

This struck me as interesting. It struck me as very interesting, more so because in the article the head of SHRM’s, I’m going to have to get his name now, Bruce Elliot, the Society of Human Resources Management manager of compensation and benefits, commented, “As a compensation professional, I can find all kinds of reasons why a company wouldn’t want to do this.” His feeling was that if they’re doing this, they’re incenting people to leave. Adore Me CEO was very clear that he felt that what he was doing was incenting people to have good feelings about the organization, particularly those who worked really hard for him, and that he really wanted, at some point in time, those people to come back to him within the organization.

John Sumser:                        I know this is true of a lot of places. I don’t mean to single out a specific company, but I’ve been watching my wife go through the process of becoming a Deloitte employee. Deloitte is very, very clear that their desire is for everybody who they hire to have a great experience because they believe that everybody who they hire will ultimately become their customer. This more enlightened view of employees as an ecosystem rather than employees as a disposable commodity I think is liable to catch on. The reason that you incent people who did a great job is you go, “Oh, yeah. You did a great job and we’re happy to see you be successful.” Rather than, “You did a great job and we’re made at you because you’re leaving.” Why do that? “We’re mad at you because you’re leaving.” People leave jobs. This is not marriage and this is not family. People leave jobs. Being positive and upbeat about it and going, “Yeah we get it. It’s over. See you. Let’s stay friends.” That’s a great model.

Stacey Harris:                        Do we think this is going to trickle down to hourly workforces though and to employees who work in the service industry? That was my question when I was going through some of this.

John Sumser:                        Obviously this is a question of the culture of the company, but we talk about hourly workers as if they were little minions with zero personality and no impact, when the best waitress in the restaurant, who is therefore also the most likely to leave if you don’t take really good care of him or her, makes the restaurant. The best cashier at the Safeway makes the grocery store. The engagement that you have with that hourly worker is your experience of that brand, and if it’s a great experience, that’s something that you want to celebrate. If they decide they need to go try something different, you want them to want to come back.

Stacey Harris:                        Yeah. I think that’s going to be the conversation in 2016. IT’s not about whether or not we’re engaging employees because they will work harder for us. I think that’s a misnomer in this whole conversation about engagement that we’ve been facing, but that you’re engaging employees because they are part of your, I think you said it right, they’re part of your ecosystem. They’re part of this relationship that you have with your customers, and they are customers and they have a voice that resonates with your customers. I think that’s the 2016 conversation about the workforce that we’re going to start to hear more and more often. I think anybody who is looking at it as “You’re incenting people to leave,” or “You’re incenting people to be better performers,” I think they’ve got a very old look at how the market views employees these days. I think that’s going to be the challenge.

John Sumser:                        That’s right.

Stacey Harris:                        I was just going to say, those were the last things I had on my list today, John. Is there anything else, as we’re looking at 2016, you’d like to add to that?

John Sumser:                        I think 2016 is going to get interesting because the political heat is going to turn up. We’re going to see HR departments called in more regularly to settle contentious conversations in the workplace that have to do with politics. The degree to which the political contenders are willing to scare the crap out of the population in order to get elected. I’ve never seen anything like this. It’s fear-mongering at its worst. That means that people who get scared by that stuff and develop hard and fast views of how things ought to be are going to talk about it at work and that’s always challenging, when the heat turns up on subjects like this. I think we’re going to see HR’s leadership and conflict management skills called into play more significantly this coming year than we have in the past.

Stacey Harris:                        Yeah. That’s a very good highlight. We’ve already started to see it obviously in some very tragic incidents towards the end of this year, but I think we’re going to see it even more so as you’re commenting on not only how HR manages conflict, but how HR helps the organization identify their role as a mediator across this very diverse culture of workforces that they have within their environment, but also as a conduit to their leadership. I think that’s the other side of the picture that HR is going to have to deal with, which is that their workforce is going to be much different from who is sitting in leadership these days. Very different. I think that HR is going to also have to play the role of a voice or a conduit for sharing the views of both their employees and their leaders. That’s going to be a tough thing this year, I think, for a lot of HR professionals.

John Sumser:                        I think what we’re saying is that the fundamentals in HR are going to be what makes it a strategic function in the coming year. That’s a really interesting thing. I think up to this point we’ve been left to believe that HR becoming more strategic had to do with some other kind of magic other than getting the payroll done, running leadership programs, and doing conflict management. We’re going to be in a year where those are the big deals. You know what, there’s not a huge amount of technology to actually address all of that stuff.

Stacey Harris:                        Yeah. I think the technology conversation might take a back burner in some cases, or technology is going to have to start to change to actually help organizations address these type of questions [inaudible 00:33:29]. Well John, we’ve come to the end of our half hour already and the end of the year [inaudible 00:33:34].

John Sumser:                        Yeah. It’s been a great year Stacey. I can’t tell you how much I’ve enjoyed doing these shows with you this year and I’m looking forward to 2016.

Stacey Harris:                        Definitely. This is our 52nd or 51st show that we’ve done this year?

John Sumser:                        51st show. We’re finally figuring out how to turn on the light switches in the new office. I want to take just a second to thank everybody who takes the time to listen to these conversations. It’s a treat knowing that you’re there. With that, let’s say goodbye to 2015 and hello to 2016. See you same time next week. Stacey.

Stacey Harris:                        Same time next week. New year. Thanks everyone, very much. All right. By everyone.

John Sumser:                        Buh-bye. Have a great day.


End Transcript

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