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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 7AM Pacific – 10AM Eastern, or catch up on full episodes with transcriptions here.

HR Tech Weekly

Episode: 54
Air Date: January 21, 2016


This Week

This week John and Stacey discuss:

  • Kronos Acquires Empower Software Solutions Link
  • Randstad Innovation Fund invests in HR reporting platform Link
  • Textkernel introduces job-sourcing tool Jobfeed for the UK Link
  • Apple Pay® Now Available to Cardholders of ALINE Card by ADP Link
  • Topics: #WorkforceManagement, Internal Recruiting, #ApplePay for your Paycards

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 7AM Pacific – 10AM Eastern, or catch up on full episodes with transcriptions 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. It’s our 54th show and how are you Stacey?

Stacey Harris:                        I’m doing well, I’m doing well. We are here in North Carolina, at least I’m in North Carolina this morning at a nippy, I think we’re at about 20 degrees right now so, it’s a good day stay inside and have some good conversations today.

John Sumser:                        I would be seriously whining about 20 degrees. That’s too cold for me. We don’t have enough down comforters for 20 degrees here.

Stacey Harris:                        I’m not complaining in the least, because my family and friends are all up in Ohio and they’re hitting somewhere in the below 0 with windchill weather today, so I will take my 20 degrees happily.

John Sumser:                        We’ve got a mailbag and we’ve got some other stuff to talk about. What’s in Stacey’s mailbag?

Stacey Harris:                        Well, we have a couple of interesting all over the place news articles that I picked up today, but I’m sure me and you will find a way to weave them all into a single conversation.

One is not a big news announcement, it wasn’t splashed everywhere, but I think it the workforce management space it’s a big announcement. Kronos acquired one of the smaller but more technical workforce management solutions that also has a small business core HRMS solution to it called Empower Software. They just picked that up this week, and I think there’s some interesting things to talk about both Kronos’ goals in workforce management and who this now might put them in more competition with and what’s happening in the small business HRMS space, small business HR technology space over all.

Also, an interesting article came out this week about Randstad’s Innovation Fund. Randstad, much like Cornerstone and Workedin and all the other guys have taken their innovation model into, instead of doing internal research and development, they’re now investing in small companies. They’ve invested in a small company in Netherlands called Crunch and the reason I thought this was sort of interesting is that Crunch is a tool that consolidates and validates employee data from any source, inside and outside the organization. I thought, well that’s kind of interesting, because I recently had a similar conversation with Stacy from SwoopTalent, which is another small organization that does that, and I’m starting to hear more and more about people trying to get data from inside their companies.

There’s also an interesting article about Textkernel. I don’t know if you’ve ever run into Textkernel, again these are Netherlands based organizations, an international semantic recruitment technology that’s launching it’s lead generation tool Jobfeed.

Then if we have a little bit of time, there’s some interesting fun stuff. ADP is launching Apple Pay.

Those are probably the biggest technical things I found today in the news space, although I know we had a great article that you had posted on Facebook about burn out of your top subject matter experts in your organization, which I think is worth talking about today too John. Where do you want to start?

John Sumser:                        Let’s start with Kronos and Empower, and what’s going on in the small and medium business space. Kronos, like most big companies, has reached the point where they can’t grow organically. There’s this law, basically, that says “At a certain point it becomes impossible to continue to have double digit growth because you’re growing with reference to a larger base.” So if you want to grow at that size, the only way to do it is through mergers and acquisitions. Kronos is at the stage where they have to grow through two methods: increasing the check at a customer’s and mergers and acquisitions. This also means, when you go into the merger and acquisitions space, it’s always going to divert you from the path that you were on. In order to attain growth, Kronos is looking deeper into the SMB market space than they have before.

Stacey Harris:                        Yeah. I had an opportunity at Kronos’ last analyst event to sit down and talk to Joyce, who heads up their customer care or service area, I cannot for the life of me remember her last name today, but she gave me a fabulous insight into the long-term picture of where Kronos has been for the last 10-20 years. What’s amazing about Kronos is 1) it is financially, a successful company, as technology businesses go it has money in the bank compared to most other technology businesses. Part of the reason of their success, I think, in continuous growth, has been they were very focused on a certain client and certain technology needs. That the workforce management space, particularly workforce management space in hourly workforce environments: warehouse, manufacturing, retail at certain levels, those type of things. That space, particularly, time and labor was a big, big opportunity for them because as you said, they’ve gained the largest share in that space, particularly here in the states and I think internationally as well in some sense.

What’s interesting about this particular pick-up of Empower Software Solutions is, not only is it going to allow them to grow their general base, which is in the workforce management space, because it’s going to allow them to do a better job meeting the needs from a scheduling perspective for their retail clients. Kronos often times has some of the largest retail organizations in the space as their clients, but many times their technology’s primarily being used for clock-ins and clock-outs, not for scheduling purposes. This new technology will allow them to have a much more flexible scheduling tool, which I think is going to put them in direct competition with Ceridian, isn’t it John? You know the Ceridian tool fairly well too, do you think that’s going to put them butt heads in that particular area?

John Sumser:                        I’m sure that both sides of that equation will think so, but it seems to me that they’re such different cultures that they really appeal to different kinds of companies. It’s the funny thing about competition in the SMB space is, it’s so big and roomy that there’s plenty of places to get business. It’s easy to get business, but people would prefer to look at each other’s piles and worry about that. I don’t know that they’ll bump into each other more than they already do, but it may level the functionality part of the question a little bit. I think buyers are shifting into relationship based purchasing rather than functionality based purchasing so, I’m not sure that the new functionality makes that much of a difference.

Stacey Harris:                        I would agree on the front that they’re relationships are definitely, particularly for the largest organization and for the organizations at the mid-market level. The small organizations are interesting. We’re talking small, probably 1,000 and below in this particular arena, because everyone has their own definition of small. Small organizations, I think, they’re still looking on some level features and functions as well as the relationship and maybe a little bit of a culture component. The other thing that comes with this Empower purchase for Kronos is another set of what we call core HRMS solution tools. I don’t know of all the pieces that are included in it, but I know it has the core HRMS and maybe some other HR technology tools that go along, maybe talent. I haven’t looked at the Empower Solution previously.

One of the things that was mentioned in a blog by Bob Clements, who I know tangentially, I’ve not actually had the opportunity to meet him but I’ve read some of his work on workforce management. I thought he was very savvy in noting that the Workforce Ready solution that Kronos has has seen the fastest growth and, to your point, that Workforce Ready was an acquisition they made from SaaS HR about 3 years ago, and it meets the needs from a core HRMS, it has some light talent in it, some payroll, some workforce management scheduling, those types of things, right? What we’re finding is that that’s the fastest growing piece within Kronos, and now they’re going to add either this piece of technology to it, or at least the customers to that Workforce Ready now package. It’ll be interesting to see how fast it grows.

John Sumser:                        These sort of speculative conversations about acquisitions are always fun. It’d be great to have an eye into the real deal here. Empower was being shopped for a year.

Stacey Harris:                        Mm-hmm (affirmative).

John Sumser:                        It took a year for them to drop the price low enough so that it looked like a deal to Kronos. It’s like a house sitting on the open market in real estate. If you don’t figure out that you can’t sell it because it’s too expensive, shame on you. They’ve been looking for a buyer for a year, the price got good enough for Kronos to do it and it may not have a stunning strategic impact. It may just be like, “Oh, that’s on sale, I’d better buy it.”

Stacey Harris:                        Yep. That could very well be true. Yes.

John Sumser:                        It would be lovely to have transparency around that. It would make it so much easier to understand what’s going on.


Stacey Harris:                        Yep, go ahead, Randstad?

John Sumser:                        Randstad is spending money. They are being very aggressive with their new Innovation Management Fund and they’ve invested in another startup. I think the idea, Randstad bought Risesmart, they’ve invested in all these little companies. They’re really experimenting with the expansion of their definition of what the business is, and doing it through this Innovation Fund. I think that’s pretty interesting, what do you think?

Stacey Harris:                        I think it’s interesting. I’ve had a few conversations with people who are working with Randstad in other spaces and I’m always somewhat surprised by how much Randstad, they dabble in the technology but ultimately the company still stands very strong. They’re a services based organization, right? Do you think recruiting RPO, which is basically what these organization are doing, they’re outsourcing recruiting on some level, but at the hourly level for the most part, some of the skilled levels as well. Is technology the biggest play in these or is it the services or is it a mixture of both? Can they manage that through this kind of a fund model, because to me, that’s the interesting piece about what’s happening here.

John Sumser:                        I think that you can reasonably say that anything that can be automated, will be. If it’s a repeatable process, somebody will figure out how to make a complex enough tool to duplicate that repeatable process. Randstad is in the repeatable process business. They have to do 2 things, I think.

They have to understand where technology is going, because they’re going to be replaced by technology, that’s a question of when not whether. Technology is going to put them out of business, so they need to have an island in the Caribbean somewhere that they can flee to when their home burns down. It’s much gentler and much bigger than that metaphor, but technology is disrupting everything, so they have to have a keen, hands-on understanding of what’s going on in the future, because the future is just a block away.

The other thing is that RPO’s are fundamentally technology companies and this is not clear yet but if you are a recruiter managing the RPO, you sit in front of a terminal and evaluate the reports that the terminal provides you. This always reminds me, have I told you about the Halloween costume when I was a kid? We would go out as a computer. I’d be inside the big, washing machine box and my brother would be the computer programmer. There’d be a little slot in the big box and my brother would stick an envelope in and something would come out. That was how you knew it was a computer!

Stacey Harris:                        I’m sorry, I’m just imagining that John and it’s actually quite, quite funny. I had not heard that story before but now I’m thinking why was I not that ingenious? My ghost costume didn’t quite get there.

John Sumser:                        That wasn’t ingenious, we didn’t have sheets for the ghost costumes, we had empty boxes. Go ahead, make your costume out of an empty box!

Stacey Harris:                        Yep.

John Sumser:                        That’s what the experience of working with an RPO is. You interact with a terminal, and then when you have questions about the terminal, you call somebody. That’s what a relationship with an RPO is like. How is that different than a relationship with some other piece of software? You’re just talking about the mix of people and technologies on the backend, and frankly, in order to be a great RPO you have to use a lot more technology than your customer’s would have. They have great technology for all sorts of things to be in that business, and they need to stay on top of it because recruiting technology is hyper competitive.

Stacey Harris:                        One of the things I think is always interesting is about recruiting and RPO technology and any of that stuff is that, generally the goal is to look outside, right?

John Sumser:                        Right.

Stacey Harris:                        The expectation is that the organization knows what they have inside their company. We all know that’s actually quite a big fallacy in many cases, but the idea is that recruiting is all about looking externally for the most part. You said both with this Randstad purchase and with the Textkernel’s international semantic launching Jobfeed for the UK, both of those groups are focusing some of their search on external, but some of it also on the internal component. Particularly the Randstad piece here. This technology is all about validating employee data from any source it has, and internal employee data as much as external employee data. The concept that we don’t know our employees internally, this is the conversation I just had with a friend of mine Stacy from SwoopTalent yesterday, seems to be a big challenge that organizations still have too many databases, too much paper, too many old, old files and they’re trying to aggregate all of this. Do you think this is as big an issue as it all the sudden seems to be?

John Sumser:                        First of all, that was the best segue you’ve ever done. That was great! That was fantastic. Good question!

Stacey Harris:                        We’re always trying to improve these things John.

John Sumser:                        No, no, no, no. That was amazing. That was nicely, nicely done.

You’re right. The strategy that SuccessFactors used in the beginning was, they never tried to sell to HR, they went directly to the CFO and they said, “Your HR people don’t know who works for you. We can tell you that. They don’t know anything about the people. You don’t know anything about the people because your HR people don’t know anything about the people.” That’s how SuccessFactors grew very rapidly in the beginning is because they used that basic positioning.

The truth, the feeling that we don’t know everybody in the organization so things might not be in perfect control, is what every executive team feels. Right? They feel like they’re riding and elephant without a saddle. Nobody feels competent that they know everybody. There is this big anxiety there. Big anxiety there, that that might be the place where things are going to go wrong. The idea that you could get to know all those people really resonates, until you realize that it’s somebody standing in the middle of a football field during the Superbowl wondering why they don’t know everybody in the stands. There’s only so much you can do! I think there’s some sort of balance between those two things. It’s a good thing to be afraid of, but you can get really wigged out about it and there’s nothing you can do, no matter how good the technology is.

Stacey Harris:                        I think that’s what we’re coming down to is that, when you have open positions, and we had this conversation earlier, is the real need to fill that position or is there also a conversation to talk about what type of people does your organization want to hire, and are there people inside your organization already who are doing something like that, but maybe not exactly what you need. The idea of job descriptions and job roles being set in stone is a changing concept right now, that there might be more room than we used to think to let people alter the idea of their jobs. Correct?

John Sumser:                        Boy, that’s such a rich question. The threads inside of that question are: is the way we think about describing what people do still adequate? We could do several shows about that. That’s a really useful and important question for people to think about. What was the other one that you asked so well there?

Stacey Harris:                        The other thing is, from a hiring perspective, all of these tools are all about parsing information and pulling information, validating information about a person, right? Is it as difficult as that? Do we just need to start talking to people? Do we need to start having better conversations about what people want to do instead of telling them what we want them to do?

John Sumser:                        I think there’s a level of presumptuousness in all of this stuff and that is we think that every manager inside of a company is going to go, “Oh great, we’re going to expose opportunities to my people. What a good idea!” In fact, working managers, from a practical perspective, think that that’s a really bad idea. They think it’s a really bad idea because they generally are solving a local attrition problem, when the attrition rate is 10% it means, in a standard supervisor’s pile, you lose 1 person a year and you got to figure out how to solve that problem, and because you don’t have that 1 person, everybody is overworked. It’s a big problem and you want to try to solve it, you don’t want to cause the guy who lives next door to you to have a worse problem. Right? The good of the company, and the good of the individual supervisor, are more than occasionally in conflict with each other.

A system that doesn’t understand how to navigate that, and just assumes that if they’re data it means something, is not going to get used because it will drive people crazy, because it doesn’t explain why this is a good idea. Not to the employee, to the employee it’s a really great idea! To the company, it may not be such a good idea. To the individual supervisor, it almost certainly isn’t going to feel like a good idea, at first.

Stacey Harris:                        Do you think that, we’ve had this conversation in the recruiting space for a long time, which is, do you borrow from Peter to pay for Paul, for when it comes to good candidates. Do you look internally and how do you create a culture of organizational sharing almost, which we are not comfortable with as companies in general. Do you think that the other side of this picture is that we don’t know enough about our employees to be able to have that conversation in an open and transparent way? Is part of the fear just, “I’d have to then fill my own spot”, or is it “I don’t realize that my employee has these skill sets, they’re unhappy, and they might leave me anyways in a year.” Which of those is the stronger issue?

John Sumser:                        Well, bird in the hand is worth two in the bush, to everybody with any sense. The problem is the people who take the employee, always call it sharing. The people who lose the employee rarely call is sharing. The idea that all departments, or all subsets are able to do this with equal capacity is crap. That’s not how it’s going to work, right? The most important departments will be able to do this more than the least important departments. The most important departments will tend to view the opening of opportunity in the least important departments to be an inconvenience, not a sharing opportunity. It’s a very complicated set of political issues because, from the company side of this, we’re talking about the control of resources. If we loosen the control of resources there’s risk associated with that and we’ll make the decision based on risk not on ideals.

Stacey Harris:                        Would you say that this is an issue that’s very US centric or is this and issue that’s global? One of the things about the Textkernel and the Jobfeed announcement that I was quite impressed by, and I’m not very well versed in all of what’s happening in the recruiting space, the statement that was made in the article here is that Jobfeed makes the online market searchable and transparent, and in it’s success the Netherlands, Germany, France, Austria and Italy is now available for the UK market.

One of the things that I have heard across the board is that international job searches are much more difficult and in many cases, sharing international talent, people who have skill sets that are very specific to a region or a culture and they’re very good at it, is one of the things that is very difficult inside companies. Crossing borders to search for key skills is difficult for many, many reasons, not only because of the job boards that are all different and the tool sets that are all different, but also because of the recruiting and regulations and laws, and the hiring laws that are different in each country. We don’t have as much of that issue here in the states, generally. Do you think that internationally this is a bigger issue? Sharing talent and searching for talent?

John Sumser:                        I would say that, I don’t know that it’s the best model, but the European Union is put together in a way that’s very different from the American model. In the European model, it matters if something flows out of your economy and something doesn’t flow back in. In the American model, it doesn’t matter to the people who take. It doesn’t matter. There’s no penalty for doing it. In the European model, when there is a net flow of anything across a border there has to be a reciprocal net flow back. Talent, money, resources, trucks, pollution, anything. There’s an agreement about it, and that’s what the European Union does is it integrates the states. It doesn’t work for everybody, but when you have that kind of thinking as the structure of the federated government, it flows down into companies fairly quickly. It’s a hard-wiring of the dynamic I was talking about, which is until you can balance out the flows between the competing entities, they won’t like it uniformly and so you’ll have an adoption problem. Adoption problems, I think, are largely caused by misunderstandings of politics. I believe that’s right.

Stacey Harris:                        Yeah.

John Sumser:                        I don’t know how we got down that tangent, I apologize.

Stacey Harris:                        I think it’s a cultural issue, right? Adoption of a process, right? Not so much a technology. The technology might allow you to do it, the technology is allowing to do is what we’re seeing here in all fronts, and even internationally now, we’re seeing some of those roadblocks being taken away. The question is, culturally, are we set up as organizations to leverage this information and to do it appropriately? That’s probably the better question.

As we wrap up today, I thought, I do want to mention the Apple Pay thing. Only just because I have my new iPhone 6s and I’m playing around with the whole Apple Pay concept. ADP has this huge business of having payment cards that people can get their paychecks on instead of going into the bank and all those things for certain categories of the workforce and now they have just offered through that an Apple Pay connection. I don’t use Apple Pay yet, but I’ve been playing around with it. Have you used Apple Pay yet, John, and do you think that that is an incentive to workers in the space?

John Sumser:                        I’ve lost so many cell phones in my life that, I’m not perfect about it, but I try not to keep that kind of information on my phone. You can’t avoid keeping some of it on your phone but I’m more comfortable if I lose my wallet than if I lose my phone. No, I haven’t tried it yet and I may be a [fuddy-duddy 00:29:48] about that, it may be an indicator of age or something. It’s coming, I think there are already national cashless economies in Northern Europe, so we’re going to have a cashless economy and we’re going to pay people with cashless ways.

Stacey Harris:                        That’s, I think, a growing issue. The question becomes, as our payroll groups who particularly work in the space of transferring the finances around the market, how much of a role are they going to play in the support of the cashless economy versus in the idea that there’s still a need to feel some of that stuff in your hands, the paycheck at least. It was funny, I talked to someone the other day who works internationally and they said that, when they started doing payroll in the US, the number 1 thing that they could not believe is that we still got paychecks in the mail to people. I thought that was an interesting take because she said internationally at most of the companies that she worked with they did not do paychecks in the mail.

John Sumser:                        I’ve never seen statistics on what percentage of payroll is direct deposited.

Stacey Harris:                        Yep.

John Sumser:                        I bet it’s a pretty a dramatic … There’s so many inducements around to having direct deposited payroll, I’m going to be surprised if direct deposit penetration isn’t 60 or 70%. I don’t know. I don’t know but it’s been around for a generation.

Stacey Harris:                        Maybe the next move is, not just direct deposit but direct to your credit card and direct to your phone, right?

John Sumser:                        Really they aren’t different things, that’s what’s most interesting here. Moving money between accounts like we’re being trained to do is just an opportunity to give somebody a transaction fee in every one of those moves. Eventually that will go away. It has to right? It’s just a bunch of people collecting transaction fees because they own a little piece of real estate. No, not in the long haul. For a little while you can make money that way but [jeeze 00:32:13]. It’s all just banking, that’s what all technology is? I don’t think so, but that’s where we are right now.

We’re running on, it’s been a great conversation, thank you.

Stacey Harris:                        Yep, definitely been a fun conversation. We’ve covered a lot of interesting ground today. I look forward to talking to everybody next week, thanks John.

John Sumser:      Thanks very much Stacey. You’ve been listening to HR Tech Weekly, One Step Closer with Stacey Harris and John Sumser. Have a great afternoon. Bye bye.

End Transcript

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