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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: 62
Air Date: March 17, 2016


This Week

This week John and Stacey discuss:

  • Namely investment Link »
  • Heating up the Learning and Development conversations Link »
  • MicroLearning Link »
  • Managed PaaS considered best practice by 2018 (Platform as a Services) Link »
  • SAP Fieldglass study and contingent workforces 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 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. This is our 62nd show. We have been getting better and better at this. Good morning, Stacey. How are you?


Stacey Harris: Morning, john. Good morning and our opening music today is definitely on target. St. Patrick’s Day. Always a nice day because it’s bringing in spring, hopefully, depending on where you’re at. At least here in The States or internationally. I always love St. Patrick’s Day. Not only is it just a fun day in general here, at least, in The States but also it is a … my youngest son’s birthday, that day, so we always celebrate quite effectively on St. Patrick’s Day.


John Sumser: That’s exciting. It’s great for you to talk about the positive impacts of immigration on the culture.


Stacey Harris: [Inaudible 00:01:07]


John Sumser: And green beer. And green beer.


Stacey Harris: And green beer. And green beer. Although, when I was in Ireland a few years back I remember they were still having some debate. I don’t know if they ended up doing it, saying they were going to change St. Patrick’s Day in Ireland because it is supposed to be a holy day where you’re celebrating from a church perspective over there and I think the challenge was that more people were turning it into a parade and drinking day, which I think was frustrating the local, regional focus on St. Patrick’s Day. I don’t know if they ever did it so someone can definitely call in and let us know at some point, but …


John Sumser: Yeah. I have a hard time imagining St. Patrick’s being reformed into a religious observance. That would be-


Stacey Harris: I know.


John Sumser: Whoever figured out how to do that should do change management as a profession.


Stacey Harris: They would be very effective at change management. This is an example of a culture taking over a day and turning it into its own cultural component, right?


John Sumser: That’s right. That’s right. It’s normal. It’s what cultures do. What’s in Stacey’s mailbag?


Stacey Harris: Well, we got a lot of fun stuff today. A couple of investment conversations. One is at Namely. Got some new investments so we’ll definitely talk a little bit about that and what does that mean as we continue to see these come out. Not as quickly as they were previously but still, we’re seeing some investments being done in the HR tech space. Some interesting topics today about learning. Learning is always at the … one of those topics that sits at the side of HR. We’re hearing a lot more about learning and development space and what’s happening with it. A lot of the big learning and development conferences recently took place and so there’s some blogs out about technology trends of what’s happening in learning and development as well as some new things about conversation around something called microlearning, which is worth taking some time on.


Then, if we have a little bit of time, there’s some good research … well, I don’t know if it’s called research, per se, but commentary from Gartner on what’s happening in the Platform as a Service space and whether or not that will continue to stay a technology conversation or a managed services conversation. I think it’s going to have a real big impact on HR. Then, there is a study done, sponsored by Field Glass, so I think you have to take it with a grain of salt from SAP, but around the vendor management space and contingent workforces. I think if we can have a little bit of time to get into that, it’s worth some conversation today. Those were the big things on the news bag today. Any place you want to start in particular?


John Sumser: Oh, money. Let’s talk about money. Namely scored an additional $30 million from Sequoia Partners.


Stacey Harris: Yep.


John Sumser: That brings their total to $107 or $108 million and it’s interesting because Namely is a unified payroll and benefits offering, so core HRS services. They are experiencing pretty interesting market growth because of the ACA.


Stacey Harris: Yep.


John Sumser: It’s nice to see the money-


Stacey Harris: Yeah, and-


John Sumser: Go in there.


Stacey Harris: It’s nice to see money continue to flow. Namely is an interesting one, I think, because they have … When you look at Namely, they don’t have anything more or less, I think, than a lot of the other players in the same space. They’re primarily focused on what we would call smaller mid-market, depending on how you explain that range and what you consider within that range, but they’re really looking into those small organizations all the way up to, I would say, maybe 1,000 employees or so. Maybe a little bit larger than that. Those are the organizations that are struggling with ACA because they don’t have, in many cases, staffs on hand to deal with some of the ACA requirements that you would see in a larger organization. Namely’s done, I think you mentioned previously, a really, really good job in the last year or two on their marketing side and branding side. I mean you see their name everywhere. You hear it everywhere. It’s interesting to see is Namely going to be one of those organizations that’s able to build their database purely because they’ve been focusing on the marketing side of things right now?


John Sumser: Well, it’ll be interesting to see and there’s not any real great examples of a company that’s conquered the small-to-medium business space. Maybe ADP is the best example of somebody who’s been able to make headway there, but generally speaking, that’s Greenfield inside of HR so maybe they can do it and maybe marketing will get them there. We’ll wait to see. The thing that I’m noticing about money coming into HR technologies is it seems to me like it’s slowed down.


Stacey Harris: Yeah.


John Sumser: The Namely thing is one of those investments that you have to make to keep the bet on the table but I think a lot of other people have slowed the flow of money while they wait to see what happens with the value of tech companies in general, and HR tech companies in specific. With Workday stumbling and the general revaluation that’s going on, people are a little bit more wary about investing in the space than they were in the more enthusiastic days of 2015.


Stacey Harris: I would agree. We were seeing … If you looked at last year, we went back and looked at our notes from our radio show, easily we had one to two investments news tidbits at least twice, maybe three times a month, right?


John Sumser: Right.


Stacey Harris: Now, we’re seeing maybe once a month. I think it hasn’t stopped but it’s definitely slowed down from what we were seeing last year. I think the winners, if you want to call them winners, but the ones who at this point in time are really going to see more investment are those who have already made headway. The new guys on the block are going to have the harder business cases to make to see investments because you see organizations like Zenefits that has really struggled in the last several months to make something of the investments they’ve had. I think people are a bit gun shy right now on some of this.


John Sumser: Yep. Yep, it’s good to watch. The people at Namely are good people and I hope they’re successful. I’d like to see confidence restored in the markets so that more investment can come this way.


Stacey Harris: Yeah, definitely. I think you’re going to see more focus not just on HR technology but I think the other space I think we’re going to start to see a bit heating up from an investment perspective, which has been a bit … I wouldn’t say slow but but it hasn’t seen as much play, airtime I guess you would say, as we saw in the HR space last year. In particular, the recruiting space last year, is the learning and development space. We saw just a few months ago that there was now a purchase of the [Resticci 00:08:46] organization for 26 million. Not a ton of money but not a drop in the bucket, considering how big that organization was. We’re starting to see more and more investment in the learning and development space, partially because you’re starting to see the big, corporate, enterprise-wide systems that have HR systems now also investing their time and energy and implementing new learning and development technologies. You’re seeing Workday put their LMS in.


You’re seeing Oracle come up with their own LMS and their cloud-based technology. You’re seeing organizations like SAP doubling down on their relationship and their connections with their existing plateau technologies. We’re seeing a lot of focus on the learning and development side. I’m somewhat frustrated that the L&D conversation is still very much about improved user experiences, gamificaiton, key performance indicators. That was one of the “What’s the tech … top L&D technology trends in 2016?” article that was on ATD, which was formerly ASTD for anybody who knew that, which is Association for Talent and Development. We’re still having some of the same conversations. I think to get that money really flowing on the learning side, we’re going to have to expand the conversation a little bit. I don’t know, John. Have you seen people talking more about learning in your conversations?


John Sumser: I have. I want to back up just a second and ask you why you think it is that learning and development and HR technologies have been separated all of these years? Why are they two different things?


Stacey Harris: Well, I … This is something … My background is in learning and development. That’s where I started out from both a practitioner side and a researcher side. When I shifted into the HR space, I literally had people saying, “Well, you know these two worlds don’t really talk a lot.” I said, “Why? They seem like they should really be working hand in hand.” Two things happened as L&D was developing and growing in most organizations, they were oftentimes much more tightly connected with operations and many times the budgets and the financing for L&D technology oftentimes came out of a business unit or operations line item; where, on the other hand … Because if it didn’t, you didn’t get it funded.


HR technology, HR spending, HR leadership, generally, is much more of a support function and so its line items, its budgeting … All of its efforts generally came from more of a support function area within the organization. I honestly think that’s the biggest split between these two worlds because whenever HR owned learning and development, they generally just got less money. Whenever operations owned learning and development or took leadership learning and development they were able to increase their budgets. Everything always tends to go back to money.


John Sumser: That’s interesting. Now, about the conversation, I think you and I both have long histories with ASTD or ATD, as it’s called today. I went to their conferences in the very early ’80s when I was working on the first interactive video disc product and trying to integrate curriculum development into video disc technology.


Stacey Harris: Wow.


John Sumser: Back then, we were talking about the topics that are the current trends or early forms of the topics of the current trends, which is how do you get people to perform when you deliver them training? How do you get them to pay attention in better ways? How do you design the coursework so that ..? Today, that’s called user experience but in those days we just wanted people to pay attention. Those are time-honored places for learning and development people to spend their energy. Today, some things are possible what weren’t possible in the past. For instance, you and I have been talking about microlearning, which is learning in small segments. What you can say about microlearning is that it’s a really good idea. It enables people to fit training into the gaps in their workday but we haven’t really figured out the mechanics of it, yet. There doesn’t seem to be really good looking into the connection between format, delivery and duration and retention and the ability to improve performance. You’d think that that’s where the focus would be; on something in the 21st century rather than the same stuff we were looking at 40 years ago.


Stacey Harris: You know, it’s funny you were talking about laser discs and video discs. For those who might be on the younger side of our listening audience, it was the coolest thing in learning to have these massive, bigger-than-a-record-player-sized laser disc that you would have inside classrooms that you would have all of your content. That was the most exciting thing; that you could put all of your content in one location and play it at any point in time. Today, we’ve conquered that issue; content isn’t the issue. We have more content than we know what to do with. We know where it’s, for the most part, pretty much all located at.


I think today the challenge in learning and development and the challenge with microlearning isn’t so much the idea of the user experience or it isn’t so much the idea even of what content do we need or where that content is located but in getting to this future that we wanted to all reach, which is where all the content was available, where you could learn whatever you wanted, whenever you wanted, we forgot a fundamental aspect about learning and development which is there is better ways to learn.


There are lessons we can take both from neuroscience and from years and years of education research and years and years of understanding human psychology that the same things were getting out of HR these days. Understanding how people behave. Well, there’s also how people learn and I think that’s the piece that is being overlooked in the microlearning conversation. Right now, we’re taking a lot of content, we’re cutting it up, we’re putting it into small pieces and we’re saying, “Great.” Because people’s attention spans are supposedly so small … The one article that I pulled basically said that the attention spans were down from 12 seconds to 8 seconds.


Both me and you had a big conversation about whether or not that was malarkey but I think the bigger issue is that when people are learning, they really learn in different ways in concerted methods and if you’re doing microlearning, what you should be doing is building content over time that builds on how people learn and the behaviors that they’ll put in place when they’re learning. That’s the piece that’s the science that’s missing right now behind the learning. It’s great to have the technology but I don’t think we’ve implemented the science very effectively, yet.


John Sumser: Yep. Let’s hope that some money flows towards learning and development and that people start down the next path rather than just bringing history forward.


Stacey Harris: Yeah.


John Sumser: There’s another piece in your mailbag about Platform as a Service. Gartner says that Platform as a Service isn’t working the way that people expect it to and that ultimately it won’t be an offering to the end user. That it will be an offering to the solution providers.


Stacey Harris: Solution providers and I think they’re talking system integrators and those organizations who basically do managed services models right now.


John Sumser: Yeah, so if you’re like me and you hear the term “Platform as a Service,” it’s entirely possible that the first thing that you do is roll your eyes and then the second thing that you do is look out there and you try to figure out what people are talking about. I don’t know how it is with you, Stacey, but I see multiple, somewhat conflicting definitions of “platform” out there and it makes it difficult to understand what Platform as a Service actually means.


Stacey Harris: Now, I agree. I tell people these days in almost all of my presentations, if you haven’t had the term PaaS, or Platform as a Service, go look it up. Research it. Part of the reason I tell people to research it is I don’t even think I have a great definition of what it is. There’s a technology component to it. There’s a services component to it and, ultimately, each vendor is describing it in their own way. Now, John, you have three categories that you were putting them into as we were talking. Maybe if you could outline those a little bit, give people at least a view of what we see, because there’s really three categories that we’re seeing people drop into.


John Sumser: Right, right. The categories are … You could use Workday and Ultimate primary examples where the architects of their product has a platform and applications and then data interfaces. The platform in that case is a library of code that you use like LEGO blocks to assemble the applications in the next layer of the offering. Platform there means “Library of code,” more or less.


Stacey Harris: It’s a closed-


John Sumser: There’s the-


Stacey Harris: -it’s a closed platform, right?


John Sumser: It’s a closed platform. They build the platform to build their applications. Open platforms, which is the second category, are similar to the Workday and Ultimate design but intended to be used by third parties to build things. This is more like the Apple Store model where the framework is provided; the component pieces are provided and the application developers, who are not the owners of the platform, combine the pieces of the platform into their own products. It’s the same structure as the Workday, ULtimate thing but allows for the development of an ecosystem of application providers. Salesforce-


Stacey Harris: That’s what we’re seeing Oracle do.


John Sumser: -is a great example.


Stacey Harris: Yeah. Oracle, Cisco, SAP. We’re also seeing Cornerstone put in place their own … the idea of this development layer, right?


John Sumser: Right, right. That’s the second thing. Then, the third thing is what I would call the tactical platform. Companies like SmashFly are developing … SmashFly is developing something they’re calling the recruitment marketing platform and that idea of platform is more like an assembly line of discreet functionality that you use to accomplish a larger task. Recruiting systems are, in some cases, these sorts of platforms. ATS is maybe these sorts of platforms. There’re emerging around the organization that you can imagine that there will be an analytics platform to emerge sometime soon, because analytics is a universe of 15 or 16 discreet kinds of technology. Those are the three and in-house platform and open-developer platform and the task-specific platform. I’m not sure what Platform as a Service means in the context of that.


Stacey Harris: Well, and I think that’s what the market is trying to figure out, as well. There’s a purely technical definition, which is the layers in the actual technology that things are built upon, but then there’s the positioning conversation around Platform as a Service and then there’s the idea of what’s the end user? Who’s actually buying this stuff? I think that was the conversation that Gartner was having, which is that a lot of organizations who have bought into the Platform as a Service at a end-user level, at a company level, are struggling because there’s still a lot of web services level management. A lot of technology infrastructure work that needs to go into this. Integration efforts that need to into it.


That’s where they’re finding that that takes more probably technical investment than they’re willing to give, particularly in a market where you’re trying to go all cloud and you’re trying to reduce some of that inside your organization. It’s funny. We just did a … I just did a presentation in Atlanta last week to a group of organizations and one of the companies who was sponsoring or supporting the event also went up and did a presentation of their implementation of cloud. The number one issue they said that they had with their cloud implementation was that they still had a lot of integration challenges. That no matter what system you’re using, it’s this between-technology conversation that’s having an issue. That seems to be what the Gartner story is. That’s why they’re saying managed services is going to grow up much more effectively around these conversations.


John Sumser: Okay. The headline in the Gartner piece says, “Managed Platform as a Service service will be a best practice by 2018,” so two years from now they’re saying that people will understand what PaaS is and how to deploy it in their organizations and doing so will be considered the optimal way to get things done.


Stacey Harris: Yep.


John Sumser: Okay.


Stacey Harris: Well, I guess we’ll wait and see.


John Sumser: We will wait-


Stacey Harris: Gartner’s prediction-


John Sumser: -we will wait and see.


Stacey Harris: -will come true. Yeah, but it’s definitely-


John Sumser: I haven’t heard anymore about the-


Stacey Harris: -going to be in the forefront.


John Sumser: Yeah. I’m hearing more about the idea. I just wonder if this is how people are going to think about this, really. Maybe in the bigs … Maybe in the organizations that have more than 10,000 people, this is the way that it works. I can’t imagine that-


Stacey Harris: Well-


John Sumser: -that’s the way that it works in the Namely marketplace.


Stacey Harris: Probably not. Probably not, at this point, and I guess that’s … It’ll be interesting to see if this changes how we think about the technologies that we’re purchasing. Will you be looking at a software or will you be looking at a platform? If you’re looking at buying platforms, that’s a different dialogue than if you’re looking at buying software. Is that the same thing as the suite conversation?


John Sumser: You know what? You know what? I didn’t understand a word you just said until that … That tells me that we’ve waded chest deep into the buzzword swamp. I think that’s a real problem here because I would love to be smart enough to understand what you just said and it just dribbled right out of my ears. People who are trying to make decisions in this space, the idea that you would buy a platform instead of software … I don’t even know how to think about that, yet.


Stacey Harris: It’s a bit scary. It’s a bit scary when you think about the next article that I had in the bag, was people are still just trying to figure out, “Do I track contingent workers as part of my workforce or not right now?” Outside of the technology comes, “What am I using the technology to do?” It was interesting … SAP Fieldglass, which is the contingent workforce component of SAP’s suite of products that they offer, Fieldglass primarily was a vendor management system that had some contingent workforce tracking in it from workforce management perspective that they picked up, I think it was last year.


It might’ve been the beginning of the previous year. It’s been a while, now. This whole article was based off of a research effort that was sponsored by Fieldglass, which basically showed that organizations were looking to … About 60 percent of organizations were looking to do a better job tracking their contingent workforces and that nearly 60 percent of businesses believe that the integrated vendor management system solution should include their HR systems as a key component, their workforce management, and 44 percent of them felt that they lacked the tools and expertise to put a plan into action.


Now, I’m always a little leery about vendor-sponsored research. Of course, they’re very up front about it, which is nice to see. It tells you what the vendor was hoping to hear, oftentimes. We don’t know the case; we don’t know the researchers in this case. We don’t know what they were particularly looking for but what I was interested in, in this article, was how much SAP was putting into basically saying, “This conversation is important; contingent workforce management, vendor management systems and HR now all being in the same place. I don’t think they’ve been quite as open about this conversation in the last year since they’ve picked up Fieldglass. Do you think we’re going to see more vendors this year, John, talking about their tools being able to manage contingent workforces alongside of their HR systems?


John Sumser: I’m not sure you’re going to see a stampede in this direction. The problem really only exists in a certain category of workplaces and this is really the larger question of how do you manage in the gig economy? Because there’s at least a lot of hype that says the number of contingent workers is growing. This looks to me like a move to make the management of the contingent workforce more like the management of regular employees but there’s a huge risk associated with that. In-house employees are more expensive than contingent workers; that’s why people use contingent workers. If you start to treat them like employees in the technical systems, that has a tax implication and it has a wage hour regulation implication. You don’t want your contingent workers to be declared employees for pure financial reasons. I think that’s probably the friction on this. It’s better to treat it as part of procurement from a tax prospective.


Stacey Harris: From a tax perspective but the challenge is that then these two worlds are never meeting and you don’t know the skill sets you have, honestly, inside your company. You honestly don’t know what you’re spending on your workforce, too. It’s interesting. I know there’s a couple of … Of course, the political scene right now is tough to watch because it’s all talking about what’s happening from a presidential run perspective but if you follow some of the under-the-ground bill and things that are going on, there are some bills out there being worked on right now that have to do with changing some of that legal language around the restrictions, both for and against the contingent workforce. If some of those things change, that could change this whole conversation and open it wide up.


John Sumser: Well, I think it’s going to be interesting to watch and we should have a very informed, ongoing conversation about this but if somebody’s an employee, that is a regular flow of tax funds to the government. Every week or two weeks or month the check is cut. If somebody’s a contingent worker, the odds of collecting that tax go down. The government is always going to be interested in calling people employees and getting them on the payroll. That’s, I think, the most powerful dynamic here, is the number of employees is roughly equivalent to how much income tax you get. You want the number of employees to grow if you’re a government. If you’re a business, you want the number of employees to shrink.


Stacey Harris: Yeah. At this point in time, for the government, if they really want to get into basically getting a bigger piece of this pie of what is called contingent workforces, they’re going to start having more requirements and more requirements that require taxes being paid up front and that. That’s the big challenge-


John Sumser: Yep.


Stacey Harris: -that’s going on these bills.


John Sumser: Yep, yep. It starts to be the case that there are a lot of dynamics trying to make contingent work become employment. That’s an underlying thing in all this. Well, Stacey we have zoomed through our half hour again. Another great conversation. Thank you so much.


Stacey Harris: Yeah. Definitely. It’s been a good conversation and a lot of good stuff going on, both in the HR tech and the learning space, it seems like. Next week, I’m sure we’ll have another round of really interesting things to talk about, so I hope everyone has a good week and a good … Happy St. Patrick’s Day.


John Sumser: Yep. Thanks, everybody, for tuning in. You’ve been listening to HR Tech Weekly. One Step Closer with Stacey Harris and John Sumser. See you next week for show number 63.


Stacey Harris: Thanks, everyone.


End Transcript

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