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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: 71
Air Date: May 19, 2016


This Week

This week John and Stacey discuss:

  • 19th Annual Sierra-Cedar HR Systems Survey Launched this Week More info or Take the Survey
  • Millions more workers will be eligible for overtime pay under new federal rule Link
  • Obama administration releases rules on wellness programs Link
  • SAP SuccessFactors to Help Companies Support Diversity and Inclusion Through HCM Technology 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: (singing). Good morning and welcome to HR Tech Weekly, one step closer with Stacey Harris and John Sumser. How are you this morning, Stacey?


Stacey Harris: I’m doing well. I’m doing well, at home this week as I have been for a while. There were really gray skies here in North Carolina, but otherwise, we’ve got nice weather for the flowers to come up so we’ll take that, and doing well. How about you, John? Are you home this week too?


John Sumser: I am home and almost recovered from a very busy first quarter on the road. So what’s in your email bag?


Stacey Harris: We had a lot of fun stuff this week, nothing too big, as far as technology goes, but we had some interesting, I think, policy and regulation articles and topics today that are well worth the conversation. Then there’s a little bit of … I apologize to the whole audience. I have a little bit of self-serving … We did launch the big annual HR Systems Survey for Sierra-Cedar this week. That’s the one thing that I spend all year long focusing on, and a few moments on that, I might give an update. We do have all the Obama regulations that came out. We’ll talk a little bit about those. There are two big ones that came out this week.


Some more bad news for LinkedIn, me and you were talking about this just before the call. We’re not quite sure if this is more of the same or just a little bit about their passwords getting out into the market for some of their clients. The conversation may be about how much security should we expect from free services like LinkedIn. Then there’s an interesting article that came out of SAP Sapphire events for their SAP SuccessFactors on a diversity and inclusion product that they’re putting out there to go along with some of their new updates in SuccessFactors.


Then, if we have a little bit of time, there’s been some conversation that I think is worth a HR Tech versus sort of HR processes conversation about the US banks really trying to get their arms around the cultural changes that needed to take place since the meltdown. There was some updates being done on whether or not that happened, and the banks were talking about what was in place and wasn’t in place, and what technology was helping them make those changes. A lot of different topics today, so it’s different directions. Where would you like to start today, John [crosstalk 00:02:42]? Do you mind us talking a little bit about the survey?


John Sumser: Let’s talk about the 19th annual Sierra-Cedar HR Systems Survey.


Stacey Harris: Thank you. Yeah, I know it’s a little bit self-serving. Sorry [crosstalk 00:02:51].


John Sumser: Oh, please, please, please, please.


Stacey Harris: For anybody who knows me, they know that this is sort of my … where I spend most of my time when I’m not spending it on the HR Tech Weekly show. I run the annual HR Systems Survey, co-partnered with Erin Spencer who you heard here a couple times on the radio show with me, for Sierra-Cedar. This is in its 19th year. Next year, we’re going to do a big 20th anniversary, but the data is huge. We usually get somewhere in the range of 1,000 organizations who participate in the survey. It’s a very long survey, so it is about 200 questions, just for anybody who has a chance to start it if you’re a big company using a lot of different HR technologies. It’s more of a conversation in many cases with the companies that we’re talking with.


We got a lot of neat stuff we’re asking about this year, including more questions about workforce planning, more questions about technology benefits, so HR technology and benefits solutions, more questions about workforce composition between generations and how that compares to the type of technologies organizations are using, and one that I think fits very nicely with some of the topics we’re going to talk about today, we have a question this year about social responsibility capabilities, things like diversity, flexible scheduling, compensation equity, how organizations are doing on those fronts and what technology is matching up as far as the environments go with that. It should be a big year this year of different topics along with all the stuff we generally ask.


John Sumser: The annual Sierra-Cedar HR Systems Survey is a benevolent effort on behalf of a company called Sierra-Cedar to give a glowing review of the industry, or a mirror so that the industry can see itself. The survey routinely digs out questions that are roughly like market share adoption problems, standard use cases. Is that right, Stacey?


Stacey Harris: That’s correct. Yeah, that’s the heart of it. The organization started this 18 years ago because they wanted to understand what’s happening in the self-service industry. That was 18 years ago. Self-service was really a fairly new topic. Lexy Martin, who ran it for 17 years, kept it going for 17 years as a thought leadership piece and as a shared service to the industry. Now, the company just continues to support it as a real valuable tool for the markets, I think, as sort of as you said a mirror. It paints a picture of what’s happening in the market as a whole, not just any 1 particular system. It’s not just talent. It’s not just core HR message. It’s not just workforce management. It covers all of that. Then it also says, what makes a difference? What are people doing that change how they think about technology? Was their practices different? Are their processes different? Is their implementations different? Those types of things that go along with technology conversations, so it’s a lot of data.


John Sumser: Rather than what you mostly see in industry analyst research, which is the analysts’ analysis of a company and its practices, what the Sierra-Cedar HR Systems Survey does is collect the experiences of companies who are implementing that software. You get a hands-on look at the kinds of projects that people are applying the technology to, and the kinds of work environments that people are creating using the tools of the great enterprise providers. Is that about it?


Stacey Harris: I would agree with that. Yeah, definitely. We look at organizations as small as 50 employees all the way up to … I think our largest last year was like 500,000, 550,000, so it’s a wide range too. I think a lot of organizations originally thought this was just for large organizations. It’s small organizations too, which I think to your point, gets at different organizations use technology differently and they use different types of technology differently. We want to understand those circumstances, the environments. I think it’s fascinating to see what comes out of it, because you really do see that there are differences across industries and across sizes and even regionally about how organizations tackle the technology questions in HR.


John Sumser: That’s amazing. It’s in the interests of the vendors in the industry to make sure that their clients report in this tool, because it helps everybody understand how the game actually works.


Stacey Harris: Yeah. Yeah. We try and make sure that the survey is spread as widely as possible, to make sure that we get the broadest audience. That includes international and the US. Last year we were about 20% headquartered outside the US, and this year we’re hoping to get to 30%. As you said, we ask everyone to distribute it. There’s not 1 group that gives us all of our data. If any data comes in through certain venues, we balance and weight it appropriately. If we know, for instance, it came from a certain vendor or someone was coming through a different link, we’re very careful about cleaning the data very carefully, almost 2 months’ worth of looking at it and making sure that people when they talk about a cloud solution, they really know that they have a cloud solution. We validate their financials. We validate the data that we’re getting from all of them. The goal is to really, again, give a good picture of what’s happening. There’s no single sponsor. There’s no single, I guess, outcome we’re trying to achieve with it. The goal is to give back that bigger picture to the market.


Yeah, you’re right. I think it behooves anyone to get information and their information into it from a client perspective. We also do, and I think this is something a lot of people don’t realize, is that we give back to the vendor community, I think, information that they aren’t aware of oftentimes too. When we share our data back about things like what various customer … their customer groups are thinking or looking at, that data is available to everybody, including the vendors. They oftentimes look at it, trying to decide which areas should they be focusing in. It’s a win-win, I think, for the whole market to use a cliché.


John Sumser: The survey period ends on the 26th of June or the 1st of July?


Stacey Harris: 1st, yeah.


John Sumser: On the 1st of July.


Stacey Harris: 1st of July. Yeah.


John Sumser: How long would you estimate that it takes a company to fill out the survey?


Stacey Harris: I think it depends on how large the organization is. A large organization, say an organization over 5 to 10,000 employees, it’s probably going to take them a good hour, if we’re honest, and they usually have about an hour. For global, large organizations, it might take an hour and a half. They’re oftentimes having to get data from other areas within their organization. For a mid-market organization or a small organization, they usually get through it in about 30 minutes to 45 minutes at tops. Those organizations aren’t using as many technologies. They have all their data in 1 place. They can usually answer the questions from a single person.


John Sumser: Got it. Got it. Okay, so you can get to a link to the survey by looking at today’s edition of the HR Examiner, or you can go to Is that right, Stacey?


Stacey Harris: That is correct. Yes. Yup, any of those places you can get to it. There will be a lot of people pushing it and announcing it this week too in social media and other areas. Thank you to everybody who supports the survey, and thank you to everybody who takes it. If you have any questions, you are more than welcome to ask me. I apologize for a bit of the commercial today, but we are excited about it, so it’s a big topic.


John Sumser: This is a central part of the industry. It’s important that we be able to talk about that. Congratulations on getting it launched. I’m sure we’ll learn some interesting things this year.


Stacey Harris: We’ll share as much as we can on the radio show as we start to get data in this year, so maybe there’ll be some fun stuff we can share too early on. Sort of that last topic I was talking about, the connections between social responsibility capabilities, that question we’ve added to the survey this year, was really actually based off of a lot of the conversations me and you have been having on the radio show about social responsibility topics. This week, Obama put out 2 major, I think, rulings, I guess if you would call them, right, administrative rulings, executive rulings, that have to do with that very topic.


One was that he has unveiled that a new rule, I think it’s going to take place on Wednesday, so I think it took place yesterday, went into effect, that workers were going to be eligible for overtime pay under new federal law, so they’re moving the overtime pay requirements for anybody making … It used to be a threshold of $23,660 a year to $47,476 a year. Basically what that means is that there’s sort of these, and you can probably explain this better than I could, John, but there’s regulations about what you would consider exempt and non-exempt workers.


Oftentimes, the workers who are on a salary basis were allowed to work overtime without having to be paid for it if they were making more than a threshold of $23,660 a year. That’s been that way for quite a few years. I think the last move was in 2004, but there’s only been 3 of those upgrades of the rate in the last 46 years. Obama basically just doubled that, said anybody making less than $47,476 a year, even if they’re an employee on a salary basis, if they do overtime, they now have to get paid time and a half for that overtime. That’s my understanding of that ruling. Have you looked into this, John? Do you think this is going to have a big impact on HR technology from that perspective? We know it’s going to have a big impact on companies.


John Sumser: It’s worth being clear about this universe, right? We’re talking about the regulation until now has been that people who make under $15 an hour, $23,000 a year is what? [crosstalk 00:13:52]. That’s about $11 an hour, $12 an hour? You could rope people at that level of pay into jobs where they weren’t entitled to overtime, no matter how much you asked them to work. It’s sort of a standard practice for restaurant managers. For instance, in [low to the ground 00:14:18] restaurants, you can get a manager and never have to pay them overtime and clock them in in a salary that’s barely livable. They just raised the ceiling on that, so now it’s slightly under $50,000 where you can start classifying people as managers and ask them to work more than 40 hours a week and not pay them for it.


Now what it means is there’s a kind of a status thing. When somebody says you’re an exempt employee, it’s almost always presented as a badge of honor. You’re now part of the company. You’re an exempt employee. For some people, it’s going to feel like a demotion. Now I’m an hourly employee. The difference between hourly and salary means something to people. It’s not clear to me what the response will be to this, because those small businesses depend on having tight margins. It means they’ll have to raise their prices or give people in those jobs a raise to slightly over the threshold. It’s the same choice that businesses face whenever there are new workplace regulations put in place. It means that some people are going to have to get used to timekeeping systems who weren’t used to timekeeping systems before. I’m not sure there’s a bigger question than that, except whether or not there’s some attempt to drive people who are now hourly down to 30 hours for ACA reasons.


Stacey Harris: Yeah. I think there’s going to be a mixture of that. There will be some of that pushing people, except the ACA regulations are going to … Again, if you’re working more hours, you can track those hours now, right? Then you’re going to have some ACA regulations there. You’re also going to have, I think, some of the stigma versus exempt, non-exempt, but that’s a changing issue in the market, I think, too, but it’s always been a bit there. It’s interesting, the 2 commentaries on this article and on this topic were made most heavily by the National Retail Federation. As you said, it’s retail and quick service organizations and restaurants that are going to particularly be impacted by this by their supervisor levels and their manager levels.


The other one was universities. The universities were adamant that they couldn’t now have what they would consider graduate students working in many of their universities because of the hours those graduate students could then claim. I was laughing about that a bit, because I was a grad student for many years. I was trying to get my master’s degree. I do remember the amount of time. You were young, and you were like, “Oh, okay, I’ll stay in the lab for 24 hours straight, I guess. That’s what you need, right?” The thing is is that at a certain point in your life, you’re less likely to be able to push back and say, “No, I can’t do this,” or, “No, this doesn’t work for me.”


These are some protections for that group of, I would say, workforce, but I think the bigger question here is, should organizations have been looking at this anyways, right? Is there a compensation equity issue here that’s just a broader conversation, and should the HR technologies be able to bring that to the forefront? Once they do start bringing it to the forefront, what’s the responsibility of the companies to start doing something about it?


John Sumser: A couple of things. One is that we’re starting to see news. McDonald’s in their quarterly briefs said that raising people’s salaries and giving them better benefits equals better customer service. McDonald’s said that. Starbucks says that. Lots of people say getting people to a living wage is important, but the downturn, the last downturn, was brutal. It was brutal. It was hard on everybody, and we’re still recovering from it, so there’s this gap between what people are making and what they need to make. For some reason, we aren’t calling that inflation this time, but there’s a gap that’s [grown 00:19:04] up there. It needs to be fixed.


What’s going to happen with technology … This spring, I went to see every one of the major proprietors of HRIS systems, and they are largely all talking about the same set of advances that involve having better statistical insight into the mind of your employees. There are flight risk calculators out there, and it’s not uncommon to see that the new [system in play 00:19:44] profiles having a flight risk calculation right on the employee profile. Flight risk includes compensation insight [crosstalk 00:19:56], so the information is already getting to the manager’s desktop. It’s already getting to the manager’s desktop.


Stacey Harris: I think that question about, “Well, we’re going to have some people who are going to lose hours or some people who are going to be pushed back,” the question is, will they then be able to now honestly pick up additional work that will pay more? This conversation of the fact that some people might be hurt by the data, some people may not, if you have the data, you know what people are actually working, then that should at some level give them more data to make better choices for themselves personally too. I’m a big proponent that data can help you make good choices, but data could also help you make bad choices. I think we’re going to quickly find out the companies that are looking at the data and using it in ways that are going to benefit employees, and then we’re going to find a lot of companies that use that data to not benefit employees too. It’ll be interesting to see where it falls out. The other … You still there, John?


John Sumser: In the United States, where there are no good choices. There just aren’t good choices. That’s going to become painfully obvious to people who live in those places because the data will be readily available. It already sort of is. You can go, and if you’re careful about what you look for in the job boards, you can find out exactly what’s possible without moving. If you go to the salary places, you reasonably easily find out what people are generally making in your neighborhood. That tells you everything you need to know.


Stacey Harris: Yeah. Yeah [crosstalk 00:21:47].


John Sumser: Go ahead.


Stacey Harris: It’s more transparent than we think already, right?


John Sumser: Yeah. Yeah. Managers are not used to operating in that environment, but they will be. Labor is going to have a more level playing field outside, but there’s also going to be a leveling of the playing field inside.


Stacey Harris: [inaudible 00:22:10]. The other administrative, and this is from the federal agency that came down, not something that President Obama himself signed this week, but there’s been this ongoing conversation about wellness programs and how much those can be used as part of a benefits package and as part of incentivizing people to be healthier, to be part of … to either save on their benefits programs or to give them some financial incentives for being healthy within an organization. There’s been a big conversation about how much can people be incentivized, but on the flip side of that, then basically hurt financially by not being healthy in an organization.


Monday, they reached a final ruling from the EEOC on this, that workers’ financial incentives up to 30% of the cost of their cheapest health insurance plans, so basically they can only incentivize up to 30% of the cost of the cheapest health insurance plans in their wellness programs without violating federal law protecting the confidentiality of medical information. John, this one kind of confused me. Does this mean that they can only go 30% of that cost, like that’s what kind of incentive they can put on the wellness program? Is that what it’s saying? It took me a few moments to get through all the red tape on this one.


John Sumser: They’ve limited how much money they can pay you for being healthy. That’s what this is. It seems that the government is scared of, and people are rightly nervous about, is something that boils down to detailed specifications of the health and fitness of the human specimen that you buy to put to work in your company. That’s just [crosstalk 00:24:14].


Stacey Harris: That’s a clever way to say that, but okay. Yeah.


John Sumser: We’re going to look at you, and if you are too much of a health risk, if you’re going to cost us too much money in health insurance, we’re not going to hire you. I don’t know that that’s going to be easy to resist over time, but this is an attempt to prevent that future by nipping it in the bud very early. The fact that the organization is going to be flooded with performance information that has a very physical and intimate component from employees, that’s not in dispute. This just says you can’t use it to buy people [into shape 00:25:06].


Stacey Harris: Exactly. Yeah. The EEOC rulings are actually more restrictive than those that were passed by the ACA regulations, because those were 30% of the actual cost of employees’ insurance and 50% for programs approved by the IRS. These are different from what they would have seen in the ACA, so this new ruling is going to have an impact. It’s going to have an impact on the benefits providers, and it might also have an impact on ACA tracking as well. This is going to have a technical perspective to it on those sides on that, I think. It’ll be interesting to see, because I think wellness has been a bigger and bigger conversation, because organizations are seeing they can really reduce cost in their benefits programs by implementing wellness programs. At least, that’s the data today that people are finding.


John Sumser: Yeah. It’d be nice to see an intelligent conversation on this subject emerge in the industry, wouldn’t it?


Stacey Harris: I think that the conversation right now is, is there financial gain, or is this just a feel good conversation, or is this in some cases a shaming conversation? I think your comment about the fact that there are people who may not be able to participate in some of these wellness programs, so the conversations right now have been pretty sort of, I guess, siloed. I think this is a very complex and nuanced conversation that has be done at a much broader level across the entire organization, and it has to include diversity, inclusion, all the conversations about compensation and benefits and equity and pay, as well as what can be done in an organization legally and within the regulated environment. It’s a very broad conversation.


John Sumser: This is a societal conversation that we should be having, but it’s almost impossible in the contemporary political environment to have a reasonable conversation about some of the stuff that’s brought on by technology, because it so quickly polarizes into a conservative view and a liberal view.


Stacey Harris: It does.


John Sumser: Right? This looks to me like the biggest trouble that there can be in the economic evolution of the United States and the Western world for that matter, and it’s almost a taboo topic.


Stacey Harris: This fits right in to the next conversation. I’m going to skip over the LinkedIn topic for the moment, because I think SAP … SAP’s doing their big Sapphire conference, which is their global user’s conference that includes their HR audiences, it also includes all of their other technology audiences, this week. They made 1 announcement on HR that stuck above everything else, which was SAP SuccessFactors is going to help companies support diversity and inclusion through innovative use of HCM technologies.


Basically what they’re going to be able to do is building new capabilities in SAP SuccessFactors to improve workplace diversity by using text mining, machine learning, and the HANA system, which is a platform which is their very fast, innovative reporting technology, to help companies review job descriptions, performance reviews, and similar people processes, I didn’t say all of them, for potential bias, and suggest changes to encourage equity. They’re going to provide guidance on these actions. Now we’re talking about the technology finding our biases for us. As you said, we could easily be polarized to find biases that are 1 political view versus another, or 1 perspective regionally versus another. How are we going to be able to tackle this as an organization, right?


John Sumser: It’s in the exact same bucket as the last conversation. Technology is about to become intrusive. Sometimes you got to really look at the technology before you can have the conversation. There’s a company in Seattle called Textio, Their product evaluates your writing for its gender bias. You put your resume or your job description or your essay into the thing, and it points out the language that has offensive overtones for, I believe, just in the gender question first, but they’re going to expand it to show nuance and language, what your writing actually means because of the words you choose. It’s powerful stuff, right?


Stacey Harris: Right.


John Sumser: You can use it. You can use it to see the biases that you didn’t know were there. Who wouldn’t want to understand where their biases are? But it means that other people can see them too. I can take your stuff and put it in and form an opinion about whether or not you’re sexist or ageist or whatever the thing is, because there’s quantitative data now on the topic that I can get by taking something you sent me and forwarding it to this processor. Your company will be able to see that. Your boss will be able to see that. Your coworkers will be able to see that. It’s a level of scrutiny that we’re not used to that comes from the benefits of [more law 00:31:01].


Stacey Harris: Yeah, and I think the thing about this, it’s going to get really scary, is the difference between conscious and unconscious bias, right? At what point are people making decisions about you as a person or you as a company or an organization on both of those factors? What’s interesting is the SAP Group, they’re going to have a group of both organizations … They specifically called out a group of corporations that are going to help them with this, Erste Group Bank, McCormick & Company, New York Life, Royal Bank of Canada, Varian Medical Systems, who will be on this board of diversity and inclusion experts to help them think through this technology.


They’re also going to bring in a group of experts on diversity and inclusion, like Elisabeth Kelan, professor of leadership at Cranfield School of Management, Tinna Nielsen, founder of the Move The Elephant For Inclusiveness, and also Tanya Odom, who’s director of innovation and an executive coach at FutureWork Institute. Their perspective is that this technology could be good, but yet has to be very broadly thought about with both experts and the companies themselves with some sort of guidelines. I think that’s going to be the challenge is the technology can do a lot of things. Are we using it with the right expertise behind it, right?


John Sumser: It’s a really important conversation to have over and over and over again, because the technology is about to become extremely intrusive.


Stacey Harris: Yeah. Yeah. John, we have [whipped 00:32:43] through all the articles. We didn’t get to talk about LinkedIn, but I’m sure they’ll be happy about that. We didn’t get to talk about the US banks and regulators, but we can definitely talk about that next week and how they’re changing their cultures. It’s been a good conversation, lots of conversations about diversity and inclusion, and what’s happening with the Obama regulations and how that might impact HR technology. Thank you for giving me a few moments on the survey. It was a busy week this week.


John Sumser: Yup. Thanks, Stacey. As usual, this was a great conversation. Thanks everybody for tuning in.


Stacey Harris: Thanks so much.


John Sumser: You’ve been listening to HR Tech Weekly, one step closer with Stacey Harris and John Sumser. Have a great day.


Stacey Harris: Bye everyone.

End Transcript

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Hello, It’s Stacey Harris Again!

Stacey Harris (my co-host on HRTech Weekly, the Thursday morning show) is operating the annual Sierra Cedar HR Systems Survey.