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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: 74
Air Date: June 9, 2016


This Week

This week John and Stacey discuss:

Erin Spencer of Sierra-Cedar is sitting in for Stacey Harris this week.

  • Simply Hired purchased by Indeed
  • Younger women make less money than younger men in technology
  • Biologically engineering your workforce
  • GE is considering scrapping the annual raise

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 HRTech Weekly, One Step Closer with Stacey Harris and John Sumser, and this week, we’ve got Erin Spencer sitting in for Stacey. How are you Erin?


Erin Spencer: Just fine John. How are you doing this fine day?


John Sumser: I’m great, I’m great, cause I’m in California and you’re in Cleveland, Ohio. How’s things in Cleveland?


Erin Spencer: I am in Cleveland, Ohio. John, it is a lovely day in Cleveland. Our basketball team managed to beat the California basketball team, and, as anybody whose ever followed Cleveland sports knows, we haven’t had a championship in so many years, I can’t even remember when the last one was, and the idea that we’re in the hunt, and didn’t lose last night’s game is making everybody here very happy. It’s a good day.


John Sumser: My dad is from the Cleveland area, and as kid, we would go to various baseball parks around the country to see the Cleveland Indians lose. It was –


Erin Spencer: That’s what happens, right?


John Sumser: It was for decades, for decades. Let’s go see them lose again, and every once in a while they’d win. Maybe if they changed the name.


Erin Spencer: Maybe. Maybe.


John Sumser: Maybe, but you can always go to the Rock and Roll Hall of Fame for all of its controversy. We’ve got an interesting bag full of mail today. We’ve got – Simply Hired was purchased by Indeed. We’ve got the, now standard, younger women make less money than younger men in technology. We’re going to talk a little bit about biologically engineering your workforce.


There’s a really interesting thing about CEOs in our space. Like 12 or 13 percent of the top CEOs in the universe are CEOs in our industry [inaudible 00:02:35] just put out a survey and that’s on the pile. What else are you seeing Erin?


Erin Spencer: What else are we seeing? We were just talking about Uber, and then we were talking about GE getting rid of annual compensation raises. That’s another thing that we can chat about. Let’s get started John.


John Sumser: Let’s get started. The number 1 eyebrow raiser this week is Indeed purchasing Simply Hired. For people in the audience who are not familiar with the job aggregator sector, Indeed is a job board that makes its money by scraping jobs from around the internet, and presenting them all in one place. It sells candidates on a pay-per-click basis, and Simply Hired was its cohort partner. They started at about the same time, with about the same amount of [inaudible 00:03:43] and a dozen years after the beginning of that industry, Simply Hired sort of gave up the ghost.


It was a good idea, but they were never able to match Indeed’s focus and discipline in the market place, and once Indeed was fueled by [inaudible 00:04:00] Japanese company, Recruit, Simply Hired just started choking. So Indeed is consolidating the market. It seems to me that what they’re doing is making the case that another highly-functional, big investment is going to start in the space pretty soon, because they’ve consolidated [inaudible 00:04:24]. I expect this to be an indicator of heighten competition in the job aggregator space. Do you follow that stuff? Does the Sierra Cedar Report look at job aggregation as one of the [crosstalk 00:04:40]


Erin Spencer: Not job aggregators, so much. As you mentioned John, obviously, with the space, you’ve got a lot of people sort of doing the same thing in general. I’m interested to see how much consolidation we’ll see, in the years coming forward. That’s the same with all technologies. Sometimes it doesn’t matter, again, who has the better software or solutions, sometimes it matters who has the most money and can stick around the longest.


John Sumser: I’m not about it’s who has the most money and can stick around the longest, but I’m very sure that it never matters who has the best technology. [crosstalk 00:05:22] It’s a very interesting thing because most of the investments are in pure technology and the realty is that the market moves on marketing and sales. You can have the best technology in the world and people who do generally under-invest in marketing and sales, because they think that their product is good enough to carry. The truth is the people don’t follow, don’t understand technology. What they want is the comfort that the decision that they’re making won’t get them fired and stands some chance of helping them become innovative.


What’s interesting is that dynamic, what it takes to be successful and consolidation don’t seem to be related. What happens every time – every single time – something like the purchase of Simply Hired happens, 5 more competitors spring up in its place because people like to sell stuff that’s already been sold. Consolidation never, ever, ever works. It’s going to be fascinating to watch how these guys play coming out of this.


Erin Spencer: Absolutely. Absolutely.


John Sumser: I meant to ask you. How’s the survey coming? You guys are in the throws of getting all the survey results to flow in on the Sierra Cedar annual survey of HR Technology. How’s the process coming?


Erin Spencer: John, as you know, we are absolutely, positively smack dab in the middle of survey season. We actually started at the beginning of May and we’re obviously at the beginning of June and we’ll close at the beginning of July, so this is about our halfway point. Numbers are coming in a little bit faster and better than last year, which is always what you want to see, but we’re not quite – the final number where we have to hit to actually be able to sleep at night to make sure we’ve got the data to come in to analyse for this fall. Obviously, if there is anybody listening who hasn’t taken the survey yet, or knows somebody who would love to take the survey and hasn’t done that yet, we would love, love, love to have your participation. We look forward to sharing all of this data with you.


John Sumser: That’s fantastic.


Erin Spencer: [crosstalk 00:07:59]


John Sumser: Are you seeing anything interesting?


Erin Spencer: One of the interesting things that we see is, year over year, people tend to say the same thing. Business process improvement, HR systems strategy, talent management. Those were our big themes last year, as far as where organizations are spending their time, and that’s still what organizations are planning on spending their time this year. Although, one of the interesting things is that people are definitely planning on replacing the core HRMS more than they’re planning on doing upgrades. Something to note for our HRMS vendor space. People are looking at you and looking at making some changes. Always good to know.


John Sumser: Great. Just one more time to underline it, please, if you haven’t had a chance yet, find the Sierra Cedar survey and fill it in for your company. It helps make the industry more intelligible. Where is the best place to do that Erin?


Erin Spencer: Absolutely. You have a link on your own page, with the radio show, but if you’re not there you can go to Sierra Cedar – We’ve got a nice little banner on the home page. As John mentioned, we do give this research away free to the industry. It’s free to anybody who wants to download our white papers. We’ve got years, and years, and years of white papers on our site. They’re free at the click of a button, so if you want more information on this year’s survey or want to see results from last year or years’ previous surveys, please visit our website and download some white papers. A little afternoon reading for your summer vacation travels.


John Sumser: Next in the queue, Comparably, who are an L.A. based crowd-sourced, compensation data site. This is like in the 20teens with a deep tech salary view is showing a significant 29 percent difference between starting salaries for females tech workers and starting salaries for male tech workers.


Erin Spencer: A 29 percent difference John.


John Sumser: In 2016. That’s astonishing. Now, it raises some interesting questions about whether or not Comparably’s data is any good.


Erin Spencer: It does. It does, but I’ve also seen some other studies, that show that women, actually at a younger age – because obviously one of the things that tends to throw a wrench in children’ careers is child-bearing and rearing – that obviously most women that are between the ages of 18 and 25 haven’t had kids yet, so actually women tend to outpace men in other industries, in overall data at that particular point, just because (a) women have more college degrees and (b) sometimes then tend to be better employees, frankly. In my personal opinion as a woman. Although that does not [inaudible 00:11:21], the data doesn’t exactly say that, but, for this it’s really interesting that the tech salaries are not only, different, but they’re that much different. John do you have any insights on that? Do have anything – reason that you think that would be the case?


John Sumser: All I know for sure is that it is extraordinarily difficult to be a successful woman technology employee. It’s extraordinarily difficult. I’m not sure I can tell you every reason that it’s difficult, but a lot of it has to do with, dissidence between the way we raise women and what it takes to be an engineer. I’m not smart enough to know if there is some way we can change engineering, that – I guess- that’s a possible solution, but it’s challenging.


I watched the schools – my kids went to, were remarkably liberal, remarkably feminist school system, and they – my two girls have pretty decent math skills and pretty decent science orientation, and they were directed away, generally, from math-oriented things. It was subtle – but it reminds me there is great gender-bias simulation tool from Columbia University. You would Google gender-bias simulator, and the Columbia gender-bias simulator shows a very, very interesting thing, which is that a tiny, tiny percentage of bias results in a gross difference in behavior.


Erin Spencer: Absolutely.


John Sumser: What that means is – the bias simulator shows patterns of hiring and promotion in an organization of, say 5,000 people. You can run the simulator at 1 percent bias, at 5 percent bias and at 10 percent bias. 1 percent bias, which means 49.5 decisions – 49.5 percent of decisions are made in favor of a woman, 50.5 percent of decisions are made on the basis that maleness is the most important variable, so almost nothing. If you have that 1 percent bias in decision-making after 8 generations of promotion cycle the composition of senior management is 35 percent female and 65 percent male. So that little, tiny increment of bias has an extraordinary impact in the field. I’m going to guess that this is a representative example of that. I don’t know, but it seems to me that – you could try as hard as you want and not root out all of the bias, and if some of the bias is there, you get pretty skewed results.


Erin Spencer: That doesn’t even take into account the bias that women themselves have. Sheryl Sandberg, in Leaning In, there are an awful lot of women who don’t lean in. That doesn’t help the already present bias within organizations.


John Sumser: That’s right. We’re going to keep seeing this – the spotlight is on Silicone Valley for its intensely male, intensely party-oriented culture, and then the destructive nature of that culture. I think we’re going to see more stories like this. I don’t know that just visibility is enough to solve the problem, but I haven’t spent a ton of time thinking about how you actually solve the problem.


Erin Spencer: No, but at least with the idea of these websites, salary aggregators you can actually – you have access to the information now, whereas 10 or 15 years ago you didn’t really know that the person sitting next you was being paid a completely different salary than you were. Now you have – you are armed with better information.


John Sumser: That’s right. You pulled an interesting piece about a Boston start-up that’s raised 100 million dollars to design microbes. What about that caught your attention?


Erin Spencer: It caught my attention because the idea of biotechnology is very interesting to me, and the idea of things that you’re growing becoming – actually something that you have and that you sell and that you use to make your business – your business grow. My grandparents were farmers, and as you look outside, you see the – in their case corn or strawberries or whatever they were growing – coming up. That’s your crop. You’re kind of at the mercy of the weather, the rain and whether or not you can get everything and if everything’s coming at one time or if you have some kind of blight on your crop. It sounds like 100 years ago these were big things, kind of variables, and now we’re kind of going back into biotech, and I just think it’s interesting how the pendulum shifts one way and then the other.


John Sumser: What do mean?


Erin Spencer: [crosstalk 00:17:20] You tend to get away from bio and growing things, and then we’re kind of – it seems like we’re back to it, and I know John, that you’ve thought about biotech and biotechnology a lot more than I have, what do you think about this?


John Sumser: There’s no question that the 21st century is going to be the biotech century – that our work in digital automation of human processes is coming to a conclusion. There’s not that much left to automate, there’s not that much left to apply the digital mindset to. There will be some transformative changes. We’re going to see some artificial intelligence fairly rapidly. We’re going to see cars fairly rapidly. There’s an argument that the digital change is now accelerating so fast that you can’t keep track of it.


That’s probably a point of view, but it’s just the door opener for the biotech era. I’m seeing, it’s early and I’m looking places, where you see this. I’m seeing significant energy being put into the idea that you shouldn’t let your children be trained as computer programmers, that’s as crazy as having them trained as blacksmiths – that the next thing on the cards is bio coding and that rather than being able to code a desktop machine, your kids should be literate and capable of thinking about how to code genetics. That’s going to be a big shift, because genetics has less of the certainty that digital science has.


Erin Spencer: I’m the mother of an 8 year old, and I of course, having be reading all this stuff about coding. I send them to Khan Academy videos. Kids play Mindcraft and build things in [inaudible 00:19:33]. I’m not going to lie John, I just pulled out my phone and the app store, and I’m like is there anything on – on genes, and biotech in the app store? Can I get him started on that earlier, rather than waiting – Of course my mom always told me that whatever job I was going to have after college hadn’t been invented yet. I guess they’re starting the inventing of the jobs that my kids are going to have, which is an interesting thought.


John Sumser: What else have we got in the mailbag?


Erin Spencer: What else have we got? We had talked about the idea that GE is considering scrapping the annual raise. Obviously coming on the heels of the fact that women are being paid less, what happens when companies don’t have an annual raise? Do you think that’s a good idea, bad idea? What are your thoughts on that John?


John Sumser: Annual raises is one of those things that – probably doesn’t have legs. Probably doesn’t have legs at all, because business is too unpredictable. The idea that – what’s under assault generally is the idea that as an employee you go and hang out with the company and they provide you stability in addition to providing you work. That’s kind of what all the talk [inaudible 00:21:01] economy is focused on. That’s not really a great relationship for the employer. Great relationship for employees – that you go sign up and somehow you’ve got a new parent to take care of you.


Erin Spencer: Absolutely.


John Sumser: That’s a lot of burden for the company, and it’s unclear why a company would think that’s a good thing do. The edging out entitled raises – because say you get a raise every year, that’s exactly an entitlement. I think you’re going to see big companies working on any place where the essence of the relationship isn’t entitlement. This is just the beginning.


Erin Spencer: But you’re an employee and you want to make more money – if you don’t have annual raises how do you do that? Do you just plan on leaving every 6, 8 months and go into a different company, or do you petition your boss for more money, when of course the answer is oh, we don’t have any money? [crosstalk 00:22:19]


John Sumser: I don’t think that is, we’re not going to give raises anymore – this is, we’re going to give raises based on merit rather than calendar. That means if you’re an employee and you want to make more money, then you need to figure out how to deliver more value. It’s a very simple thing. If you’re doing exactly what you did last year – why would you get paid more for that?[crosstalk 00:23:03] In most of the supply chains, when you’re selling stuff, if you have a contract this year, it’s going to be for less money to do the exact same thing that you did last year. There’s always downward pressure on suppliers, and – this is just bringing that dynamic into the employee ranks. Which is, if you do for me exactly what you did for me last year, you’re worth about 90 percent of what you got last year. What you have to do as employee is find the additional 10 percent of value to bring so that you’re worth what you were paid last year. Does that make sense?


Erin Spencer: Absolutely. I’m thinking about how to prove that. Especially when we’re talking about women in the workplace and women who traditionally don’t do a very good of promoting themselves. If they do promote themselves – I’m sure you’ve seen the studies John, that women are seen as being pushy or bossy or annoying when they actually stand up for themselves and ask for a raise. As a female I’m going, gosh, I have to prove my worth and is my boss going to take that well or is he going to go, oh look she’s whining again about not being paid enough and wanted more money. I think companies are really going to have to think seriously about how they handle compensation issues.


John Sumser: I should interrupt you there for a second.


Erin Spencer: You should.


John Sumser: I don’t know how to – this is such touchy subject area.


Erin Spencer: It is.


John Sumser: Let’s just make it personal between me and you rather than trying to generalize it out to all of our gender cohorts. If you think what’s supposed to happen when you ask for a raise is that the boss is supposed to like it, I don’t know what you’re smoking. Why would a boss think that that’s a good idea? The idea that the boss thinks that anybody who asks for a raise is pushy. I think it’s worth really surfacing here. Because the boss doesn’t want to give raises –


Erin Spencer: Never.


John Sumser: The boss wants to keep costs down so his bonus is bigger. The boss doesn’t have an incentive to give a raise, so the idea that, somehow, when women ask they’re grumpy and when men ask they’re not, I think that misses something. I think that the real promlem there might be that men don’t care quite so much what other people think about them.


Erin Spencer: They really do.


John Sumser: These generalizations are terrible. I don’t know about you but I live with somebody whose a complete – exception that proves the rule maybe[inaudible 00:26:20]. I don’t want to get too far out on the trail here, but that sense that’s there’s something wrong with people thinking that you’re overly assertive – I think that’s what they think about leaders. Part of the price of being a leader is that a lot of people don’t like you, and they say mean things about you.


Erin Spencer: That’s hard for a lot of people, so what do you do for the people for whom it’s hard? Do you just not give raises to those people. You’ve got a lot of employees who are very good at doing their jobs, coming in everyday, doing what you’ve asked of them and then going home – do you not reward them?


John Sumser: I didn’t say don’t reward them, but if they’re doing the same thing every day and going home, each day that’s worth less. I don’t think you pay them extra because they show up every day. If it’s worth less – if what you do everyday is worth less than it was yesterday, then me paying you the same as you made last year, is paying you more than you’re worth. God, you could start a bonfire with this one, couldn’t you?


Erin Spencer: Absolutely. Then I’m going, so if you’re not going to – if no one appreciates me and I’m not bringing anymore value to the company, but I still want to make more money, then do I just leave? [crosstalk 00:28:02]


John Sumser: You want to make more money, but you’re not bringing more value.


Erin Spencer: What if you can’t bring more value?


John Sumser: Well then you’ve got a problem that you probably need to solve by leaving. Because you can’t bring more value, means that what you’re doing – what you do is going to be worth less. That’s what it means. If there’s something that structurally prevents you from bringing more value, and you can’t figure out how to do your job faster, smarter, smoother, more interesting, then what’s going to happen is there is going to be a squeeze and your company will experience it as declining profitability. It’s not just you that’s got the problem, the company got the problem too. The solution for that problem is some companies – what the company does and what the employee does – and when you have routine, predictable, calendar-driven raise cycles, you don’t look at the problem, so that’s what GE is trying to figure out here.


Erin Spencer: Plenty of companies don’t look at the problem, but then sometimes they do, and I know John we are running to the end of our time – but one of the other articles we pulled was Uber – and the Uber driver saying that Uber itself is violating labor laws, it kind of goes into this. Are you classifying people correctly? Are you entitled to minimum wage and overtime pay and reimbursements for expenses? If we go into that – it’s an interesting thing thinking about your employees, how they fit into your –


John Sumser: Let’s hit that next week. The thing to notice is that the stakeholder with the most to lose in the battle of the contingent workforce, is the government. The government depends, for its existence on payroll taxes, and the few people who are classified as employees, the less money flowing through in payroll taxes. What you will see is that the government will continue to reclassify people and reclassify the definition of what an employee is in order to save the cash flow associated with employment taxes.


Erin Spencer: Everyone likes to save money and the government likes to get it. On that note –


John Sumser: Thanks Erin. We will talk to you all next week, you’ve been listening to HR Tech Weekly, One Step Closer with Stacey Harris and John Sumser, and Erin Spencer was sitting in. See you next time around. Bye-bye now.


End Transcript

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