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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: 77
Air Date: June 30, 2016


This Week

This week John and Stacey discuss:

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

  • Brexit spells turbulence for cloud computing: 6 stormy scenarios Link
  • Snag-A-Job and Snag a Shift – no one planned for the reality of venture backed companies Link
  • Gartner: Cloud will be the “default option” for software deployment by 2020 Link
  • Workforce Software event and Workplace Acquisition
  • Millennials Having Trouble Finding Full-Time Work From Human Resources Report 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 Spencer and as is becoming our habit, we have Erin Spencer sitting in like Kenny Loggins used to siting with Jim Messina, she’s the real star of the show and we’re grateful to have her with us. How are you Erin?


Erin Spencer: Just fantastic John, fantastic. It’s always a pleasure to be here and talking about what’s going on in the market place with you.


John Sumser: It’s been an interesting week, there’s this summer shift in HR technology industry news that goes form the flurry of product announcements that happens in the spring. There’s a [lol 00:00:49] in reorientation stuff that happens in the summer as we get ready for the fall trade show season. What’s in the mail bag Erin?


Erin Spencer: What’s in the mail bag? John, it’s interesting what’s going on in the HR tech market is sometimes the technology market is influenced by powers certainly beyond things that we can control. One of the things I know that’s been heavily in the news the last week or so is the Brexit, the UK leaving or voting to leave the European Union and that just doesn’t have political ramifications, it also has ramifications for software and data. We can talk about that a little bit. I was also at an event this week for Workforce Software so we can chat about that and we can talk about whether or not cloud is truly the default option software deployment. If there’s more time we can talk about some more things but I think especially with the Brexit that’s going to take up some time so let’s get started. John what are your thoughts on that?


John Sumser: Before we start talking about Brexit, let’s talk about the CR Receiver survey. You’re having extraordinary success as I understand it. You’ve got 50% more submissions than you had last year and-


Erin Spencer: We do, we do. We are. The official end date of the survey was supposed to be today, however due to some popular demand, some of our distributors have said we want more time and I’ve actually had individuals email up. John can you imagine that there’s a survey that people go, “I haven’t had a chance to take this yet, I will it next week, can you please keep the survey open longer? So I have a chance to make sure my information is included in the survey.” Most people get an email about a survey and they go, “I don’t want to do that.” Delete. I have people emailing me wanting to be able to take it and asking for more time.


John Sumser: You know the CR Receiver survey, this is the 19th year it is the benchmark study of the industry. As people have come to understand what that means the good hard pioneering work to get the survey recognized and branded is now maturing as the industry is exploding. The amount of investment in our industry has gone through the ceiling over the last couple of years and I’m sure you’re getting headwinds from all the entrance in the market place.


Erin Spencer: Absolutely.


John Sumser: It’s exciting, I can’t wait to see the results of the survey and I think it might be worth telling everybody that the process of getting from survey complacence to a reports is a very 120 day process that you guys try to squeeze into getting your presentation ready for the HR Tech Conference in Chicago at the beginning of October.


Erin Spencer: It is.


John Sumser: It’s an exciting time and the fact that you’ve got so much more additional input means that the result are going to be that much clearer and that much more legitimate. I would say to anybody who’s listening, if you haven’t helped your company complete your survey, the fact that this is kind of a slow week and they’ve extended the deadline means now is your chance.


Erin Spencer: Absolutely. We would love to have everybody, all of our listeners and everybody who is involved in the HR committee to take the survey. Every person, every single entry really does matter. We appreciate the time and effort that people put in to taking the survey and giving us their information.


John Sumser: Just in case you haven’t heard, you can find a link to the survey on the website or you can go to and find a link to the survey. Please if you’ve haven’t had a chance to finish your survey or you’re just hearing about it for the first time take some time and complete the survey. The industry will be [inaudible 00:05:28] for it. Now to Brexit.


Erin Spencer: Now to Brexit.


John Sumser: You know in the security and privacy world, what I understand to be the case is that most companies organize their security and privacy policies and procedures so that they meet the most stringent requirements of the European Union which has policy on a EU basis and policy on a country by country basis. When or If I suppose Europe leaves the EU, they don’t have any of the formal trade agreements associated with privacy and data in place. One of the single most important things is that England is going to have to do is get those agreements in place and until they have them in place, there’s a wonderland of what does it mean to have a cloud service in the UK and how does that relate to the rest of the EU do it’s a really big trade issue that impact all of the major providers of HR enterprise software who are at the heart of our industry. I don’t think … I’m sure there a lot of scrambling going on but you haven’t really heard anybody pop up with an interesting theory about how this is going to work, it just looks like chaos.


There’s some risk in, is this development? There’s some risk in the sustained performance in the industry and I believe that over the next 90 to 120 days we’re going to have a long conversation about this. My guess is that if there isn’t a clearly observable shift that you might see things like a change in the HR technology conference agenda either in the US or in Europe to address shifting privacy and security issues as the result of England’s departure from the EU. What do you say?


Erin Spencer: You know John, I think what we’re seeing right now is a lot of people obviously don’t quite know what to do. It wasn’t until last week, two weeks ago that we even … that Brexit blew up. Obviously in the US we’ve got an entertaining, I’m sure that’s not quite the best words and our political race has been anything but for some people but that’s been making the news here so Brexit just Popped up and then the next day it was suddenly, “They’ve voted to leave, what do we do now?” I’m sure a lot of companies were hoping to ignore this and have it not be something that they would have to think about but for those organizations who do a lot of risk and a lot of business obviously internationally, this is going to be something that there going to have to think about whether they want to or not. I think that head in the clouds on this is not a good place to be.


When we were doing research for the show I saw some articles of some possible scenarios and they had six different options that they thought were the most likely but the truth is we just really don’t know yet. We don’t now A if this is really going to happen or B what it’s going to mean of the industry so stay tuned to the radio show, we’ll definitely be talking about this again.


John Sumser: One of the things that I think is interesting is over the last five or six years, it’s become convinced the wisdom to say that the strategy is not really a useful thing because things changed too quickly to have a strategy in place. As a result, I think a lot of people were caught unawares by this shift in Brexit and so the question that’s the governance question for big technology providers is how do you plan for the unthinkable? The idea that the UK would leave the EU was completely unthinkable. I don’t know of anybody who had contingency plan in place for the disruption of the European market. Here you go. We’ve got a market disruption in process and people are scrambling as a result.


Erin Spencer: Absolutely.


John Sumser: This kind of kite into a bigger question about our ability to predict the future. We’ve talk a lot over the months about the flows and risks in predictive analytics. If you imagine that the unthinkable happens in most people’s lives on a routine basis. We’ve got some personal experience here with people who shouldn’t be dying, dying and nobody ever plans to get cancer and nobody ever plans to get divorced but the truth is that our lives our riddled with this completely unpredictable phenomenal. Yet we are starting to install HR technology that forecasts human behavior as if the past was always going to repeat itself and become the future and the way that you get in trouble is by believing crap like that.


Erin Spencer: You don’t believe it passes [inaudible 00:11:47] repeatable John?


John Sumser: Well it’s a really weird paradox because if you want to make a really good bet about tomorrow you bet that tomorrow’s is going to be like yesterday. If you want to be right you have to have a very large allowance for, “No it isn’t.” Because the past is going to be like tomorrow unless you’re hit by a car or struck by a lightening or get fired or your kids’ in jail or the thousand things that are the actual story of most people’s lives. The story of a life is never it was always the same and then I died. The story of life is this kind of emotional dramas that pop up wrapped around predictable life events and so the idea that government are permanent, the idea that political structures are safe and secure, it’s really only been the last 30 or 40 years where anybody dared to believe something like that.


What we are starting to see is those foundation shaking and that argues for having better strategy with more scenarios planned for in your organization and predictive analytics whose use is contingent on the idea that the analytics are flawed because they predict that the future will be more of the same only better. There’s an object lesson here that ought to be heard loud and clear in the algorithm development sections of everyone the technology providers in our business. I somehow doubt that’s the message that’s getting through


Erin Spencer: Everybody wants to think of the trajectory that they’re on and everything is improving and going up people are going to meet the market demands and develop things and do things perfectly is the way that’s going to happen. John you and I have seen software vendors come and go. We’ve seen a lot of changes in the market place even just in the last 10 years so it’s certainly flawed thinking to think that the next 10 years aren’t going to again see a number of changes and disrupters.


John Sumser: This week I had breakfast early this week with the CEO of Snagitup who purchased People Matter. Then this morning … actually over the course of the week I’ve been in Charleston, over the course of the week I’ve met with People Matter alums. Nobody really planned for the reality of venture back companies. The reality of venture back companies is that one in 20 of them survive and prosper. It wasn’t a surprise that People Matter was liquidated and became part of Snagitup and would be a really interesting part of Snagitup but it failed as an independent entity. That shouldn’t be a surprise it was just one of the 19 out of 20 that don’t really make it. We don’t know how to organize ourselves for that kind of reality, nobody starts a business with the idea that the most likely outcome is that it’s going to fail but when you start a business the most likely outcome is that it’s going to fail in some way.


That same kind of thing believing your own dream to be true is an expensive reality to fix if you haven’t done the planning for what you do if your dream becomes somebody else’s nightmare. Brexit is like that, Brexit is going to stress out the strategy departments of all of the big players and I believe they are going to start to develop a hunger for what I’ve been calling the court gesture function. You need somebody … every organization needs somebody to do what HR examiner does which is to be the operation that poked holes. The operation that says, “Yeah, I get the vision but, no that’s not going to happen.” Brexit is a great case in point for that. Being able to prepare for the unpredictable is critical for long-term survival. My bet is that we will see some shake up in the industry as a result of Brexit.


Erin Spencer: Well John you bring up an interesting point, do you surround yourself with people who tell you that you’re on the right track and that you’re going in a good direction or do you surround yourself with people who actually point out the things that could be problematic and the holes on your business strategy? People like to work with people that are like them and have the same cultural and ideals and values. Do we go out of our way to surround ourselves with people that make us better and stronger?


John Sumser: I think it’s kind of like hot sauce. You want to diet that’s digestible. Sometimes you want hot sauce but you don’t want hot sauce on everything. You don’t want a court gesture in every important meeting but you need the function. You need to be able to go, “What if we really have this whole thing wrong? What do we do if we really have this whole thing wrong?” I think an awful a lot of people have been caught flat footed by Brexit. It’s a reasonable question, I think maybe some of the reasonable questions in the United States might be what happens of Texas [inaudible 00:18:25]. What do you do?


Erin Spencer: Well absolutely, absolutely one this of the articles I was reading this morning was Puerto Rico are not going to be able to pay its bills essentially? How does that affect the US but that’s the thing.


John Sumser: Right and so my sense is that we are traveling into turbulent times and being more alert to possibility. Probably comes a little bit at the expense of [inaudible 00:18:57]. It’s probably hard to grow and to be aware of risk but a heightened risk sensitivity is what’s coming. The way that you manage a heightened risk sensitivity is you expand your ability to see possibility. If you want to focus on growth you narrow the ability to see possibility. I think we are going to see some changes in strategy departments over the next year or so. Going to be at this time, we’re going to learn a lot as we get through the rest of the year both in international politics and national politics.


Erin Spencer: Absolutely we are definitely heading into an interesting six months John. The end of the year is going to be one that brings a lot of changes for everyone in a lot of ways.


John Sumser: The famous Chinese curses may you live in socially significant times.


Erin Spencer: Of course you have the French [French 00:20:03] the more things change the more things stay the same.


John Sumser: There you go. I knew that learning French would come in handy one day.


Erin Spencer: Maybe I’ll be invited to speak in HR Tech this year.


John Sumser: Gartner is on the streets saying that cloud will be the default option for software to put in by 2020 but that isn’t what your survey result says it.


Erin Spencer: Not quite John. If we’re going to go back to the survey and the cloud it’s interesting. Our survey obviously has been tracking a deployment options for … we’ve been looking at things for 19 years, we’ve a lot of data on this. Over the past three or so years we saw a significant increase in cloud. We said that last year that new cloud purchases make up more than 50% of the market place for 2015 and then obviously in 2016 we were planning on seeing again, significant changes in the cloud but what’s interesting is although certainly talent management and workforce management software’s are hosted in the cloud. The basic payroll and HRMS space, we don’t see the planned change to cloud the same way coming to this year that we saw in previous years. I don’t know if it’s just that the early adopters changed and the people that aren’t in the cloud weren’t planning to be in the cloud. When Gartner says the cloud will be the default option for software deployment, it will be really interesting to see if that actually occurs by 2020.


Our data kind of says that people are a little bit more conservative in their software changes than Gartner and sales people would in the cloud. Cloud software sales people would like them to be. John do you seen any of that with the research that you do and the people you talk to?


John Sumser: There’s a lot of concern because there’s no really adequate definition of what means cloud and what doesn’t mean cloud. One way of thinking about the cloud is this stuff happens at somebody else’s computer. If that’s the definition, it’s a pretty expansive thing. What I think people mean when Gartner does its research what they’re really talking about is some large scale centralized load balance software execution system that happens on computing facilities as expansive as the Amazon web services. When people sell cloud it’s virtually impossible to distinguish between old fashioned clients server and new [inaudible 00:23:03] cloud stuff because you sit at your desktop, you see a screen and you respond to the screen and where it happens is hypothetical. What happens is really hypothetical. We don’t know what cloud means in particular and I tell you our Brexit conversation suggest that people are going to be more careful about their decision to get to the cloud. I think Gartner might have read the news before they published their report. Go ahead.


Erin Spencer: No you go.


John Sumser: It’s one of those moments where all bets are off. This is a very difficult time to be a soothsayer because the odds of getting it right are zero.


Erin Spencer: You better be a soothsayer right now or a venture capitalist.


John Sumser: Well venture capitalist are always operating in a world of where the odds of getting it right are in the low single digit percentage rates. Soothsayers like to pretend that they have a better shot at delivering the truth of that. It’s fascinating, I can’t wait to see the results of the survey and compare them to this Gartner announcement.


Erin Spencer: I know it’ll be very interesting. Along with that john you mentioned being Charleston this week, I was actually in Chicago earlier this week for workforce software event. They acquired WorkPlace which is the global company, a leader in scheduling optimization for retail and hospitality. Workforce software specializes in scheduling and they tend to do more with a lot of compliance. Organizations that have high compliance needs and one of the interesting things that they mentioned in their acquisition was that WorkPlace had a very international presence and WorkForce software not that they were just the US but they were trying to expand internationally. It was easier to buy that experience than to grow it. It will be interesting especially they were talking about the Brexit and the market changes. How companies handle international strategy going forward and what they do to gain that information. One of the takeaways that I took from the conference was how are companies going to structure themselves internationally, globally going forward.


John Sumser: It’s a really interesting acquisition. WorkForce is an enormously powerful tool set for managing environments like nuclear energy plants where in order to feel the fully functioning shift you need to have a certain range of certifications and credentials present or the shift is in violation of regulatory stuff. To blend that with a company that does hospitality and retailer as its primary markets is it’s a fascinating choice. It’s a fascinating choice because you couldn’t imagine two different markets being brought under one umbrella. Those are the two extremes in scheduling are restaurants or retail and highly regulated dangerous safety oriented environments. In one you need to be completely agile and anybody can fit anywhere and in the other nobody can fit anywhere. You have to have very specific people doing very specific stuff. Figuring out how to blend this to culture is going to be a very interesting project.


Erin Spencer: Absolutely the last week, John our listeners were calling we spoke about Snagajob and Snagashift. The idea of the marriage between hourly work forces and shifts and so it’ll be interesting, it’s interesting to see the market reflecting the things we talk about which is always fun but the changes going on. Especially, one of the other topics John that we had had with millennials they’re having trouble finding full-time work according to a human resources report. This report actually says that by 2020 40% of the … some 40% of the US workers will be independent workers which isn’t necessary the same thing as independent contractors but that we’re really moving towards a gig economy. Obviously there’s software that makes that possible but did they touch on that John?


John Sumser: That’s such crap. The number of people in the gig economy is depending on who you ask. Four or five percent and the idea that it’s going to go to 40% is … the only way that you can get the gig economy to 40% is if you include all of the owners and employees of small businesses with 10 or fewer employees in it as part of the economy. That’s just not … that’s mixing apples and oranges. This is like somebody put together a really good power point for venture capital company to invest in gig economy work places and somebody else started quoting that stuff. I’ve seen really intelligent [pandents 00:29:10] and analysts in the HR space repeat these numbers about how big the gig company is going to be and it’s just nonsense. Nobody, nobody in their right mind who doesn’t have an extreme entrepreneurial bet wants to be an independent worker.


Erin Spencer: That is very true.


John Sumser: Why would you work that, it’s more expensive, it’s more uncertain, it’s higher anxiety, freedom is always accompanied by higher levels of anxiety. Most people don’t want more anxiety they want less.


Erin Spencer: Absolutely.


John Sumser: To suggest that somehow people are going to be thrown into the gig economy and without choice or they’re going to choose the gig economy, I don’t see it, I don’t see it for a second.


Erin Spencer: Well on that note John we’ve finished our half hour show. Is there anything else that you wanted to mention before we sign off for this week’s episode?


John Sumser: I think we’re good, I think we should just underline that if you haven’t taken CR receiver survey, now’s the time.


Erin Spencer: Absolutely, absolutely we are going to shut it off in a week or so.


John Sumser: You can find out about it at or on the CR receiver website, please come along and take the survey and thanks so much for listening today and thanks so much for being here today it’s-


Erin Spencer: Thank you John I always enjoy our discussions.


John Sumser: Yeah, so you’ve been listening to HR Tech Weekly, One Step Closer with Stacy Harris and Johnson Spencer with Erin Spencer sitting in, thanks very much for listening, bye, bye now.


Erin Spencer: Thanks.


End transcript


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