HR Technology Conference 2014: HCM Roundtable

Every year we’re trying to figure out what’s next.  7 years ago, I started hearing about social HR everywhere, but the market really wasn’t ready.  Every HR organization thought that social was a bad idea, with personal privacy challenges looming to kill any social enterprise initiatives.  2 years ago, we all took for granted that social was going to be a part of our businesses, and this year it really seemed like social finally became its own and is permeating many of our HR processes and technologies.  It lonely took 7 years after the vendors and advisor market predicted it for it to become reality.  (LOL)

During this year’s HR Technology  Conference HCM roundtable, it was fascinating to hear what everyone was working on (it was the first question posed to the group, and I’m not trying to bash any vendor, but I am representing my opinion of the answers).

  • What was fascinating was that 2 of the vendors were talking about a great user experience (Oracle Fusion and Ultimate).  Wait a second.  We’re still talking about UX?  How did these 2 vendors get a seat at this panel and only have UX to offer up for what’s new in the product.  It’s unfortunate.  Y’all gotta do better than that.
  • 2 of the vendors talked about machine learning.  (ADP and Workday).  Machine learning was part of an overall theme of the conference, and there was a follow-up conversation in this panel about it, but these 2 vendors were the ones who brought it up as a focus area in their opening comments.  When I think about social HR 7 years ago, I think that machine learning is what the next few years might be about and it seems like 2 vendors want us to know that they’re on top of it.  What is surprising here is who the vendors were – and it shows us that there can be surprises.  It wasn’t Oracle and SAP with their deep (and legacy) analytics engines and mountains of programmers.  It was ADP (wh-wh-wh-what?!?!  I LOVE that ADP is thinking about this as they have the largest client/employee base to run analytics off of.  Maybe I don’t give them enough credit.) and Workday (ok, maybe predictable since they seem to be thinking/innovating faster than the others).
  • Last up was SAP.  Can anyone say “extensibility?”  Actually, SAP was gearing up to talk about some really cool metadata and object architecture that will create extensibility, but they got cut off from a time perspective.  Leave it to SAP to make things more complex, but if we can get to configurable extensibility, that’s pretty cool.  Honestly, I would have expected Oracle to be on the extensibility bandwagon based on their application architecture.

I’m hard pressed to say whether machine learning or extensibility is what’s next, but I’d think that all the vendors should be working on both of them.  UX is table stakes, and you should not be allowed to talk at the table (or panel as it was) if that’s what you’re working on.  My guess is that SAP will have some chops in the machine learning space, but it just was not what they wanted to focus on.  It’s also interesting that ADP and Workday were not on the extensibility front as it’s clearly a focus area for the very large customers that SAP has as its client base (but maybe that’s why SAP is so focused).

In a few vendor comments unrelated to the HCM roundtable, the HCM vendor space is going to start reaching parity in the next year.  Oracle and SAP are picking up steam and finally starting to look competitive.  First of all, lets agree that I HCM software in vendor demo booths while I was at the conference.  The following is an aggregation of vendor demos and conversations I had with conference participants.  Here are a couple of comments around gaps or deficiencies that I’m still watching out for based on those conversations:  (alpha order)

  • ADP:  I was really quite pleased to see their new UX.  I can’t remember what it’s called, but they’ll be rolling it out to all of their products so that no matter what you’re on, you’ll have a similar experience.  My concern is really still around the back end.  ADP’s ability to stitch together a common front end on top of multiple back end (and still mainframe?) systems is pretty good, and perhaps when you’re outsourcing everything but the core HCM to a best in class payroll and benefits vendor, it might not matter what the back end looks like.  Maybe.
  • Oracle:  The main question is in the UX.  It’s simply not seamless, and it goes to the point of why they were focused on UX in the panel. It’s way better than the last couple of years, but one goes from the cool “mobile apply” look and feel into a slightly different transaction screen, into a completely non-appy environment in just a few clicks.  The first couple pages are well executed, but it just feels like they didn’t finish the job as you continue through a manager transaction.  The second question is in their customer base for sold Fusion Core HCM.  As I talked to conference participants, they were getting numbers from the Oracle booth anywhere between 400 to 600 (note to Oracle, please get your story straight).  There are still a lot of conference participants wondering why Oracle is giving Fusion HCM licenses away for free if they have market demand in the 100’s of customers.  It’s just not adding up, and nobody I talked to could figure out the story.
  • SAP:  I’m pretty sure that SAP is on its way to filling a few gaps.  Certainly per the above comments, if they are working to fill extensibility gaps that its large enterprise clients will need, they are also going to figure out benefits administration, timekeeping and payroll.  I talked to one conference participant who was told that benefits administration will be available to demo this quarter, and another who said they were told it would be in Q4 of 2015.  Either way it’s coming and that’s good news.  I think SAP’s original philosophy that payroll, time and benefits get outsourced, but for the top 250 clients in size, that’s a hard position to maintain.  (I don’t consider SAP cloud payroll to be comparable to Employee Central in architecture, agile configurability, or usability, so that’s why I harp on it.  I know that SAP would disagree).
  • Workday:  Everyone has been uber positive about Workday for years.  The questions among conference participants seemed to be around the viability of their recruiting module.  Granted this is their newest module, and the top vendors seem to have the capability to innovate rapidly over a couple release cycles.  Just as I’m confident SAP is going to figure out benefits quickly, same goes for Workday recruiting.

Having said all of this, I’m actually quite pleased with the vendor space.  The last couple of years (no matter what Oracle and SAP say) have been relatively uncompetitive.  There has been one clear winner in the market, and the fact that I don’t have to say who it was is a good indicator that it’s true. I think 2015 will get a bit more competitive, but 2016 will become an all out war.  This post is definitely “negative” about what my concerns might be, but what I don’t mention is the huge progress that all of the vendors have made and the very long lists of things they have done well and right.  I’m going to get in trouble from the vendors over this post anyway, but either way, I think 2015 is going to be interesting.  More viable vendors is always a good thing.

(Last comment.  I thought long and hard whether to post this.  Some vendor somewhere is going to be pissed at me, but at the end of the day, there were only 5 HCM vendors on stage, so any exclusion is not mine.  Also, each vendor chose to talk about what they talked about.  Perhaps they didn’t have enough time, but again, if Oracle really wanted to talk analytics but didn’t get to it, that’s not my fault.  Each vendor decided what they wanted to focus on by themselves.  The opinions in the latter half of this post are based on talking to other conference participants and seeing each of the vendors demo at their booth.  Posting this also saves me the effort of writing a year end post.)

Get Over the Cloud

I think it was back in 2004 that I was writing about “DavesNextMove.com.”  PeopleSoft had just gotten acquired by Oracle, and Dave Duffield was sitting around with $1B but no job.  At the same time, SuccessFactors was building up some pretty good steam, about to start having bad implementations because their stuff was so much cooler than everyone else’s that their deployments could not keep up with the sales.  RecruitMax had made their conversion to Vurv which was then bought by Taleo (if memory serves me correct).  It was also around 2003 or 2004 that I got my first work issued Blackberry.  Before that, my personal device was purely for phone calls.  10 years ago, we were just starting to get cloudy and mobile.  DavesNextMove.com became Workday.  SuccessFactors much later got bought by SAP to fuel their cloud HCM offerings, and Taleo by Oracle to bolster their cloud HCM.

The point being… that was 10 years ago.  If you are not already in the cloud, you’re somewhere between 5-10 years behind the times.

None of us can imagine being on our 2004 Motorola flip phone, so why is it ok that we’re still talking about deploying cloud technology today?  I still go to clients that tell me they are getting ready for PeopleSoft 9.3.  A recent conversation with a large employer informed me that a client on Oracle EBS had no intention of getting off of it.  If you are on-premise for HCM, chances you installed it between 1998 and 2008.  I tell you what – you can have your 10-15 year old technology.  Send me your iPhone, and I’ll send you a 10 year old flip phone.  It’ll be great.

By the way.  PeopleSoft was founded in 1987 and the underlying architecture has remained pretty much the same.  Where were you in 1987?  I was just starting high school.

The point being… your employees and managers hate you.  

You really think they don’t know that their employee and manager self service technology predates Amazon.com’s initial user interface?

Wait, if I’m telling you to get over the cloud, where exactly are you supposed to be?  All the cool stuff right now is in consumer driven technology.  Think Uber.  I don’t call a taxi service that controls where the cabs go.  I get on an app and the consumer controls the experience without a middleman.  Same with AirBnB.  Come to think about it, same with Quora.  Ask anything and a community of users will tell you how it is.  Hang on, we’ve been rating products to help other consumers on Amazon for years.  How many of us read the product description on Amazon?  Maybe a few of us, but pretty much 100% of us check the consumer star ratings first.

The same thing is happening in HR.  Companies like Careerify are helping employees control the recruiting process.  Instead of recruiting organizations pleading with employees to provide referrals, the technology advises the employee putting them in complete control.  Companies like Betterworks are making goals and feedback real time, collaborative, and truly valuable.  At the HR Technology conference this year, ADP and Workday were talking about machine learning where their tools will help employees predict what to do next faster and better than your HR people.

The point being…  HR isn’t the facilitator anymore.  If you are, then you’re not adding value where you should be.  HR should be sitting around analyzing what is happening, not managing it.  The power to create, transact, and collaborate is squarely in the hands of employees and managers now.  Time to give them the technology to do it.  

And if you’re still not in the cloud, you’re 10 years behind your competitors.

Time for the Annual HR Technology Survey

With the web content and search developing the way it has over the last 15 years, I think we take for granted how ubiquitous information is.  We can Google just about anything and get decently reliable results every time.  At the root of all of this, somebody is creating great information and insight, and it takes time.

One of the very few surveys that is just purely robust in it’s data set and is unquestionable in it’s quality is CedarCrestone’s Annual HR Technology Survey.  This is the 17th year of the survey, and we’ve all benefitted from its insights and direction.  It helps us all know what the market is thinking about and if we’re keeping up with everyone else.

All respondents will receive an advance copy of the results in early October 2014. The first 100 respondents to complete all questions will receive a $5 Starbucks card. The 17th, 117th, and 1,017th respondents will receive a $100 Visa gift card in celebration of our 17th year. All who complete the Survey will be entered into a drawing for an in-depth Benchmark Service.

SystematicHR.com used to be one of the leading blogs in terms of how many responses this website generated versus other blogs.  In fact, at some point we were the top blog, but we slipped last year.

First:  Fill out the survey.  It’s worth doing just from the standpoint of helping out the industry.  Second, use this link!!!

HR Technology Conference – Calling All Slackers (like me!)

I’m a big fan of Jeopardy! and tend to watch when I get a chance to.  I was distraught a few years ago when Ken Jennings lost to Watson, the IBM supercomputer.  I personally felt like there was no chance for Ken to win against this highly quantitative, calculating machine unless they gave Watson a 0.1 second pause before buzzing in for an “answer.”  In many cases, Watson is technology that is filtering into many of our organizations, especially in marketing and operations, less so in HR – but it’s coming our way just as we all doubted social 8 years ago but it arrived in the enterprise anyway.

If you are a slacker (like me) and have not registered yet, there is more good reason to do so now.  Watson is coming to the HR Technology Conference.  I for one will have to decide if I’m going to cover the conference at all, or if I just geek out (actually a normal state for me) and cover Watson and analytics instead!

Just use the Promo Code SYSTEMATIC (all caps) when you register online www.HRTechConference.com to get $500 off the rack rate of $1,895. The discount does not expire until the conference ends on Oct. 9.

Be there!

Fooling Ourselves

I’ve been watching with fascination over the last couple years as countires have rebelled against their governments (Arab Spring in 2011), and American citizens have condemned corruption, and congratulated the populous for rising up and forcing change.  It’s fascinating to me because we are so unaware of what has been going on around us for so long.  After all, we (as a country) have been supporters of Egypt for decades.  The United States has supplied and trained their military, given them aid in various forms, and we have very publicly acknowledged them as strategic allies in the region.  Apparently, The United States has never actually cared that a particular leader was corrupt.  I mean really, do a Google search for the now famous photo of Donald Rumsfeld and Saddam Hussein.  Uhh, yeah, Saddam was an ally too.  Oh, the guy we took out of Panama, Noriega, him too.  Actually, we were the ones who put him in power ((I think, but I’m on a plane and can’t actually do the quick research to verify this)).  I mean, come on, we’re all blind to the other side of the coin that we hold in our own hands?

I’m often surprised at the level of myth that is present in large corporate organizations as well.  “Oh, no, we can’t possibly expect to have most of our employee transactions go through the portal.”  Really, in 2011, you can expect it, and you can even demand it.  “Oh, no, we can’t outsource payroll, the displacement of control would be devastating to us.”  Guys, you still control the rules in the gross to net.  You really want to run printers and update your own taxes in the payroll system forever?  “Our CEO has demanded that we implement talent management in the next 3 months.”  Seriously, this is just the flip side, and you didn’t tell him or her that it’s a bad idea to slam a strategic system in?

I love myth.  Myth tells us about ourselves, our beliefs, and our culture.  In every myth, there is a grain of truth, a particle of reason that is steeped in the reality of our companies.  But often times, myths get blown out of proportion.  Deeply held beliefs that are there for so long that they only are a reality in the minds of the 10 and 20 year company veterans.  Unfortunately, those 20 year employees are usually not that current with the as is culture.

We as HR have indeed started to change.  Talent Management was honestly one of the biggest catalysts we have had, in conjunction with an ever improving ability to manipulate data through systems.  But I often think that the biggest obstacle of change are ourselves.  Talent was supposed to be a revolution, but 5 years or so later, all we have is a bunch of automated processes and new theories.  We need to be the HR leaders that force the issue, realize the former state was crap (even if we put it there and supported it), and the future state is where the game will be played.

Annual HR Technology Survey

There are some things that inform all of us in HR about what is going on with our industry and where things are headed.  Of all these useful tools, the annual CedarCrestone HR Technology Survey is one of the top at making us all smarter.  Therefore, if I’m going to come out of sabbatical for anything, it’s going to be to plug the survey.

Over the years, Lexy Martin and the CedarCrestone survey have provided some of the most thought provoking ideas, content and industry insight I’ve had, and I know that many others share this experience.  The thing is, while the results are always valid due to the sheer number of respondents Lexy gets over other surveys, the validity does not always carry when we look at certain cuts of the data.  Therefore, while it’s the biggest survey in HR technology, more is ALWAYS better.

This year, Lexy has told me that if 100 people fill out the survey using the systematicHR link, all of those people will get a free iPad 3.  OK, so I’m lying about the iPad 3 thing, but you will have the gratitude of one of HR’s industry giants (Lexy) and from feeble little me as well.  So click the link and take the survey.  🙂

www.cedarcrestone.com/survey/systematicHR.html

Thanks!!!

-Wes

Fusion HCM Website is Up

Just an FYI since this appears to be about the softest launch we’ve seen in ages.  Considering we’ve been waiting for Fusion for a while.  Here’s an FYI that the website is up and perhaps the software is in GA (but you’ll have to ask Oracle to confirm that)

http://www.oracle.com/us/products/applications/fusion/hcm/index.html

Evaluating the Demo

I’ll admit that a while back (wow – are we going on 10 years now?) I was an SC.  You know – those guys from the vendors that the salespeople count on to demonstrate product during the sales cycle.  SC’s are a highly valued commodity.  They are highly trained product experts that must float between the functional world that many of the HR practitioners in their audience live in, the technical world that many IT people in their audience live in, and the sales world that they are part of.  I mean seriously, how many people do you know that can have a functional, technical and sales conversation all at the same time?  The best SC’s are truly rare, have extraordinarily hard jobs, and in my humble opinion are actually quite underpaid for what they bring to the table.

I was attending the HR Demo show in December (put on by the one and only John Sumser) and it was really quite interesting watching back to back to back demos.  It was even more intriguing to listen to the commentary and watch the twitter feeds at the show.  Personally, I watched 3 demos (I was only there for the first day).  Not in any order, there was a horrific demo of a terrific product.  There was also a middling demo of a middling product, and a terrific demo of a fairly poor product.  However, I’m not sure that the verbal or twitter commentary really reflected this.  Part of this is the varying degrees of capability in driving through to what the core product capabilities are from either a functional or technological perspective, and reading past the SC’s ability to sell (that is after all what they are there for).  Let’s face it, a 1-hour demo of a product is designed and probably scripted to show all the best that a product has to offer.  The best SC’s are going to show all the flash in a way that looks incredibly simple.  Even if the product is absolute crap (I’m not saying I saw anything that was), the sales job is to convince you that you can do everything you need to do within the product and that the capabilities are not only sufficient, but that you love them.

At the same time, the technologists in the room are looking around at the exact same demo and not listening to a word about functionality.  Instead, they are watching the screens, table driven values, background integration, web architecture and all sorts of other things that are not being explained verbally.  Thus, I can watch an incredibly dry presentation but still come out of it saying, “wow, that was cool” while the functionally driven people in the room might be saying, “wow, that sucked.”  Functionally, if we are talking about core HR, I’m going to say that the product capabilities of the best demo and the worst demo were within 5% of each other.  However, technologists and functionally driven practitioners are going to come out of a demo with different perspectives.  Unless you are an analyst or have a specific background, I’m not sure that you’re going to be able to pull together these perspectives in a single individual.  That’s why, even though some HR people get a bit tight, we invite very broad teams of HR, IT, Finance, etc to watch demos.

As a parting thought, here are a couple of hints when you ask questions during the demo:

  • When the SC says, “Our clients handle that situation by using this functionality over here” means that it’s a workaround.  No matter how good and convincing the demo was, it’s a workaround and does not really exist.  You should also be aware that many of the workarounds that SC’s come up with are totally legitimate, but that the implementation groups may not be aware how to implement them.
  • When an SC says, “We suggest that you handle the situation this way” means there is a band aid.  You might be exiting the application, or using a workaround, but be in no doubt that once again the functionality does not exist.

Go to the HR Technology Conference

Really.

You guys know that I don’t usually pitch anything.  But I have pitched this show a few times.  It really is probably the largest gathering of HR people outside of the SHRM conference.  But you never hear people come back from the SHRM conference talking excitedly about… well, anything really.  Some people like the keynotes, but other than that, it’s just a big gathering.

The HR Technology Conference on the other hand always seems to have the blogger and twitter pages abuzz.  Analysts flock to see what is happening and what vendors are saying.  People talk about the Talent Management Panel for months, and I still remember who won every single one of the Vendor Shootouts.

But (you say) it’s just a big vendor meeting and a huge, organized sales meeting!!!  There certainly is a time and place for buyers and sellers to meet here, and that is valuable.  There are the 40 educational sessions, many lead by senior practitioners, and none of which is sold to a vendor like at so many other conferences.Even more valuable is for you to find out what direction the market is headed in.  What exactly are the vendors working on?  What is the next cool break in functionality?  What are your own incumbent vendors competing against and are they lagging, maintaining, or leading?  At the same time all of the consultants and bloggers are there, trying to figure out exactly those questions above.  Your peers are there in masses (which with the budget cuts these days is tough to find sometimes).

Head over to www.HRTechnologyConference.com and get registered.  Use the Promotion Code SYSTEMATIC10 (case sensitive) and as a reader, you will get a $500 discount off the on-site rate of $1,650.

What’s Next?

Just a few short years ago, it really seemed like the vendor space was leading the market with all sorts of great new functionality and new ways to think about the world.  After all, what would we have done if SoftScape had not coined the term “Talent Management”?  (I’m pretty sure it was them, but I’m not 100% sure, so if I’m wrong, don’t crucify me please)  Talent Management gave HR a completely new lease on life, helped us get the attention of executives, and got many of us the proverbial “seat at the table”.”  TM provided us a way manage our Human Resources, whereas before we were just another resource.

The SaaS vendor space provided us with dashboards while the rest of the organization was implementing them, but HR didn’t have the budgets or the technical capability.  We got analytics for cheap from vendors when our organizations didn’t seem to see the value of a $MM implementation for HR.

But lately, it feels like we’ve taken hold of all the new technologies and the opportunities it brought us and we are not trying to push our vendors faster and further rather than being tugged along.  While vendors consolidate and focus on platform integration, we’ve all moved on to thinking about long term talent management that goes beyond the processes of today and looks at the planning for 2 and 3 years from now.  We’re wanting to understand workforce planning and implement technologies to help us with it.  We want to understand internal mobility and get a handle on how increasing mobility engages, develops and retains our employee base.

But it’s not really all the vendor’s fault.  Sure, the vendors (some of them anyway) tell us they have some functionality, or that it’s on the way, but we in HR are certainly now pushing rather than pulling.  The problem for the vendors is that most of the new work is pure analytics and decision support.  To do workforce planning, we need to be able to project out where our businesses are growing and what skill-sets we will need a few years down the road.  Often, HR does not yet have this level of visibility in the organization.  Sometimes, the business as a while does not have the ability to know what the future brings in highly project and contract based businesses.  Others of us have more stable sales and business cycles that can be predictable.

I think we’ve gone forward with our thinking, but both the HR and Vendor capabilities are lagging, and we have come to count on the vendor space to provide us a solution for our problems.  Unlike with Talent Management where many of us didn’t even know we needed it, now we know we have an itch to scratch – and we are eagerly awaiting a stick to scratch it with.  I’m sure it will be great…  (just hurry up already)

Bill Kutik and the Direction of HR Technology

A recent Bill Kutik Radio Show featured Tom Keebler of Towers Watson.  Tom is the Global Practice Leader of the TW HR Service Delivery Practice, and each year they run an HR Technology Survey that is probably the second largest in the industry (Lexy’s from CedarCrestone is significantly larger this year).  The TW survey is sometimes hard to get a hand on since it is distributed probably only to survey participants and Towers clients.  However, Bill gave us a brief look into some of the more interesting results of the survey, and for me, most of them happened to be in the vendor space.

While it’s no surprise that PeopleSoft has the most installs for core HR, it might come as a surprise that SAP has about a 20% market share.  This seems to be reflected in my own consulting as the number of SAP related projects or the number of core HR selections that involve SAP seems to be on the upswing.  The reasons for this seem to be simple.  In the large employer space, the number of companies who own SAP ERP far outstrips Oracle in any flavor including PeopleSoft.  All this means is that most of these large organizations already own SAP HR for free.  If you think about either SAP or PeopleSoft licensing when you get to 50k or 100k employees, you could really be talking about $5M to $20M annual software maintenance, so if you’re going to get HR for free, there seems to be some benefit to implement it.  That said, the integration that exists from a data and workflow perspective within SAP is hands down the best in the industry.  SAP flows transactions between ERP components like nobody’s business in real time.  Since PeopleSoft does not have nearly the same traction in other ERP modules (like supply chain, finance or CRM) they can’t boast the same thing.  There are of course tradeoffs in functionality or usability, but SAP seems to be catching up in the space.

What comes up as more of a surprise is that trailing PeopleSoft and SAP was ADP in 3rd place.  While I don’t know what the breakdown of ADP subscriptions is for small, medium and large employers, it’s probably safe to say that most of the subscriptions occurred in the TW small to medium space – that is under 20k employees.  What this does say about ADP is that they are getting lost of traction where organizations are still finding significant value in outsourcing payroll.  My thoughts on this is that 5 years ago when we were all excited about multi-threaded HRO, organizations are pulling back and looking at the ADP and Ceridian’s of the world to do single function outsourcing.  So while ADP’s Enterprise HRMS (v5?) is gaining momentum, I’m guessing that ADP’s GlobalView partnership with SAP is also doing well.  There are not that many organizations that can do global outsourced payroll like ADP can, and so companies with a major geographic footprint only have one place to go if they want a single vendor scenario.  (Single vendor yes, but lets remember than SAP and Cornerstone OnDemand are also part of the mix)

Last up on the list of interesting points was who the up-and-comers are.  This list seems to be based on who companies are planning to select or will be implementing in the next year.  On this list were Workday and SAP.  Again, the SAP is described above, but Workday has gained such traction in such a short amount of time that you have to be interested if they can keep up with the demand.  Certainly as the first true SaaS core HRMS, they have the ability for now to roll out functionality enhancements in the way that first generation Talent Management vendors were in the early days.  Second of all, their partnership for implementation with the Jeitosa’s and Towers Watson’s of the world should give them a bit of breathing space should the volume be larger than Workday can staff for internally.

It is a bit surprising to me that core HR seems to be changing at the pace that it is.  Usually when a market reaches a point of maturity, the vendor space settles down.  However, with the increasing viability of SaaS and the changing attitudes towards HR outsourcing, we continue to see an evolution of buying habits.  Here’s to core HR and keeping it fresh.

Note:  Sorry about the badge Bill, I’m just jealous I didn’t get a banner that looked like that.

CedarCrestone’s HR Systems Survey

It’s that time of year again, for what Bill Kutik of the HR Technology Conference calls “the most thorough, highly respected and useful survey on technology usage in HR.”  Each year, I send out a link to the readers of systematicHR to fill out this thing.  The more respondents, the better the insights the entire marketplace will get.

http://www.cedarcrestone.com/survey/systematicHR.html

Last year, systematicHR readers came in just behind Oracle.  I think Oracle was able to solicit 2 more respondents than I did.  Considering I only do the one post, that’s probably not bad.  Still, I have some pride at stake here.

http://www.cedarcrestone.com/survey/systematicHR.html

Lexy of CedarCrestone wrote me a brief note about the survey:

I think this year’s survey is going to address the trend in HRMS software acquisition patterns better than we ever have by looking at choices around licensing vs. subscription, architecture, and process handling. In addition, we have refined our metrics collection specifically on headcounts so that we can better evaluate the links between size of HR or IT staff and the existence of HR technologies for benchmarking. And, we have more questions around social networking.

I think a lot about our survey vs. others. It is the longest running than any otherand, as a result it can actually be used as a barometer of HR technology adoption across core systems, service delivery, talent and workforce management, business intelligence and social networking.

You can find out more about the survey and go on to filling it out by clicking the link above.

Do yourself a favor and do the survey.  Do the market a survey and complete the survey.  Do me a favor, and use the link above.

Normative Data for Employee Surveys – Worth the Spend?

Guest Author:  Stephen B. Jeong, Ph.D.

As a child, whenever I would screw up, my mother always said, “Why can’t you be more like Billy?”  Billy was a straight-A student who excelled in every sport with which he was involved – an all-around “wunderkind” who could do no wrong.  Needless to say, I didn’t like being compared to Billy all that much.

Those of you who have had experience with employee surveys – satisfaction or engagement – may be familiar with the concept of “benchmarking.”  Benchmarking involves comparing a company’s survey scores – on a range of topics such as communication, supervision, engagement, and efficiency – with scores from a group of companies on comparable survey questions.  Most commonly utilized benchmarks are scores from companies that fall into the same or similar industry sector, or scores from companies deemed “high performers.”  This idea of gauging our company’s performance in reference to other companies can be tremendously appealing – it’s simple, intuitive, and sexy.

Notwithstanding the above, I find it hard to justify – from a scientific point of view – the current level of enthusiasm for the use of these benchmarks.  There is no doubt, when carefully selected, normative benchmarks can provide useful insights into an organization’s standing.  Before pulling out your pen and checkbook, however, I’d like to point out a few things for your consideration.

  1. Differences in company strategy – While most companies have in common the goal of increasing revenue, there are key strategic differences among companies that work to diminish the actual (as opposed to perceived) value that benchmarks bring to interpretation of survey data.  Depending on their strategic goal, one company might emphasize “innovation,” while another, “efficiency.”  One might focus on “training,” while another, on “R&D.”  In other words, companies vary on the extent to which they place more or less value on one or more aspects of their operations or culture.  This is true even those within the same industry. Take the “microchip” industry; some are now focused on producing cheaper solar panels while others are continuing to pour money into improving wafer machines.  These varying strategies can and do have an impact on survey scores.   So, what am I saying?  The point here is that an overall survey score of 89% (satisfied employees) on “innovation” may be fabulous for one company, but unacceptable for another.  So, drawing conclusions from the difference observed between one company’s score on “innovation” or “customer service” against a group of other companies (even those in the same industry) downplays the meaningful differences that exist among these companies.
  2. Timing of data collection (historical effects) – Employee survey is a collection of attitudes.  Attitudes, in turn, are susceptible to constant fluctuations in one’s emotional state.  Imagine that your company just announced the second round of layoffs and reported that revenues were less than expected for the past quarter.  We all know that the conditions – both internal and external – can impact our responses to survey questions.  This is what statisticians call “error.”  This means that, any temporary condition – like layoffs – that can either inflate or deflate survey scores can contribute to increasing the size of this error.  Imagine now, the timing of the surveys from different companies that make up a given benchmark.  It is highly unlikely that the data were collected within the same month or even the same year.  We’ve gone through a fairly significant roller-coaster ride in the past 12 months.  Can you really draw firm conclusions from your Q2 of 2009 surveys scores when compared to data collected between Q2 of 2007 through Q2 of 2009?
  3. Importance of past performance (historical trending) – Benjamin Franklin emphasized the importance of gauging current performance using past data.  For example, in order to stop cursing, he carried around a notepad to keep track of the number of times he cursed each day.  After several weeks, he would draw a simple chart to check his progress.  Similarly, one of the most important diagnostic tool available to organizations is historical survey data. Historical trend data provide information that, I would argue, is substantially more important than comparison to external benchmarks.  This is primarily because one company’s culture – like one’s personality – tends to remain fairly stable over time.  This means that, any significant shift in upward or downward direction (as measured by standard or average deviation) tells a lot about what is happening to different aspects of that company’s culture.  Moreover, because you are likely to be aware of the changes that your company has undergone in the past 12 months, you are able to more reliably factor this into your interpretation of the results.  From this perspective, historical shifts deserve much more attention than any discrepancy found between your survey results and some external benchmark data.

To summarize, there’s quite a bit of “hype” tied to the use of benchmarking data; more so than can be justified.  While they can provide useful information when selected and used appropriately, differences in company strategy, cultures, and historical effects all work to make external benchmark data, in general, less useful than they appear on the surface.  In worst cases, benchmarks can lead to grossly misleading conclusions and what I would call here the “Why can’t you be more like Billy” syndrome.  Well-functioning companies are like Olympic athletes, you don’t need to be good at everything to win the gold, just your event.  By the way, Billy is now a history teacher and although I watch the History Channel from now and then, I would never think for a moment about trading professions.

Stephen B. Jeong, is currently the Managing Director of Waypoint People Solutions – www.waypointps.com, a human capital consulting firm that focuses on high precision employee diagnostic surveys using cutting-edge measurement technology and methodologies. He holds Ph.D. in Industrial-Organizational psychology from the Ohio State University and has been advising private, public, and government organizations since 2000.  He can be reached at stephen.jeong@waypointps.com.

Workforce Talent Retention

I recently talked to an organization who is moving their organization from one end of the city to the opposite far end of the same area. The commuting time between the cities is about 40 minutes, and some employees would benefit and have reduced commute, others would certainly pick up longer train or car rides. I asked about turnover rates and received an answer I was not quite expecting. People who normally would have left the organization were deciding to stay and make the long commutes. For a wholesale organizational relocation, their turnover was in the low single digits. Well, I suppose this is to be expected in this economy, if you leave a job now, there is no telling when you’re going to find the next one.

This got me to thinking, not about corporate relocations, but about the state of turnover and talent in the next couple of years. Sure enough, nobody is leaving their jobs willingly. But whatever the situation is, whether it’s a long commute, someone angry over a missed promotion, or a bad manager situation, there is a large amount of talent that is unhappy and not moving. Let’s say that the average turnover rate in the U.S. is 15% per year and that it sits at 5% today (totally made up numbers – I don’t feel like doing the research). That means a full 10% of the workforce is fairly disgruntled and is in your employee population right this minute. That is a pretty big number, and it’s a lot of unhappiness.

The number is probably a lot bigger than 10%. While this is a global economic problem and most companies are proportionally impacted, negative economies tend to decrease employee engagement. The real problem is that this year you have 10% of the population that is not leaving. That does not exempt you from the additional 10% that is going to get pissed off next year and want to leave. While you might be basking in a disengaged workforce with low turnover this year, next year’s situation might change drastically.

Employees may not be leaving now, but the top talent is already scouting strong companies, identifying which are weak, and determining possible landing spots. You might be the recipient of many applicants when the economy clears, but you might be on the negative end as well. What’s going to happen next year when the economy does turn and the floodgates of people ready to leave open up? Are you ready for the mass exodus or influx? Do you even know where your company is positioned against your competition?

Don’t fool yourself – next year is going to be different for talent and talent acquisition and I don’t know if any of us have really talked about how to prepare for it.

On Towers and Wyatt

Well, it’s been a full week now, and I feel like I have enough information to formulate a decent opinion on the merger between Towers and Wyatt.  Here goes:

Was this a merger, or an acquisition? Well, to be honest, my first reaction to this was that Wyatt got the upper hand.  I think I’m probably mistaken on this though.  It really does seem that just about everything is being split 50/50.  Each gets 50% of board members, the partners at each firm get 50% of stock, etc…  However, Wyatt did indeed get the CEO.  I’d generally say that this makes good sense since Wyatt was previously public and a CEO who understands how to operate in the public environment certainly has the upper hand.  Towers CEO now gets to be president.

What do I think of the retirement industry? Well, combining Wyatt (who I have long assumed was the largest actuarial firm out there) with TP really creates a behemoth in the retirement industry.  I have no idea if this is a good thing or not.  Sure, the new company will get the lions share of any new work available (which won’t be much), but the retirement industry is dying a slow death.  On the other hand, that slow death is obscenely slow.  Realistically speaking, if every plan shut down today, you’d still have to make actuarial valuations on an annual basis until the last plan participants died.  That would be decades.  In the mean time, this new company has an incredibly stable base of revenues.  It really does not matter what happens to the markets and recessions like we have right now.  When the plan needs an actuary, they will pay for it.  Even if retirement work declines at 3-5% each year, there is still 30-40 years of very steady income.

What happens to HR service delivery and technology work? This is probably the area I’m most concerned about.  Really, the Wyatt-TP merger presents an opportunity to the smaller players in the industry.  I always saw Wyatt as more of a mid-market player.  Actually they have some really good people, but just don’t have the depth and bench strength that TP once had.  In the last year, TP ended up completely removing its SAP and PeopleSoft practices and severly cutting much of the technology practitioners as the economy went shouth.  Certainly as we have discussed on systematicHR, this is consulting business that is subject to the swings in the economy.  Still, the merging of a mid-market player with an organization that has seriously trimmed its service delivery and technology capabilities does not make for a HR technology think tank.  I think that the Hewitt, Accentures, and Delloittes have it best right now.  While Accenture and Delloitte have not been the strongest in HR consulting (IMHO), they have been the best at integrating HR consutling with other functions like finance and technology.  Hewitt on the other hand has probably the best grasp of H operations from their HRO ventures.  I’d also say that small boutiques have been getting a much larger share of the HR technology and strategy market for several years now, and they are in better position now than ever before.

The HR Software Slump

I was recently getting caught up on some blog reading and noticed Josh Bersin’s post on the Talent Management Software Slump.  I’m not sure if I’m just a pessimist, but I thought I’d post a reply.  (granted, Josh wrote his post in early May…

Despite this difficult Q1, we believe the market is going to come roaring back in Q2 or Q3 of 2009.  Most of the private companies we talk with (Plateau, CornerstoneOnDemand, Learn.com, GeoLearning, Halogen, and others) tell us that while they had a weak Q1, they have seen tremendous growth opportunities in Q2.

First, the mid-market and small enterprise segment of talent management is starting to grow rapidly.

Fourth, there is still tremendous demand for talent management software.  In today’s rapidly changing workforce (from layoffs to restructuring to rapid growth), the value of this set of software is greater than ever.  While Q1 was tough for vendors, most buyers only postponed their purchases – giving themselves more time to evaluate options and improve their own businesses.  In Q2, Q3, and Q4 these companies will buy these systems.

So my thinking on the slump basically reflects back to 2001 when the dot-com bubble “burst.”  When that happened, basically, HR technology spending totally dried up.  It actually took about 3 years for HR technology spending to come back, and when it did, spending came back with a vengeance.  My theory on this was that when spending cuts happened in 2001, HR technology was among the first to be cut.  Then as the recession ended and things got better, neglected business critical technologies were upgraded, implemented, and restored.  Things like CRM or supply chain that didn’t get needed upgrades for months or years got the first funding dollars.

As we all know (or think), in most companies HR funding is a lower priority than other business functions.  I don’t see any reason to see this to be any different as the economy recovers this time.  As organizational revenues recover, employees will be rehired or returned from furloughs, business critical applications will be maintained first, and budget cycles will still lag a year behind needs.  Before an organization goes out and spends $100K or even $1M on any HR application including talent management, there are a whole lot of other unspent business critical dollars that will probably come first.  HR budgets that got slashed in 2009 will still remain slashed in organizations with any governance at all.  Perhaps some organizations will get dollars in their budgeting cycles at the end of this year, making dollars available in 2010, but I’m guessing that 2010 budgets will focus in other areas than HR.

Perhaps Josh is a better judge than I am though.  It may indeed be possible that certain talent applications will actually fare better than most other HR technologies.  Performance and Succession ran such high profiles in the last few years that we can only hope executives remain enamored with those technologies.  I’m not a big fan of looking at vendor pipelines for guidance on future sales.  Every vendor (application, outsourcing, or consultancy) has great looking pipelines right now.  Salespeople seem to be sandbagging as much questionable prospecting into their pipeline portfolios as they can right now, as much to remain optimistic as to try and keep their jobs.  Pipelines are also more robust in number of prospects, but smaller in terms of deal size.  The mega deals that have kept vendors going for years will be slower to rebound.  I think that most organization will have to deal with the technologies they were able to install in the last couple of years and hope they continue to work for a couple more years.

Engagement Overkill?

No pun intended. But I’m troubled and I don’t get it.

This morning the acting CFO over at Freddie Mac committed suicide.  He was brought in after the bailout, so theoretically he should not have a ton of direct responsibility over the causes of the current economic crisis.  People seem to be committing suicide at an alarming rate.  Just over the Golden Gate Bridge from me in Marin, a bond trader with a good life and a great family jumped from the bridge last month.  I suppose I (kinda) understand when you embezzle money, get caught, and are going to spend the rest of your life in jail.  But these are smart people with good lives facing a period of hard work.  Maybe you can’t feed yourself and your life really sucks.  But neither of these cases is true for many people bailing out on life right now.

I don’t have any false ideas that the cultur and environment at most financial institutions are deeply negative right now, and yes, I too preach that you want very highly engaged employees.  But when employees are literally killing themselves over their responisbilities at work, possibly because the work and work environment are so bad, this is quite a terrible thing.

I know, I know, people commit suicide for many reasons and being overly engaged with the workplace is probably not that high on the list, but it troubles me that people are dying because their work life sucks.  Companies go around and freeze pay hikes, do RIF’s, cut back budgets and stop impotant projects.  Employees feel undervalued, threatened, and are always on the edge.  We have become reactionary and tactical.  As soon as something bad in the economy happens, we forget about the positive strategic things we’ve been talking about for years.  We forget that productivity lies in a pool of happy, positive, encouraged and engaged employees.  Not people fearful of their jobs, and fearful that their company sucks (yeah – I’ll keep using that word).  Sure, the company has a duty to protray reality to the employees – they can deal with it.  But a company at the same time has the duty to make sure that the employees also feel some value instead of a culture of mass depression.

There has got to be something we can do about this…

SuccessFactors Results

It will be interesting to see what the SuccessFactors executives say on their 4th quarter performance results, and even more so for their projections for 2009. Given that they just did an across the board layoff ((I don’t have direct knowledge, but the word on the street was that they did 20% across the board)) it would be hard for them to say that they are still projecting strong growth.  This goes for pretty much all of the talent management vendors.

I’m suspecting that pretty much every technology vendor out there is going to have a very bad year.  Lets face it, pretty much all technology decisions for HR are discretionary.  If HR needs a new spreadsheet, that would be fine.  If HR needs to spend $100k then perhaps there is still a good chance.  But when software licenses are $100k or more, and there is implementation to consider as well, I’d hazard a guess that HR technology spending this year as going to be down right terrible.

The problem is that most organizations are going to be doing large reductions in force this year, if they have not already done so.  This simply means that much of the innovation that has been coming from talent vendors is going to slowly erode as R&D organizations thin and programmers find themselves on the street.  What I’m most concerned with is that we seem to be stuck with Talent Management 1.0.  I consider this to be a purely transactional system of managing talent and data.  While I know we are all pleased with where talent management has gone in the last few years, I’m sure we all also know that the evolution has not stopped and isn’t even close to being over.  This pause of innovating talent management could us back for a couple of years.  I think about what happened to HR technology in the years after the dot com bubble burst where HR technology spending stopped for several years.  Now, if technology spending stops and it’s accompanied by a severe reduction in vendor thought leadership.  I’m hoping that in 6 months, all this isn’t as bad as I think it will be.

LinkedIn Talent Advantage

LinkedIn is expanding it’s corporate recruiting functionality today with Talent Advantage.  Really, all of the functionality is old stuff that has been rebranded.  There is a new “Custom Company Profile” which I think has existed in one form or another for some time, but now has new functionality for employer branding and some cool algorythms to search your profile and those of your immediate network for job matches, automatically displaying jobs you might be interested in, or allowing you to forward to suggested network contacts.

LinkedIn’s value proposition is (I think) much stronger than Facebook’s for recruiters.  After all, Facebook is a social network as opposed to a professional network, and does not allow the dynamic searching of competencies and jobs, nor does it have the same targetted professional audience that a recruiter would want.  Everyone seems to be in love with Facebook these days, but honestly, Facebook has only the minimal vision around building out corporate recruiting functionality.  And if they ever did get the the point of having an algorythm to search jobs versus the profiles of my contact list, I’m not sure I want my 13 year old niece being suggested for a job.

It seems we now have 3 choices for on-line recruiter experiences.  There are the legacy job boards which we know people don’t find jobs in.  There are social networks like Facebook that are simply not suited for real recruiting.  And there is LinkedIn which over time has truly targetted the professional network.  I’m not sure who wins in 3 years, but I do think that LinkedIn is most suited in their current level of functionality.

All of these toold have a considerable amount of work to do in order to get to a vision of the future that I have.  For now, nobody serves both the candidate and the corporate recruiting function equally well ( or optimally I might add).  LinkedIn now has better tools for recruiters, and candiates (who are almost entirely passive candidates) have good ways to look at an organization, but the LinkedIn traffic by candidates is still problematic.  LinkedIn has to find ways to tap into LinkedIn groups and increase adoption of those platforms for it to really drive utilization by the population that recruiters want to capture – the passive canaidate that is interested and engaged with their work.  Until then, technology remains a good enabler, but without people to enable, it’s nothing.

LinkedIn does have around 35 million members, so it’s a platform ripe for a explosion of activity.  Compared to Facebook, I’d guess that LinkedIn members are much less active on the platform that Facebook members are.  For now however, LinkedIn is still the best professional network out there and their efforts at engaging the recruiting community are continued steps in the right direction.