Episode Transcript
Speaker 1 00:00:10 Hi everyone, this is Josh Buron. I'm going to play a 40 minute overview of the HR Tech landscape, which is part of the keynote I'm giving at the spring conference in March. Uh, you won't see the slides, but I think you'll find this podcast very informative. And then in the next couple weeks, you'll be able to get your hands on the HR technology report and I'll publish all these slides for you to look at as well.
Speaker 1 00:00:36 This is a very, very big year in HR tech and in 40 or 45 minutes, I'm gonna try to give you a very high level overview of what's going on. And there is a lot, and it is really all about responding to the 12 year economic cycle we've been in, not just the pandemic, as most of you know, we've been talking about digital disruption, AI data, income inequality, labor market dislocation in the future of work and agile organizations for a decade. Well, last year it all happened. Every single one of those things became real. Every single single one of those things became common. And the HR tech market has been adapting very, very quickly. And I think what you're gonna see in the presentation that I'm going through is a significant move from what I called systems of record in the old days, systems of engagement in the beginnings of the cloud systems of experience over the last five years or so to systems of design systems that allow you to design solutions for employees.
Speaker 1 00:01:42 And I'll show you what I mean by that as I get going. Now, one thing to think about for this year and next is we are going to be in a red hot labor market. I have no question in my mind that this will be perhaps the most exciting growing economy you have ever been a part of. Yes, we all need some rest and there will be some vacations and people will probably take a little time off when the pandemic finally subsid subsid. But the job market is on fire 18% of year over year. If you look at the unemployment rate, it is very likely to go down to where it was before to three and a half percent is where we reached right before the pandemic. I drew that red line as a curve. That's the same slope as the decrease in unemployment as you can see from that chart.
Speaker 1 00:02:26 So you're gonna be looking for people and you're gonna be having to recruit internally and you're going to be having to look very hard for skills because people won't be available that have experience in the jobs that you're creating. An internal brand and employee of value proposition and engagement is gonna be hot as ever, and you're gonna be moving people around in a very prescriptive way and developing a even better system for listening and understanding what's going on in employees. In fact, the real theme for the next two years is transformation, not recovery from the pandemic. That's already happened. Most of you have already adapted to the pandemic in a very significant way, but now you've changed what you do, how you go to market, who you sell to, what your products and services are. 80% of the job market is now in the services industry and everything about people is change.
Speaker 1 00:03:17 And so we need systems that are very, very adaptable and very easy to change because we in HR have done the same thing. If you look at HR operating models today, and most of the companies I've talked to are going through transformations, it's all about resilience, cross-training, HR people, building agile teams, turning HR leaders into product managers, iterative design, co-designing with the business. This is really what's going on in the company. And so we need systems that allow us to do that. Now, that's not easy to build because the average deep technology system takes 3, 4, 5 years to develop by the vendor and then they have to mature it in the market and they can't change it every year, every time we come up with new requirements. But that means there's gonna be some disruption and vendors, Microsoft that have now decided to get into the market are gonna have some very, very significant impact as far as the job market.
Speaker 1 00:04:09 I, I won't spend a lot of time on this, but this is why we're seeing these disruptions. It isn't just the recovery from the pandemic, it's the fact that we are all becoming service companies. All of your companies, even if you sell a product, are really in the consulting service design management, sales, marketing business. And those are human skills. And so our ability to build technology that makes work easier, that makes people more productive is really falling on the shoulders of hr. Yeah, we need to do payroll and administration and track vacation and take care of compliance and harassment claims and all that too. But that's not the strategic thing that people need from their systems anymore. We need systems that make work easier. I'll give you a piece of interesting information. Okta, which is a company that does identity management, looked at all of their customers and the number of employee systems they have, the average large company has more than 120 employee systems.
Speaker 1 00:05:09 It's insane. And there's no way people can use all these things or even understand what they are. So we need to either simplify them or put something in the middle that makes them all easier to use. And that's really the theme for HR technology. And I like to think about it as really moving and migrating everything that we know about N HR towards being systems of work, systems that work in the flow of work and still do HR things on our behalf. But without us having to log into the HR system, find the right panel, click around, fill out a form and try to hope that we did the right thing. So this is really the issue that we're trying to address. Now, let me talk about employee experience for a minute because employee experience really is the big elephant in the room that's changing the tech market.
Speaker 1 00:05:55 You know, going back, I wrote about this when I wrote about the Microsoft announcements, EX goes back to industrial engineering and it had roots in data analysis and time and motion studies and then surveys and quick pulse surveys and feedback and IO psychology. It is now a design discipline. It's now a problem of designing experiences that cross between hr, IT facilities, health and safety, legal finance that work for your company. You can't sit around in HR and fix the employee experience. I mean you can improve it, but you have to work in a cross-functional team and you have to work on projects and solutions that are probably unique to your company and your workforce. You may find some off-the-shelf systems that do what you need, but the chances are you need creator tools as much as you need off-the-shelf systems and that's really affecting the market.
Speaker 1 00:06:49 Many of you have seen this chart for years and every year I look at it, I change it. But where we've now reached is the systems of productivity, whether it be Microsoft or Google or Facebook or Slack or whatever it is you spend all day doing, really have to be integrated into the HR technology. We don't log into Workday that often. We don't log into success factors that often. In fact, most people would like to not log into it at all. They'd like to use whatever they're already doing and get access to those services through APIs or chatbots. That's a massive change in the market. And I know the big vendors are not gonna give up easy. Every vendor wants to have employee interactions directly on their platform, but I would suggest that's not necessarily necessary. You can make a big company without having a lot of front end tools too, if you integrate with the vendors that own the front end systems.
Speaker 1 00:07:41 And that's really the reality of the market ahead. In fact, this red area is now much clearer. Employee experience platform is now a category and I think Microsoft will legitimize that. And it has layers and it has functions and all of the systems vendors in the market from Oracle to S A P, to success factors, to Workday, to AD P are all trying to figure out where do they play in, what parts of that layer do they play in? Because you're probably thinking that a lot of your energy in HR Tech is that this layer is figuring out how to make these systems easy to use and what we call personalized to each employee, not personal, where we have to call a business partner to figure out what to do, but personalized data driven and AI enabled so that employees can do their jobs, manage their HR lives, deal with the HR transaction systems and not have to learn how to use the HR system.
Speaker 1 00:08:36 And I think Microsoft by the way, just to make one more point, is going to be even bigger than I thought. Now I have absolutely no vested interest in Microsoft and no reason to push them. But having used Microsoft tools for most of my career and followed the company for many years, they have really woken up to this market. Not only does Viva have applications in productivity and wellbeing and learning and employee portals that virtually every company needs Microsoft technology is the core infrastructure and roughly 70% of global 2000 companies. So even though you may or may not like all the features of Viva as they exist today, I can guarantee you that your IT department is looking at it and trying to figure out how to use it to pull together the hundreds of SharePoint sites, the Office and Microsoft 365 infrastructure or the video streaming or other technology that they have from Microsoft to make your life easier.
Speaker 1 00:09:31 So this is a pretty big change in the market and I think this is something we'll be talking about a lot more in the fall. Let me go into the various segments of the market for a couple minutes and then I know you're gonna have lots more presentations during this session. The core HR systems market, it's obviously big, it's obviously growing and everybody wants to get into it Every year I look at this chart and I realize there's another major technology provider that decided to get into hr. Obviously this year it's Microsoft. Last year it was to some degree Facebook. And the reason for that is we need these things. The core systems are absolutely essential. I think the market for core HR systems is becoming a little more commodity like there are big differences between Oracle and Success Factors and Workday and a D P, uh, and depending on the size of your company and the industry you're in, they're gonna be certain ones you're gonna want and look at and others that aren't gonna fit.
Speaker 1 00:10:26 But the reality of it, the world for them is they are really struggling to keep up. All of those vendors have become very large successful companies and they're adapting to this new world of employee experience. And it's not easy. They have tremendous amounts of data about your people and those systems are important, critical, safe systems of record. So we need to use them and leverage them. And they're now realizing they have to open up their APIs, create journeys or journey interfaces so that you can use these systems in much more creative and developmental ways. And there's another thing going on that's even bigger, and that is that most of you are probably starting to look at your job architecture. The job architectures of the last 30 or 40 years are designed around industrial organizations, management labor, jobs in defined roles with boxes around them and competencies affiliated to those jobs.
Speaker 1 00:11:25 As you all know, that is not the way world of work works anymore. There are companies that have lots of operational jobs and those jobs need operational capabilities and skills and certifications, but that is a declining part of the market. You're all finding that jobs are changing constantly. Most people have hybrid jobs where they do one thing and something else. They work on a project in addition to the responsibility they have. And the job that they started in a year ago isn't the same job that they have today. And so what we need to do in the HR technology is create simpler, more adaptable career architectures and job architectures that facilitate this mobility and continuous re-skilling that goes on in companies. And we happen to be getting pretty good at this. We've helped a lot of companies do it, but I'm finding that most of you have too many layers, too many job descriptions and too much detail at the leaf level of your job architecture.
Speaker 1 00:12:23 This is really where you're going. And I wanna point out this third box in the middle called capabilities. Even though I'll talk a little bit about skills architecture in a few minutes, you're going to have to sit down with your C E O and other business leaders and define the critical capabilities for your company. These tools from the HR tech vendors will help, but they won't prioritize the capabilities that make you successful. And so this is a major, major theme in the market. Let me go through a couple vendors. Workday of course, is doing extremely well, grew it another 20 or 25% last quarter has introduced the People experience platform, the Prism Analytics platform, Workday Learning, they just acquired Pecan, which was and is a fantastic engagement survey and performance management system. So they're continuing to expand their footprint all over the market. I think the big issue or the big challenge for Workday is maturing all of these tools.
Speaker 1 00:13:21 Everything from the skills cloud, the talent marketplace, the learning platform, the journeys, the new vibe experience for D E I. There's a lot going on at Workday. Workday is a big company but they have a lot on their plate. And so those of you looking at Workday just wanna look at each part of the system and make sure that it's mature enough to solve the problem that you have. Now, Oracle is now also very successful and very competitive with Workday. I'm incredibly impressed what the Oracle has done with Oracle H C M, you know the history of Oracle going back to PeopleSoft and tole and a few other acquisitions going through this middleware and architecture and now emerging with a really best of breed Oracle Cloud H C M platform. One of the most elegant and integrated systems with an integrated help disk with integrated analytics with an incredibly useful social network and an employee experience layer that they'll be introducing in May that I think you're gonna find pretty interesting.
Speaker 1 00:14:21 A d adp, if you're in mid-size companies, this product and platform called Lithon is starting to grow. ADP is one of the only graph database systems in hr. I think there's a few others. So it really has potential to manage a highly distributed networked organization in ways that to some degree some of the other vendors really can't. And so I think we'll see ADP continue to grow and reach into mid-sized and larger companies with this platform. Success Factors has done an amazing job of re-engineering its user experience, developing an interface that is really modern chat based, very experiential and very open to Microsoft teams and other chat interfaces. And is also in the middle of a major project to reinvigorate and redesign its entire learning technology under the covers, which is very, very extensive. So you'll see, I think really the three major vendors, Oracle, SAP, and Workday are very, very competitive with each other right now and they've all got competitive advantage in different areas.
Speaker 1 00:15:23 I can't leave out Microsoft and Facebook. I talked about Microsoft a little bit earlier. You're gonna see Microsoft touching more and more of the HR stack as the Viva product set gets more mature. And then Facebook, you know who I'm not a fan of as a, as a general business is doing a really spectacular job with workplace. Workplace is a very successful employee experience, social employee app that is widely used in retail and hospitality and other desk list workers. I've used it a lot, spent a lot of time with their customers. It is a very viable employee experience layer for a lot of you. And it is virtually no training because everybody who's ever used Facebook can immediately use it. So those are really disruptive changes. And then of course there's ServiceNow and I mentioned some other vendors here, but ServiceNow is the big one.
Speaker 1 00:16:12 ServiceNow is one of the most creative and innovative vendors in the market. And I mean that not only have they crawled out of it's service delivery into the whole big and complex employee experience space, but they're going a lot further. They are now really to some degree an industry standard and service delivery automation and IT and HR service management. They've built a journey development tool to build journeys and onboarding tool, much more analytics. And there's some pretty exciting stuff coming from ServiceNow that I can't tell you about a little bit later this year that's really gonna put them in a very, very significant excellent position for all of the employee experience applications that you have. And they are a bigger company than Workday from market caps. So they've really done exceptionally well in the talent space. What's really pretty interesting how it's changing the theme of talent software is first of all, the systems are always changing and no one platform will ever be good forever.
Speaker 1 00:17:10 You might have bought Cornerstone a decade ago and realized that it doesn't really do what you needed to do anymore. And and that's true of many, many of these talent applications. The reason they're changing of course, is management is changing and management philosophies is changing. So the types of tools we need are changing. Performance management for example is going through a total revolution to become much simpler and much more agile and much more business driven. The learning market, which I'll talk about is becoming learning in the flow of work and micro-learning and self-authored learning and collaborative learning. So virtually everything that these vendors build has to be adaptable for change and there's lots of new applications, safe workplace management, back to work, hybrid work, video interviewing, onboarding on remote, remote recruiting, sourcing. AI has touched every part of this market and some of the vendors are doing exceptionally well and other new ones I think have the potential to be disruptive.
Speaker 1 00:18:07 And even though there are acquisitions, I don't think this is a market that's consolidating. I think this is a market that's expanding because you need more employee applications than ever. Those 120, 130 applications that Okta was talking about are are real. Those are real things that employees are doing. It's everything from learning, recruiting, performance, rewards, engagement, wellbeing, payroll, just project management and collaboration, leadership development. Um, there's lots and lots of things to do here and it's tough on these vendors. Now the one area that I wanna touch on just in this keynote that I think is the most disruptive of all is the talent marketplace. This is a picture of gloat, but there are other vendors in this market. You know, we're entering a very tight labor market. It will get hard to hire people by the way, the birth rate is down too. So there will be fewer people entering the workforce over the next decade or so.
Speaker 1 00:18:59 And so internal mobility has become a core strategy for every company. It's not just a sideline thing we do, you know, as needed in the United States, roughly 40% of Americans changed jobs this year or changed roles. Most of you went through radical transformations internally and you realized it wasn't really as hard as you thought. People did re-skill themselves, they did deal with changing roles. But now we have systems that make this easier than ever and that is what the talent marketplace does. Now, I'll show you the vendors in a minute, but these are systems that basically are really sort of the backend of recruiting systems that turn recruiting inward to employees. And they give employees the ability to search for opportunities, apply for jobs, and it will recommend opportunities for them based on their skills. So they're both skills engines and job mobility and career engines.
Speaker 1 00:19:51 And it turns out, if you really look at internal mobility, there's three types. There's planned typical career models that companies have developed for years. There's rapid facilitated mobility where we make a massive change, we do a reorg, we go through an m and a or maybe we have a high program and we push somebody to a new role over and above their normal career path. And then there's the new model which is let's just open up the whole system and give people time to work on other projects to change roles, to participate in developmental assignments. I really think Google's 20% time was the beginning of that. And more and more companies in all industries are doing that. I've talked to banks, insurance companies, manufacturers, S A P, they really look at this agile work model as the future. At SAP for example, you can even share your job.
Speaker 1 00:20:41 You can even say I only want to do 50% of this job. I'd like to give 50% of it to somebody else cuz I have young children at home and I need to spend more time at home. And it works really well for S A P. So these vendors at the bottom have all built systems that facilitate the exposure of jobs and projects that have D been developed by hiring managers and not only produced them for the outside market for recruiting but also for the inside market. And some of the more sophisticated vendors like Eightfold for example, have very intelligent matching systems. Gloat does the same thing where an employee wouldn't really know what jobs are available inside the company, but the system I'd say to them, based on your career, based on your experience, you might wanna consider a project like this managed by this person and the company.
Speaker 1 00:21:27 Here's how you apply, what a great opportunity. So this is a massive, massive market and something I really recommend you look at. Now it gets to the issue of how this all fits together and I won't spend a lot of time on this chart cause we'll spend some more time on this in the fall. But the talent marketplace is to some degree disrupting or competing with the external recruiting platform and the internal learning system. And so the vendors are all kind of fighting with each other about who's gonna get this market. The recruiting platforms like Gloat used to be a recruiting system. Eightfold is recruiting system hitch to some degree as a recruiting system are really good for a talent marketplace because they have all the workflow and intelligence of job matching. But on other hand, the learning systems like Degreed or EdCast or even Cornerstone have a lot of information about knowledge and skills and what courses you've taken and what developmental paths you have and what careers you have.
Speaker 1 00:22:21 So really these two things on the end, sort of like the two dumbbells in this market are impacting this market. And from a marketplace standpoint, I think we will see some acquisitions. Obviously Workday is in the talent marketplace market, Oracles in the talent marketplace market. I wouldn't be surprised if SAP got into it. So right now what companies are doing is they're buying standalone products for each of these areas and then figuring out how they fit together. And let me just point out this picture, the big database on the right, the global skills database. The other thing that is a jury that is out yet is where do all these skills models go? The learning system has a skills model based on the learning experience and the learning platform and the learning searches and the content. The recruiting platform has the skills model based on pre-hire assessment and how we're gonna evaluate people for skills coming into the company and what skills we're looking for.
Speaker 1 00:23:16 And then the talent marketplace as a skills engine to try to match people to opportunities and match people to learning. Right now these are in different databases, they don't all look the same. One piece of it says collaboration, the other piece says teamwork, the other piece says open dialogue. They're all kind of talking about the same skill but they might use different words. And so what you're gonna see over the next year is these vendors are going to build integration tools to pull these skills architectures into one so you can have a more federated or integrated skills architecture. I mean we would hope that the A R P vendors become the core of this and they certainly do too. But the jury's out a little bit on how that's gonna go and we can help you with that by the way. We have a lot of expertise in helping you figure that out.
Speaker 1 00:24:02 The third market I want to talk about is listening. You know the employee experience space is very complex. There are at least 24 elements to the employee experience and I'm not even talking about back to work and virus safe workplace and we're gonna be doing vaccine checking and so forth. But what we find in all the research we do, and we're gonna be publishing a big study on this, uh, in Q2 is above it all is listening, understanding what people need because the problem is very complex. We have the various employee journeys and activities on the left. Everything from the basics of the job to the high level careers and goals and aspirations of people and then all the service delivery groups at the bottom. So you've basically got an end by end problem here and that's why EX is a multi-functional business strategy. It isn't an HR initiative anymore.
Speaker 1 00:24:56 Well to adapt to that we need listening tools that are similarly as sophisticated. It wasn't too long ago when you all used used an annual survey and that was your employee experience program and then you did pulse surveys and you got all this data back and you realized maybe we should send this data directly to managers because we can't analyze it fast enough. So let's create an action plan or a a portal for managers to get feedback directly from their employees and it got smarter and smarter and smarter. And there's companies like Culture Amp that now have active and glint that have active journeys and recommendations to managers based on feedback by employees. Where we're really going to is a closed loop system. Just like you can reserve a flight on an airplane and fill out a form and maybe even get a call back the next day if you're lucky if something didn't go well.
Speaker 1 00:25:45 We need the same thing for employees because in the pandemic and the response to the pandemic and everything else that's been going on in the workforce, the number one thing we've learned is that the employees are where the action is. They know what's going on in the company, they know if something's unsafe, they know if we have a customer service problem. They know if our process can be improved and if we're not listening to them and giving them help and also paying attention to the journeys that they're responsible for in need, we're not gonna be able to solve the ex problem. And that has become an explosive market. It's interesting to me every year these vendors are worth more money than they were the year before. You saw what happened to Qualtrics. Qualtrics was acquired for 8 billion by S A p. It was a staggering sum then they kept them around for two or three years, doubled the revenue, went public just a couple of months ago, is now worth more than 20 billion.
Speaker 1 00:26:41 Workday just acquired pecan for a very large number. I won't mention it on this webcast, but it's available if you look on my website because they wanna get in this market. Wouldn't be surprising to me to see success factors do something else now that Qualtrics is a separate company. Wouldn't be surprising to me to see Oracle dumping in this market. Wouldn't be surprising me to see ServiceNow do something in this market. Medallia is becoming a major player in this market cuz Medallia has a multi-channel listening technology that can listen to data from employees in all different parts of their employee lives like they do for customers. And Medallia can directly correlate that to employee data. So at a, at a, at a hotel chain for example, you would find out that if the cleaning people are not happy with their jobs because maybe the vacuum cleaners are old and they start complaining, you're gonna see a result in the customer experience in those hotels, they can actually close that loop.
Speaker 1 00:27:35 So this is a massive part of the market and I think you need to think of it as listening at scale and it has to be an integrated part of your HR tech strategy. Right now these tools, many of them are standalone, but with Workdays acquisitions of Pecon and more of the work that's been going on at S SAP P and Success factors, I think you're gonna see it become more part of your co part of your core ex infrastructure and part of your core ex strategy. Performance management continues to be an issue. It has simplified itself radically this year most companies reduced the number of steps and really focused on development and much less on evaluation. And we also now know that performance management has to operate in a networked way. Most of the E R P vendors have tools that do this, but I often find companies tell me that's great but we only use 'em for the end of year review.
Speaker 1 00:28:28 The ongoing activity is really in another system. And I think one of the ways to think about performance management is it really is the integration of data and activity from many things that go on at work. We just had a long talk with a company that's in the uh, health and wellness and resort business yesterday and they said our employees don't want a really detailed end of year review. They want to know from their managers and from the company based on what they've been doing week by week, month by month, what are they doing well, what are they not doing well and what could they be doing better? So we're working with them to build a framework for high performance and that company it won't be that hard for them to figure out and then they'll pull this data together and that will be their performance management system.
Speaker 1 00:29:12 And I think that's really where this is going. You know, there's some exciting companies in this market. I won't go through all of these but I would say they're all growing and they're all stepping on each other's toes. The the core performance management vendors are getting into surveys and feedback and development. The companies that do team management and OKRs are getting to end to analytics and development and more into end of year reviews. The engagement tools are getting into feedback and analytics and uh, performance reviews and then the recognition vendors are in the same market too. So uh, you probably have three or four vendors in each of these spaces and they will eventually come together. I would think about it though as an integrated set of tools that's really designed for action. Employees want to know what they can be doing better. Managers wanna know what they should be coaching employees on.
Speaker 1 00:30:02 And you and HR and the HR business partners just want information on where performance is low and where they should be spending their time to help the organization improve. The learning market is incredibly exciting and very, very healthy. In fact, they've been working on an article on the learning space and the theme of the article is that we in L and d have to be capability champions because we now have so many tools and so many technologies that there's no excuse for not having a great learning experience. We've kind of reached the point now where learning is available all over the company with tools like Degreed or EdCast or Viva Learning, it's very easy to make learning available to people, but we need to organize it into a rational place because there's a lot of content. In fact, content is not the problem. The problem really is bringing it together into a strategy because employees don't want tons and tons of things to see.
Speaker 1 00:31:01 They wanna know what do I need to learn to be good at this job? And more and more young people, if you look at the right side of this chart, they wanna know what soft skills, what bes behavioral skills. How do I learn how to become a better manager? How do I become a better teammate? What will help me get promoted? How do I become a better designer? Yes, I need technology and yes I need to know how to do AI or or coding, but those are not really where the action is. The action really now is in the power skills, the high level skills, the context skills. In our academy we have 500 learning objects and 70 or 80 hours of formal learning. And people basically say to us, I wanna take all this stuff, I wanna learn all of these things because I need to see the broad context of HR and how my role fits into everybody else's role.
Speaker 1 00:31:49 So these really behavioral skills are where the learning industry is going and the market has gotten very, very creative in providing solutions. First of all, learning in the flow of work is now possible. You've heard me probably talk about it for three or four years. I remember I really kind of dreamed about it and talked to quite a few vendors about it. It's now a reality. Uh, you can get learning in the flow of work from virtually any L X P provider, from Microsoft, from Facebook, et cetera. And it is contact sensitive and it is aware of what you're doing. The learning market is also flipped upside down. You know, it used to be that the L M S was the core center of your learning technology and then you built on top of it. It's really the opposite now. You start with the learning experience and then you build and add the learning delivery systems and the content systems to that.
Speaker 1 00:32:40 And that's why the L X P market has gotten so hot. I spend a lot of time in the L M S and learning market and I think most companies are saying how do I build an experience that will deliver the capability development, the leadership, the skills development, the technical development, the sales leadership that we need in our company and where do we put this content and how do we arrange it into a context that's easy to use? Now the vendor market is complex and confusing. It tends to fall into categories. The top are systems that really arrange and D and allow you to arrange and discover content in very creative ways. They include collaboration, they include ai, they will give you recommendations for content and you have to pick the one that you like. They will fall into the categories of an L X P or a learning delivery system or a micro-learning system.
Speaker 1 00:33:35 And most companies have more than one. As I'll show you in the middle, there are the tools for development and content management. They have not gone away. They continue to be important. But you know, we don't build long complex courses the way we used to. I was just on the phone yesterday with a a very large industrial manufacturer and they said all they're learning is self-authored by experts in the company and they just crave five minute videos and make them available to each other. So the development tools market ranges from how quickly can I get a video into the system to how do I build this complex blended system. Learning in the flow of work includes digital adoption tools. Tools like WalkMe Enable Now Microsoft Teams, EdCast has a tool that does this are also an important part of the learning market. And if you're a big company you probably need to look at those.
Speaker 1 00:34:24 And then of course the L M S and the L R s. Now I'm not gonna spend a lot of time on the L m S market. Most of you probably have an L M S, there are a lot of L m S systems and some of the smaller mid-market ones are very, very full stack systems that can really handle all of this. But another market that's really taking off is now the learning record store market. L r s. The L R s is a system that captures all of the inter activities and utilization of learning in the company and puts it in one place. And that's really important when you've got content all over the place. And so we're gonna publish a white paper in the next couple of weeks on the L m S market. I don't think you'll be surprised that those are very important technologies that will help you make sense of all this content that is not in your l m s anymore and not in one place.
Speaker 1 00:35:11 There's some disruptive vendors I talked about. Microsoft BetterUp is an example of a company that's come outta nowhere that really built an AI-based coaching platform that's now worth almost 2 billion impacting the l and d space with what they call precision learning at scale. Udemy an amazing company, self-authored content by experts like me. I actually have a course on Udemy that continues to be doing reasonably well even though I built this other academy. A really successful company. Another one that you need to look at, you need to look at vr. If you haven't looked at vr, you need to look at it. Not only are there really incredible platforms like Striver who's the market leader, but there's companies like Mersion that can actually do psychological coaching and leadership development directly through VR and lots of others. And this is becoming mainstream now that more and more of us are working from home and the headsets are becoming almost so cheap that they really can't afford not to have them.
Speaker 1 00:36:09 As far as learning industry from a technology standpoint, it is now time to think about learning data. You all have multiple learning systems. I've never talked to a company that didn't have you know, a dozen or more learning systems and you probably have more learning going on in your company than you even know you do. We just finished a big project with a company and found out they had $140 million of learning stuff that they didn't know they had. So there's a lot of work going through cleaning it up. But that has gotta be part of your job. You need to have someone in the company that is like the systems architect for learning. If you're a big company, that person will make the experience better. They'll help you select technologies, they'll build more integrated data and they'll deal with this issue of skills. And let me just take a minute on this cuz we don't have time for this in this keynote, but there's a basically a war going on for skills clouds.
Speaker 1 00:36:59 All these vendors have skills clouds, they all claim to be great, they all claim to be fast, they all claim to infer skills, but they're all different. They all use different models, they all have different taxonomies and that's just where the market is. So what you're gonna have to do is accept the fact that virtually every strategic system you buy has some form of skills engine in it. And over time you're gonna have to rationalize that stuff. A lot of big companies are making architectural decisions now where they're holding off on their L X P skills technology because they've implemented Workday for example, and they wanna make sure the Workday skills cloud works because they could put everything in Workday. Now I'm not telling you that that's necessarily gonna work in the long run, but right now you need to look at the really sophisticated vendors, Workday, eightfold to some degree gloat that have really been working on these taxonomy architectures for a long time.
Speaker 1 00:37:55 And you might find that they are a source of truth for the others. As I said, I don't have the answer for this right now, but I just want you to know this is a significant issue in the market and I wanna add that as an L and D leader for chief learning officers or heads of learning, you gotta get beyond this issue of technology and data and content and make sure you're focused on business capabilities. There is no substitution for prioritizing your learning investments based on the capabilities needed in your company. That is really where the action is. And you'll find that your learning and development department and your learning development team will adapt and IT and change its role for these needs. The wellbeing market's explosive. I'm a little short on time, let me just take one minute and explain to you that ultimately wellbeing is about performance.
Speaker 1 00:38:46 It is no longer a benefit, it is now a business need and you need to integrate wellbeing into the leadership model, the management model, and of course all the things available to employees. There's lots and lots of wellbeing vendors. We're gonna be publishing a big study on this in q2 and what we found is that they all sort of work, but you don't need all of them and you might have too many of them. In fact, the most recent data shows that 35% of payroll in the United States is now spent on non-cash benefits including this stuff. So even though these may seem like wonderful solutions, the real strategy is to build a wellbeing approach and to teach people in the company about flexibility, forgiveness, time management, taking breaks, taking vacations, shutting down the company on the weekends, not sending emails all night and doing social responsibility and giving back to society because those are the things that really create a sense of wellbeing at work.
Speaker 1 00:39:48 The people analytics market is explosively growing, it's maturing, it's become very important during covid. A really big theme on people analytics is it's really everywhere. It's become much more graphical and much more integrated. And not only are there many tools, and I'll show you a list of tools in a minute, but it really is a business consulting function. Many of you probably have small analytics teams with IO psychologists running reports, but you need to think about them as consulting groups that analyze DA data on behalf of business leaders and then give them the answers they need in dashboards and systems that are easy to use. There's some amazing technologies all of these vendors are really worth looking at. They all have quite advanced analytics solutions and I happen to know all them, but, but I think the solution is really to continue to invest in analytics and focus on analytics as a business solution, not just a technology group running reports in hr.
Speaker 1 00:40:45 And you can look at our maturity model for more help on that final point, I'm gonna wrap up. The big to me new issue is what I call the creator market of hr. If you wanna really solve the employee experience problem in your company and you've got 120 employee apps and you've got a bunch of learning apps and you've got Workday and or Oracle or SAP and a bunch of other sort of e r P type systems, we need to find a way to pull that together into an integrated experience. And the best example I can give for that is TikTok. Now you heard me talk about TikTok in the fast. Look at how fast TikTok is growing. I mean it has the potential to be four times bigger than Facebook. Why is that? Because it's a creator tool. It is so easy to author a TikTok that everybody with a creative idea, with a, who likes to dance, who has music, who wants to show off their clothes to make some point, can build a TikTok and it's great.
Speaker 1 00:41:44 And that's really where we need to go with HR Tech. We need to find and build systems for design. We need to find and build systems that allow you to customize and configure them for what your employees need. Yes, you can buy a system off the shelf that is beautiful and elegant and probably looks like something everybody will use, but a year from now you're gonna need some new things. There's gonna be a reorg, there's gonna be some new roles. So these systems have to be design oriented and they have to be more available for you to create and really edit and design and create apps around them. In fact, that's one of the reasons that I think Microsoft has a potential for being such big player because Microsoft's tools really are tools for developer, for creators, for authors, and that's really the theme. So everybody in the market, no matter what space you're in as a vendor, I recommend to you think about how your system can be opened up for reuse, for design, for analyzing and understanding what employee needs are. That's the end of my keynote. I know it is a lot of material to cover. In the next couple weeks we're gonna publish our HR technology report. You'll be able to get it as a member of our academy. And I want to thank L R P once again for the spring conference and I look forward to seeing you all in person in the fall in Vegas. Thanks a lot.
