Episode Transcript
Speaker 1 00:00:08 It's Josh be home from in the HR technology conference. Didn't get enough sleep, but lots of, lots of things to talk about. So I'm gonna talk about the HR tech conference. I'm gonna talk about success connect. I'm gonna talk about our GWI launch. What's going on in healthcare, the four RS, a little bit on the economy, and then a little bit about my upcoming book. So first HR tech, there were two conferences in Vegas and also the Workday rising conferences going on at the same time. The success connect conference success factors introduced what I believe is the biggest release since they bought the company. And it's, doesn't really have a name <laugh>, it's called the second half, 2022 release, but whatever it includes, the introduction of the opportunity marketplace, the skills ontology a really exciting module on dynamic teams to create teams centric work and embrace that and, and monitor that and create goals and look at skills amongst teams in the success factors, infrastructure, and the introduction of what they call the whole person model, which is the model for what you want out of life and work and your desires and your interests, not just your skills and the reason these are important modules is that they're not just features they're infrastructure.
Speaker 1 00:01:23 They're built into the architecture of both the SAP people model and success factors core. So Workday has this talent marketplace and lots of other companies have introduced these, but to some degree, those are features not entire architectures. And so what success factors is doing, and then next year, by the way, they're gonna introduce a bunch of new learning technology is they're really redesigning from the ground up what a talent management system does. And I give them a lot of credit for this. They're really doing it. So as you get your hands on this later this year and into next year, you're gonna see a totally different experience in success factors. And I think it puts them into least appear if not the lead in the feature and architecture comparison against Workday and Oracle. Now Workday of course, is doing great. They've been growing at 25 to 30% per year continuously, by the way, Oracle also had a really great quarter in Oracle HCM growing around the same rate.
Speaker 1 00:02:21 Success factors has the largest number of users, 73 million users workdays around 60 million and then Oracles somewhat below that I think probably significantly below that, but they don't wanna disclose it. So I can't tell you what it is. Workday introduced a very important capability, which is the opening up of the skills cloud. You know, the skills cloud from Workday was one of the first skills engines in the market, but it hasn't been as useful as some of the newer ones because the newer ones are really much more data enabled and data rich. Well, Workday has now come to the understanding, which we all know that this has to be a completely open interoperable system because as I talked about in the keynote skills, engines exist in recruiting, in mobility, in learning and even in pay and will be used for other things. And so there will be ontologies and industry specific skills, domains, and technology skills domains in every industry that will be unique.
Speaker 1 00:03:17 And there's no way one company will have all this. So this is really a highly interoperable system. And by the way, it's pretty high on where success factors is going. And they're probably gonna see a lot of momentum as a result of this. Now, in terms of the total conference, you know, I gave a very long keynote. It was more than an hour and I covered a lot and our research members can get access to the slides though. Please join as a corporation, our research membership, and we'll give you all this stuff. But basically the high level is that next gen eight HCM is here. The payroll vendors are all exploding with growth. ADP is growing at two to three times the rate of the S and P 500. It's one of the most successful stocks in the stock exchange, by the way, as is Paycom Paycor.
Speaker 1 00:04:02 All of the companies in that market have just been exploding with growth and market cap because, you know, HR is a great space to be, and it is recession proof in the learning industry. I talked about all the different things going on. Cornerstone has been on a tear buying companies. Greed is reinventing itself at the moment to respond to the acquisition of EdCast by corners. All of the content providers are doing well. You to me had a 60% year over year growth. I think they're an exceptionally well run company and really an interesting company in the content market. LinkedIn learning grew it 30 to 35%. I'll talk about Microsoft in a minute. Skillsoft is doing really well and there's lots and lots of other content providers. Our academy is doing really well. So the content industry has been doing quite well in the area of AI.
Speaker 1 00:04:49 I spent a lot of time talking about skills technology and skills engines. And essentially what I was explaining to the audience is that the skills tech has been very disappointing, frankly, to most companies. It hasn't done nearly what we had hoped and because it's a very, very complex problem and it isn't gonna be solved by one piece of software. And there's essentially three families of skills technologies, there's skills engines embedded into an app. So Beamery or eightfold or cornerstone or degreed, or, you know, any app, including recruiting, learning, mobility, gloat have skills engines in them. The second is skills, middleware companies like tech Wolf and others that are trying to build interoperability software to in first skills, across different apps and import and export data between apps retrain.ai as another one. I think those guys are gonna have a little bit of a harder time.
Speaker 1 00:05:42 I had a big debate with one of them about it because they have to come big enough that they're relevant to these other big players, because everybody of course wants to be the system of record for this, which is very, very difficult when you have so many different applications and use cases of the AI. And the third is what I call the talent intelligence platforms. And these are the ones that I think are the most interesting. These are the companies that are really data companies, not software companies, eightfold B Marie. You could argue that probably sky high fits here. These are companies that have amassed a huge amount of data, and they're using their AI to infer skills and adjacent skills and career pathways and job clusters. And we are working with eightfold. So I just happen to know that one very, very well. So anyway, take a look at, at this space and, and join our membership, or just call us if you want to talk about it.
Speaker 1 00:06:33 It's, it's a very big, rapidly changing space in the recruiting market. Lots of M and a been going on tric was acquired. Lever was acquired. The market has done very well over the years. It's a lot of innovation. Interview intelligence is a new category in this market. The assessment market is still growing like crazier, lots of interesting things going on there. And I think it's the space where AI has truly proven itself to be a big help in HR tech. And it is starting to converge with the talent marketplace space because in a labor market where like we're in today, there's only so many people you can recruit. And so you have to look at internal candidates as a strategic part of your talent acquisition, which gets me to the talent marketplace space, where we have vendors like gloat and fuel 50. And of course, Workday and most of the other companies are adding features.
Speaker 1 00:07:25 The conclusion I've come to about the talent marketplace is that this is a very, very significant platform. And it is a platform, not a set of features. This is not simply opening up the back end of your ATS and showing employees what jobs is available. It's much more than that. This is the equivalent of Airbnb competing with Marriott. As I talked to a bunch of clients about when I was there, if you think all of the talent decisions should be made from the top down, then you're operating in an old management philosophy. To be honest, there's no way you can make decisions fast enough, or even have the awareness to do that. So what the talent marketplace really does is it democratizes the decisions on who's gonna do what and where, and in what form, so that a manager or project leader, a team leader, or an executive can say, we wanna start doing X.
Speaker 1 00:08:16 We wanna go after this market, this customer base, this geography, this product segment, let's get a bunch of people to work on this, by the way, HR, do you know who they are? No. It depends on what, who has the skills, who has the interest, who has the availability, who has the passion for this. That's what the talent marketplace is all about. It's about really taking this agile organization that we've landed in and really making it smarter and faster and better. And we're gonna do a bunch of research on this starting this fall that will introduce you next year. We're gonna try to prove to you that this is a more productive way to run a company. So stay tuned for that. And so that's a little bit of an overview on HR tech and we are very top of a lot of this. So if you're a vendor, make sure you're talking to us.
Speaker 1 00:09:01 So you're in our directory and we'll continue to be writing articles about it. And as I said, corporate members can get into much more detail here. The next topic I wanna talk a little bit about is the GWI. The GWI is a lot of you've read about is the global workforce intelligence project, which is our initiative to industry by industry, give you the information you need to understand the most urgent and critical talent skills, career, job model, and architectures in each industry. And this is turning out to be the most fascinating and probably high value research I have ever done in my career. We launched the healthcare study this week and Greg till the C HRO of Providence. Who's one of the smartest guys I've met was there with us. And as you can see from the research and read on our website, this is the largest employer in the United States.
Speaker 1 00:09:53 Almost 16% of Americans work in healthcare. It is under enormous stress. Healthcare providers do not have the op really authority to not deliver service. So they have to deliver service regardless of whether they can hire enough people. And so they tend to resort to contingent work and gig work and part-time work and all sorts of things to fill the gap. And there will be a shortage of 2.1 million clinical professionals in the United States. By the end of 2025, we have done the analysis of that. We used the eightfold 2 billion person data set to figure this out. We did time series analysis, backwards and forwards to figure this out. And we identified exactly the jobs and the roles and the skills that will be in demand. And what we concluded as we talked about at the conference was that you will not be able to recruit your way out of this problem, by the way, this is true in every industry we're looking at recruiting is not enough.
Speaker 1 00:10:47 You have to do what we call the four RS recruit, retain. Re-skill redesign all in an integrated way because the gaps and the transformations going on in work are happening so fast. And the labor market is so constrained and not growing fast enough that you, as a company have to do all four of those things in an orchestrated way. And that's what the GWI is all about is giving you the information, how to do that. The healthcare research is fascinating. Join our membership if you'd like to get the details, but you can see the infographic and some great information about it on our website. The next study we're gonna be launching is banking. That'll be out before the end of the year, early next year, we're gonna do consumer package goods, then we're gonna do pharma. And then we're probably gonna do energy. And what we're basically doing for you is we're becoming a vertical industry research company.
Speaker 1 00:11:39 Each one of our analysts are specializing in an industry. And so we're gonna be in a position to not only talk to you about HR and all the things that make HR better, but also in your industry. What are the specific initiatives and innovations and creative ideas that, that you should be thinking about? And if you're in the healthcare industry, please contact us. We have a special healthcare CHRO forum going on, and a whole series of big reset activities going on in healthcare right now to be followed with the other industries coming. The other thing I wanted to say about the four R model is it's very, very repeatable on Friday. I talked to a friend of mine who works at a large semiconductor company, and he's using the four R model to plan and predict and understand the future skills gaps in the semiconductor industry.
Speaker 1 00:12:27 And as you know, the United States just allocated something like 50 billion to build fabs and do research all over semiconductors. But there aren't enough people. There aren't enough production engineers. There aren't enough scientists. There aren't enough operations people. So we have that data too, and we're gonna be working with them and that consortium to help them identify the gaps and what they can do to fill them. One of the themes that comes out of all of these studies is the fact that the most powerful tool you actually have to fill these talent gaps is the redesign tool of redesigning the work. In the case of healthcare. There's this idea of working at the top of your license, which means if you're a licensed nurse, you shouldn't be sweeping the floors or taking out the trash or scheduling people or filling out forms. So all of us have the opportunity to go through the org design work that we've been showing you and figure out how to decompose your jobs into tasks and delegate them to the right technology or the right people.
Speaker 1 00:13:25 So you don't have people wasting time on things that they're overqualified for. And that's a massive opportunity all over business, everywhere I've ever worked, that we're gonna all learn how to do better in the next couple years. Okay. So that's a little bit about that. The economy, I'm not an economist, but I think I'm pretty good at seeing what's going on. And as many of you know, I have been saying for months that there is no recession. I don't think there's gonna be a recession. Yes. We're gonna have value interest rates. Yes. We've gotta get this inflation under control, but the demand in the economy is high. Every company we talk to is growing, yes, the investment banks can't hire as many MBAs because there's no companies going public, but that's a tiny, tiny, tiny number of people in the workforce. And we're gonna have an economy that's gonna be very different in the coming years.
Speaker 1 00:14:16 I'm working on a large presentation for a speech I'm giving in Europe in the fall. So I'm not gonna spill the beans yet, but I have some things I wanna share with you on the economy. And I think what we're witnessing is a pretty big transformation that happened during the pandemic that we're now seeing the evidence of in the unemployment numbers and the job numbers. So anyway, call me if you wanna talk about it, I'm gonna be talking to some economists about it, but I think we're gonna have a very interesting time. And what's really coming out of the work environment that we're in is the fact that the workers are now in charge. And I don't mean that in a communist way. I mean that employees, the workforce managers, professionals, they have more authority and power in many cases than employers. That's an odd shift after so many years, hundreds of years where the employers were the bosses, but it's happened.
Speaker 1 00:15:10 And I know employees who are laid off don't feel that way. And I know how difficult it can be when you have to change jobs. But, but as a whole, the big shift that's been taking place following the big reset from the pandemic is the need to think about employees as an asset. So let me talk about my book. We printed Workday very, very kindly purchased 1500 copies of my book. We gave away 900 at the HR tech conference. I signed a lot of them, and this is a book I've been working on for seven years. The name of the book is irresistible. It's available on October 25th. And it's all about this transformation that's going on in business that we now see that the employees are the most valuable asset you have. Now, the problem we all face is that all of our financial systems, financial models, P and L statements basically look at labor as a cost.
Speaker 1 00:16:07 And so if labor is a cost like real estate or inventory, you're gonna minimize the cost. And when you look at something like training or mobility or benefits, you're not gonna wanna spend a lot of money on that because the whole business system works against it. But in reality, in an environment like we're in today, where most companies are in the services industry, virtually every company's becoming a professional services like company, the workforce is in great demand. Skills are changing faster than ever. You have to think about the workforce as an asset because unlike equipment or inventory that depreciates over time, human beings appreciate when you invest in a person. When you give that person training, when you get them more familiar with your business, when you get them connected to customers, they become more and more and more valuable. And you have to keep working at making sure that they stay valuable in your company.
Speaker 1 00:17:06 And they don't feel left out. That is what is all about building an irresistible organization. And what I did for many years prior to Deloitte and at Deloitte is I studied data from hundreds and hundreds of companies. And of course I was having interviews and meetings with many of them. And I found that there are companies that understand this philosophy and these companies far outperform their peers over long periods of time. During short periods of time, companies can do great and just ignore their workforce entirely and just treat them like dirt. But over a long period of time during the business cycle change, during a technology change during an economic disruption, during a competitive disruption, those companies that are not taking care of their people always always fall behind. So this idea of building an irresistible organization is one of the most sustainable enduring, predictable things you can do as a company.
Speaker 1 00:18:01 Now, those of you in HR know this, but what I really did in this book is I really took this apart. And I went through hundreds of examples, what I call the seven secrets, and I put it in print and through my work as an analyst and as a consultant and a Deloitte and other places, I've tried to put this into a digestible form. And that's what this book is all about. You'll be hearing more about it. We have a website on the book. We're gonna have podcasts where I interview C level executives about this topic and the seven different principles. So I encourage you to check it out and buy it. If you buy it the first week, it comes out. It helps me with the best seller lists, but I just encourage you to look at it. These are things that sound simple, but they're not.
Speaker 1 00:18:44 And so what I go through in the book is these seven ideas, all of which are proven in organizations and the implications for you as a company, as an HR person, as a leader. So that's a lot to talk about in one week, but I would say it kind of left the week, really inspired. The pandemic is kind of ending. People are out and about. It was really fantastic to be face to face with so many people at these conferences, the tech industry is doing great. I know we're gonna be dealing with high interest rates. I know the stock market is frustrating, but you know, we've gotta work off this 14 years of zero interest rates. You know, as, as bill was saying to me the other day, it's like, when you take a dose of penicillin, you can't take half a dose. You gotta take the whole dose.
Speaker 1 00:19:28 And the fed hasn't given us the whole dose yet. And so we're gonna have to just painfully work through the slowdown of this zero interest rate environment and all of the asset inflation that was created that probably will take until next year, maybe the middle of next year. So the, the economy's gonna be a little bit weird, but you know what, doesn't matter. People are more important than ever. So everything we do in HR is just as important, if not more important than it ever was before. Take a look at the GWI materials we launched this week and call me if you have any questions. And if you're at the HR tech conference, I really enjoyed meeting you. I met hundreds and hundreds of people. There are a lot of my old friends and let's all have a wonderful fall. And then of course, a fantastic 2023 signing off for now.
