Episode Transcript
[00:00:03] Speaker A: Good morning, everyone. This week I had a quick trip to Europe and I want to tell you about three things that happened there. First, I want to talk to you about Workday Rising a little bit. Then I want to talk to you about my meetings with a whole bunch of leaders of Talent Acquisition and Talent management and what's going on in Talent Acquisition. And then I want to talk to you about a really fascinating conversation I had with one of the most high powered chros I have ever met. I won't mention who it is yet because you'll be hearing more about it. So, first of all, Workday Rising was unfortunately postponed by a month because they had some problems. It was held in Amsterdam and I was once again really impressed with the way Workday has managed to pull together.
[00:00:52] Speaker B: All of the heterogeneous products and features.
[00:00:55] Speaker A: Of that massive system into an integrated story and an integrated solution.
[00:01:02] Speaker B: Now, you all know Workday isn't perfect.
[00:01:05] Speaker A: It doesn't do everything and it doesn't do everything exactly the way you want it to do it. And there are thousands of capabilities and configurations and features. But when you look at how the product team has integrated itself, and I'm talking about the human capital product, I'm not into the financials too much. It's really come together. Ashna Kirchner, who I spent some time with, really sees the big picture here, as do the rest of the product team. And I think their acquisition of Hired Score was extremely significant because they got a dose of AI applications and recruiting that was really badly needed. And we are announcing soon an integration with Workday with Galileo, which are going to be really jazzed about. There's some cool stuff coming there. You know, there's still a lot of competition from SAP and Oracle.
[00:01:58] Speaker B: SAP, by the way, has done extremely well.
[00:02:00] Speaker A: The new implementations of SAP are really fascinating.
[00:02:04] Speaker B: I talked with a client that's using.
[00:02:05] Speaker A: SAP's AI for personalized employee driven career planning and performance management and feedback, which I don't even know, I didn't even know they had that I think they're working with on a beta product.
So those two companies are doing extremely well in adapting to the new world of AI. That is not to say that the market has in any way collapsed. In fact, it's expanding.
[00:02:31] Speaker B: If you look at what Eightfold's doing.
[00:02:32] Speaker A: Eightfold is expanding beyond talent intelligence for recruiting into all aspects of talent management and workforce management and workforce planning and skills planning. New companies like Rejig Gloat are opening up, you know, more opportunities in the talent marketplace segment, which I'll talk about in a minute. When more and more of the talent Marketplace implementations are not just looking at skills, are not just looking at skills, but they're looking at experiences and tasks and activities. And I do believe, and I've written about this the last couple weeks, that we're going to be managing our companies, not around skills. By the way, I think skills is the wrong concept, but I know everybody likes it. I think it's really around activities or capabilities, not underlying skills.
[00:03:23] Speaker B: Underlying skills, to me, are the contributors to your capabilities.
[00:03:27] Speaker A: And so we're going to basically have task and capability management algorithms and systems embedded in the HR platforms. So that's a little bit about that. Number two, talent acquisition.
[00:03:40] Speaker B: Well, in Europe right now, and I think this is true in a lot.
[00:03:43] Speaker A: Of parts of the world, the hiring.
[00:03:45] Speaker B: Cycle has slowed down for most companies.
[00:03:49] Speaker A: And it's driven by two, really several things. One is, of course, the economy's kind of slowed down for a lot of people. But the second is we are beginning to see productivity increases from automation and.
[00:04:02] Speaker B: AI that is going to reduce the.
[00:04:04] Speaker A: Number of people we need to hire. I'm going to put a link in the webcast, in the podcast to an article about Klarna, which is a buy now, pay later company, who claims to.
[00:04:15] Speaker B: Have reduced their headcount in engineering by.
[00:04:18] Speaker A: 30% thanks to AI.
And that doesn't mean you're going to lay a bunch of people off. You might, but I don't think you have to. In fact, my thesis is that we're going to rather go the other direction as we're actually going to increase the value of the workers that we have. And that's what Klarna is doing, and.
[00:04:35] Speaker B: Create what I call super workers.
[00:04:37] Speaker A: And you're going to read all about super workers in January.
So people that do talent acquisition are kind of looking at each other and saying, well, what's next? And I would suggest the theme for talent acquisition going forward is two things. One is being more systemic, pulling together the hiring process with the internal mobility process, the job design process, the job redesign process, and the architecture of your job architecture so that you don't necessarily hire people for a job that maybe isn't the job you need in the future. And I think we're going to be doing a lot of job architecture work next year in AI. And that is, in a sense, making it more systemic. And that means taking talent acquisition out.
[00:05:22] Speaker B: Of the mode of being the Amazon.
[00:05:25] Speaker A: Fulfillment center for human bodies, which it still is in a lot of companies, by the way. Because some companies have natural high turnover, but a lot of companies don't. And really thinking about it as a growth function, in other words, what I think really the future of talent acquisition is is these are the people in the company that deal with issues of growth in a systemic way.
[00:05:49] Speaker B: So I know in our company, and.
[00:05:50] Speaker A: I'm sure this is true of all of you, when you want to grow a business area or a function or a technology or whatever it may be, you know, our traditional natural, historic approach.
[00:06:02] Speaker B: To that is, oh, let's hire more people who know how to do this.
[00:06:05] Speaker A: Or let's hire some experts or you know, maybe let's outsource this. Well, that's not as easy to do as it used to be because whatever you're trying to do, other people are trying to do the same thing. So those people are hard to hire.
[00:06:16] Speaker B: If you hire highly skilled people into your company, they may leave.
[00:06:20] Speaker A: In fact, listen to this. I forgot this statistic. Bill reminded me of the other day. We looked at all of the high tech workers with advanced technology like AI and data science that went into work into banking. This last year, 70 to 80% of them left banking within two years of their entry to banking. Not because they didn't like the industry, but they didn't like the work. There wasn't enough high tech work for them to do. They got bogged down in all the legacy systems and went back to their tech or other software company jobs. So it's not that easy to bring really highly skilled people into a company.
[00:07:01] Speaker B: When you're in an industry that might.
[00:07:03] Speaker A: Be different than the one they're in.
[00:07:04] Speaker B: On the other hand, if you think.
[00:07:06] Speaker A: About talent acquisition as a growth function, what you might say is, you know, go back to a hiring group and say, look guys, I know you need, you know, the equivalent of 10 more people.
Why don't we work with the L and D group and soup up our academy to generate more people internally? Why don't we help you search around for internal candidates who have JSON skills? Let's bring our Org design people in here and do some projects with you and see how we can make you more productive where you are. And by the way, you know, here's some AI stuff that we want to evaluate anyway. So you guys should be looking at that. And you know, what about the idea of talent density? Do you have the right peak skills and are you managing people effectively so they're not quitting or operating at a low level of performance?
[00:07:49] Speaker B: Who's going to have all those conversations.
[00:07:51] Speaker A: With A hiring manager.
[00:07:53] Speaker B: In fact, I hate the fact that.
[00:07:54] Speaker A: We call them a hiring manager. That's a very almost discriminatory term. They're not a hiring manager, they're a manager, they're a leader. They think they need to hire, but.
[00:08:05] Speaker B: You'Re just assuming they need to hire.
[00:08:06] Speaker A: Because you're the head of recruiting.
[00:08:09] Speaker B: Maybe they don't need to hire. So that's, number one is being more systemic. You know, we have the 4R model, recruit, retain, reskill, redesign.
[00:08:18] Speaker A: We've, you know, this concept of recruiters being talent advisors. And when I talked to everybody about that, and this was about 12 or 15 different companies, you know, then there's the issue of how do we upskill the talent acquisition people? How do we.
[00:08:30] Speaker B: What's the new role of the recruiter?
[00:08:32] Speaker A: I mean, you're going to have to deal with this in 2025 because more.
[00:08:36] Speaker B: Of these new AI agents are going.
[00:08:38] Speaker A: To take over the tactical stuff that recruiters do. So that's kind of number one. Number two is something that we're going to call precision recruiting or precision talent acquisition. Now, other than high volume, high turnover jobs, most of the roles you're recruiting for are specialized in the sense that they have functional skills, human skills, you know, maybe professional or industry skills that you need to find in the market. And sometimes you want entry level people out of college, and sometimes you want mid level people, and sometimes you want senior executives and directors and so forth.
The traditional hiring process, which we've done for as long as I've been involved in hr, is a little bit of.
[00:09:29] Speaker B: A spray and pray approach.
[00:09:31] Speaker A: I mean, that sounds really simple and kind of dumb, but it is what happens. You, as I talked about in last week's podcast, you know, you create this job description. Hopefully you do some good analysis before you create it, but sometimes you don't. You put it up there and you.
[00:09:45] Speaker B: Kind of see what happens.
[00:09:46] Speaker A: You kind of. It's kind of like casting bait into the water and you kind of see if there's any fish and if the.
[00:09:52] Speaker B: Wrong kind of fish are eating your.
[00:09:53] Speaker A: Bait, you change the bait.
[00:09:55] Speaker B: Or you go to a new part of the pond and maybe you change.
[00:09:57] Speaker A: The size of the hook. Right? I mean, it's very analogous to fishing. Well, I don't think that's going to work in a tight labor market where we have very specialized skills and internal mobility going on. I think we're going to have to be much more specific now. We're doing a lot of work with this really fantastic company called Drop D R A U P and these guys are data people. They came from Talent Neuron and they've built a really, really fantastic global data set of skills, capabilities, workloads, economic data, company specific data, all sorts of things you need for talent acquisition.
[00:10:36] Speaker B: And what they've shown us, and I.
[00:10:38] Speaker A: Think they can show you, and I think you kind of understand this, is that in some markets the ability to.
[00:10:44] Speaker B: Hire people is dominated by the employers.
[00:10:47] Speaker A: That are in those markets. If you go to Seattle, you're basically fishing in a pond with Microsoft and Amazon. There are other tech companies in Seattle, there's Zillow, there's others. But for the most part you're going to hire people that have worked in those two companies or perhaps want to work in those two companies. So you know, if you're going to do precision hiring in Seattle, you need to know exactly what you're going to offer people that's different from those two companies and maybe they're going to come work for you and then go back.
[00:11:16] Speaker B: To those two companies.
[00:11:17] Speaker A: So you have an issue of location specific domains. Second part of precision hiring is swapping.
[00:11:26] Speaker B: When you hire, as I talked about.
[00:11:28] Speaker A: Earlier, when you hire somebody into your company that comes from a different industry or a different functional domain, they may only stay with you for two years. We did a study several years ago with General Assembly, I believe was the sponsor. But we talked to four or five large banks, financial services companies, about hiring data scientists and at that time was really hard to hire them.
And what we found was that because.
[00:11:54] Speaker B: Of the turnover rate and the high.
[00:11:56] Speaker A: Demand for data scientists, it was six times higher cost to get a data scientist from the outside than it was.
[00:12:03] Speaker B: To develop one internally. And it turned out they had a.
[00:12:05] Speaker A: Lot of data people and analytics and.
[00:12:07] Speaker B: Statistics people in the company that could.
[00:12:09] Speaker A: Learn how to do this. So they built an academy for it internally.
So you have the issue of swapping when people come in and then they leave. One of the big banks I met with a couple weeks ago told me that one of their challenges is high turnover amongst college hires admissions. They hire very, you know, highly ambitious.
[00:12:28] Speaker B: People out of college to come work.
[00:12:29] Speaker A: In the investment bank and a lot of them don't stay. And that's a not a hiring problem.
[00:12:35] Speaker B: That'S a talent problem of what are.
[00:12:37] Speaker A: We doing with them, are we developing them, are we moving them? So there's this issue of swapping. Third issue is the skills adjacency issue.
[00:12:46] Speaker B: Maybe we can't find the person we.
[00:12:49] Speaker A: Need because they're too difficult to hire, but maybe there's somebody in a related role that would be a really good.
[00:12:57] Speaker B: Fit for us if we develop them.
[00:12:59] Speaker A: Can we. Can we find that adjacency? That's a form of precision talent acquisition. And then the fourth, which I talked a lot about with everybody and they all agreed, was the soft skills or cultural hire, where maybe we don't really need the highly tuned professional or technical skills at a, you know, 100% degree, but we really need the culture fit.
[00:13:24] Speaker B: And many, many companies do this.
[00:13:26] Speaker A: But I don't think people think about it all the time.
That all the research I've done and all the companies I've met with over the years, the people that are the.
[00:13:35] Speaker B: Most successful when you bring them in.
[00:13:36] Speaker A: From the outside are actually people that.
[00:13:39] Speaker B: Want to be part of the company for cultural mission, purpose, or other reasons.
[00:13:44] Speaker A: And they fit like a puzzle piece into a jigsaw puzzle. And that way they learn and absorb the company's processes very, very fast. That's not a skill. You can't measure that through a skills assessment. We have to measure that through other things. So this idea of precision talent acquisition or precision hiring is something we're going to build out a lot more information for you on, because I think that's where we're going, especially as our companies become more focused on internal productivity and less focused on just churning through people.
[00:14:20] Speaker B: Okay, so let me move to the third point.
[00:14:23] Speaker A: I don't want to talk about this company yet because we're going to talk to you a lot more about them in the future. But this is a company that's a financial services company, very global.
[00:14:30] Speaker B: They do wealth management and global banking.
[00:14:33] Speaker A: All over the world. And the Chro, there's two parts to this story. First, I want to tell you about the company, but I want to tell you about her.
[00:14:40] Speaker B: The company just had an incredibly good quarter.
[00:14:43] Speaker A: It's extremely financially successful. Profits are up. They're very focused on their target market. And the woman who's now the Chro is also the head of strategy, the head of marketing, the head of supply chain, and the head of a couple of other things. I forgot what. And I asked her, you know, I.
[00:15:03] Speaker B: Had lunch with her and I was.
[00:15:04] Speaker A: Asking her, well, how did this all come to be? And she said, you know, I started in hr, but I really wanted to do strategic things. So I worked in strategic planning at another company. And as I learned more about the relationship between strategic planning and hr, I realized that there's a massive connection here that is lost in most companies.
[00:15:24] Speaker B: Most companies, by the way, Santander is.
[00:15:26] Speaker A: Trying to do the same thing. I met with them when I was in the uk. The strategic workforce planning is usually looked at as a headcount exercise, but it actually is much, much more complex and much more strategic because if you know.
[00:15:39] Speaker B: Where the company's going, in her case.
[00:15:41] Speaker A: The bank and you know what business areas are the most profitable and which ones we want to grow the fastest and which ones we might want to rationalize back then. Strategic workforce planning is about looking for the skills, people, geographies, roles in those strategic areas and HR should be focused on that. But if they're not getting that signal or they're not involved in that process, they don't know. They're just getting a bunch of headcount to hire. So they can't possibly be that strategically aligned with the company's growth strategy. And I think a lot of companies don't even have a strategic workforce plan that's this sophisticated. Well, she's developed that because she's a business strategy person first, HR person second, but she knows a lot about HR2.
[00:16:31] Speaker B: And so what they're doing in this.
[00:16:32] Speaker A: Particular bank and she's going to speak at our conference and we're going to talk a lot more about what she's doing as we get further along here is they're building a diamond shaped talent model. Diamond meaning narrow at the top, wide at the middle, narrow at the bottom. The meaning of that is that there's high value roles in management and leadership in wealth management and in relationship banking and other banking value add jobs. But then the operational stuff at the bottom is largely either outsourced or contracted or done through gig work.
[00:17:08] Speaker B: So you don't hire a whole pyramid.
[00:17:10] Speaker A: Of people at the bottom you rationalize that to different channels.
[00:17:15] Speaker B: But in the middle you really focus.
[00:17:17] Speaker A: A lot of your energies. And so what she's done through her combined role is built a. And by the way, they're doing a lot of systemic hr. I mean they're really, you know, kind of getting this systemic HR issue is.
[00:17:30] Speaker B: They'Re really focusing their HR investments on that middle of the pyramid, of course, the top two, but the middle of.
[00:17:36] Speaker A: The diamond to make sure they're getting those functional jobs exactly when and where.
[00:17:41] Speaker B: And how they need them. And she knows what those functional jobs.
[00:17:44] Speaker A: Are because her team has worked with the business to define the 20 or.
[00:17:49] Speaker B: 30 job roles that are needed in.
[00:17:51] Speaker A: Relationship banking in great detail with career paths so that when somebody comes in, they don't just get a job, they know where they're going. So you can see that in this bank and this particular company, HR and strategic planning and operations are very, very connected. Now I think she's a very unique person because she's got these multidimensional skills and she has the ambition and energy to do this. But my challenge to all of you.
[00:18:19] Speaker B: As we do more of our chro research and Kathy and I are going.
[00:18:22] Speaker A: To be, you know, by the way, you're going to see a big survey from us early in the year on chros that I want you guys to take is that this is where the chro role is, role is going.
I've been struggling with our research to.
[00:18:36] Speaker B: Figure out what happens to chros once they become chros.
[00:18:39] Speaker A: Most of them don't know what to do next.
[00:18:41] Speaker B: They take another job as a different.
[00:18:43] Speaker A: Chro and they flop, you know, flip around from company to company as the chro and. And then they don't know what to do and they kind of go into retirement or they go on a board or they become a consultant, become like me.
Well, I don't think that's actually the right path. I think for many of you who.
[00:19:00] Speaker B: Want to be more business centric and want to continue to grow in your.
[00:19:03] Speaker A: Careers, you should be thinking about how the systemic HR function. And it has to be systemic.
[00:19:09] Speaker B: By the way, if you're at level.
[00:19:10] Speaker A: One or level two in hr, you can't do this. You've got to operate. HR in a more systemic way should.
[00:19:16] Speaker B: Be much more integrated into the business planning and business strategy process of the company. And this next year, as this is.
[00:19:22] Speaker A: Going to become even more urgent, because I think a lot of companies are going to do what Klarna is going to do. They're going to be bringing in more AI, automating, more routine work, changing the.
[00:19:33] Speaker B: Profile of the workforce, moving people from low value to high value jobs, creating.
[00:19:38] Speaker A: Super workers and super worker career paths. And you want to be a part of that. You don't want to be waiting for people to tell you what to do.
[00:19:45] Speaker B: And then saying we're here to help.
[00:19:47] Speaker A: The worst thing you want to do is we're HR and we're here to help. You want to be involved in that stuff.
[00:19:54] Speaker B: And I think every one of you is capable of that if you align.
[00:19:58] Speaker A: Yourself effectively with the business planning people.
[00:20:01] Speaker B: In your own company.
[00:20:02] Speaker A: And that gets to the issue of what people analytics does and what TA does and what L and D does and everybody else.
[00:20:07] Speaker B: Right.
[00:20:07] Speaker A: Okay, that's my 20 minutes. Let me wrap up with a couple of more thoughts.
[00:20:11] Speaker B: We're going to be launching this next.
[00:20:13] Speaker A: Week where you're going to get a nice holiday message from us and thank you for everything that you've done this year.
[00:20:18] Speaker B: I am personally extremely thankful for the.
[00:20:21] Speaker A: Generosity of every single one of you, of taking time with us, of talking to us, of joining us, of joining the Academy using Galileo, et cetera. You're going to see a really cool thing called the Hundred Use Cases for Galileo, which is going to really be educational for you on AI. We're going to send you some really cool information that we put together on the super workers that's going to come out in January. And we're doing a lot of planning right now for Irresistible next May. Those of you that want to come, you can sign up now.
[00:20:53] Speaker B: It's going to fill up. I guarantee you.
[00:20:55] Speaker A: It filled up last year. It'll probably fill up even earlier this year.
[00:20:58] Speaker B: And then we have a whole bunch of new content and features for Galileo.
[00:21:02] Speaker A: That are coming out soon. I think, I don't think everybody understands that Galileo is not just something we're excited about. It's perhaps the most exciting thing that.
[00:21:14] Speaker B: I've done or we've done ever.
[00:21:16] Speaker A: Because Galileo gives you access to the entire corpus of research we've ever done at your fingertips.
[00:21:21] Speaker B: Generative AI to formulate answers to questions.
[00:21:25] Speaker A: And create content of any type. Third party trusted content from some amazing companies that you can't get that content from on your own. And a whole bunch of professional development tools built into the templates and the Galileo Success center and I try to tell people, look, if you want to do more work with us, why don't.
[00:21:43] Speaker B: You just get your hands on Galileo.
[00:21:45] Speaker A: First and start asking Galileo questions and then we'll help you as part of that process. We're also working on a whole bunch of other kind of manifestations of Galileo. But the other way I want you to think about it is it's not.
[00:21:58] Speaker B: Just an individual tool for you as.
[00:21:59] Speaker A: An HR person or a recruiter or an L and D person.
[00:22:03] Speaker B: It's a library of information for you as a consultant. All of our vendor research is in there.
[00:22:08] Speaker A: So if you're an HR consultant, you're going to love it. But it's also a glo, an enterprise.
[00:22:13] Speaker B: Management tool for the HR function because you can set up separate collections of.
[00:22:18] Speaker A: Content and create a Galileo assistant for all of your recruiters, Galileo assistant for all your business partners, Galileo assistant for all your call center agents, customized with special data and prompts and functionality for them. So it's a very flexible system. Anyway, you'll keep hearing about that. I'm not going to stop talking about it. We're going to do some whole bunch of new announcements in Q1 and Q2. So I'm going to do at least one more podcast before the end of the year. But I wanted to fill you in on this idea of precision talent acquisition, the future of the Chro and systemic hr, and why I think thinking about your workforce as super workers is going to be really, really important. And we'll continue to be beating that drum through next year. Have a great weekend, everybody. Talk to you all next week.
