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HR Technology Column

What's Still Job No. 1 for HR?

Talent management suite vendor Peopleclick Authoria held its first joint user conference recently. In addition to the usual talk of integration, social media and workforce planning common to such events, there was also attention paid to HR's Job No. 1: compliance!

Monday, October 18, 2010
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Attending the first joint user conference since Bedford Funding bought talent-management vendors Peopleclick and Authoria, reminded me that HR's Job No. 1 remains compliance.

Oh, HR loves to talk endlessly (for the last seven years now) about talent management, and more recently about social media and workforce analytics -- all of which are covered nicely in this trip report about the company's recent Global Customer Conference by Gartner's Jim Holincheck.

Most notable was CEO Joe Licata's disclosure that the company will spend $23.4 million in R&D this year, a figure close to SuccessFactors' expenditure last year. It is currently servicing 2,400 clients in 200 countries and carrying no debt.

Never forgotten -- but rarely on center stage -- is the company's Workforce Compliance and Diversity Division, which helps 37 of the Fortune 100 deal with the U.S. Equal Employment Opportunity Commission and now more often with the OFCCP (Office of Federal Contract Compliance Programs).

The latter is a part of the Department of Labor -- in the spotlight a few years back for its new rules about online recruiting and candidates -- but which also oversees every company with $50,000 in federal contracts and more than 50 employees. In short, just about every company with a federal contract.

Peopleclick bought the major part of the division in 2001, when it was called Criterion, started in the late '70s by a labor economist, and already known then as being the gold standard for this kind of compliance work.

About 80 percent of larger customers (and there are many, including 115 of the Fortune 500) use it like a service bureau. HR executives figuratively sweep the papers off their desk, send them to the division, which cranks out the reports using their CAAMS software, and the federal agencies say, "Oh, these are from the old Criterion, they must be right." Stamp!

Hyperbolic, certainly, but not really so far from the truth.

A personal note and one reason for my interest: One of my first vendor briefings in 1989 was from then-independent Criterion, in the person of Jeff Comport, who later ran Integral's client/server HRMS, became Gartner's leading enterprise software analyst (including HR) for years and is now the top product strategist for all of Lawson's ERP software.

SVP Randy Jesberg, general manager of the division, reminded me that after acquiring Criterion, Peopleclick added Optimum and Peterson Research Institute, which gave it a small company capacity, as well as legal advice and expert witness capabilities.

The desktop software product, AA Planner, is now used by about 450 of the division's 1,200 customers.

Unlike the Internal Revenue Service, which has long been a paper tiger announcing huge new audit efforts every year around April 10, Jesberg says, the OFCCP is actually doing it, increasing its onsite audits and examining not just a company's efforts in hiring but what it's actually producing. (So, now you know.)

Separately, Peopleclick Authoria announced that it would be the first software company to embed Brad Smart's "Topgrading" principles into its software.

Topgrading is a methodology of incredibly rigorous information gathering (16 questions about each of a candidate's previous jobs!), candidate arranged reference calls (four bosses, two peers and two subordinates for senior positions), and then tandem interviewing (two at the same time for senior positions). Those are just three steps of a 12-step program.

Discussions of it always center around the methodology's success in identifying "A Players" for organizations, which resurfaces a decades-old dichotomy between CEOs and HR executives, first pointed out by recruiting guru John Sullivan, who also presented at the user conference.

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Namely, that HR tends to spend most of its time trying to raise up the bottom 10 percent of performers, while the CEO cares most about aiding the efforts of the top 10 percent performers.

Topgrading could offer another route into the C-suite with software promising to meet those needs, something that Peopleclick Authoria and all its talent management suite competitors are desperately seeking.

Near the end of the conference, I spoke with Gordon J. Fyfe, president of the Investissements PSP in Toronto, the firm managing the Canadian pension fund backing Charles Jones, head of Bedford Funding, the private-equity firm that owns Peopleclick Authoria.

Fyfe pointed out his firm's enviable but difficult position: PSP has already invested $50 billion to pay for the pensions of every federal employee in Canada. And each year it receives $5 billion more and has to find a money-making place to put it!

His point was that the last thing PSP wants is to get back the $220 million (or potentially more) invested in Peopleclick Authoria by flipping the company to another owner. Fyfe said PSP was a patient investor of the old school.

I was glad to hear it, and he confirmed Jones is expected to acquire other companies to add to Peopleclick Authoria, without hopefully adding another name to it.

HR Technology Columnist Bill Kutik is co-chairman of the 13th Annual HR Technology┬« Conference & Exposition, recently held in Chicago. Some of the 80 blogs about the event are posted on the website. You can comment on this column at the Conference LinkedIn Group , which does not require prior attendance to join. He is also host of The Bill Kutik Radio Show┬«. He can be reached at bkutik@earthlink.net .  

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