HR Tech Gets Smarter
Thousands of attendees at this year's HR Tech Conference got a good look at the future of the human resource function.
By Andrew R. McIlvaine, David Shadovitz and Michelle V. Rafter
If you weren't aware that artificial intelligence and machine learning are having a major impact on the human resource profession, then attending this year's HR Technology Conference and Exposition® at the Venetian in Las Vegas would certainly have enlightened you to this new reality.
A decent number of the roughly 440 vendors on the exposition floor specialize in harnessing AI, using some of the estimated $5.5 billion of venture-capital funds that have been poured into HR tech since 2014 to mobilize chatbots that will walk candidates through the initial stages of applying for a job and keep them informed on their application's progress, or use machine learning to help companies identify the sources that consistently generate great hires. These and other innovative new tools can take much of the busywork out of process-laden functions such as recruiting, freeing up HR staff to do more important things. This, of course, will cause some disruption: For example, will HR staffers have what it takes to step up and actually do those more important things?
One clearly important thing -- and one that HR does not yet appear to be actively involved in -- is the task of preparing employees to work alongside robots and AI in this new world of work. Only 35 percent of the companies that are doing this report that HR is actively involved in the effort, noted Bersin by Deloitte's Principal Josh Bersin in his closing keynote, citing data from Deloitte's Global Human Capital Trends report.
There are, of course, plenty of opportunities for HR to get involved in helping their organizations prepare for this exciting yet unpredictable future, as outlined by Laszlo Bock, Google's former chief people officer, during his opening keynote, which outlined six things HR can do to help their companies be more innovative and productive.
Of course, no one could overlook the horrific tragedy that occurred a week prior to the conference just a few miles down on the Las Vegas Strip, when a gunman opened fire on a crowd of concert-goers, killing nearly 60 people and wounding 500 more. Officials credited ordinary bystanders with helping to keep casualty numbers down by stepping forward while the shooting was still going on to move wounded victims to safety and treating their life-threatening injuries until they could be transported to local hospitals. It was a profound reminder that in the face of horror, ordinary people can and typically do rise to the occasion with extraordinary bravery and grace.
Ed Chase, vice president of LRP Conferences, commemorated the moment during the opening day of the event, announcing that parent company LRP Publications had donated $10,000 to a fund for the victims and their families.
What follows are the highlights of this year's event, which featured more than 60 speakers.
Six Principles for Innovation
What's the secret to having an organization filled with productive and innovative employees? Is it creating a "skunkworks" facility in which workers can innovate to their hearts' content? What about giving lots of inspirational speeches and having outlandishly ambitious "moonshot" goals? Showering your top performers with bonuses and public praise so that others are motivated to similar levels of achievement?
Absolutely not -- these and other approaches often don't work and can actually be counterproductive, said former Google People Operations leader Laszlo Bock during his opening keynote address at the HR Tech Conference in Las Vegas, titled "From Moonshots to Roofshots: What Everyone Gets Wrong About Innovation and How to Get It Right."
Instead, a much better approach includes having a mission, trusting your employees and "massively reducing fear," Bock told the overflow crowd in the main ballroom at The Venetian Resort and Casino.
"There are some underlying psychological and environmental things that need to happen in order to drive innovation," he said.
Bock, who now leads a start-up firm called Humu, based much of his talk on what he learned at Google, which grew from 6,000 employees to more than 72,000 during his tenure there.
HR and corporate leaders need to do six things in order to boost and sustain innovation and productivity at their organizations, he said.
No. 1, said Bock, is to connect people with a mission.
"The traditional ways we tried to inspire and motivate people was with revenue targets and launch dates," he said. "But meaning is way more powerful than those things. After all, once you've hit a goal, what's left to learn?"
Bock cited work done by Wharton School Professor Adam Grant, co-author of current bestseller Option B, who found that the productivity of call-center workers whose job was to raise funds for student scholarships more than tripled when the students came to speak to the workers about how the scholarships had helped them.
No. 2 is tapping into intrinsic motivators, he said. "Those are far more powerful than extrinsic motivators, like bonuses."
Bock related the story of Google's Founders Award, in which the company would reward employees who came up with breakthrough ideas or inventions in order to spur greater innovation.
"These awards turned out to be de-motivators," he said. "Most of the awards went to engineers, which meant at least half the company -- sales and marketing, for example -- felt left out." Even the winners weren't really motivated, said Bock, because once they'd received the award they felt there was nothing left to gain by continuing to work on the project.
"Tying their work to money is a great way to get people to do something once and then never again," he said.
Instead, unleashing intrinsic motivators by giving employees greater control over their work will pay continuous dividends, said Bock.
No. 3 is massively reducing fear. "Fear of failure is a great de-motivator," he said, citing a study which found that graduates of Harvard Business School often "flatlined" in their careers within 10 years after graduation. Why? "People who are highly successful have rarely experienced failure, so when they do, they completely shut down," said Bock.
The trick lies in getting employees to feel comfortable with failure, he said.
"If you want learning and innovation to happen, you have to be able to tolerate and learn from failure," said Bock. At Google X (the company's famed research lab), managers hand out a quarterly award for the "biggest failure," he said. Leaders must create "psychological safety" for their teams by regularly discussing projects that failed in the past and assessing why they failed so the teams can learn, he said.
No. 4: Build a portfolio of moonshots and roof shots.
"Moonshots," or extremely ambitious goals, are exciting and inspiring but can obscure the important work being done on "roof shots" -- comparatively mundane but vital everyday projects, said Bock.
"If you don't have a portfolio that includes roof shots, the people who are doing that sort of work are going to feel left out," he said. "You need to strike that balance. At every all-hands meeting I had, I would make sure to talk about things people were doing at all levels of the company -- this gave people confidence that their work matters."
No. 5, said Bock, is "know your enemy."
"[Former Google CEO] Eric Schmidt used to be the CTO of Sun Microsystems, and he said their move to set up a number of business units inside the company was the worst decision they ever made," he said. The internal units competed with each other for resources and attention to the detriment of the entire organization.
"We decided there would be no business units within Google," said Bock. "Once you shift your focus from what's going on outside the organization to what's going on inside, it's terrible. Don't make internal comparisons."
Finally, No. 6 is "be lucky."
"I've been very lucky in my own life," said Bock, referring to his childhood as a refugee from communist Romania. Luck arises from moments of serendipity, and these moments will occur with greater frequency when people are given the opportunity for "casual collisions" at work, he said.
At Google, the company's physical layout was inspired by Stanford University's, in which students mingled in a series of quads, libraries and cafeterias. "Layout drives interaction," and interaction drives innovation, said Bock. Situating bathrooms, coffee stations and cafeterias in areas of a building designed to encourage people to gather will spark conversations and idea-sharing, he said. The idea for Google News was sparked when an engineer standing in line in a Google cafeteria overheard colleagues complaining about how hard it was to gather news from different sources, said Bock.
"You increase your odds by encouraging moments of serendipity," he said.
Big Business Adopts Freelance Platforms
As freelancers account for a greater portion of large enterprises' workforce, HR executives are adopting new technologies to streamline sourcing and paying gig workers.
Chief among those tools are cloud-based platforms such as Upwork, Fiverr and Freelancer.com that help identify contractors with skills and experience that match up to requirements for short- or long-term projects.
Companies can use the same platforms to handle onboarding and paperwork, set up project milestones, and pay people once work is completed and approved, according to speakers at a Thursday session titled "Leveraging the Freelance Marketplace to Harness a Global Talent Pool."
In the U.S., 55 million people do some kind of freelance, gig or project-based work either full time or as a side hustle. Forecasts show half the country's workforce will work independently by 2020, said Eric Gilpin, Upwork's senior vice president of enterprise sales. "A lot of people do this as choice," Gilpin said.
Freelancers know their skills are in demand, and they like being able to work from anywhere. Their biggest problem is finding clients, "and platforms like UpWork can help them market their skills."
At the same time the freelance workers' ranks are growing, large enterprises are looking to be more agile and bring in talent on an as-needed basis. Freelance platforms have been more than happy to play the role of digital matchmaker.
For most of the 31 years Rich Postler has worked at Procter & Gamble, the only approach he took to adding talent was hiring employees. But changing times call for changing methods. When P&G initiated a culture change to innovate faster, Postler, the company's vice president of HR, global shared services and global information technology, launched a pilot to "borrow" talent only as long as it was needed.
Postler started working with Upwork and several other freelance platforms 18 months ago as part of that initiative. P&G continued to tap ad agencies and other third-party vendors for large, multi-million-dollar projects. But as part of a pilot project, the company gave departments permission to funnel smaller work to freelancers who'd been vetted and approved through platforms such as Upwork.
The payoff was almost immediate. Using platforms to find freelancers cut the time it took to source talent for a project from 90 days to 4.2, Postler said. Not only that, in the first full fiscal year of the pilot, quality of the work rose 33 percent, and costs dropped 60 percent, he said.
Postler gives partial credit for such successes to creating a multi-functional team with people from HR, legal, labor relations and procurement to run the pilot and develop processes and controls around how the company uses freelancers and platforms. Bringing on freelance platforms won't work, though, unless they are part of a larger strategic plan, and have executive-level sponsorship, he said.
Start-ups Make Their Case
HR departments know they need to innovate. They know they need to make more workforce decisions based on predictive analytics. In both cases, they also know change means swapping out old HR applications for new ones.
Despite all that, many large enterprises are risk averse, which makes them reluctant to work with start-ups offering the kind of technology that could meet their needs. It's one reason HR is years behind sales, marketing, accounting and other corporate functions in adopting new technology platforms, according to HR analytics and recruiting tech start-up founders speaking Wednesday at a session titled "Start-up Spotlight: What's New and What's Next in HR Technology."
"Selling into HR is bizarre," said Shon Burton, chief executive at HiringSolved, a recruiting and sourcing data aggregator tool.
Being more compliance-heavy than other departments could have added to the reluctance to embrace new options, Burton said.
But things are starting to turn around, he said. "You're hearing CEOs talk about how they didn't hit goals" and need to change up processes as a result, he said. "The need to innovate has outweighed the fear of new technology."
Organizations are hungry for something new. But when HR buyers talk to a vendor, they want case studies, white papers and other formal sales collateral that start-ups might not have had the time, resources or longevity to create, said Elliott Garms, chief executive at Human Predictions, a recruiting analytics platform for the tech industry.
At most organizations with predominately white-collar workers, employees account for 60 percent to 70 percent of costs.
You'd expect those organizations to use technology to make their people practices more efficient, said Manish Goel, chief executive and co-founder at TrustSphere, a relationship analytics start-up. The hesitancy to work with relatively untried vendors could result from a lack of awareness of what's out there, "and that lack of awareness is slowing down the rate of innovation," Goel said.
Larger companies also have lagged behind in adopting new technology because of the logistical challenges that come with making changes that affect thousands or tens of thousands of people, said Kieran Snyder, chief executive and co-founder at Textio, an augmented writing service that screens employment marketing content for unintended biases that could turn off job seekers.
"But if your competitors are using competitive technology they will beat you for talent," Snyder said.
Thinking Like an Economist
Google's pioneering use of data more than a decade ago to improve how the company found, engaged and retained employees helped popularize people analytics for HR.
But you don't need to be a tech giant to incorporate analytics into your hiring and HR practices, according to workforce industry economists speaking at a session titled "The Real Economics of HR Technology: Using Big Data to Drive HR Decision Making."
In fact, employers that aren't using analytics to improve recruiting and other aspects of people management put themselves at a distinct disadvantage. A tight labor market that is intensifying competition for workers, technological innovation, the evolution of how work gets done and changing labor demographics make it imperative to plan for the future, and analytics are the best way to do that, economists said.
"CHROs have to think like economists," said Ahu Yildirmaz, co-head of ADP's Research Institute. Not just CHROs, but the entire C-suite should be using data to understand how best to allocate talent resources to optimize their workforce and increase margins, said Yildirmaz, who produces ADP's monthly employment reports and other research.
Smaller employers might not have the budget to hire a data scientist. But they can use analytics built into existing payroll, applicant tracking or core HR management systems applications to test hypotheses about workforce practices to see if the data that results bear them out, said Andrew Chamberlain, chief economist at Glassdoor, the jobs and employer review site.
In addition to internal analytics, economists urged HR teams to track macroeconomic trends and use benchmarking and publicly available data for decisions and planning. When Glassdoor recently investigated changing benefits for its own employees, the company looked up academic research on organizational psychology. Instead of simply changing offered benefits based purely on costs, "we looked at the psychology of what people really care about that would drive satisfaction," Chamberlain said.
In particular, panelists suggested organizations use analytics to track employees' skills and matching that data against external job growth forecasts to identify types of skills or positions they'll need to develop in the future to fill any gaps. Using analytics to pinpoint people for internal training gives employees a chance to grow, costs less than hiring from the outside and could create new roles within HR, such as learning managers, said Josh Wright, chief economist at iCIMS, a producer of talent-acquisition software.
Incorporating outside data sources into workforce analytics also makes it easier to show a hiring manager that a talent problem they're dealing with isn't specific to the company but a part of a larger trend, said Tara Sinclair, an associate professor of economics at George Washington University and senior fellow at the Indeed Hiring Lab. That, in turn, could help facilitate a discussion about aspects of the situation the hiring manager might be willing or able to change, she said.
Researching with Care
In today's digitally connected world, HR leaders should tread carefully as they research and evaluate their technology options.
That was a recurring theme in a presentation delivered by Blackbox Consulting Principal Consultant Jonathan Grafft and Aptitude Research Partners Co-founder Madeline Laurano at a session titled "Research to Practice: How to Use Industry Resource to Make Better HR Technology Decisions."
To be sure, the hunt for new technologies is fraught with danger.
"There are more and more vendors in the HR technology space," said Laurano, adding that a report by the research firm CB Insights estimates that investments in HR technology have gone from $400 million in 2012 to $2 billion today. "That indicates a lot of new providers, a lot of new opportunities and a lot of confusion."
Between the dozens of different analyst firms dedicated to covering human capital management and the hundreds of bloggers and vendors that do their own research, the process of selecting new technology can be extremely difficult.
Grafft said that the process needs to start with figuring out the problem you're trying to solve.
Then, he said, the next step needs to involve collecting the information that's going to help you solve your problem. "It might be research reports," he said. "It might be [talking to] colleagues in the space. It might be coming to HR Tech and talking to vendors."
Laurano pointed to research her firm conducted last year that found word of mouth and reference calls with customers were the two sources employers trusted the most. "When I look at ratings or reviews, whether it's to buy shoes or clothes, I look at what other people are saying," she said, adding that the same is often true for those evaluating HR technology.
Both Grafft and Laurano advised employers to take a lot of the information out there with a grain of salt.
"Is your source a trusted analyst firm . . . or a vendor that's trying to push a particular message?" Laurano asked. "You need to figure out where the information is coming from."
Often, Laurano said, the information might be coming from someone with a relationship with the firm.
Salesforce's Efforts to Engage
Most employers are looking for better ways to engage employees -- and Salesforce is no exception.
Speaking at a mega-session titled "Building and Maintaining an Engaging Company Culture," Salesforce's Senior Vice President of Employee Success and Operations David Kingsley described employee engagement as the secret sauce for achieving the tech company's principal goal of "improving the state of the world."
As you might expect, Salesforce -- which now employs about 28,000 employees globally -- has made a concerted effort to leverage technology to better engage its employees.
While the world outside has become more app-centric, Kingsley said, employers are continuing to use the same playbook in the workplace. "Employees are asking, 'Why can't work be more like my personal life?' " he said.
Everything comes down to whether or not "we can create a better employee experience," Kingsley said. He cited the way Salesforce previously onboarded new hires as a prime example of a process that was in disrepair.
"When you started working at Salesforce," Kingsley said, "you received a printout with 17 IT tickets you had to submit on the first day that gave you access to all of the systems you would use. We'd say, 'Here's your laptop [and] here's your Wi-Fi, now go online and stay there for an hour-and-a-half to fill out these tickets . . . .
"We were making the employees do the work on behalf of the organization," he said.
In response, Kingsley and his team looked at the data to identify ways to streamline that experience and change it from being organization-centric to being employee-centric.
Later in his talk, Kingsley the story of an employee who joined Salesforce three years ago. "He came in for orientation and his laptop wasn't ready, his phone wasn't provisioned and, worst of all, his boss didn't know he was starting that day," he recalls.
By the end of the day, he said, the employee sent an email from his personal account informing the recruiter who hired him he was resigning.
That email, Kingsley said, was sent around the globe with the subject line: "New World Record," referring to the fact that Salesforce had lost a new hire after just one day.
"That was our Apollo 13 moment," he said.
Today, he said, Salesforce is using the cloud, social, mobile and the Internet of Things to create an experience in the workplace that mirrors the one employees are having outside of work.
Bersin: Massive Disruption For HR
Companies are living in a paradox right now: Brilliant new technology is flooding the workplace and changing business models, and yet, employee productivity and engagement levels are going down in the U.S. and around the world, said Bersin by Deloitte's Josh Bersin during his closing keynote titled "Digital HR: A New Architecture for Technology."
"Within the last two years, 90 percent of companies have said their business models are under disruption by technology and the problem isn't the technology -- it's the people," said Bersin. Employees lack the skills to use the technology properly and companies can't find the people who do, he said.
A big part of the problem, said Bersin, is "the overwhelmed employee."
Employees are being bombarded by emails and texts, at all hours of the day in some cases, and are suffering from FOMO, or "fear of missing out," said Bersin. They're stressed over which message to respond to first. All of this is undermining productivity and engagement. The solution, he said, is to find ways to help employees be more productive in the face of this constant change. But how?
The structure of work must be changed, said Bersin. The most cutting-edge companies, he said, are doing away with hierarchy and replacing it with teams. At Cisco, he said, 20,000 different teams are working on a variety of projects. What's notable, he pointed out, was that none of this was reflected in the company's HR database. HR departments -- and the vendors that serve them -- aren't adapting their services and tools to support organizations that will increasingly resemble a network of teams.
"This really concerns me," said Bersin.
Automation is also remaking the nature of work, with Deloitte research showing that 38 percent of companies expect to be fully automated within five years, he said. Seventy-seven percent of companies anticipate that automation will result in "better jobs," while only 20 percent expect it will result in job reductions. The problem, he said, is that at 65 percent of those companies, HR is not involved in these efforts at all.
"My message is this: You guys have to be involved in the recrafting of work around automation," Bersin told his audience.
The HR tech vendor community has plenty of tools to offer in this and other areas, with money pouring into the sector from venture capital funds, he said. "HR tech is now a hot marketplace," noting that venture capitalists have invested $5.5 billion in HR tech start-ups since 2014.
The hottest area of investor interest is talent acquisition, said Bersin, with new funding and innovation making it "an incredibly dynamic space," spurred by record-low unemployment rates that have led to "an arms race among employers to arm themselves with data and create a wonderful employee experience."
Video interviewing is seeing some of the biggest strides in innovation, he said, with vendors like HireVue creating tools that "can capture a million data elements from one 15-minute interview."
Another area that's seeing lots of disruption is performance management, with "continuous assessment" replacing the annual year-end reviews that Bersin jokingly referred to as "drive-by shootings."
"I've been through around 46 of those myself, and out of all of them, maybe one was a pleasant experience," he said.
Bersin predicted that the market for employee well-being tools and services "will explode," noting that "well being" has been steadily trending upward as a Google search term since 2004.
"The idea of corporate well-being has been around for 200 years," said Bersin. "But it was previously focused on things like safety and reducing insurance rates. Yet as we've become more overwhelmed as employees, we've changed the issue to be one about human performance -- as in, help us learn how to be healthy and well and productive at work."
What's Coming Next in HR Tech
Twenty years ago, on-premise HR systems were the norm and self-service applications a rarity.
Flash forward to 2017. Cloud-based platforms that employees and managers can access without help from HR personnel are a fact of work life for companies large and small. In the not-so-distant future, people could be using voice-based assistants such as Amazon's Alexa and Google Home to look up payroll, benefits and other work-related apps.
"It'll be no more clicking or going through menus," said Jason Averbook, a long-time HR tech industry analyst and consultant, and one of several industry futurists who discussed the past, present and future of workplace applications during the "20 Years of HR Tech" general session.
"I guarantee in two or three years, we won't be talking about user interfaces or menus, but how we bring interaction to the worker," said Averbook, founder of HR consultant LeapGen.
Just as today Uber hides more than 20 different processes running its ride-hailing service behind a single user interface, future HR technology will deliver the same "comfortable, frictionless" process, Averbook said.
Some HR tech innovations are just around the corner. AI is one. Close to 50 companies exhibiting at this year's conference are showing various workforce applications that leverage artificial intelligence, said Bill Kutik, the conference's chairman emeritus.
AI will work best in applications that automate high-volume repetitive tasks and other things people are bad at, and augment things people are good at, such as problem solving, said Ray Wang, founder of Constellation Research. Early applications of the technology are trickling into HR, including for employee assistance, job interviews and wellness, Wang said.
ADP Chief Executive Carlos Rodriguez said the company is completely rebuilding its Autopay payroll platform, versions of which have been around for close to 50 years. The new platform, in the works for close to five years, will better match modern work and pay practices, including giving employers the flexibility to pay independent contractors by the day or shift.
"It's inevitable that the old ways of how people got paid -- by the batch, weekly -- is not going to be the way business is done 10 years down the road," Rodriguez said.
In the future, HR practitioners will continue to be pressed to innovate quickly to keep up with business' faster pace of change. One way to do that is by running experiments on possible HR tech projects before even instituting a pilot, said Stacey Valy Panayiotou, global head of talent and development at The Coca-Cola Co.
Panayiotou's team recently experimented on new performance-management processes for nine months to try different approaches, build data and create a business case. The experiments created buzz about the project.
"You're not trying to convince anyone," Panayiotou said. Ultimately, she said, the experience gave her team the data needed to fast-track approval to proceed with the new system.
Next year's HR Technology Conference and Exposition® will be held Sept. 11 through 14 at The Venetian in Las Vegas. Go to www.hrtechnologyconference.com to learn more.