In advance of our upcoming HR Demo Show in Las Vegas—to be held on December 8-9—the editors recently convened a virtual roundtable of HR technology thought leaders.
HRO TODAY: In the past couple of years, SaaS has evolved into the market-dominant model. Where are the risks in our rapid move to cloud computing?
John Sumser: It’s really hard to be certain about the market. Much of what we are seeing is a response to too-rapid headcount reductions and the demise of growth. SaaS is primarily attractive because it requires no material investment (other than implementation costs) on the part of the buyer. Here’s the problem. Great SaaS products offer price advantages because they are a single configuration. No matter who you are or what you want, your choices are limited to what’s on the menu. It doesn’t really work optimally for anyone. What’s worse is that once a vendor decides to compromise, all of the cost control evaporates from their business model. If you are dealing with a hyper-responsive SaaS vendor with unlimited flexibility to meet your needs, you’re dealing with someone who is defying the laws of physics. It can’t last. So, SaaS will take its place. You don’t need to excel at everything. Where you don’t, use a SaaS solution. Where you do, you are in the market for a big-ticket expense. Until new economic good times emerge, SaaS is the way of the future.
Jason Corsello: We’ve seen SaaS become very accepted at companies of all sizes. The conversation in terms of risk has changed in the last three years. It was security, security, security, and the vendors have done an amazing job to address those questions through the infrastructure, the data center, and the initiative. The big challenge today is around integration. Now that I have multiple SaaS solutions, how do I put them together? So providers are reacting. The vendors are rushing very rapidly to have a single solution since there is a movement toward using fewer vendors. We are seeing consolidation for a more common user experience and process that makes it more useable.
Kevin Martin: From an HCM perspective, a primary risk certainly is the security of employee data (i.e. social security numbers, etc.). However, via encryption and other means, those risks can be minimized. Another possible risk is accessibility to data that is maintained outside of the confines of a business. According to our research on “Integrated Talent Management: Improving Business Results through Visibility and Alignment” (December 2009), the primary barrier to effective talent management is the inability to validate its impact on the business. This validation requires not only a clear understanding of what to measure, but also the ability to integrate the data into other systems (i.e. applicant data with employee performance data to determine the source of best-performing new employees, or employee performance data with customer data—from a CRM tool—to reward employees based on customer retention, upsell, etc.). So, it’s important for metrics and workflows to be defined upfront so as to avoid conflict with these objectives. This also requires collaboration between HR and IT, as well as HR with the lines of business.
Dr. Katherine Jones: Actually, the movement to the cloud has been gradual over the decade–from the ASP-hosted environment and even the intranet-connected client server that had no code on a client to today’s NetSuites and Workdays. The risks to corporations moving to software-as-a-service solutions are few: in general, those providers can offer better security than many companies do themselves. The predominant risk a company would face is if the SaaS provider’s data center were to fail—from a catastrophic event like a fire or earthquake, and if that provider did not have a second redundant data center. Beyond that, the upside predominates: lower cost, reduced support costs, no maintenance fees that can increase yearly, and more rapid access to new releases and new technology.
HRO TODAY: Talent management means one thing in one setting and another elsewhere. What do you think the basic components of a talent management platform should include?
Jones: In the very broadest definition, talent management can be said to begin pre-hire, and encompass the entire lifecycle of the employee. Most managers, however, see talent management as that which happens to the employee once on board: recognizing high-potential employees, measuring the delta between the employee’s execution ability on the job and the desired performance levels—and coordinating the learning and other interventions to enhance that performance. Talent management also includes the shifting of employees to other places in the organization where their skills are more appropriate, planning a promotion plan in keeping with the employee’s talents, or ushering them out if their performance cannot be improved to the level required.
Martin: Our research shows that talent management includes the entire recruit-to-retire employee lifecycle. This includes recruitment (including sourcing, selection and
hiring); onboarding; employee performance management; compensation; learning/development; and succession planning. And, in order to have the most effective talent management processes, an organization must have a good grasp on competency management, as well as be able to leverage employee data (thus a core HRIS is important). Depending on the needs of the organization (pre- vs. post-hire), there can be made a strong case for which elements are critical to that organization—and our research shows that most companies view recruiting and employee performance management as the foundational elements of their talent management efforts. However, two elements are typically viewed via singular lenses. These two elements were the focus of our latest research. We found that competencies not only become the common language between the business and talent management, but also provide common direction between the multiple activities in the employee lifecycle. After all, how can an organization successfully recruit or develop the most productive workforce without identifying the competencies that it deems essential? And learning helps an organization fill its gaps and fulfill its employees’ aspirations to grow professionally.
Sumser: Man, this is a cluttered arena. There is much to be said for Marc Effron’s view that talent management is overly complex and should be limited to “one page.” At its simplest, talent management is a variation on a familiar theme, succession planning. The problem is that the single greatest predictor of not getting the job is being the person identified in the succession plan. In order to make the most of the available talents, you have to know what they are. The core goal of a talent management system should be to identify, catalogue, and harvest the organization’s human capital. The heart of a talent management system is a single profile of each employee. Starting anywhere else gets you less than acceptable results. Once you have a system of profiles in place, it’s easier and more effective to build out the other features: job matching, internal mobility programs, talent development initiatives. I’d stay away from the notion of succession planning. The current fair-haired boy lasts about as long as his sponsor.
Corsello: If you look at any of the traditional analyst charts, you’ve got recruiting, performance, succession—all the modules that have been traditionally defined as talent management. The difference from that definition to what we are seeing today is the leading organizations aren’t thinking about it like that. They are thinking about it more as, “How can I leverage technology to accomplish the goals that are tied to the business? How do I need to mobilize talent to pull employees from one business unit to another? How do I build talent pools? How do I plan for my organization if the CEO says we need to enter new regions, or we need to have new product lines, and figuring out the people associated with that?”
HRO TODAY: How will HR evolve as a result of the massive introduction of social media tools into the organization?
Sumser: I have a feeling that there is more smoke than fire in social media. While social media provides tremendous opportunity for small and effective communication, you can’t get anything done when everyone is on the same committee all of the workday. At least some of the hype surrounding social software comes from the fact that few of our organizations are really growing. The people who usually handle growth are sort of underemployed these days. They tend to be the advocates for social media. In the long haul, social media is a great status-keeping toolset. Rather than collaboration, the tools will be used to monitor moment-to-moment performance by workers who are not in the office.
Corsello: We are seeing increasingly from vendors that they are building in collaboration in their product. From Taleo to SuccessFactors to Oracle, they are showing collaboration capability in their application like the activity streams you see in Facebook. We still haven’t seen mass adoption of it, however.
Martin: Our research on Web 2.0 tools in talent management shows a growing adoption of these tools that will continue to proliferate. While it’s in the areas of recruitment and learning where Web 2.0 tools are currently used most, where these tools may hold the most promise is in the area of knowledge capture and transfer. From a customer standpoint, the inquiries, comments, and ideas that proliferate in realms like the Twittersphere can be used to improve marketing messages and/or sales training, as well as incorporated into the development or enhancement of products that better address the changing needs of customers. From an employee perspective, the use of Web 2.0 tools can help identify internal subject matter expertise, establish introductions and relationships between new employees and existing employees, and aid in the transfer of both legacy knowledge from existing employees as well as fresh perspective from new employees. Aberdeen’s Human Capital Management research has pointed out the impact these types of solutions can have on employee engagement, organizational culture, and employer brand. And according to Aberdeen’s 2009 research entitled “Beyond Satisfaction: Engaging Employees to Retain Customers” (July 2009), when it comes to the use of Web 2.0 tools, HR executives should bear in mind the following: Establish metrics to measure the impact of Web 2.0 tools and review them regularly; get buy-in from all stakeholders—senior managers, front-line managers and IT—to help champion adoption; and articulate the purpose of the tools, and provide support and training.
Jones: Savvy recruiters today depend heavily on social media for sourcing, and increasingly use products such as JobVite, which rely on employees’ referral networks through all types of social media to locate job candidates. But the real use of social media within the organization is just starting: The integration of on-the-job networking and “chatter,” and the ability to understand employee value to the corporation through network-based social interactions, once charted, will aid corporations in identifying their real key players and influencers internally.
HRO TODAY: What is the one high-value element of tech marketing that no one is paying attention to?
Jones: Strategic long-term workforce planning. Despite applications that move companies into better planning, most are parochial and shorter term than they will need to be for serious strategic planning. Another area that needs more attention is integrated hiring of contingent employees into the mindset and applications that are used for hiring management.
Sumser: No one is creating useful tools for program management and contract administration. While vendors are busy automating the things that outsourcers do, the HR team (or, more precisely, what’s left of the HR team) is increasingly occupied with the administrivia of sub-contract management. There isn’t a single interesting piece of software out there in spite of the dramatic growth in outsourcing.
Martin: When you consider all the possible areas such as lost productivity due to marketing and sales misalignment, preoccupation with the social media channel, failing to adopt marketing metrics that matter most to the overall business, or improving wasteful, inefficient marketing operations, the simplest, most basic, high-value action that marketers are missing involves using customer data. It’s the most tangible, readily available source of information that is the least costly to review and incorporate into marketing campaigns. Yet customer data can have the greatest impact and highest value to drive effectual marketing programs. Using this information improves marketing program initiatives, tactics and messages regardless of the medium (i.e. direct mail, e-mail, social media, mass media, web SEO/SEM etc.). Research from Aberdeen’s Marketing Strategy & Effectiveness Practice revealed that 81 percent of all those surveyed do not have a heavy reliance on customer data for their marketing programs. Companies should magnify or multiply their efforts around this common sense tactic to realize higher lead conversion rates and revenue gains.
Corsello: Workforce planning is really starting to fall on the initiative agenda for many HR executives, most likely for next year. Employers understand there is a need, and that need is being driven from the business. The fate of the microeconomic state is fragile, and there is this unpredictability, so people are looking at it longer term. We need to have flexibility in our workforce, and that’s where workforce planning comes in—if we need to grow our workforce 5-to-10 percent in new markets, we’ll have the information and data to do that fairly quickly. Conversely, if there is a need for reduction, workforce planning allows us to point out the low performers quickly.
HRO TODAY: Apps (single point solutions) or integrated platforms, where are we headed?
Sumser: Ah, which is a better knife? A Swiss Army knife or a single-purpose blade? It doesn’t matter if what you need is a spoon. This summer, I sat in a half dozen sales meetings in different companies. At each meeting, the dominant discussion topic was, “Why aren’t the salesforce.com forms filled out properly?” It turns out that CRM systems are great for managers and not so great for salespeople. So, salespeople don’t fill them out. Whether it’s an app or a new integrated platform, the cost of using and maintaining software dwarfs the costs of acquisition. It has never been more important to keep the end goal in mind. When the work required to use the software exceeds the value it creates, you are in deep yogurt. Then, you need a spoon.
Jones: Integration will always win. Just look at both the acquisition and in-house development activity of HR/TM solutions providers today. Companies like Taleo, Saba, Kenexa, and others have grown broader and broader in their product footprints. But TM itself is insufficient—the kind of integration we see in the ERP providers such as Workday, NetSuite, SAP, and Oracle in its Peoplesoft, eBusiness, and Fusion application architecture will drive technology roadmaps for competitive application providers in the future.
Corsello: We are seeing interesting initiatives more around this idea of a platform as a service. You keep that core configurability in place, but you have flexibility to make unique modifications if an organization uses matrix-based reporting versus hierarchical.
Martin: At a recent Aberdeen summit, 43 percent of attendees indicated the inability to capture and validate data as the primary barrier to their organization’s ability to measure the business impact of HCM. Certainly the talent management solution providers are in a race to have the most complete and integrated product suite available, and this is evident in all the merger and acquisition activity in this space. However, at the end of the day, what end-users care about is access to, and use of, accurate data in a timely fashion. And this can occur via a single platform (system of record) or multiple sources linked via an API. Our recent research revealed that only a slight majority of organizations had at least partially integrated their talent management processes/ workflows, systems, and/or data. However, those that have achieved integration across at least one of the three had also experienced significantly greater performance gains
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HRO TODAY: Name a software product that is really distinct from its competitors.
Sumser: First of all, the vendors in the HR technology space cut their marketing efforts and hung on to their tech teams when the downturn hit. The net result is an ocean of undifferentiated, me-too software. It’s really, really hard to tell the differences between the functions of a whole array of bloated software. I am an Apple fan. iPhone, Mac Desktop, Mac Laptop, iPad, iPod, the whole shebang. There is nothing sexier that the Apple user experience. I went so far as getting a “DroidX” from Verizon simply to have a data connection for my iPad. Then a funny thing happened. The DroidX, in all of its oversized, clunky, unsexy wonder has become my phone of choice. And, I hate Verizon. Their customer service is wretched, their pricing is ridiculous, their website is unworkable. But, their phone works. It’s not particularly cool but I can talk on it and not get dropped almost everywhere I go. I think that’s the big coming technology trend, even in HR: crap that actually works.
Corsello: The folks that are on the bleeding edge have a new, next-generation architecture that is configurable and multi-tenant that allows new releases to be adapted faster, and for everyone to be on the same code to fix it faster. The ability to add new functionality is really next generation.
Jones: Perhaps visions rather than products are more distinctive: I’d like to see products that address global talent management (and some are beginning to address that challenge) and integrated workforce management—orchestrating all kinds of workers with the labor force all over the world. I’d like to see more products that helped HR address the concerns of the CEO and CFO rather than just helping HR folks talk to themselves.
HRO TODAY: Has the conversation really changed from talent management to performance management? If you had to pick one of the two as a direction, which one would it be?
Jones: Talent management—improving employee productivity through improved performance—is only a value when it positively affects corporate performance itself. The goal of a company is to increase revenues, the goal of a government organization is to fulfill its mission. It is the application of TM to the greater goal of improved corporate or organizational performance that really matters. Companies are rapidly becoming much better at measuring their own performance through their ability to correctly diagnose early warning signals that foretell issues that adversely affect overall revenues and shareholder value. Corporate performance management wins.
Martin: To me, they are one in the same. Given the economy over the past two years, there is no question that more and more organizations are focusing more attention on identifying, engaging, developing, and retaining their top talent—and as such, employee performance management is taking on greater importance. But, if there’s anything we’ve learned as a result of the current recession, it’s that while you should hope for the best, you’ve got to plan for the worst. Businesses, too, are realizing this and as a result, longer-term planning is coming back into the fold. And, this planning is going to require a business to have much greater visibility into the status of its existing workforce and the gaps that exist between the current and planned states of the business. The orchestration of this will require synergy across the entire talent management lifecycle, whereas employee performance management is just one element in that continuum.
Sumser: SuccessFactors has single-handedly taken a stodgy, navel-gazing marketplace and injected real energy. Bypassing the HR people and taking the sale to the CFO was exactly the right move at the right time. What matters most about human capital is the degree to which you can realize its inherent value. That makes performance management the right focus for the non-growth duration. We may be in a period of transition when historical growth is simply not possible for most organizations. Certainly, we’re in the midst of big demographic change that suggests a slowing of growth. One manages resources differently depending on the growth climate. When it’s heated, you focus on development. When it slows, you emphasize conservation.
As senior vice president of products & technology for Knowledge Infusion, Jason Corsello is responsible for the company’s solutions, technology, and corporate development strategy.
Dr. Katherine Jones is the founder of Independent Consulting Services (ICS), serving technology and service-providing organizations with marketing, strategy, and talent management consulting services.
As vice president, principal analyst, and group director of Aberdeen Group, Kevin Martin manages research practices that focus on human capital management, service management, sales effectiveness, and marketing strategy.
John Sumser is a technology consultant, webmaster of HRExaminer.com, technology columnist for HRO Today, and chair of the HR Demo Show.
