Lexy Martin - The past and future of talent management technology

Jim

Welcome back to People Performance Radio, you are here with Jim Matheson.

Steve

And Steve Hunt.

Jim

Steve, did you see that last week, we will launch the new podcasts, the European edition of People Performance Radio?

Steve

I did hear about it, so where is it at?

Jim

It’s at www.successfactors.co.uk/podcast and Episode 1 is up now, hopefully we will have a few more episodes in the coming weeks and it’s more of a customer based thing. Shorter podcasts than these, but it is definitely worth checking out if people are interested.

Steve

Well, I will definitely check it out and I will, I always try to get our podcasts shorter Jim, that’s a constant goal and so you listening audience people, we are working on it but we are still failing miserably, but we did have, in a way it’s hard as we have these guests that actually have, just like really fascinating things to say and this week is no exception, Jim. We had a chance to talk to Lexy Martin who is the Director of Research & Analytics at Cedar Crestone and I don’t know if you had a chance to hear a preview of this or not.

Jim

I have, it’s a good one.

Steve

It is, she does a lot of survey research, over 11 years of looking at the state of the talent management industry, the talent management technology industry, and has some really interesting observations around how the industry is evolving over time, more people are focusing their time and attention, including business leaders, not just HR people, and also some great observations about how the HR technology space is evolving in Europe and Asia, and how that’s a little bit different in terms of the United States even. Possibly saying that maybe, we will see the real innovation maybe in Asia, somebody frogging it over what we have been doing here in the States, so interesting, very interesting conversation and I encourage everybody to take a listen.

Hi, this is Steve Hunt with People Performance Radio and today, we are very happy to have Lexy Martin who is the Director of Research & Analytics with Cedar Crestone Group. Hi Lexy, thanks for appearing on People Performance Radio.

Lexy

Thanks for asking me.

Steve

So Lexy, can you tell us a little bit about what you do as a Director of Research & Analytics at Cedar Creststone?

Lexy

Sure, well it’s survey season right now, and so that seems to be all that I am doing these days. We have just released our 11th annual survey on the state of HR technology adoption at the HR Technology Conference last week, and in addition to that, I am also working on an extension to it that covers the Asia Pacific region from India to Australia, New Zealand, on up through Taiwan to Hong Kong and China, there is actually ten countries that we are covering in this extension.

I was just going to say two other things, when I’m not doing the survey, my role is to work with customers and vendors as well, on business case and value analysis work.

Steve

OK.

Lexy

My latest thing (I talk too much) is that I do a lot of work with our customers on their analytic strategy.

Steve

OK, wow, so it sounds like you stay quite busy. I guess on the survey, because I think that’s going to be probably the most interesting thing for our listening audience in general if we could talk a little more about that. First of all, who do you survey, who are the people that answer it?

Lexy

So, this year we had over 800 organizations respond and what we are looking for is organizations with at least 500 employees. So they range on up to, the largest one this year was 340,000 employees. The typical person who is the respondent is someone who’s responsible for human resources information technology, but interestingly, this year, about 12% of our respondents were actually business leaders, so people that were either from an executive office or the finance arena or operations, and I think that’s because we are seeing more of them be responsible for one or two application areas.

Steve

So Lexy, I’m curious just in terms of how you get people to respond, you said you’d gotten a lot of especially business leaders. I probably get at least once a week, somebody ask me to respond to a survey, and I usually don’t. How do you actually get people to participate?

Lexy

Well, you know, first of all we’ve been doing this survey for 11 years now, so we have some visibility on the survey, and so some of the people that respond have responded before. So the topic is timely, we would cover a broad set of technologies, but the way I get respondents is I partner with a number of different organizations: IHRIM (International Human Resource Information Management), HR Executive also sends out the invitation to its readers, then I partner with a number of the HCM vendors. SuccessFactors last year sent it out to its customers. This year, I think you just announced it in a newsletter, so we didn’t get as good a response from SuccessFactors’ customers this year as we did last year. I have probably partnered with maybe 15 to 20 different vendors and I get anywhere from ten to 75 responses from each one of those.

Steve

Wow, it sounds like you have a great technique you have truly tapped into, so I guess the next obvious question is so, what is the state of HR technology?

Lexy

Well, it’s growing, so with ten, 11 years of results we are able to look at trends over time, and last year I did a really thorough ten year trend analysis. This year I just looked at the difference between last year and this year, and one of the interesting things this year is that there was much less growth in the adoption of recruiting solutions and much more in the growth of, what I would call, the developed categories of talent management applications, so things like learning management or competency management or even something simple like training administration. So there was a much larger growth, and that’s kind of, it’s a trend that we saw back in 2002, and that is that when economic conditions are tough, organizations focus less on recruiting and more on developing the human capital that they do have, retaining their top performers and on measuring their performance.

Steve

Well, that makes a lot of sense. We just talked to Rob Bernstein the other week, and he was saying the same thing. I break talent management into basically two things, you’re either trying to predict people’s behavior, like if I put him in this job, what will happen, which is staffing largely. When you’re trying to change it, which is in some ways much harder, which is maximizing their productivity, align them with the goals of the organization and so, it’s interesting when you go into a recession, it is like we are not going to hire as many people, we have just got to maximize what we’ve got.

Lexy

Well, I get where you’re going with the maximizing productivity and all. We actually don’t track all the applications that you might think of, we don’t do goals management, we should probably, but when an application has really early adoption, we typically don’t get a real good response obviously, so we’re looking at the more mature, if you will, of the talent management applications. I think the one that has the least adoption right now is something like career planning and that would be one that I suspect you guys see much more adoption than we do.

Steve

Yes, we definitely see that coming up more and more and the idea of career exploration which is a little different from career planning, so, the survey by nature is, you say, you have to survey other things people are familiar with and some of the newer things are not as, people just aren’t going to be as aware of them. What I am curious though, what have you added to the survey over ten years, because we have definitely seem some emerging technologies over that time.

Lexy

We started this survey back in 1997, actually looking at the early adopters at that point, to things like self-service, employee manager self-service, and so we continued to look at that. We added portals, we added in 2000, we added what we call the strategic human capital management applications and since then, everybody has renamed that talent management, but I still view them as being very strategic for the organization. Then three years ago we added business intelligence, and then this last year we added the Web 2.0 technologies, that’s specifically recruiting using things like Facebook for recruiting and branding and wikis used for collaboration.

Steve

What do you think, if you had chance to look in the future, what do you think you are going to be adding over the next couple of years?

Lexy

Oh gosh, I hadn’t thought about that one, but one that we added a few years ago and just didn’t get much response to was mobile computing, and I suspect we will add that one back in, because I think that’s an area that will be increasingly used by organizations that see the value of technologies, but don’t have a way to get applications to the desktops of their employees, so, like people in retail or healthcare or maybe even shop floor positions.

Steve

Okay, so you mentioned, and I think it’s fascinating that you have done this survey long enough, that you’ve gone through a recession before, as you said you’re seeing again this go into recession people, shift from sort of staffing solutions to more development solution or chain solutions. What are some of the other things that you are seeing in a shift in the space as far as where people are focusing their technology efforts?

Lexi

Well, one of the questions we ask is, where are you spending at least 25% of your time and where are you spending budget, and we have a list of initiatives, this is about 20 that we have tracked and, for the last three years of asking that question, the top initiative across the board was that organizations are spending time on business process improvement and I think the survey respondents are pretty sophisticated in their use of HR technology and so, they first look at process improvement. Maybe they do some standardization, maybe they do some variations by region, but they spend some time really fine-tuning their processes and then they implement technology. Well that one was no longer number one this year, number one was activities around metrics and analytics and it could be that they were doing strategy work, or they were defining metrics, or they were starting to do some integration of data from multiple applications, or they were even doing some kind of analytics and predictive analytics.

Steve

It’s interesting, if you think about that. We talk a lot about maturation curves, and we see our clients go from manual to automation to data-driven to ultimately transformational, they are changing people’s behavior in the way they think about talent, but they follow this path, and it sounds like the whole industry is going through this. If you think five years ago, they said, well we don’t even have the processes figured out, now they have got the process and they have got the automation. Well, now they have the automation, suddenly they can start thinking about the metrics. Do you see this as an evolution of the entire industry going through this, or is it just a shifting of priorities, or is this just truly growth?

Lexi

It’s probably all of those, but I want to talk on your point about transformation and, we actually ask a couple of questions. One is on what’s been the impact of your automation, is it efficiency, is it effectiveness or is it transformation and that transformation one is still not widespread. Now, we don’t give a lot of definition about what efficiency, effectiveness or transformation means, just assuming that people have a sense of the differences, I think efficiency is you know you can do things a little more cost effectively. Effectiveness, you are doing the right things. Transformation is HR, and your technology is really transforming the way that the business operates. While that latter category has grown a bit, I think that people are still pretty critical of whether technology has enabled them to transform and, in fact I think that the business respondents were least likely to respond that they had been able to transform the organization with technology.

Steve

That actually doesn’t really surprise me I guess, when I think about the work that I have done and I have been in this field for over 15 years too, where I’ll use the staffing example, just because I think it’s easy, come in, and people often talk to me about very sophisticated assessments that really would transform how they predict positions, but the first step usually is, “Do you have a consistent measurement process at all for evaluating candidates?” - that’s the first step for improving that, it’s not getting into advanced analytics and stuff, it’s like just standardize what you are doing and it’s the classic continuous improvement, so the people aren’t on the transformation which tends to be less well defining because, largely going back to what you were saying earlier, that I think this whole field started out and people had no consistency at all. Now, they are getting consistency and saying, “Well now we need to have measures, so we can do continuous improvement”, and once they have that, then we’ll see more transformation, but it’s interesting, as you are talking about, it’s almost like we’ve seen the development of an entire industry unfolding over time in your survey results.

Lexi

I see that a bit, last year when I looked at the ten year trends, it is something like employee and manager self-service. It’s still only at the 50% adoption level overall when I look at all industries. Now some have always been what I call early adopters, so financial services and hi-tech organizations that use technology to deliver customer services also use those same technologies to deliver employee services, so maybe two-thirds of them have employee and manager self-service. Now, when you think about it, that’s amazing, that’s only two thirds. You think everyone is using self-service but they’re not, in larger organizations. There is a lot of industries where they have such difficulties with the culture of rolling out something like manager self-service where managers are going to do salary actions or promote people, have transactional support for promotions and, performance management, maybe only 50% of organizations have some form of automation when it comes to performance management.

I think you have to realize that there’s a lot of organizations out there that haven’t yet done much automation.

Steve

I think that’s a great point, I used to do a lot of work in retail and I remember talking to the one client, we work in this space in technology, we tend to think everyone is very technology-focused, I remember talking to a VP of operations and he was about internet and stuff and he goes, “We barely have phone lines in a lot of our stores”.

Lexy

I have looked at emerging technologies almost all of my career, and you really have to look at whether a technology is truly mature, and we are truly mature with our administrative systems like our HR management system, our payroll application, maybe our benefits, but I think we’ve just reached maturity on self-service, in the whole strategic talent management area. Maybe the only ones that are mature recruiting maybe, recruiting and automation so you guys are helping push the envelope on performance management, but that one’s just barely at a matured stage, I think.

Steve

Wow, interesting, that’s a great observation. I have just two more questions, one, you are doing this sort of thing in Asia - how are you seeing technology being used differently outside of, if you are breaking into the big areas of Europe, America, Asia, are there major differences in how people are using technology in these different economies?

Lexy

Well, first of all, I will tell you the survey results and then I will tell you some anecdotes that I’m hearing. Looking at Web 2.0, and I mentioned using innovations like Facebook or wikis, Asia Pacific organizations aren’t as far along as the rest of the world in its adoption of that, say we’re at 10%, they’re at 8%. Now that’s not that big of a difference but because Asia Pacific is a bit behind the United States certainly, might be ahead of Europe actually in technology adoption. So the numbers say that they’re behind, but I have heard, and I’m looking forward to checking this out because I’m actually going to India next week and then I’m going to China, I have heard that there’s a number of organizations there that are completely doing recruiting using Facebook-like tools, and certainly many of the organizations that are doing programming are using wikis for collaborative development. So they may be completely bypassing the traditional applications that US and European organizations are using.

Steve

That’s interesting, it’s like they talk about with cell phones, a lot of developing countries are completely bypassing landlines, because at this point, if you’re going to put a phone system in, why would you have a landline, they are just leapfrogging entire technologies.

Lexy

Exactly, I mean it could be, one of my kids lives in Africa and their whole economy is using cellphones. They don’t have phones in their homes or their offices either, and the same too in places like Singapore and Taiwan and some of the Malaysian countries.

Steve

Interesting. The last question that I have is, from all this work you have done, so much work looking in, really analytically looking at this field - what would you say is the biggest insight that you have gotten from studying this, that people may not be fully aware of, to say? - really if you are a person using HR technology, considering it, these are some of the big things you should be thinking about, both in terms of what we know now and where you think we are going in the future.

Lexy

Oh no, I’m a broken record on this topic. I think that the key differentiator towards achieving any kind of successful HR technology project is change management, and I would put under that things like, make sure you’ve got a strategy that links the business needs to what you’re doing with your technology, commit to change management from the very beginning, get everybody involved from defining strategy, defining metrics related to strategy to defining why you are doing self-service or recruiting automation at performance management. Then make sure that any kind of value proposition that you think that through for every single kind of stakeholder, whether it’s the executive or manager who is going to have his or her job changed, or whether it’s the employee that realizes, if they are really going to be methodically measured, and one of those survey respondents this year said that they, and a very sophisticated company take them through a lot of technology adoption, and they say that they allocate at least 15% of their overall project budget to change management, to training them to communication and I actually think that’s light. I have seen so many companies fail with their technology adoption because they didn’t do any kind of change management that included everybody in the process, and they have had to go back and do it again so, change management is the thing that is absolutely mandatory.

Steve

I think that’s a great point, I think we get so enamored of the technology that ultimately realize success depends on people. A final question Lexy, so I know everyone is wondering, is there a place where we can get these survey results?

Lexy

Sure, it’s available for free and you can download it on our website which is www.cedarcrestone.com/research and we have actually got 11 years of surveys out there so you can go do your own research.

Steve

Lexy, thank you so much for your time. I have learned a tremendous amount in the conversation and I really appreciate you appearing on People Performance Radio and hope that you will come back again and we can learn some more from you.

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