HR Tech vendors disappoint on the topics that matter to buyers

Profile picture for user brianssommer By Brian Sommer September 23, 2018
Summary:
While the hype around AI and other advanced technologies was everywhere at the recent HR Tech Conference, product realities and vendor messaging were off.

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The current AI-craze looks like the ‘predictive analytic’ craze of a couple of years ago. So what were the big observations from this year’s HR Tech Conference event?

I suspect many HR executives make the pilgrimage to the annual HR Technology Conference hoping to reach a new level of HR consciousness. The most recent confab in Las Vegas had a lot to offer although I came away wanting more: more vision, more clarity, more science, more results, etc.

So what were the big a-ha’s?

Macro observations

  • The ATS got no love – About two weeks ago, I produced a three-part critique of Applicant Tracking Systems and the resume parsing woes within these systems. Of the 18-20 vendors I met with, I could tell that most had read the article. No one wanted to discuss it.

Why was this? It’s because improving the ‘intelligence’ of these systems is not/was not and will not be a priority for these firms. That’s a major disappointment and like the groundhog’s shadow, it tells us that firms will continue to struggle with their War for Talent for several more years to come.

The real food for thought for HR leaders is this: If your HR vendor can’t improve the smarts behind its ATS/Recruiting technology then why should you believe they can do anything meaningful and accurate with artificial intelligence (AI), machine learning (ML) or Natural Language Processing (NLP)?

If you’re worried that the robots, chatbots, etc. coming from HR vendors are going to take away our jobs anytime soon, think again.

  • Here’s an idea; let’s work around the pitiful ATS – I did see vendors that will solve the war for talent by pumping more worker profiles into the top of the recruiting funnel.

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That’s right, if you can’t fix the quality of resumes getting through the recruiting funnel, then your firm should get more volume.

Upon hearing this, I thought of Home Improvement’s Tim Taylor’s solution to everything: “More Power.” A couple of vendors suggested putting screening assessments ahead of the ATS resume scoring process. I think there’s some merit to this as it gets more qualified candidates into the funnel and kicks out a lot of poseurs and people who game the ATS with their keyword and jargon-laden resumes. I suspect we’ll see employers who hire a lot of people for a common role use this. However, the time it takes to create one of these assessments may keep the adoption of this technique subdued.

  • Compliance big but bias was even bigger - 2018 saw a lot of vendors take on compliance but it wasn’t so much around I-9 and employment history checks. It mostly touched on GDPR and cloud security standards. A subset of the discussion centered on workers in sensitive posts like nuclear energy or government.
  • Gender bias got a lot of visibility in new technology but I saw little to address ageism – recruiter and hiring manager biases are a real problem and cause many otherwise qualified job seekers to get kicked out of the recruiting funnel. A couple of vendors showed me their solutions that anonymize a candidate’s name, remove any words/language that could indicate their gender and remove many dates from the resume. Unfortunately, these tools only start to work once a resume has been loaded into an ATS. But that’s a BIG assumption that the ATS will correctly parse a resume.
  • Where’s the Reimagined Process? - I spoke at the show on what the next generation of cloud HCM solutions will look like and what companies should assess if they’re going to get one of these products/product lines. Not only did I have a great crowd, but they all also seemed to want my slides (or photographed most all of them). I’m okay with that.

In the post-talk conversations and email exchanges with attendees, it became clear that new HCM buyers don’t want their grandpa’s Oldsmobile anymore. They suspect that the cloud HCM or ERP solution they’ve had since 2007 (or earlier) probably won’t carry them into a more digital, volatile, big data-driven, smart app world. And they’re right: putting a spoiler on the trunk lid of your grandpa’s Olds won’t make it a Tesla.

  • What these buyers want from vendors are real roadmaps and process designs for radically re-imagined HR processes. They don’t want some vague statement about AI or a cutesy NLP demo. They want to know exactly how new tech will be used in a big data powered process. These buyers, like me, scoff when they hear a vendor claim their HR system will be the ‘book of record’. Wake up old school vendors: your solution might contain some HR transaction data but huge amounts of HR information are outside the four walls of your enterprise. It’s in review sites like Glassdoor , on social media, on video interviewing sites, on YouTube, etc. The ‘book of record’ terminology is proof positive your vendor doesn’t know what they’re talking about.

This subject is a big one as I’ve been recently approached by firms who want to hire me to do a short strategy project for them. Specifically, they want help designing future HCM/HR processes and developing potential shortlists of new vendors to fill these needs. Josh Bersin, one of the HR word's leading analysts confirmed that he, too, is getting identical requests.

Why is there all of this interest in reimagined HR processes? The next observation will explain that.

  • Getting the HR marketing message/value proposition right - HR vendors, like many enterprise software firms, sell functions and features and miss the HUGE experiential factors triggering change. I asked vendor after vendor at the show “What are the top three things you want me to know?” and invariably I’d get a function/feature summary.

If you peel back all the geek speak, most HR technology executives are struggling to articulate new capability to help companies either attract more/better talent or to retain/optimize the talent they already have. That’s a literal extension but it’s only going one level deep: they help companies with their war for talent challenge.

But, the real goal of HR tech buyers isn’t just to maintain stasis; it’s to propel outsized organic growth. Boards of directors are hammering top executives to deliver outsized growth. These board members aren’t content with growth rates akin to the inflation rate or GDP economic growth. Shareholders want the kind of growth that clearly shows the firm is outpacing competitors, grabbing more market share, successfully entering new markets, etc.

But companies can’t grow like this if: 1) they can’t get great talent in bulk, and, 2) they don’t retain, train and optimize the talent they already have. NO VENDOR ADDRESSED THIS WITH ME. All I got were more functions and features….

  • The debut of Raven IntelRaven Intel was the (unintended?) belle of the ball. This startup has developed great data on HR implementations and implementation partners. Everyone was talking about them and, one of the founders was apparently in my session audience. My first interview was with former NGA HR CEO (and former SAP SuccessFactors top exec) Mike Ettling. He’s got money in Raven Intel. Colleague Vinnie Mirchandani wrote this piece on Raven Intel recently. Jon Reed had plenty to say and recorded an interesting podcast with the founders.

I’d say these folks got a great launch. Now, let’s see their second act.

Closing thoughts

I have more vendor specific material coming in the next piece. It’s a bit more optimistic than this one. That said, the HR industry is really going hyperbolic on all new tech innovations. Everyone, it seemed, had a pitch on how they will someday use more AI, NLP, ML, etc. in their products.

But I’ve heard this story before. Just a couple of years ago, every vendor was promoting analytics, smart analytics and/or predictive analytics. I’m still waiting for 99% of those promised innovations to appear.