Workday Rising highlight - jobs are fluid. Why aren't HR vendors? VNDLY makes the case for the extended workforce

It happens every show - a great story gets away from you, lost in the blur of Ubers and airports.

At Workday Rising 2022, the one that got away from me was VNDLY. For as long as I can remember - and that means decades - I've been peppering HR vendors with my gripes:

• Why aren't you integrating contractors and employees?
• Isn't the job market becoming more fluid between contract and "perm"?
• Wouldn't you want your HR software to reflect that?
• If you're serious about supporting your customers' talent needs, shouldn't your software help them to pull in the best people from the "gig economy"?

In Orlando, I got into all that with Workday's Shashank Saxena. His answers deserve a full review, not a tarmac teaser - and now it's time. When Workday acquired VNDLY in December 2021, Saxena was a VNDLY co-founder; now he is General Manager of VNDLY, a Workday Company. While VNDLY continues to run an independent line of business, it's the integration with Workday - and, by extension, permanent employees - that really stokes these issues.

Why Workday plus VNDLY? - because "permanent employee" is becoming an oxymoron

Saxena began our sit-down with a statistical wake up call:

Workday HCM is a system of record, a single source of truth for 64% of the workforce, which is full-time employees. [VNDLY] is basically Workday HCM for the other 36% of the workforce, which by 2027, they are saying is going to be 50% of the workforce.

He took issue with my use of the term "permanent employee":

I'm intrigued by your opening comment about skills, because if you take a step back - and I'm mentioning this in my keynote today - a few years ago in the HR world, we would use terms like temp and perm, right?

But which full-time employee today is permanent? And who is temporary? What if a good contractor is coming up on assignment? How often do you contract-to-hire - you flip them over to a full-time employee? Happens all the time, right?

Indeed. Saxena cited this scenario:

Let's say you hire someone as a contractor. You like them. They like your culture. So are they truly temp? And how do you categorize? These boundaries are blurring. This terminology is getting outdated.

It was impossible to ignore Workday's huge emphasis on skills at Workday Rising - and this is why. Saxena:

A lot of it comes down to: what skills do you have? What skills do I need? Do these skills match? And by the way, we've figured out the engagement type, whether it's W-2 versus 1099, gig versus freelance. And in that world... What should the software and compliance be like?

Tax compliance is a formidable hurdle. But now, Saxena says, we're getting better at managing that - and building software to ensure that compliance:

With these blurring boundaries, let's not forget, co-employment is still a real thing. So how do you keep clients compliant, but also give them visibility into what we call the extended workforce?

Another gotcha: your systems integrators are part of this extended workforce also.

Very often, I walk into clients, and I ask them, 'How many contractors do you have?' They're like, 'I don't know; we actually don't have a whole lot.'' And then you ask them, Well, do you have any big system integrators you're doing projects with'? And they say, 'Yeah, we have people from Accenture, Deloitte' - well, they're contractors and consultants, right? TCS, Wipro, Infosys. Well, that's another example of contractors and consultants. So it's not just a local staffing firm.

Why are we stuck in employment data silos?

Not to mention that the big SIs do plenty of contracting themselves - but let's not go there. Here's my problem: too many companies stick to the playbook: HR hires the perm people; procurement hires the contractors. Isn't that setup pretty dysfunctional now, when so many employment lines are blurred? Saxena says change is afoot:

SIA (Staffing Industry Analysts) puts out a lot of publications and research. [They found] a lot of these programs are moving from procurement into HR.

A contractor could end up being one of the best employees you ever have. So why is procurement messing about with that relationship? Here, Saxena challenged me: regulatory history has been a boot anchor on procurement, for understandable reasons: the bottom line was perceived to be at stake. He cited past Microsoft and GE lawsuits:

There's history there. But at the same time, the world has changed. Now it's about talent - and fixing the processes that block your ability to acquire and nurture that talent.

In the last few years, we've gone from this being an employers' market to an employees' market. It's a new engagement model, or, I would say, a shift in power dynamics towards talent. So how do we help employers win this war for talent?

Workday and VNDLY integration - a snapshot

These questions inform VNDLY's ongoing integration with Workday. Saxena:

Does every role have to be a full time employee role that they open in a platform? Or can they post a contractor role, a gig role or a contract-to-hire role? Each of these does not need to be separate workflows or separate systems; they can be integrated. Today, VNDLY has 28 native, in-platform API integrations with Workday HCM, where we use Workday as a current business process framework. We write the contract or record into Workday. So there's a lot of things managers can do to leverage those capabilities.

Such as?

Tenure is a great example. Generally, from a co-employment standpoint, you want to have a tenure policy in place, saying this person can only be a contractor here for 18 months or 24 months, after which there has to be a six month break in service before they come back. They can't be a perpetual contractor here for 20 years. So at the 18 month mark, when the person is a contractor, they're performing really well. What are the decision criteria? The hiring manager has to decide whether to let go of the person.

If they say, 'No, they're performing really well; I don't want to let go of them.' In Workday, there's a button in there. So using the Workday VNDLY connector, you see the manager; they can see their org chart; they see the employees that report to them -  but they also see the contractors that report to them.

They can click on the contractor; they can see the tenure; they can click and choose the "convert contractor to full-time employee. The 'convert contingent worker workflow' and business process is currently in Workday.

Another example? A manager can now select multiple employment types when posting a position:

Why should the manager go ahead and post a full-time employee position in Workday, and then go into a vendor management system and post a contractor position? Why can't they select multiple options while posting it in Workday? That's the kind of stuff we enable using our APIs.

My take - on roadmaps and workforce visibility

Workday's integration with VNDLY is ongoing, but it's further along than I expected. VNDLY was already a Workday partner, and looped into Workday's APIs. In July 2021, VNDLY upped the ante, becoming a certified Workday partner:

The customers kind of forced the marriage between Workday and VNDLY, because of how well the integration was already working together.

More integration plans are ahead. One that jumps to mind: Workday's Skills Cloud. Yes, Saxena says, that's on the roadmap. Over time, reporting lines at VNDLY will change, into Workday's CHRO product leadership:

Right now, VNDLY's in the incubation period where we sit independently and report to Pete [Pete Schlampp, Chief Strategy Officer at Workday], but the plan is to for VNDLY to roll up under the CHRO product line, right is for exactly what we're talking about - integration with Skills Cloud, and these other areas which we believe sit squarely with planning.

That fits: VNDLY just announced shift scheduling, to help fill gaps that are typically filled by staffing agencies:

We have some pretty aggressive plans in the space, and this will continue to evolve. That's why we aligned with the CHRO product line.

Once a customer really gets VNDLY running well with Workday, what does that look like? Saxena responded:

One of the major benefits is full workforce visibility. You don't just see full-time employees; you see an entire workforce of employees and non-employees. You can then understand how much are you spending on these non-employees - 10 million a year, 100 million a year, 200 million a year? You can have a digital auto invoicing setup with vendors. So you're streamlining the invoicing process. And you don't have to do account reconciliations.

If you want to break down employment silos in the large enterprise, compliance must be global. Saxena's team is working to expand compliance internationally, beyond what they offered in their startup years. But these days, security looms just as large. As Saxena explained, VNDLY allows managers to plug any workforce access gaps:

Do you know who these non-employees are? And do you know what systems they have access to? If you gave them this access during onboarding, did you revoke that?

Compared to its peers, VNDLY is relatively new to the game. But Saxena thinks the late entry gives VNDLY an architectural advantage:

Our two biggest competitors are older than Y2K. Back when I was trying to look at the space, I asked, 'Where are the five Silicon Valley VC-funded startups in the space? And the answer was, there was none. And I was like, 'How is this possible'? It's such a big opportunity.

Saxena says that VNDLY's growth rates are the fastest in the VMS market - but that's not how he measures success:

The way we measure success is not necessarily by growth rate, but rather by customer satisfaction. So that's something that we have to make sure we don't lose sight of.

Agreed - though I will also judge VNDLY's ultimate success by whether it can break down that temp/perm silo for Workday customers. That change has been a long time coming in the HR software market - is it finally here? Granted, there will be challenges. We had an interesting back-and-forth about mapping contractors' skills.

Anything like that would have to be very carefully considered; there is still an important legal distinction between contractor and employee that must be respected, not just by Workday's customers, but by the software itself. I'm sure Workday, always a deliberate vendor on such matters, will handle things properly - but to me, these are the right conversations.

There is nothing more frustrating than getting tagged (and locked in) as an employee or contractor, when all you want to do is contribute as life evolves. It's high time for HR managers to have software that allows them to flex around real life pivots and skills changes. I'm looking forward to documenting VNDLY's progress, via customer use cases.