HR’s New Risk Reality with Special Guest Andrew ‘AG’ Gadomski

[00:00:08] [SPEAKER_00] Welcome everyone to another episode of the HR & Payroll 2.0. I'm Pete Tiliakis and as always, I'm joined by the legendary Julie Fernandez. Welcome, Julie.

[00:00:16] [SPEAKER_01] Thanks so much, Pete. Let's hear what you got in store for us today.

[00:00:20] [SPEAKER_00] Yeah, yeah, I'm stoked on this one. We've got one of our fellow work definers, the host of Reciprocity with AG and the Managing Director at Aspen Analytics, Mr. Andrew Gadomski, AG for short. Welcome to the HR Amperell 2.0 Podcast.

[00:00:33] [SPEAKER_02] I appreciate that, Pete and Julie. Thank you so much for being hosts and work definers. I love it. We got our own club. We'll need a tree house soon.

[00:00:45] [SPEAKER_00] Yeah, yeah. Is that what we should call them? I don't know. Maybe we need something better branding. We can certainly try that.

[00:00:51] [SPEAKER_01] Yeah, listen, for those who don't hear us drop out work defined but might not recall off the top of their head what that is, it's really a network or community of those of us that are podcasting in the HR payroll technology space, right? Yeah. So if ever you like one of our episodes or shows and want similar types of content, you can go out to the work defined network and find a lot of others that are talking about and promoting some of the same types of stuff.

[00:01:17] [SPEAKER_00] Yeah, yeah. Full spectrum HR and all the edges to that as well. I don't know how many shows there are now. Does anybody know? 50 or so maybe? I think it's right around 60 plus or minus. Yeah, yeah. That's cool, man. It's some good quality stuff, so I'm enjoying it. But yeah, look, man, I'm really happy to have yours. So Julie, you want to do the honors and we'll get into it?

[00:01:36] [SPEAKER_01] Yeah, I think, AG, you do know that we start out with everyone asking them how they got into this space around HR and why they stay because it doesn't seem like it's usually on purpose.

[00:01:48] [SPEAKER_02] No, it is not on purpose. I've always been an information technology and mathematician. Call me a mathlete, if you will. And I was working at a company that was early into the e-commerce space in Philadelphia, a lot of specialization around building new websites and then integrating data sets.

[00:02:14] [SPEAKER_02] And I wasn't super happy with it. And I went to an executive search firm and a couple of them. I was young and it was meetings that said, hey, what should I do? And one of them said, let's get this straight. You have a chemical engineering background, a logistics background. Your degree is in marketing and you know how to sell stuff. I'm like, yeah. And they said, why don't you become a recruiter? Well, what's a recruiter?

[00:02:41] [SPEAKER_02] So within about a month of being a recruiter, because all my background was in IT and convergence, I told my wife, OK, it's been a month. This is completely busted. This whole way that recruiting is done is going to die. So we're going to monopolize on that. I'm going to stick with this organization.

[00:03:05] [SPEAKER_02] I'm going to get promoted and then I'm going to leave and go to a really big company, become the head of talent. And then I'm going to start my own business. She's like, it's been a month.

[00:03:17] [SPEAKER_00] And I'm like, what a vision board. What a vision board.

[00:03:20] [SPEAKER_03] Yeah, right. That's a great story.

[00:03:22] [SPEAKER_02] That's it. And that's how I did that. So I did a lot of intelligence work with them and then ran Honeywell. It was about a $4 billion business and did all of their recruitment work and put in a very large RPO. It was one of the first. This is back in 2000. It was a long time ago.

[00:03:43] [SPEAKER_01] Actually, we might have crossed paths back in those days.

[00:03:45] [SPEAKER_02] I know. I was going to say, I know that world well.

[00:03:48] [SPEAKER_01] And then I started up Aspen Analytics.

[00:03:50] [SPEAKER_02] It started as a traditional human capital, HR consulting, but always there was a lot of grounding in data. I was fortunate to work with some very large companies early on. And that advanced into building a dashboard system. That advanced to then doing more collection of data and then dispersing it back out. At one point, I think we're managing over 150 companies and data analytics for part of their businesses.

[00:04:20] [SPEAKER_02] And I then was like, well, what else am I going to do next? I mean, there's like a point where, you know, do you sell? Do you not? So I went back to school and I really focused in more on data analytics. A lot of people were surprised. They said, so that's awesome. You became a professor. I'm like, no, I'm going back to school to sharpen the samurai sword.

[00:04:42] [SPEAKER_02] And that's when I went ahead and I moved over into auditing and working closely with companies on what's your compliance, what's coming up with artificial intelligence and where are the threats associated with that. That gave me the opportunity to then go work with the Department of Homeland Security and help them build their cybersecurity agency. And they let me keep the business while I was working for the executive branch. Very unusual.

[00:05:12] [SPEAKER_02] Yeah. And what a great ride. So that's my little story.

[00:05:17] [SPEAKER_00] Yeah. Wow. That's impressive. I mean, that's kind of a full view of a lot of different things. I mean, you know, a lot of different lenses that you carry.

[00:05:26] [SPEAKER_03] Yeah. Thank you.

[00:05:27] [SPEAKER_00] Yeah. I love it.

[00:05:27] [SPEAKER_01] So much journey and movement. That's what I think we hear folks wanting, you know, from younger generations and not super typical of folks that, you know, have already been paving paths. So.

[00:05:39] [SPEAKER_03] Yeah.

[00:05:40] [SPEAKER_01] A cool example of how this whole entire space can take you across some pretty broad stretches of path. Right.

[00:05:47] [SPEAKER_02] I think it's good that if you focus in on human resources is really about the humanity, there's always some sort of level of connection between really workforces. It doesn't matter if they're selling chemicals or they're selling information technology, hardware or services, or if they're focused in on pharmaceuticals.

[00:06:11] [SPEAKER_02] Eventually, there's a bunch of people working together in a team of roughly 80 percent of the people you work with is limited to 25 people. And they all got to work together. Okay. Yeah. It's kind of a common denominator.

[00:06:23] [SPEAKER_00] Yeah. Yep. Yep. Totally. Totally. But Andrew, tell me what you guys do over at Aspen Analytics and then tell me about the show because I don't know if everyone, I listen to it. I think I've listened to three or four episodes now. I try to listen to more, but you have some really interesting subjects on there and I want you to share that. But tell me about what you do at Aspen and then, yeah, the podcast.

[00:06:42] [SPEAKER_02] Companies come and say, Andrew, we want to learn more about what's happening with artificial intelligence, wage transparency, and salary, excuse me, wage solicitation, any type of regulation related to human resources. Yeah. And there's a platform that you can log into that has lessons and knowledge checks and so on. And ultimately, they ask the question, are we doing what we're supposed to be doing?

[00:07:12] [SPEAKER_02] And that might have been a question that wasn't that exciting or really around, you know, so many years ago. I mean, Title VII, EEOC, OFCCP were some of the ones everyone knew about. And now more and more regulations have really popped up and they're not quite sure how to handle it, but you handle it by looking at the data. Yeah, yeah. And so that's the work that I really flipped over into.

[00:07:42] [SPEAKER_02] And I couldn't do DHS work. I couldn't do Department of Homeland Security work if I didn't flip. I'm on workforce planning. But I can't do that. And I can't do workforce planning for other organizations when I'm doing workforce planning and managing 20 people. Right. Yeah.

[00:08:02] [SPEAKER_02] So for now, at Aspen Analytics, there is a lot of talk about are we doing all the things we need to do in terms of regulating AI, regulating wages? And are we too risky when it comes to anything related to cybersecurity for our recruitment and employment? Those are topics that don't have a lot of grounding right now. Yeah. You're talking about for the marketplace.

[00:08:31] [SPEAKER_00] They're gray areas.

[00:08:32] [SPEAKER_02] Yeah.

[00:08:33] [SPEAKER_00] When you say we, you mean the marketplace, not yourself internally.

[00:08:35] [SPEAKER_02] If you went ahead and pulled 150 position descriptions from heads of talent acquisition, if you did it for 150 CHROs, 150 CISOs, information security officers, heads of talent acquisition, and heads of recruitment on those three or four topics, some of them are not going to be there at all. Yeah. Yeah. They're going to, if they are there, they're going to call them different things. Mm-hmm.

[00:09:04] [SPEAKER_02] By the way, HR's history of having the same lexicon is hysterical. We've never called it the same thing. Yeah, I know. Hysterical. It's the same thing.

[00:09:13] [SPEAKER_01] Miserable.

[00:09:14] [SPEAKER_02] It is a story in itself. You could write a book. Everyone's unique. You got to remember.

[00:09:18] [SPEAKER_00] Everyone's unique. They all think they are. It's all special.

[00:09:21] [SPEAKER_02] But there isn't a lot of crossover. And all of a sudden, everyone's talking about AI governance. Yeah. Like it's some new shiny object. I'm like, we've had governance. Exactly. Like workforces, whether they're, you know, for regulations and data privacy for decades. All of a sudden, it's, you know, hot and bothered. And I'm like, you know, you should have been doing the right thing the whole time. Now that we're just, this is just another thing to do.

[00:09:52] [SPEAKER_00] Yeah. No. Agreed. Agreed. So, Andrew, I want to get your kind of, your lens on the market right now. Like looking across HCM tech, what are you excited about? But what are you concerned about? I know you and I talked a few behind the scenes yesterday about what's going on in the recruiting world. But like, what are some of those, you know, there is a lot to be excited about. But what are some of those concerns to balance that out?

[00:10:11] [SPEAKER_02] What I do like is there's a level of excitement around the use of artificial intelligence. That's a very broad statement. But using agents to execute work with the idea that the individuals who were doing the work are using it like an Iron Man suit, where it's enabling them to potentially do more or have more excitement.

[00:10:39] [SPEAKER_02] What I'm excited about as an opportunity is somebody saying, we can hold on to people longer and give them more time off.

[00:10:49] [SPEAKER_03] Yeah.

[00:10:49] [SPEAKER_02] And pay them the same because we gave them agents and AI. I, you know, Andrew, we think that we're going to give you all kinds of training and AI agents. And now you only have to work for us for 25 hours a week. And we want you to focus in on fitness and health or additional education. And your job is secure because we surrounded you with technologies that just weren't available for, and they're cheap for us to execute. How wonderful.

[00:11:19] [SPEAKER_02] Show me the Wall Street Journal article. Yeah, yeah. That says that, but I'm excited about that opportunity. Yeah. I'm a little concerned about the analyst speak that is out there because it is a foot deep in what's easily something that has many fathoms.

[00:11:40] [SPEAKER_03] Oh, yeah.

[00:11:41] [SPEAKER_02] Yeah. And so when you proxy information and say, well, this is what's really cool and exciting. And then everyone else says, this is what's cool and exciting, but there isn't a lot of depth. Yeah. It doesn't, I think it creates fear as much as frustration. Yeah. Makes sense. I am also excited about how individuals want to focus in on their work.

[00:12:10] [SPEAKER_02] There's so much dialogue. I'm just going to use LinkedIn as the reference. In my thread, there's plenty of people talking about humanity, and this is what's important to retain as work. I don't recall that being in my thread five years ago.

[00:12:29] [SPEAKER_03] Yeah.

[00:12:30] [SPEAKER_02] An excitement, or maybe it's a defense mechanism, but people saying this is what humanity is inside work, and we really need to think differently about the use of technology. So in my lifetime, I haven't quite seen that dialogue because we haven't had a disruptor that's roughly the equivalent of the discovery of gunpowder.

[00:12:56] [SPEAKER_00] Yeah, I would agree. And the internet was one thing, but this is a whole other level.

[00:13:01] [SPEAKER_02] Right. So I'm excited about the dialogue. I am concerned that there's so much dialogue, and it's so diverse when it comes to HR technology that you can't quite tell, did someone create a feature, or did they just mimic something? Are they testing it? Yeah. Do we have customers who are using it? Okay. Do you know what their downstream impact has been?

[00:13:29] [SPEAKER_02] No, because we haven't even had two or three fiscals of having it going, so we don't know if it's driven more earnings for us. And that's ultimately where you want to get to with HR. We have a more effective workforce that's driving more productivity, that insulates us from error and increases earnings. Stockholders are excited. Our investors are excited.

[00:13:57] [SPEAKER_02] Our own teams are excited about productivity. We haven't quite gotten there yet.

[00:14:04] [SPEAKER_00] Yeah, yeah. I'm actually excited about creativity because I want to spend more time creating and following passions that I don't have time for. So that's where my brain is with automation. But you're right. I think a lot of folks, it's just straight up productivity, and that's it, right? And I think that's kind of missing the point in the opportunity, right, to make your employees more powerful on another way, in another way, not just more time to do more shit. But, you know, give them a chance to actually live their life. Hey, you're right. Be healthy, productive, and bring their passion and that creativity to work.

[00:14:33] [SPEAKER_00] And what could be? You know, new iPhone or whatever.

[00:14:37] [SPEAKER_02] I have had people say, Andrew, what would be an excellent downstream impact of artificial intelligence? I said, and I have told people, a 30 to 40 percent difference in health care costs powered by any government in any country.

[00:14:51] [SPEAKER_00] Yeah.

[00:14:52] [SPEAKER_02] They're like, what?

[00:14:53] [SPEAKER_00] That'd be amazing.

[00:14:55] [SPEAKER_02] Mental health, emotional health, redistribution, and all of that, that should be the upside. A hundred percent. You know, an entire, you know, the idea that the psychology and the family dynamics become healthier and closer because we have more time to invest in those items. Yes, yeah.

[00:15:18] [SPEAKER_02] The return of, you know, less of a pressure for dual income houses based on, dual income housing, literally based on income and cost. If someone wants to work and two people want to work or multiple people want to work in one household, that's great.

[00:15:35] [SPEAKER_02] But if we could do it where there would be maybe one primary income because it's servicing the needs, does that change family dynamics that then have downstream social impacts and can affect other things like volunteerism? Now, I have said a number of things in the last minute and a half. I don't tend to read about those things. Not yet.

[00:15:57] [SPEAKER_01] I feel like sometimes we read them on an extreme level, right? Where people start talking about, well, nobody will have to work because they'll do everything. So instead of thinking about how to be more productive or how to improve your life or how to infuse these things that we all long to have as part of our life, you know, some of the thought pattern in the conversation more goes to, you know, well, you don't have to do anything. And the antithesis of productivity and creativity and those sorts of things.

[00:16:27] [SPEAKER_01] And I think, you know, like that does nobody a service to focus on that as, you know, hey, here's what you can get out of this. It actually defeats everything.

[00:16:37] [SPEAKER_00] I'm guessing that if you're listening to this episode, that payroll is important to you. And if not, you likely know a payroll leader that powers this critical profession. Well, now's your chance to make a difference for the future of payroll. The payroll profession confidence index survey is now open for input by any and all payroll stakeholders. The PPCI is incredibly unique research. It focuses on measuring the sentiment, relationships, eminence and strategic impact and ROI of modern payroll.

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[00:17:32] [SPEAKER_00] Offline yesterday, we were in the hot mic session where they work to find group. We all kind of get together and riff around. And you were talking about some crazy stuff out there, threats that are happening with AI. And we've seen a lot of that with like payroll and PII. And I know about the hiring stuff, but man, what has you concerned? What are some of the things you're seeing?

[00:17:51] [SPEAKER_02] Well, one of the things I've tried to help people understand is that HR is a attack surface or a vector for individuals with malicious intent. And they are using cyber attack techniques to exploit members of the HR community or recipients of services from the HR community.

[00:18:18] [SPEAKER_02] Said another way, someone might be impersonating an HR individual to gain information. Someone might be trying to work at a company and, you know, to gain information, actually get hired. Some may be trying to apply to a job with zero intention, but trying to social engineer and get information.

[00:18:41] [SPEAKER_02] And my concern is, is that we've all in HR. Ultimately, we try to focus in on treatment and advancement. We want to treat people well and we want to advance any number of things associated with them, whether it's their compensation or their benefits, their ability to learn, if it's making a better team. But usually we're not necessarily trying to always stop something as much as we're trying to get something to work.

[00:19:11] [SPEAKER_02] Yeah. And in that concept where someone is leveraging the fact that they're trying, that someone else is trying to be advanced. So we have, so HR has every desire to look at applicants and say, yes, I have an opportunity to change that person's life. Or, yes, I have the opportunity to give this person different kind of learning. So that's our baseline. Yeah.

[00:19:40] [SPEAKER_02] I'm concerned that that is being exploited in mass. And it's just not necessarily on the radar screens of the individuals who are setting the strategic tone of HR. And I'm certainly wary that the senior level operators are not influencing the HR teams about this.

[00:20:08] [SPEAKER_03] Yeah.

[00:20:08] [SPEAKER_02] And saying, what are you doing to make sure that the people who are working in our manufacturing plants aren't operating, you know, aren't creating threat? I don't want something to happen to our infrastructure. What are you doing HR to assure? Right. And I think we'll see more of those questions. I'm hopeful.

[00:20:32] [SPEAKER_02] Unfortunately, I think we'll have to have more attacks to start getting people to kind of wake up a little bit. Yeah. Yeah.

[00:20:41] [SPEAKER_00] Is this a governance gap? Is this just an immaturity thing with the cycle of how we have to go through learning about this? Or is it uniquely AI?

[00:20:50] [SPEAKER_02] I think that it's actually a gap in the maturity of how a market changes around a function.

[00:20:58] [SPEAKER_02] We didn't have to worry about individuals leaving our companies after a few years and then replacing them and executing a vacancy or pressure for people to have upward mobility when individuals were carrying 10 to 15 years or more of tenure with one organization. Yeah. Yeah.

[00:21:23] [SPEAKER_02] It just wasn't as it was accepted that I was going to be in my job and I'm going to be in my job. And then as soon as it became socially acceptable to move from one job to another, either laterally or to gain more money, then all of a sudden we have a different concept around what we used to call job hopping. Now we understand it and we accept it. In this, we're sort of in the same place.

[00:21:51] [SPEAKER_02] We're just coming into a spot where AI is creating problems and we're scared of it rather than we have the opportunity to accept it will cause problems. Yes. And now we're going to educate people on job hopping isn't a problem. It doesn't define someone as a bad person or a poor performer.

[00:22:18] [SPEAKER_02] They have the skills and the attributes and so on that we can leverage and we can learn from so they can be part of the workforce. We haven't gotten there with artificial intelligence.

[00:22:28] [SPEAKER_00] You're right. We're in such a skills-based economy now that you're right. And I don't know that everything around it has completely caught up. Most of the employers, you know.

[00:22:36] [SPEAKER_01] And honestly, aren't we still trying to digest some of the challenges of having that different aperture and that open-mindedness to job hopping? And yet we know that folks who are really good salesmen sell themselves into skills and capabilities that they don't have. Right. And so, you know, there's a different level of, you know, different level of activity to find and match skills on the upside and address it when, you know, it fails and it isn't a good match.

[00:23:06] [SPEAKER_01] And we're not even that far on the AI side, right? No. But I feel like we're still choking on... We don't know what we don't know. We're still choking on the skills economy part of the story, right?

[00:23:15] [SPEAKER_00] Yeah. Yeah. Yeah. Yeah. Andrew, like, what do you think are like, what do you think are some of the blind spots that HR has right now? Maybe you see in what you do in your research and your work that maybe the market's not, like you say, not talking about really or isn't pointing out.

[00:23:29] [SPEAKER_02] I think the first one is actually a workforce planning gap. When I talk to organizations, the maturity level of workforce planning isn't what I would call consistent, right? So there's a lot of investment. There's a little investment or they're early or they haven't made changes. But what I'm not seeing in workforce planning is a deliberate reassignment of technology, contractors, and the use of artificial intelligence when we think about a position.

[00:24:00] [SPEAKER_02] We've decided that we're going to budget for a position usually for a multi-year period. We're going to spend so much on it. What are the knowledge, skills, abilities, and tasks associated with that job? And then how much of that actually, can that actually be outsourced 100%? You know, and so we do that already.

[00:24:25] [SPEAKER_02] We might say, no, we're going to go ahead and we're going to call a staffing company and we're going to take a large-scale contract and we are outsourcing all of our IT technical support. We are no longer hiring as full-time employees, IT technical support. We've made those decisions. That's a workforce planning decision. But what we're lacking is we have full-time employees.

[00:24:51] [SPEAKER_02] How much of their work is going to be changing because of technology and then how much of their work is going to be changing because of artificial intelligence and the use of agents? And then how does that go ahead and get cast out over the next, say, three or four years so we can talk about it intelligently with our teams and then back into annual operating planning?

[00:25:14] [SPEAKER_02] I just haven't heard in HR saying we have 250 people who are under headcount and 50 of them are contingent labor and we want to enable ourselves that in two or three years we don't have to have a dependency on contingent labor. Yeah.

[00:25:36] [SPEAKER_02] I haven't heard some of that dialogue and that's really concerning is that we're not thinking about the integration points.

[00:25:46] [SPEAKER_00] Yeah, yeah. I do think you see, though, that that subject is rising with the HCMs. You've seen some – we talked about HighBob and so Dayforce turned on that capability. UKG obviously has that capability with all the time data they have. And then HighBob purchased – I'm drawing a blank now – but picked up a solution for that purpose. So you do see that coming closer sort of – Yes.

[00:26:09] [SPEAKER_00] In somewhat – what you're describing is very much an HR function, but some of that historical was kind of on the finance modeling side of things. And now I think that's coming – those are coming together more. So there seems to be at least an appetite from mature companies to get it. Are we maturing companies at scale fast enough?

[00:26:25] [SPEAKER_02] The project programming and expenditure, PPE process, tends to start with the CFO. Yeah. And then bleeds into –

[00:26:37] [SPEAKER_00] Yeah, because it lands in their lab to approve that cost, right?

[00:26:41] [SPEAKER_01] It still feels like where those dialogues are happening, and a lot of times it's capital intensive or labor intensive types of industries, right, where it's really admittedly their business is people business. It feels like it's still very binary, right? And the objective is to figure out how my staffing decreases over time or some similar formula, how much I can grow with how much incremental staff increase,

[00:27:07] [SPEAKER_01] as opposed to the whole idea of looking at how these things are affecting individual jobs and productivity and skills and kind of redefining that value proposition, right, of the skills and talent and how they interact with AI in order to have a role, yes, but also do something bigger than themselves within that role.

[00:27:27] [SPEAKER_01] It feels like that's a bridge further in reengineering, right, and application of how AI is going to impact roles.

[00:27:37] [SPEAKER_02] I agree with that. And, you know, when you're doing that PPBE process and really trying to program, I think one of the things in going back to what was being said earlier, one of the things I find concerning is that we're using job announcements or job ads as a proxy definition of what the job is.

[00:28:03] [SPEAKER_02] And with artificial intelligence, it would be smarter to make a very long job description that is not seen outside of the organization. It's a historical HR document, so it doesn't need to be disclosed. But it lists all the knowledge, skills, abilities, and tasks, and the mix of AI and the type of systems that can be used. And then when people apply to a job, they're really measured against that.

[00:28:32] [SPEAKER_02] And when people are in the job, they're measured against that. The idea that six bullet points and what your education is describes the work is, you know, it's actually a very weak position.

[00:28:47] [SPEAKER_03] Yeah.

[00:28:49] [SPEAKER_02] Yeah, interesting. So I'd like to see that. I'd like to see us say, okay, we're hiring a neurology physician assistant. That's going to be a position we will have at a hospital for a very long time. And there will be many people who will go through that job in the next five years.

[00:29:11] [SPEAKER_02] Well, what is the responsibility of any of those individuals who are ever in that job? I imagine some of it is they have to be able to diagnose an EEG. That is a task. And whether or not there's power by AI, that's not going to change. Yeah. We don't do a great job of saying that out loud. That's concerning.

[00:29:37] [SPEAKER_02] So it's difficult to assign artificial intelligence to anything when you haven't defined clearly what the neurology physician assistant is supposed to do versus the neurologist.

[00:29:52] [SPEAKER_00] That's a great point.

[00:29:53] [SPEAKER_02] Like, how do you? Yeah. We want to use AI. I'm like, yeah, but to do what? And for what position? So let's start to answer that question.

[00:30:02] [SPEAKER_01] In fact, I have a panel in a couple of weeks here with several leaders who have been working on not just AI use cases and what the heck do you do with AI use cases, but then doubling back and looking at the skills impact and the position and roles impact of whatever that use case is and trying to be a little bit more holistic. Holistic not as an end-to-end process because there's that out there, right?

[00:30:27] [SPEAKER_01] But holistic in let's boost productivity and also infuse back into our thinking of our roles and skills exactly what the impact of this is. And I've only heard it in a few places and thankfully some thought leaders that will be presenting with me on it in a couple of weeks.

[00:30:44] [SPEAKER_01] But it gives me some hope that there are HR leaders out there that have this mindset and also recognize some of these same challenges and are trying to figure out how can I address these even within kind of something as simple as a use case situation.

[00:31:03] [SPEAKER_00] Yeah. Yeah. Yeah. Andrew, I want to ask you a question. I don't know if you remember a couple of years ago, Lattice, right? They put out, they are a HCM or HR tech platform. They put out this thing about giving, I'm going to go back and read this here. So they had proposed, originally intended to treat AI tools as documented team members, giving them profiles, dedicated managers, performance metrics. And if I recall correctly, personnel numbers. That got a lot of backlash. And most folks thought that was kind of marketing.

[00:31:32] [SPEAKER_00] I thought my compliance brain went off. I started thinking about audits that I've been involved in. And I've been involved in a lot of them. I get it. I understand we have to have some sort of, you know, we've got the agent system of record over at Workday. We've got, you know, other things at different solutions. We are going to have to manage these things. Absolutely. We are going to have to be very guarded with their access and whatever. Well, what are your thoughts on something like that? Does that make sense? Is that the future? And what is the risk there? Because I know you do a lot of work in the cyberspace and compliance.

[00:32:01] [SPEAKER_00] But what are the risks here of something like that? It's similar. Or just at all with AI.

[00:32:06] [SPEAKER_02] Yeah. Yeah. It's parallel to the risks associated with managing contingent labor and full-time employees or part-time employees. So both are full-time equivalents. We have someone who's working 2,080 hours a year or whatever. And we decided in this case that we're not going to give individuals benefits. We're going to pay for it. We're going to pay for it at a premium.

[00:32:34] [SPEAKER_02] But we're also giving up the right to manage them. We're giving up. We have less liability. Someone else is carrying any number of liabilities and insurances. And we can't take that position description in the statement of work and make it identical to a position description inside the company and manage people the same way. That creates compliance problems. That's a problem.

[00:33:04] [SPEAKER_02] So we haven't necessarily been doing that where we take, oh, let's take our entire workforce of 5,000 employees and another 6,000 non-employees that work with the 5,000 and put them into one system and manage everything right there. There are reasons why we don't do that.

[00:33:26] [SPEAKER_02] So when you're talking about using automation agents, what I would offer is what happens when you outsource the agents to a third party? So now you're working with consulting company Alpha. And they go ahead and you buy agents from them that are supposed to be doing the work of the equivalent human that you would have been working with them as an outsourcing provider.

[00:33:53] [SPEAKER_02] Well, now we have four different classifications. So I think that what Lattice was leaning towards is why don't we think a little bit differently about workforce planning and we can start with unique identifiers for the individuals that are in it or the agents that are working in it. I don't find there to be an issue with that. I think that the workforce planning sophistication is way beyond the majority of the market.

[00:34:23] [SPEAKER_02] I think it's one of those things that you try to do it and they're like, oh, this is so hard. Because HR doesn't know how to do the position assistant job. They have to lean on all these other folks to say, can you actually tell us what the job is? I like what Lattice was thinking. I like the idea. I think that there is a compliance issue for sure. I think there's a CFO and budget issue.

[00:34:54] [SPEAKER_02] And, you know, because how are they going to account for it?

[00:34:57] [SPEAKER_00] Are they assets? Fixed assets? I don't know.

[00:35:00] [SPEAKER_04] Yeah.

[00:35:01] [SPEAKER_00] And there was so many things that went off in my head.

[00:35:03] [SPEAKER_02] And so when I think about when I work with companies and they say, can we do this? I said, you always have to test for is it sustainable? Is it technically feasible? Is it politically feasible? And is it financially feasible? In this case, totally financially feasible. Technically, maybe. You have to do a lot of change management. Politically, way, way off the scale. People are like, do not treat me like a robot.

[00:35:29] [SPEAKER_02] Do not count me the same way as an AI agent. And then is it sustainable? I guess mathematically it is. The only problem is that the movement of the agents would be much faster than the movement of the human.

[00:35:44] [SPEAKER_03] Yeah.

[00:35:44] [SPEAKER_02] We don't know what AI is going to look like in a year, let alone four years.

[00:35:49] [SPEAKER_01] Well, and that might presume that AI keeps doing the same thing and not that it evolves, you know, according to the task. And I mean, our jobs evolve. Yeah, jobs evolve.

[00:35:59] [SPEAKER_02] And I think that the questioning is good. I think the system, a system for it probably is hard to adopt. But you want to tell me that, hey, part of my job is to use artificial intelligence to get me educated on different regulations or use artificial intelligence to suck down the different court cases so I can review them and it can screen them and it can summarize it. Fine, put that in a position description.

[00:36:27] [SPEAKER_02] Make sure that I've got the capability and the resources. That's great. Do it.

[00:36:31] [SPEAKER_00] Yep. Yep. Software. Yeah. Totally. Yeah. Makes sense. Andrew, I want to talk the cyber subject because I know you're passionate about that. You do a lot of content on that, research, consulting. Talk to me about what's going on there. We had a cybersecurity firm come on and we talked about just all the sort of, really what I think we walked away with. It's how human of a problem it is on both sides, the nefarious side and the actual victim side and what causes it.

[00:37:01] [SPEAKER_00] But what's your thoughts right now, particularly with AI coming into the fold so much more progressively? What's the status of sort of cyber in the HR world?

[00:37:10] [SPEAKER_02] My concern is that first, there is lack of vocabulary. When there's a lack of vocabulary, that means there's lack of awareness. So if I ask a HR person to define what zero trust is, they won't, many won't be, won't know what that is. Or if I say your HR systems need to be secure by design, what does that mean?

[00:37:39] [SPEAKER_02] And they wouldn't necessarily know, well, there's some sort of standard for secure by design. And I'm like, well, what are the same five things out of that they don't, right? And so an example that we've secured by design is every single person who has access to the system has the lowest level of visibility possible based on their job. Which means that you'd have to not only have a system that allows for that, a system that can audit for it.

[00:38:07] [SPEAKER_02] And you have a method of saying, recruiters can only see this, HR business partners see this, managers see that, and it's clearly defined. Okay, I did that in 30 seconds. But can everybody else in HR do that? Right. And that's where I think I've got concerns around cybersecurity is there's so much of a gap in understanding how it impacts HR.

[00:38:36] [SPEAKER_02] And we have talked about, and here's a good litmus test. We've had data privacy and personally identifiable information out there in discussions for a long time. But the average, how many people can actually define what data privacy or GDPR is in Europe? And what are the rules? Okay. Probably people who are in Europe, who are in HR, who have had to deal with it.

[00:39:03] [SPEAKER_02] And especially when they've been slapped with some sort of regulatory infraction. Yeah. They definitely know. And, you know, if you ask people, you know, how do you do disparate impact? They probably could tell you. But I guarantee you they can tell you once the Department of Labor has come knocking at the door and done an audit. And that's where we are with cybersecurity. We haven't had enough exposure. We don't have the education.

[00:39:29] [SPEAKER_02] And when people think about cybersecurity right now, it's that two-hour modular session that I get to do in my self-learning during orientation.

[00:39:40] Oh, yeah.

[00:39:41] [SPEAKER_02] Yep. That says this is what phishing is. This is what malware is. This is what ransomware is. Yeah. But there's not a part of it that says you're now in the HR department. Yeah. Ransomware for HR, phishing for HR, exploitation, impersonation, places where we have seen it. Here are case studies.

[00:40:08] [SPEAKER_02] I'm concerned about that. Yeah. And then tactically, I'm concerned about once those gaps have been exploited by cyber actors, HR doesn't quite know what to do.

[00:40:22] [SPEAKER_00] Agreed. There's so many threats, and they're compounding, but there's so many entryways into the HR world, right? Recruiting, payroll, benefits. All of them have these open doors to different things that could, you know, incentivize and nefariousness for sure. So do you think that AI is going to make it, obviously, more threats? Sure. But is there, obviously, opportunity for AI to help with those threats? Do you see that being part of the answer for HR, maybe?

[00:40:52] [SPEAKER_02] Well, certainly the cyber actors and the bad actors are using artificial intelligence to exploit as much as they can. Yeah. In recruitment, I think I said this the other day, a good cyber actor would be able to apply to thousands of jobs and hundreds of languages in a week.

[00:41:13] [SPEAKER_03] Wow.

[00:41:14] [SPEAKER_02] And they're not banking on getting, they don't care about anything other than someone clicking on a link or getting the callback so they can then execute social engineering. I don't think that the average, I don't think many people understand how cybersecurity regimes work. Once they get the data, not only do they sell that data to other regimes, they tell other regimes how to do the same exploitation.

[00:41:43] [SPEAKER_02] So what happens more than once?

[00:41:45] [SPEAKER_03] Wow. Yeah.

[00:41:46] [SPEAKER_02] Incredible. You know, there's a lot of talk, you know, North Korea has done this. And when I was speaking at a conference recently, I said, has everybody heard about how North Korea has done this? A bunch of hands go up because it was on NBC News or whatever. And I said, can anybody tell me how Russia or Iran does it? Yeah. I said, okay, that's kind of the issue is that you don't know how many ways there are to drive it.

[00:42:12] [SPEAKER_02] You know, you don't know how many ways there are to get from New York to Los Angeles. You can walk, you can run, you can ride a horse, you can take a car, you can take a bus, you can take a plane, you can take a train. Right now, you just heard about taking a plane. Right. There's all kinds of ways to get there. So that's where I am with cybersecurity is one general awareness to HR needs to be able to educate the people they serve us.

[00:42:39] [SPEAKER_02] How great would it be if we're bringing on someone into human resources and they get training and then we can then test on how are they educating their business leaders? How great would it be if when a business leader comes on and says, here is how HR is keeping your team safe and secure, their personnel records secure.

[00:43:07] [SPEAKER_02] We use this when there is a breach. I mean, HR, just like they engage with, they have a fire marshal on the floor.

[00:43:15] [SPEAKER_03] Yeah.

[00:43:16] [SPEAKER_02] Right. We all have that. Like we weren't doing active shooter training until after we had a problem.

[00:43:22] [SPEAKER_03] Yeah.

[00:43:22] [SPEAKER_02] Yeah. Let's get ahead of this one. Right. Let's let's use the practices and the tools and people in HR are educating on we may have not have had this happen, but there are other people who are exploiting this. We're going to make sure it doesn't happen to us.

[00:43:38] [SPEAKER_00] Yeah.

[00:43:39] [SPEAKER_02] HR has got a great opportunity to be a leader.

[00:43:42] [SPEAKER_00] Yeah. Yeah. I think there's a lot of training that's necessary, too, because I mean, we even still see companies that don't have business continuity plans that don't really have redundancy for their for their operations. I mean, I just think it's sort of out of sight, out of mind sometimes for HR. And now more than ever, as we've learned, it's such a human. It's so easy. It's so easy to get an email from someone, you know, or it seems like someone, you know, and then you're clicking on a link that seems very innocuous. And then you just, you know, expose yourself, open the door up.

[00:44:09] [SPEAKER_02] And IT is doing a fine job. But, you know, this isn't necessarily, hey, our tech department has left us out in the lurch. Yeah. The CISOs and it's never been HR's job. Their teams are doing what they can. That doesn't mean you outsource the responsibility completely.

[00:44:27] [SPEAKER_00] Yeah. Yeah. It's good to mature around those things, because I think we are going to see completely new threats. We surely we already are. We, you know, we talked about the lady that had was on the other side, was a candidate and was being trolled or whatever you want to call it, spoofed by a fake employer. She went through the whole process and had had her information stolen. And how awful, right? I mean, she's vulnerable already. She's laid off or whatever between jobs, let's say. It's just really ugly. You know, you don't want to see that. So I hate it.

[00:44:56] [SPEAKER_00] But Andrew, I look, man, I could talk to you for hours, man. This is really great. But I want to round this out with like maybe some piece of advice or two. What would you say to HR leaders that are out there? Maybe both for their operations, like how they can they can sort of assess where they are and what they need to be doing better for the future. But then also as they're buying technology, like what should they be? What should they be focusing on right now?

[00:45:21] [SPEAKER_02] First thing is, is if you don't know the name of your CISO, find out the name of your CISO and immediately have lunch with him or her. Yeah. Great advice. You know, you need to have a, you know, HR needs to have a relationship with their security office. And they need to understand your concerns and something very simple.

[00:45:47] [SPEAKER_02] My recruiting team thinks that 25 to 30 percent of what they see on a daily basis is fake. Or we've been seeing interviews that are fake or our hiring managers aren't sure if this individual is real. Okay. Yeah. Have that have that meeting right first and then say, what do you how can you be partner with you? The second.

[00:46:12] [SPEAKER_02] I would I would offer up once you kind of have the cybersecurity concept is understand where you are vulnerable and think about from a regulatory perspective. We hire or have people in these areas. Can we name some of the new regulations or the pending regulations that may have to change the way we purchase artificial intelligence? Right.

[00:46:40] [SPEAKER_02] And then when we go ahead to a developer and we're purchasing human capital management, are you secure by design? If they don't know what that is, they will find out and they will tell you whether or not they are. And if they don't have tremendous documentation, if you say I need your documentation on anything related to artificial intelligence and I need it within 24 hours.

[00:47:05] [SPEAKER_02] And if someone says, sorry, we even though they've signed an NDA and they're in the RFP, if they can't get that to you the next day, I would scratch them off the list right now. Sorry, you lose. You know, you can't tell us how you manage it. Yep. Don't ask us to buy something you don't know how to make.

[00:47:29] [SPEAKER_00] That's a great point. Can I ask you this one more thing? Just kind of an add on to that. Do you see, you know, there's a lot of talk in the market about IT and HR getting closer together. I certainly see that. I think that's the tone of what you're saying. What do you think is this sort of the future of HR and IT's relationship as we go forward?

[00:47:45] [SPEAKER_02] So I could give you that it depends. I think the regulatory industries are going to have a very different position than the non-regulatory. So I do believe that if you're in banking or pharmaceuticals or in healthcare, there will be very defined silos. And there are reasons for that. Yeah.

[00:48:06] [SPEAKER_02] If you're a publicly traded company that's not regulated, you are likely going to keep IT and HR also in silos. There might be a little bit more of a cross. But there's perception by the shareholders on what are you doing? Who's your leader?

[00:48:27] [SPEAKER_02] And to be able to explain to analysts who want to, you know, or a bank who wants to throw ahead a mutual fund and then say, Oh, yeah, we're doing something really cool with IT and HR and it's going to change the way. Whoa, whoa, whoa, whoa, whoa. Yeah. And realize that there's a C-suite in the board of directors that are going to reduce risk and they've already decided to silo. Where I think that we could see a big change is in the private companies.

[00:48:58] [SPEAKER_02] Right? Where there's a handful of people, a board of directors, maybe there's some private equity there and they're trying to do better, faster, cheaper. They're trying to maybe think about headcount differently. They want to infuse HR. And the functional areas of HR, procurement, IT, R&D are excellent places to go because they're outside of sales and they're outside of account management, which is very earnings dependent.

[00:49:27] [SPEAKER_00] Yeah.

[00:49:28] [SPEAKER_02] Interesting.

[00:49:29] [SPEAKER_00] Man, it's fascinating. It's, and I appreciate you sharing all this. It's, it's, it really is a lot to think about. And I think there's a lot of, you know, there's a lot of excitement here. I know we're kind of talking some doom a little bit, but it's more, I think it's more warning, right? Is what I feel like it is. It's not negative. It's really just saying, Hey, listen, you got to understand the game's changing on the other side too. It's not just on the positive side. We got things we got to deal with now, new threats and new concerns and challenges. So you got to be smart.

[00:49:54] [SPEAKER_01] And that's, there's no quick fixes, right? To this sort of stuff. This is a journey. No one size fits all. Yeah.

[00:50:00] [SPEAKER_02] Yeah. There are rules. There are just good guidances. A little anecdote. Last time I played, I played golf and they paired me up with a professional and one other person. And he and I were playing and you could just tell that he was following the general rules of making sure that you do not bogey a hole or you do not double bogey a hole. And I don't, and I think the thing is, is that there are rules that will just keep you safer

[00:50:27] [SPEAKER_02] when it comes to artificial intelligence or cyber. It is better to be on air on the side of caution. This idea of going for it isn't going to work, you know, eight out of 10 times. It's what's going to work eight out of 10 times. Do that. Whatever that is. Yeah.

[00:50:48] [SPEAKER_03] And so safe is, safe is smart. Safe is smart. Yep.

[00:50:54] [SPEAKER_00] Yep. No risk it, no biscuit, as they say for that, for those three man teams that are trying to run fast, man. Yeah. But no, I love it. Andrew, thank you so much. Where can folks get in touch with you, get a hold of the show, that sort of thing?

[00:51:05] [SPEAKER_02] Yeah. So go out to the work to find network, look up reciprocity with AG. When it comes to finding me on LinkedIn, obviously there's a profile out there. I think that that's a good place. If you want to follow me, that's great. I'm one of these people who I keep like a secret identity in terms of my email. So you just can't connect with me, but follow me. And if you ever want to talk, I'm a big fan of, if you know someone who knows me, that's good enough for me to talk with you.

[00:51:34] [SPEAKER_03] Yeah.

[00:51:34] [SPEAKER_02] I love it. Talk to someone who knows me and says, hey, somebody needs an introduction about this problem. I can't find anybody a job. I'm not in that world, but hey, I want to talk to you about something. Yeah. Great.

[00:51:48] [SPEAKER_00] Just let's all share and care. I love it. Yeah. I love it too, man. Well, thank you so much for sharing with us. We really appreciate you. And thanks to the audience and our sponsors as always. Like, share, subscribe, all that sort of thing. You can find us also on all your favorite platforms and we'll be back with more very soon.