HR, We Have a Problem - The dichotomy of HR compliance - a delicate balance and pace to manage innovation and foundational needs.

[00:00:01] [SPEAKER_00]: Welcome to the HR Huddle podcast presented by Sapient Insights Group, the ultimate resource

[00:00:09] [SPEAKER_00]: for all things HR. It's time to get in the huddle.

[00:00:20] [SPEAKER_02]: Hello everyone, welcome back to the HR Huddle. I'm your host, Terry Zipper, CEO and Managing

[00:00:25] [SPEAKER_02]: Partner at Sapient Insights Group. And I'm back for another exciting episode of HR,

[00:00:31] [SPEAKER_02]: We Have a Problem. This is the show where we break down the big and most relevant HR issues of the day.

[00:00:37] [SPEAKER_02]: We help you make sense of what they mean for you, and we talk about what you might do about some

[00:00:43] [SPEAKER_02]: of them. So joining me today is Mark Stelsner. Mark is the founder and managing principal at IA.

[00:00:52] [SPEAKER_02]: He spends a lot of time advising the C-suite. I first met Mark a number of years ago when

[00:00:57] [SPEAKER_02]: I was on the product side and we were seeking advice from smart people. Welcome Mark, great to

[00:01:03] [SPEAKER_01]: finally have you on the show. Thanks Terry, big fan of the show. Happy New Year, pleased to be with

[00:01:08] [SPEAKER_02]: you. Looking forward to today's conversation. Happy New Year to you too. How was your holiday?

[00:01:14] [SPEAKER_01]: Short? No, it's never long enough right now. Actually for the first time in a while,

[00:01:20] [SPEAKER_01]: I would say I was really good at trying to step away. We went on a few trips and just tried to do a

[00:01:27] [SPEAKER_01]: little bit of nothing, which was glorious. I'm not going to lie. Shout out for all the notifications

[00:01:32] [SPEAKER_01]: from all the different devices and mediums. Certainly like you when leading a business,

[00:01:37] [SPEAKER_01]: have to close out our fiscal year and take all the responsibilities of running a shop.

[00:01:41] [SPEAKER_01]: But really it was a nice break. Thank you for asking and looking forward to another

[00:01:45] [SPEAKER_02]: super fascinating and interesting year. Awesome. Well, Mark and I had a conversation

[00:01:51] [SPEAKER_02]: last month about, dare I say, compliance and decided that was worth a dialogue.

[00:01:59] [SPEAKER_02]: And I think we can actually make this an interesting topic and relate it to what a

[00:02:05] [SPEAKER_02]: lot of people are doing today going through with respect to compliance. So don't go away.

[00:02:11] [SPEAKER_02]: Mark, does that sound like a good plan to you? I think it sounds like a great plan. Thanks, Jerry.

[00:02:15] [SPEAKER_02]: Awesome. Then let's get into the huddle. So here we are. It's 2024. Some things change.

[00:02:24] [SPEAKER_02]: Many things stay the same. Compliance is still a challenge for us. We have to

[00:02:30] [SPEAKER_02]: many times make decisions before we know the potential consequences of those decisions.

[00:02:38] [SPEAKER_02]: And there's just a lot of work that we have to do from an HR perspective

[00:02:44] [SPEAKER_02]: around things like compliance that are basically table stakes for the work that we do. There's a

[00:02:49] [SPEAKER_02]: lot of fun stuff we want to do, but there's all the other basic stuff that's got to get done. Right?

[00:02:56] [SPEAKER_01]: Absolutely. And I think of something like compliance can either serve as a distraction

[00:03:01] [SPEAKER_01]: or an accelerant in terms of how one runs their people function around the world.

[00:03:08] [SPEAKER_01]: And, Jerry, you know this better than anybody. It's getting really messy. We have, and we can

[00:03:12] [SPEAKER_01]: talk about this in the forthcoming minutes here, but we have issues about roles and

[00:03:16] [SPEAKER_01]: responsibilities. We have issues around accountability, awareness, consumption,

[00:03:21] [SPEAKER_01]: deployment, influence, lobbying, disagreement, right? And all of that combines to make this

[00:03:29] [SPEAKER_01]: a huge issue for certainly every organization that we work with. And I imagine the same is for you.

[00:03:35] [SPEAKER_02]: Yeah, it is. One of the things I think is going to be interesting about this topic is

[00:03:39] [SPEAKER_02]: I think some of these things apply to small and large businesses and small businesses starting

[00:03:45] [SPEAKER_02]: to grow. We're growing outside of our banks. We're not working in offices. We're working

[00:03:51] [SPEAKER_02]: remotely. I worked with a company, a small company a couple of years ago just after

[00:03:57] [SPEAKER_02]: the pandemic started. And they were a couple hundred employees, right? And employees were

[00:04:04] [SPEAKER_02]: having to work remotely, obviously as a result of the pandemic. But suddenly, they were immediately

[00:04:11] [SPEAKER_02]: one of these companies that was very forward thinking. They were out in front telling employees,

[00:04:15] [SPEAKER_02]: hey, you can just, you can work from anywhere. And they kind of didn't know what they were

[00:04:20] [SPEAKER_02]: committing to. And before you knew it, they had people that wanted to move back home to Germany

[00:04:26] [SPEAKER_02]: and Australia, not just to Michigan and Ohio, right? So it really is a very different working world

[00:04:36] [SPEAKER_02]: out there now. And it's creating some new and interesting challenges for organizations,

[00:04:41] [SPEAKER_02]: especially those that haven't had people working across states or across continents in the past.

[00:04:47] [SPEAKER_01]: Yeah, I agree. And these migration patterns are very unpredictable. And when great traditional

[00:04:55] [SPEAKER_01]: organizations have a high amount of people centricity in a certain location, you can imagine that

[00:05:02] [SPEAKER_01]: internally there would be a fractional or even at certain sizes, a dedicated resource who's looking

[00:05:07] [SPEAKER_01]: after the impacts of hyper localized compliance from a statutory regulatory legislative

[00:05:14] [SPEAKER_01]: perspective down to the city, the county, the state, the jurisdiction, the provost, whatever it

[00:05:19] [SPEAKER_01]: may be, right? However, one looks at the world. But small, medium, large clients alike suddenly

[00:05:25] [SPEAKER_01]: experience exactly what you were describing. And before we knew it, we won't even necessarily

[00:05:30] [SPEAKER_01]: aware of where our people were. So our systems weren't necessarily accurate to,

[00:05:35] [SPEAKER_01]: we didn't necessarily maintain an understanding of the difference between work location and

[00:05:40] [SPEAKER_01]: home location, right? Which impacts sort of all kinds of issues relative to compliance and

[00:05:46] [SPEAKER_01]: regulatory controls. And number three, we don't have the resources. I mean, HR is a function that

[00:05:52] [SPEAKER_01]: has constantly and consistently in my three decades in the function had to do more with less.

[00:05:58] [SPEAKER_01]: And so at the end of the day, our resources that already have divided attention could not keep

[00:06:03] [SPEAKER_01]: up with this highly distributed load, let alone just the unbelievably relentless changes

[00:06:11] [SPEAKER_01]: and compliance and regulations that are coming everywhere around the world all at once.

[00:06:17] [SPEAKER_01]: And what this has manifested is some organizations, their risk tolerance has changed.

[00:06:22] [SPEAKER_01]: Terry, I'm curious if you see this as well, that they sort of expect

[00:06:25] [SPEAKER_01]: at some point that I'm going to get a letter, I'm going to get a fine,

[00:06:28] [SPEAKER_01]: I'm just going to have to build this into my budget. And yet others are saying, listen,

[00:06:33] [SPEAKER_01]: I want to do all these cool, interesting sort of next gen things, but our foundation is broken.

[00:06:39] [SPEAKER_01]: So I'm going to have to over index on investment in tools and technology and

[00:06:43] [SPEAKER_01]: resources and partnerships because I am not willing to tolerate a surprise multimillion

[00:06:50] [SPEAKER_01]: dollar euro pound notice from a government entity that suddenly says, wow, I've got to defend

[00:06:55] [SPEAKER_01]: my position in an area where I was underprepared. Yeah, it's kind of waiting for that IRS audit,

[00:07:02] [SPEAKER_02]: right? Exactly. It's nerve wracking and you kind of forget about it as things go on and you're busy

[00:07:09] [SPEAKER_02]: and then all of a sudden something comes up and you're like, wow, you're like,

[00:07:13] [SPEAKER_02]: we got to figure this out. And you're right. I mean, it's happening not just at the larger

[00:07:18] [SPEAKER_02]: sort of continental level, country level, but now it's at the state and local

[00:07:25] [SPEAKER_02]: level. There's so much, so many regulations and so many new things coming out as a result of

[00:07:32] [SPEAKER_02]: pay equity and the way that people are hiring. So yeah, it's interesting. It's overwhelming

[00:07:38] [SPEAKER_02]: and you're right. I'm hearing that mantra again as we head into 2024, which is HR,

[00:07:45] [SPEAKER_01]: you got to do more with less. Exactly. And at the same time, get your house in order,

[00:07:50] [SPEAKER_01]: de-risk the environment, be prepared to recruit people from anywhere around the world.

[00:07:55] [SPEAKER_01]: Make sure we have competitive benefits offerings that go beyond the statutory requirements and

[00:08:00] [SPEAKER_01]: global locations, right? We're fighting against everybody for global talent. And make sure that

[00:08:05] [SPEAKER_01]: you have competitive offerings. You're keeping up with wage an hour requirements here in the

[00:08:09] [SPEAKER_01]: States for your hourly or blue collar workforces and do all the things and doing well and

[00:08:15] [SPEAKER_01]: exceed expectations. And also please monitor and get ahead and let us know what we need to

[00:08:19] [SPEAKER_01]: prioritize and prepare for and just do that with the five people that are looking after

[00:08:23] [SPEAKER_01]: the topic please for our 80,000 employees. And by the way, be more strategic. Oh yeah,

[00:08:29] [SPEAKER_01]: and please exactly. Let's not talk about tables and seats for God's sakes. But at the end of the

[00:08:34] [SPEAKER_01]: day, Tara, I'm finding that people are therefore increasing their dependency on third parties,

[00:08:40] [SPEAKER_01]: right? The goal here is an astute recognition. Understandably so like listen, we can't

[00:08:45] [SPEAKER_01]: cover all this. We can't monitor. We can't systematize. We can't deploy and execute

[00:08:50] [SPEAKER_01]: in a way that I think is sustainable given all the constraints we discuss. So I'm going to go out and

[00:08:55] [SPEAKER_01]: I'm going to find really good providers. Those could be managed services providers. Those could be

[00:09:00] [SPEAKER_01]: tools and technologies, other consulting organizations that are going to be my eyes

[00:09:05] [SPEAKER_01]: and ears to make sure that I stay within the confines of these constructs. And we're finding

[00:09:12] [SPEAKER_01]: you can't outsource the accountability, right? You as the legal entity are ultimately

[00:09:17] [SPEAKER_01]: accountable. But can we risk share? And I'm curious, Terry, from your perspective, how do you think

[00:09:23] [SPEAKER_01]: the provider market is doing in this topic because we have some pretty serious concerns

[00:09:29] [SPEAKER_02]: about the promise versus the execution? Yeah, I mean, I think there's a lot of work to be done

[00:09:35] [SPEAKER_02]: there. And I think this has largely been a payroll and benefits issue. There's other issues

[00:09:41] [SPEAKER_02]: as well, but it largely focuses on payroll and benefits. And the payroll providers are all

[00:09:48] [SPEAKER_02]: over the place, right? There's hundreds of these providers that can manage payroll. And then there's,

[00:09:55] [SPEAKER_02]: as you said, there's outsourcers and people who do it, who knows what systems they use,

[00:10:00] [SPEAKER_02]: right? But they're running and managing your payroll for you as an outsourced provider.

[00:10:06] [SPEAKER_02]: And there's got to be some level of accountability there for them to know what's happening in the

[00:10:12] [SPEAKER_02]: market and how do they manage your pay... I know I'm relying on my vendor heavily to make sure

[00:10:20] [SPEAKER_02]: that they're paying the right taxes to the six states that we're in. And doing the other things

[00:10:26] [SPEAKER_02]: that unemployment insurance and all those types of things, I think they're doing a pretty good

[00:10:31] [SPEAKER_02]: job. But I think the landscape, as you said, is getting so complex that it's getting harder and

[00:10:38] [SPEAKER_01]: harder to manage the nuances. 100% agree. And we're only in seven states, so we're not too far

[00:10:46] [SPEAKER_01]: from you. And for example, I just got a notice in the mail from one of our states,

[00:10:52] [SPEAKER_01]: as the leader typically does, no idea what it's about, no idea what we owe.

[00:10:59] [SPEAKER_01]: Immediately opened a case with our provider who of course logged the case and said, well,

[00:11:04] [SPEAKER_01]: I'll be happy to get back to you within our service level of 48 hours. But was completely

[00:11:08] [SPEAKER_01]: blindsided by a legal and potentially a financial responsibility. And of course,

[00:11:13] [SPEAKER_01]: we bandied that we're a work from anywhere, so we don't care where people live. We're very

[00:11:18] [SPEAKER_01]: flexible. But with that comes exactly the scenario that we're describing. So stay tuned,

[00:11:24] [SPEAKER_01]: I guess for the next episode to see whether HR, we really have a problem.

[00:11:27] [SPEAKER_01]: Yeah. Depending on the nature of that.

[00:11:30] [SPEAKER_02]: Personally and professionally. And I mean, you're right. I mean, we do have responsibility,

[00:11:36] [SPEAKER_02]: ultimately, that responsibility resides with us. And that means we have to find the right partners

[00:11:44] [SPEAKER_02]: and the right technologies and the right consultants to help us make those decisions.

[00:11:51] [SPEAKER_02]: And I find I'm shocked at the number of relationships that we have as a small firm

[00:11:57] [SPEAKER_02]: to help us manage all the different areas that just to run the business.

[00:12:02] [SPEAKER_02]: That's right. Right. So it gets complex. And I think people do rely on their vendor sometimes

[00:12:08] [SPEAKER_01]: too much. Yeah. And we run like you a lot RFPs as an independent advisory firm. And I will

[00:12:16] [SPEAKER_01]: say that there is a lot less time focused in this category than I would clearly advocate is required.

[00:12:24] [SPEAKER_01]: Providers are very quick to put up a website or describe notionally the fact that they have

[00:12:30] [SPEAKER_01]: a compliance solution embedded in their SaaS offering or managed services and outsourcing

[00:12:35] [SPEAKER_01]: capabilities. We provide compliance. But when you double click and you ask about,

[00:12:42] [SPEAKER_01]: and this is what I would advocate for certainly our listeners here, as you then double click into

[00:12:46] [SPEAKER_01]: the jurisdictions and localities in which they monitor, that would be a question that I would

[00:12:52] [SPEAKER_01]: ask. Look at our census as an organization. Look at our potential migration patterns,

[00:12:58] [SPEAKER_01]: whether it's organic or inorganic growth like geographies in which we're investing.

[00:13:03] [SPEAKER_01]: And find out exactly to the end of the degree what your providers actually provision as delivered

[00:13:09] [SPEAKER_01]: services. And we're finding for some providers, it's based on the size of the location.

[00:13:17] [SPEAKER_01]: So we found out unceremoniously on behalf of some of our clients that there are some payroll,

[00:13:23] [SPEAKER_01]: workforce management, time vendors and even HCM and ERP vendors that only monitor jurisdictions

[00:13:28] [SPEAKER_01]: of a certain size. And therefore they only provision as delivered capabilities in their

[00:13:35] [SPEAKER_01]: releases compliance notifications. So this is the second piece, how do I find out that there's a

[00:13:41] [SPEAKER_01]: change? Some will deliver it in their release notes, others say, well, we have a community for

[00:13:46] [SPEAKER_01]: that. But when you go to the community, you as the client need to know what to look for.

[00:13:51] [SPEAKER_01]: It's not always self-evident that there's something that the community is talking about

[00:13:56] [SPEAKER_01]: or looking for, or that a new release may contain something or more importantly may

[00:14:00] [SPEAKER_01]: not contain something that would be important to you. Then we have the actual release of the update

[00:14:07] [SPEAKER_01]: and then we have the internal governance process in the organization to review the update to agree

[00:14:13] [SPEAKER_01]: on in fact that the update should be deployed because again, in fairness to the provider community,

[00:14:19] [SPEAKER_01]: there are certain organizations that say we are willing to litigate or disagree or take

[00:14:24] [SPEAKER_01]: on the risk of not being compliant in certain areas. We've worked with some archdiocese and

[00:14:30] [SPEAKER_01]: organizations, for example, that take issue with certain provisions. We have other organizations

[00:14:34] [SPEAKER_01]: that believe that their population does not qualify and the letter of the law is that theoretically

[00:14:40] [SPEAKER_01]: would apply. So these providers send us updates. But in many cases we have to say turn it on,

[00:14:46] [SPEAKER_01]: like turn on that in your software. Then we actually have to regression test it and

[00:14:50] [SPEAKER_01]: make sure it worked. Then we actually have to deploy it. The reason I bring up this level of

[00:14:55] [SPEAKER_01]: specificity is there are very few organizations that have thought about the internal governance

[00:15:00] [SPEAKER_01]: process or who of whom needs to be monitoring, ingesting, socializing, deciding, deploying,

[00:15:09] [SPEAKER_01]: testing and therefore confirming that we in fact are compliant in ABC, XYZ as it continues to

[00:15:16] [SPEAKER_01]: come. It's coming all the time. Then you combine it with the fact that our providers, of course,

[00:15:20] [SPEAKER_01]: don't coordinate their releases. You and I have a number of providers, a small company,

[00:15:25] [SPEAKER_01]: as your studies certainly would show, your research shows, we're talking dozens if not

[00:15:29] [SPEAKER_01]: hundreds of service providers around the world. So this is no small amount of coordination

[00:15:35] [SPEAKER_01]: and tasking and therefore have we really thought about strategically planning for all this?

[00:15:40] [SPEAKER_01]: I don't know if you're finding Terry that organizations you're supporting have thought

[00:15:44] [SPEAKER_01]: about the entire ecosystem or internal governance processes.

[00:15:48] [SPEAKER_02]: I think they are and I think just thinking about their overall technology strategy for one thing

[00:15:54] [SPEAKER_02]: that's becoming a component that people are spending more time with to better understand

[00:16:01] [SPEAKER_02]: that part of it, but when you think about some of these bigger companies, of course

[00:16:07] [SPEAKER_02]: they're going to do a level of testing that is commiserate with the work,

[00:16:12] [SPEAKER_02]: the business that they operate. A lot of these small to mid-sized companies,

[00:16:17] [SPEAKER_02]: I would submit that they're not doing anywhere near this level of testing.

[00:16:23] [SPEAKER_02]: I mean, they don't have the ability to do that much testing and there's a certain level of

[00:16:27] [SPEAKER_02]: trust that you place in the organization that like, I'm not sure they go and check,

[00:16:34] [SPEAKER_02]: hey, did they pay my taxes to this particular state? They just wait for the notification

[00:16:39] [SPEAKER_02]: that says, hey, we haven't gotten your taxes and we know you have 12 employees there.

[00:16:43] [SPEAKER_02]: It's that kind of thing that I think you're right. People are waiting.

[00:16:48] [SPEAKER_02]: Some people are just waiting for the shoe to drop versus trying to plan ahead and I think

[00:16:52] [SPEAKER_02]: that just comes with as the organization grows where organizations want to spend their time

[00:16:58] [SPEAKER_02]: and where they want to put the effort. Do we think this is a big enough issue

[00:17:02] [SPEAKER_02]: that we're going to spend money here because it's going to save us money later?

[00:17:08] [SPEAKER_01]: Absolutely. I would posit, Terry, as we have a number of listeners that I imagine are going through

[00:17:14] [SPEAKER_01]: the midst of a new implementation or maybe about to begin some form of a transformational effort

[00:17:20] [SPEAKER_01]: in facets or holistically in their organizations, this is something you have to think of at

[00:17:25] [SPEAKER_01]: that moment. For example, something you said triggered in me the fact that as we're

[00:17:32] [SPEAKER_01]: implementing these solutions, if we God forbid use the word customization, if we deviate from the

[00:17:38] [SPEAKER_01]: delivered capabilities and fields of these systems, we're actually inhibiting our ability to absorb

[00:17:46] [SPEAKER_01]: these delivered capabilities. Let's go on a positive note. Let's presume the providers are doing an

[00:17:51] [SPEAKER_01]: amazing job monitoring and deploying for us. Understandably, as the providers deliver

[00:17:57] [SPEAKER_01]: with effective dating, the fact that these new requirements will go into effect on 1-1

[00:18:02] [SPEAKER_01]: and 2024 and so on and so forth, that because of the decisions you made in your deployment and

[00:18:08] [SPEAKER_01]: in your configuration, unfortunately, that won't be automated. That would not be something that

[00:18:13] [SPEAKER_01]: even if you agree with and you turn it on because of the level of configuration or customization

[00:18:18] [SPEAKER_01]: that you deployed, you're going to have to do an extraordinary level of effort just to make

[00:18:23] [SPEAKER_01]: sure that you can understand the implications to your configuration, which ironically perpetuates

[00:18:29] [SPEAKER_01]: this dependency on our system implementation and managed service provider community.

[00:18:34] [SPEAKER_01]: So when we're going through implementations, I think we really need to ask our SI and

[00:18:39] [SPEAKER_01]: implementation partners what would be the downstream impact of this decision, of this

[00:18:44] [SPEAKER_01]: deviation of the secret special thing that this organization states that they require

[00:18:50] [SPEAKER_01]: when in fact we're trying to maintain compliance and have that conversation

[00:18:53] [SPEAKER_01]: early and often. So at least we create some level of internal situational awareness of how

[00:18:58] [SPEAKER_01]: we're setting the table for the future. And again, it doesn't matter where you are in this

[00:19:02] [SPEAKER_01]: life cycle, it's about intentionality from our perspective. And there are some organizations that

[00:19:08] [SPEAKER_01]: are doing this really well. But is there anything, Terry, you think that as clients

[00:19:14] [SPEAKER_01]: are going through the buying cycle that you think they should be doing differently in this

[00:19:18] [SPEAKER_02]: category? Well, I think they should be looking at implementation vendors. So not everybody's

[00:19:24] [SPEAKER_02]: looking at, they're looking at the technology vendors as the whole scope of things, right?

[00:19:30] [SPEAKER_02]: And I think they miss out when they don't look at implementation vendors separately

[00:19:36] [SPEAKER_02]: as well as change management. I think those are the two things that

[00:19:40] [SPEAKER_02]: when I do any sort of vendor selection, the vendors are great. Obviously,

[00:19:45] [SPEAKER_02]: they know their products really well. So they're going to know how to implement

[00:19:50] [SPEAKER_02]: the complexities of their product. But at the same time, they tend to be, hey,

[00:19:56] [SPEAKER_02]: they'll implement it any way you want them to implement it and not give you,

[00:20:00] [SPEAKER_02]: not necessarily have the full breadth of knowledge about, well, what happens if I

[00:20:04] [SPEAKER_02]: go this direction? And what are the downstream implications of that? And I think that's where

[00:20:11] [SPEAKER_02]: having a third party that does implementation becomes a more critical partner,

[00:20:17] [SPEAKER_02]: because they can help you with those particular types of questions and help you document those

[00:20:23] [SPEAKER_02]: things. I mean, if you really critically need to do something custom, then let's make sure

[00:20:28] [SPEAKER_02]: that it gets documented to a level that it can be managed. And you don't have,

[00:20:35] [SPEAKER_02]: you don't miss things because you just didn't realize you needed to worry about it.

[00:20:40] [SPEAKER_01]: And then the rush to go live, right? We're all under pressure, especially depending on when the

[00:20:44] [SPEAKER_01]: licensing starts. Like try to hit that go live thing. And when we talk about payroll, right,

[00:20:49] [SPEAKER_01]: you miss by a quarter because of GL recognition. So there is a lot of push to like, let's get

[00:20:55] [SPEAKER_01]: into production. But I really want to amplify something you said, which is the call up

[00:21:00] [SPEAKER_01]: between the difference of an implementation and configuration from only versus those that

[00:21:06] [SPEAKER_01]: have somebody of experience and ongoing support, only because those that have to live

[00:21:12] [SPEAKER_01]: in these systems on behalf and in partnership with their clients have a higher level of maybe

[00:21:17] [SPEAKER_01]: sensitivity and situational awareness to the long-term implications of the decisions that are made

[00:21:23] [SPEAKER_01]: in the immediate term or near term. So I do really, I'm also thinking contractually

[00:21:28] [SPEAKER_01]: terry about things that are not super sexy and exciting to talk about like limits of liability

[00:21:33] [SPEAKER_01]: and indemnification. But if you are working with your internal and external counsel,

[00:21:38] [SPEAKER_01]: and you start to scenario plan and think about the ultimate exposure that the worst case scenario

[00:21:44] [SPEAKER_01]: could potentially bring to your organization, I think quantifying that and then putting that

[00:21:48] [SPEAKER_01]: up against the limits that are put against the LOL that's, you know, pro offered by the

[00:21:53] [SPEAKER_01]: provider or even those that surround the technology provider. That's where the

[00:21:58] [SPEAKER_01]: rubber really meets the road. That's where you find out actually it's a very truth telling moment

[00:22:03] [SPEAKER_01]: where the providers will suddenly inexplicit clarity to find your accountability and responsibility

[00:22:08] [SPEAKER_01]: as the organization versus their accountability and responsibility as a third party. Nothing

[00:22:13] [SPEAKER_01]: like putting legal limits in place that to suddenly put it crisply and clearly into

[00:22:18] [SPEAKER_02]: relief. Yeah, you're absolutely right about that. And we like to help organizations think

[00:22:24] [SPEAKER_02]: about what are the guiding principles for this particular solution, implementation, whatever it

[00:22:34] [SPEAKER_02]: may be. There's a lot more planning that goes into getting ready for that acquisition that purchase

[00:22:42] [SPEAKER_02]: than people like to think about. It's just not easy. And that's why I think people do hire

[00:22:49] [SPEAKER_02]: third party consultants to say, help us think through how we need to prepare for this. Because

[00:22:56] [SPEAKER_02]: the better prepared we are before we actually jump in and start doing demos and getting RFPs and all

[00:23:02] [SPEAKER_02]: that kind of stuff, the better we're going to know what we're looking for, who's how we can

[00:23:08] [SPEAKER_02]: eliminate particular organizations based on, you know, them meeting our needs. I just think

[00:23:14] [SPEAKER_02]: it's a key part of the process that people like to overlook.

[00:23:18] [SPEAKER_01]: Yeah, and we like to sort of an old adage of go slow to go fast. Like let's get our health in order,

[00:23:23] [SPEAKER_01]: let's define our true North, we're going to get lost. It's our security strategy going through

[00:23:28] [SPEAKER_01]: an implementation. So what's going to keep us grounded and help us navigate successfully

[00:23:33] [SPEAKER_01]: to the solution? And then also this ethos of the fact that the implementation is really never

[00:23:39] [SPEAKER_01]: over. Like yes, there is a go live date and we have phases and we can print a beautiful logo cake

[00:23:45] [SPEAKER_01]: and raise a glass of your favorite beverage and we should celebrate those moments because of the

[00:23:50] [SPEAKER_01]: intensity of this work. But we have been called many times and I would say way too often into

[00:23:56] [SPEAKER_01]: failed situations into the need for re-implementation and to the need for remediation

[00:24:02] [SPEAKER_01]: for very large and complex organizations who put a tremendous amount of capital

[00:24:07] [SPEAKER_01]: and operating expense and opportunity cost into that initial thrust toward go live,

[00:24:12] [SPEAKER_01]: but failed to maintain the systems and the processes and the governance and the relationship

[00:24:17] [SPEAKER_01]: manager have been necessary to take advantage of the lease because this is a lease now, right?

[00:24:21] [SPEAKER_01]: We're not going anymore. It's like I want to take this thing back to the shop on a

[00:24:25] [SPEAKER_01]: agreed upon basis and take advantage of the innovation that we're basically paying a tax

[00:24:30] [SPEAKER_01]: for. And I keep coming back to this issue of governance, but it really comes down to like,

[00:24:34] [SPEAKER_01]: are we clear about setting expectations and Terry, like you guys do when we roll up the financials?

[00:24:41] [SPEAKER_01]: It's not unusual for the internal expenses to exceed the external expenses. We have to think

[00:24:47] [SPEAKER_01]: about change. We have to think about continuous improvement. We have to think about process

[00:24:52] [SPEAKER_01]: optimization. We philosophically believe in process led and tech enabled. So if you don't

[00:24:57] [SPEAKER_01]: take the time to establish a point of view of what's going to be important to you, then

[00:25:03] [SPEAKER_01]: you will be taken on someone else's ride and may not necessarily get you to the destination that

[00:25:09] [SPEAKER_02]: you expected, at least not intact. Yeah. I'm curious how you see what your thoughts are about

[00:25:17] [SPEAKER_02]: how AI is going to support this area. I feel like it's one of those areas that could be

[00:25:24] [SPEAKER_02]: very significant because the rules are in place, right? Things are documented. How do we

[00:25:31] [SPEAKER_02]: get AI to better help us deal with the compliance type issues, the things that we don't have time to

[00:25:38] [SPEAKER_02]: run around chasing all the time because we're really focused on how we keep good talent in

[00:25:42] [SPEAKER_02]: the organization and how we drive the business forward. Yeah. I love that question. And I

[00:25:47] [SPEAKER_01]: think good AI is predicated on timely and accurate content. So the first sort of opportunity to

[00:25:55] [SPEAKER_01]: solve is do we have AI tooling that is interrogating accurate repositories to bring us back

[00:26:03] [SPEAKER_01]: preemptively, proactively or reactively, accurate and responsive insight? Like that's sort of

[00:26:09] [SPEAKER_01]: number one. Can we monitor the market? Is there someone monitoring the market, specifically our market,

[00:26:16] [SPEAKER_01]: in bringing back to us again those notifications in a timely fashion so we can action ourselves

[00:26:21] [SPEAKER_01]: and get ready for what's to come? Number two is do we have our own policies documented in a

[00:26:27] [SPEAKER_01]: similarly accessible repository? So then we can marry what we're finding from the open market

[00:26:33] [SPEAKER_01]: against our own approaches. What we've stated and attested to our employees and they've therefore

[00:26:39] [SPEAKER_01]: had to attest and agree to are, in fact, our policies and ways of working. I think the

[00:26:44] [SPEAKER_01]: excitement is the marriage of the two, right? If we can use AI to not only look at the policies

[00:26:50] [SPEAKER_01]: that are impacting our populations, but then putting against our own policies for either validation

[00:26:55] [SPEAKER_01]: or for change in policy and update, that brings us a tremendous amount of acceleration and knowledge

[00:27:02] [SPEAKER_01]: that then our critically human actors can figure out, okay, what are we going to do about this

[00:27:07] [SPEAKER_01]: to complement sort of our strategy and our ways of working and execution? So from my point of

[00:27:14] [SPEAKER_01]: view, this is not necessarily a technological issue, right? It's about good manageable content.

[00:27:22] [SPEAKER_01]: And then as the population changes, this is now the complexity factor that suddenly our

[00:27:27] [SPEAKER_01]: census changes and people start to pop up like where we started the conversation due to mobility.

[00:27:32] [SPEAKER_01]: In new geos, how often are we updating these tooling to basically no, we no longer have

[00:27:38] [SPEAKER_01]: to look at San Francisco, right? Those five people no longer live there or work there.

[00:27:43] [SPEAKER_01]: Now we need to focus on Budapest or now we're in Osaka or Shri Laker, wherever we may pop up.

[00:27:49] [SPEAKER_01]: And that continuous process among and between our people and their locations, the monitoring,

[00:27:56] [SPEAKER_01]: of course, of the associated compliance implications, the necessary routing to the

[00:28:01] [SPEAKER_01]: individuals who have ownership and accountability, and then our policy implications like that.

[00:28:07] [SPEAKER_01]: That's an amazing combination. So I think 2024 we'll see a lot more experimentation.

[00:28:11] [SPEAKER_01]: We'll also see providers I think that specialize in these types of monitoring services

[00:28:17] [SPEAKER_01]: start to offer more technological intervention in order to give some sharp relief to the fact

[00:28:23] [SPEAKER_01]: that we are understaffed as we started with, right? We don't have enough people

[00:28:27] [SPEAKER_01]: to keep track of this on their own. And we have way too many providers to knit it together

[00:28:31] [SPEAKER_02]: individually. Yeah, I think there are some providers out there who are providing it

[00:28:37] [SPEAKER_02]: locally. But at this point, I don't know that there's anybody that's doing it more globally

[00:28:41] [SPEAKER_02]: at the level that I think organizations would need. Do you see any big legislative impacts for 2024

[00:28:50] [SPEAKER_01]: coming on the horizon? Well, I mean, one one's always interesting, especially here in the states

[00:28:56] [SPEAKER_01]: where all of what we talk about benefits and pay a significant number of adjustments for

[00:29:00] [SPEAKER_01]: benefits and pay and localities all over the nation. So that's probably the biggest. And I

[00:29:06] [SPEAKER_01]: think what's going to be interesting to watch, and we're seeing this right now is continued

[00:29:11] [SPEAKER_01]: challenges around the classification of what makes an employee number one, which is always open for

[00:29:17] [SPEAKER_01]: interpretation. Because like your Terry, we have clients where their contingent contract casual

[00:29:24] [SPEAKER_01]: population, everyone refer to it is actually multiple of their FTEs. So I think we'll see

[00:29:30] [SPEAKER_01]: continuing challenges and interpretive differences and therefore ongoing pursuits by

[00:29:35] [SPEAKER_01]: legislative bodies to collect on misclassification of what is a contract employee versus what is

[00:29:41] [SPEAKER_01]: actually considered a traditional employee. And then we have continued battles on exempt versus

[00:29:47] [SPEAKER_01]: non-exempt. So I think, like again, we're talking about the basics. I think that's going

[00:29:53] [SPEAKER_01]: to continue to be a challenge for employers. And then we're seeing rise of the unions

[00:29:58] [SPEAKER_01]: again. So I think then you add into it the material increase in, I'd say a successful year

[00:30:05] [SPEAKER_01]: for collective bargaining around the world with a wide variety of material examples

[00:30:10] [SPEAKER_01]: that organizing efforts are certainly back. And therefore now we talk about the implications

[00:30:17] [SPEAKER_01]: to CBAs and in many cases dozens and dozens of CBAs, which are also hyper localized,

[00:30:23] [SPEAKER_01]: just adds another level of complexity of yes, that may or may not apply to this tranche of

[00:30:29] [SPEAKER_01]: individuals. So you combine just like those basic tenants of what's an employee,

[00:30:35] [SPEAKER_01]: what's the classification of an employee and what's a union versus non-union employee. And boy,

[00:30:39] [SPEAKER_02]: that's keeping people up at night already. It is. And it's funny. It's what I said at

[00:30:44] [SPEAKER_02]: the beginning, like as things change, most things stay the same. And people are coming

[00:30:49] [SPEAKER_02]: into HR thinking, what? You haven't gotten this exempt non-exempt thing figured out yet?

[00:30:55] [SPEAKER_02]: How long is that going to take? You've been doing that for 100 years. It's the same thing with

[00:30:59] [SPEAKER_02]: the unions. Like, well, hasn't that been a thing for a long time? Like, why am I having to figure

[00:31:04] [SPEAKER_02]: this out? But it is, I mean, it is something that is evolving and changing and organizations

[00:31:12] [SPEAKER_02]: are having to look at that again. And it's HR's responsibility to at least bring

[00:31:18] [SPEAKER_02]: that information to the table and to the organization and support the efforts that have

[00:31:24] [SPEAKER_02]: to go on there. We just did a project down in New Orleans, and their nurses voted a union in

[00:31:31] [SPEAKER_02]: just before the holidays. So it is becoming more and more popular again.

[00:31:37] [SPEAKER_01]: Yeah, I would agree. And I'd say maybe the last thing on this topic is transparency. It's

[00:31:45] [SPEAKER_01]: timely and accurate people data. And I mean, timely and accurate people data is getting more and more

[00:31:52] [SPEAKER_01]: acute. And this is not easy. Like pulling the necessary compliance reports that you can provide

[00:32:00] [SPEAKER_01]: to the government bodies to in fact demonstrate or support that you're within the confines of

[00:32:05] [SPEAKER_01]: the law. The easy button is literally supposed to be an easy button that this is to functionality

[00:32:10] [SPEAKER_01]: or these are delivered reports. But the reality is it is far from that in many organizations.

[00:32:16] [SPEAKER_01]: So again, just the basic tenants of maintaining our accurate and timely data is still pretty

[00:32:21] [SPEAKER_01]: paralyzing and a tremendous amount of effort for a lot of organizations, which I think is,

[00:32:26] [SPEAKER_01]: as you said, if you're a new HR professional, this is pretty irritating and surprising to you

[00:32:32] [SPEAKER_01]: that here we are welcome to the future. It's 2024. And we're still with some

[00:32:36] [SPEAKER_02]: main issues all over again, Terri. I'm with you. Yeah. So if you're listening to this podcast and

[00:32:42] [SPEAKER_02]: you're kind of thinking, oh, I might need to sort some of these things out. What's one thing that

[00:32:49] [SPEAKER_02]: you might tell people to do to start thinking through this? This is a broader issue. Obviously,

[00:32:57] [SPEAKER_02]: they're not going to go try to figure every component out. But as just kind of a broader

[00:33:01] [SPEAKER_02]: issue, looking at their organization, how do I make sure that we've got a good

[00:33:07] [SPEAKER_01]: compliance model? Yeah. I mean, first and foremost, an accurate current state inventory,

[00:33:15] [SPEAKER_01]: meaning that who or whom, and I mean internally and externally, is looking after what topics

[00:33:22] [SPEAKER_01]: and with what frequency. And I'd say literally documenting that and I don't care what format

[00:33:28] [SPEAKER_01]: it is. It could be a spreadsheet, it could be a smart sheet, it could be something exciting.

[00:33:32] [SPEAKER_01]: But at the end of the day, do you have a well-documented inventory of all the

[00:33:38] [SPEAKER_01]: points and takes that are impacting your organization from a compliance perspective?

[00:33:43] [SPEAKER_01]: Second, then I come back to internal governance processes. Is it clear who or whom, therefore,

[00:33:49] [SPEAKER_01]: is deciding our position relative to those impacts now that we know who's involved

[00:33:55] [SPEAKER_01]: and we know what third parties are involved? Is it clear about roles and responsibilities?

[00:34:01] [SPEAKER_01]: And then lastly, I would say with what frequency are we meeting? It's not the most popular topic

[00:34:07] [SPEAKER_01]: until it becomes the most popular topic. But with what frequency are we meeting to continuously

[00:34:14] [SPEAKER_01]: look at opportunities for improvement or even forget improvement just for compliance,

[00:34:18] [SPEAKER_01]: for the basics of compliance. And how do we build that into our capacity model?

[00:34:25] [SPEAKER_01]: And I'd say when we go into a new fiscal, therefore ensuring we've got the right funding and the

[00:34:30] [SPEAKER_01]: right focus. I mean it really is the basics but it starts with understanding the reality of your

[00:34:35] [SPEAKER_01]: current situation and making sure that gets in the hands of your senior leadership. So everybody

[00:34:41] [SPEAKER_01]: goes in eyes open. Everybody can make a decision they want, but if you're not well informed,

[00:34:46] [SPEAKER_01]: then you're going to be surprised. So I'm starting with just the basics of take stock,

[00:34:50] [SPEAKER_02]: Terry. That's where I would begin. Yeah, no, I think that's a really good point. And

[00:34:54] [SPEAKER_02]: knowing that as an organization, you've said we're going to deal with this when it happens

[00:35:00] [SPEAKER_02]: and you've got, I mean, okay, it might not be the best solution, but if you know that's

[00:35:06] [SPEAKER_02]: the approach, you can at least work with that. And I love that call up because

[00:35:13] [SPEAKER_01]: the last thing which I absolutely wholeheartedly believe in is intentionality. Like what you

[00:35:19] [SPEAKER_01]: describe means there was an intentional exposure discussion and decision has been made.

[00:35:25] [SPEAKER_01]: And honestly, that's at the C-suite. The C-suite has the accountability and responsibility to

[00:35:29] [SPEAKER_01]: make those determinations, which means it's incumbent on all of us as HR professionals to

[00:35:34] [SPEAKER_01]: provide the right level of intelligence to those who don't live in the four walls of these

[00:35:38] [SPEAKER_01]: topics every single day. So in fact, they can make an educated determination and declare that

[00:35:42] [SPEAKER_01]: position. Once it's declared, then it's just about accountability and execution. But in lieu of that

[00:35:47] [SPEAKER_01]: declaration, it can get pretty ugly pretty fast. Yeah, no assumptions, baby. No assumptions.

[00:35:55] [SPEAKER_02]: Exactly. Well, Mark, this has been a great conversation. I'll be interested to see how

[00:35:59] [SPEAKER_02]: the year goes and how we see some of these things start to evolve. I'm just wondering

[00:36:04] [SPEAKER_02]: real quickly if you want to give a quick plug for your event coming up in April, the Epic event.

[00:36:12] [SPEAKER_01]: Yeah, thanks, Terry. I have the great pleasure of hosting a new event by the parent company of HR

[00:36:18] [SPEAKER_01]: Executive and the HR Technology Conference called Epic HR. Elevate People Ignite Change. We just

[00:36:25] [SPEAKER_01]: had to make up something for Epic, Terry. I love it. Yeah. So it's epicepichr.com

[00:36:33] [SPEAKER_01]: and it is really a people-centered event. And we have amazing keynoters. We have tremendous C-suite

[00:36:39] [SPEAKER_01]: attendance. We've got a tremendous number of really innovative and engaging presenters that are going

[00:36:47] [SPEAKER_01]: back to the center of HR, which is the people. So I'd encourage you to check out the website.

[00:36:52] [SPEAKER_01]: The agenda's fully posted. I am the least important person as conference chair. I'm

[00:36:57] [SPEAKER_01]: just the facilitator and the guy that gets to introduce all these amazing minds to all of

[00:37:02] [SPEAKER_01]: you. But I'd love for people to attend and certainly encourage people to reach out and

[00:37:06] [SPEAKER_01]: connect with me on LinkedIn or otherwise if they have any questions. But thank you,

[00:37:09] [SPEAKER_02]: Terry. I appreciate that. Awesome. Looking forward to it. Thank you again. I want to

[00:37:13] [SPEAKER_02]: thank our producer, Brandon Method Media Groups, done a great job of getting these out there

[00:37:18] [SPEAKER_02]: posted and driving up our listenership, which I don't know if you saw on LinkedIn,

[00:37:23] [SPEAKER_02]: we had something like a 250% increase or growth in our podcast last year. So super excited

[00:37:30] [SPEAKER_02]: about that. Thanks to our marketing team and thank you for tuning in. That's it for this episode of

[00:37:37] [SPEAKER_02]: HR. We have a problem. If you enjoyed the episode, you can subscribe to it on your favorite podcast

[00:37:43] [SPEAKER_02]: app or leave us a review. If you have a minute, we'd love to hear from you and know a little

[00:37:47] [SPEAKER_02]: bit more about what topics you might want to hear about. You can also drop us a line or

[00:37:52] [SPEAKER_02]: schedule a chat on the website. We will be back in two weeks with another exciting episode

[00:37:57] [SPEAKER_02]: of HR. We have a problem. Thanks, everybody.