Spilling the Tea on HR Tech - Will your skills become obsolete by 2030? The Paychex-Paycor deal, UKG’S leadership moves, and the blurring lines between HR and IT.

[00:00:00] I think any of this was earth shattering. I think what it was, and they also made a very big note that there will be a pretty high percentage of new jobs being created, right? Like we're going to be losing some jobs, but there was a higher percentage of new jobs being created than jobs that were being lost, although the skill sets would be changing. What I really liked about sort of how they approached this, and I'm pretty sure this is going to be the biggest conversation all through what they'll be talking about at the Davos event, is that they were really focusing on understanding

[00:00:29] what I as an individual need to think about for me and my career. And I think that's, if anything, businesses are accountable to understand what their employees want and what their businesses need. But you as an individual employee are going to be responsible for being somewhat involved in this transition, more so than we were maybe in the knowledge era transition and in the industrial age transition, because those were very much, I'm going to go to a place or go to a location,

[00:00:58] I'm going to get a location, I'm going to get a location, I'm going to get a degree, and then the businesses will just need this and they'll teach me how to do it, right? Like that was the, like I'll go there and they'll teach me. Welcome to the HR Huddle Podcast presented by Sapient Insights Group, the ultimate resource for all things HR. It's time to get in the huddle.

[00:01:28] Welcome everyone to Spill in the T on HR Tech, where we focus on the hottest HR tech news everyone needs to know to be in the know. We break down the news the week and help you make sense of what it means for our industry and how it can impact your organization. And we are recording today on January 16th, 2025. Lots going on, still fires burning in California. It's been a kind of crazy couple of weeks, but we're going to bring you all the news you can use this week.

[00:01:53] And I'm your host, Stacey Harris, Chief Research Officer and Managing Partner for Sapient Insights Group. And joining me today is my co-host and dear friend, our Director of Research, Cliff Stevenson, and Principal Analyst for Sapient Insights Group. Welcome to the show, Cliff. We have a lot of tea this first part of the year. Like the day after I think we did recording for our last podcast was like a big announcement that we're going to be talking about today. Like it's been kind of nonstop since the first of the year came, right?

[00:02:23] Yeah. And I think that's positive news, right? A lot of this is growth. We saw some last year where it was, you know, okay, you know, they're cutting back. We saw some releases of workforce. That is not the kind of news we're talking about now. We're talking about acquisitions and mergers and new people joining. Obviously, heart goes out to all the people in Los Angeles and everyone affected by the fires. As someone who went through a natural disaster back in November of last year, you know, I know what it's like and I've had a lot of friends lose their places.

[00:02:53] So stay safe out there. Evacuate. First chance you get. Yeah, yeah, yeah. Shout out to some of our friends at iSolved and Cornerstone and all the other companies that we work with on a regular basis because we know many of you are in that area. So we're just thinking of you. Well, we're going to be talking a lot about acquisitions. We're going to be talking a lot about new leadership in innovation. So we are starting to see some solidification of their leadership in various organizations.

[00:03:20] We also, I think, have some unique information about sort of social platform changes. We have some interesting, I think, information about sort of what we're seeing in the market for the World Economic Forum, which Davos is coming up next week. So by the time everybody's listening to this, I think it'll be out and running. We're probably getting a lot of news from that as well. But before we get started, we should probably just let people know a little bit about where we'll be at, what they can access, all those fun things on the Saviard Insights website.

[00:03:44] First thing is that everybody should be aware of, but we always have to keep repeating it, is that the big annual HR System Survey report, the thing that kind of takes up mind and clips, mind share for most of the year, it's available plus all the segments, which is a new thing this year. So if you're just looking for payroll or talent, looking for learning or looking for recruiting, there are segments specifically for that that you can purchase and acquire that'll give you a little bit of detail and insights. That's available on our website at the Research Marketplace.

[00:04:10] Also, just kind of we have available a few more seats in our March HR System Strategy Cohort Education Series. That's a really important program. We keep it limited to a small amount of people in the event. The focus is on giving you a full walkthrough of all the steps plus the tools and the processes you need for building an HR System Strategy.

[00:04:32] That was based off of a lot of conversation we've had over the years with people about the fact that they just don't either find the time or know how to do it or who in their organization is going to do it. And that is something that we are capstoning this year with a session at the Las Vegas, US-based HR Tech, HR Technology Conference. And so that's always been really exciting that we've started to sort of build that into some of the other events. So if you're interested, let us know. Just ping one of us on the website. I think there's some forms to fill out those kind of things.

[00:05:00] We and you are going to be mostly virtual for the next couple of months with things, right? And I will be out in person, though, in Scottsdale, Arizona, the last week of January here, actually next week now. So by the time everybody's listening to this, I'll be out in Scottsdale, Arizona, for the sales kickoff for Cornerstone. And I'm kind of excited about doing that because we get to share our data with the sales teams just around, like, what's changing with the audience that they're now talking to?

[00:05:26] And I hope, you know, as practitioners who are sort of sharing their data with us, I hope that's helping them. Like, I always think, like, the better informed you are, if you kind of go in and you don't realize that, you know, your audience now has this type of education and this type of background. And by the way, this is what's driving their needs. And you're talking about things like skills, but right now it's cost savings and efficiencies. You know, you're mismatched in the conversation. The two sides aren't going to have a really good conversation.

[00:05:53] So that's a lot of what we share is what is driving the conversation. What do organizations need? We're going to have also a conversation with Vizier at their sales kickoff in Scottsdale, Arizona again. So my thing this year is that everybody's going to Scottsdale, Arizona, pretty much. Because then we'll be back at Scottsdale, Arizona, probably for the iSolve event, right? That's right. That's in March, April? Mm-hmm. In March, yeah. We'll be back there at the front of the process. So I think Arizona is the place to be.

[00:06:18] And then also we're doing a February 18th HR Executive Magazine sponsored Where Are HR Leaders Spending Their Time and Budgets in 2025 webinar. That's going to be both Cliff and I. So please sign up for that. Join us. We'd love to hear your questions. Again, that'll be a little bit along the same lines of what's happening in the data set. So any place else, Cliff, that I didn't mention or we're going to jump right into the tea? Because we've got lots of stuff to talk about. Yeah, we do. Don't want this tea to get cold. You mentioned most of it. We'll have some other events.

[00:06:45] But those will be probably in the second quarter of 2025. And we'll keep you updated on where we'll be. But as you mentioned, you can go to HR Executive. You can do a search and look at their webinars and you'll see that one. And I think that'll be of high interest to anyone who has a budget and is curious about, you know, where is this? Where should I be spending it? Where are others spending it? Where are people getting maximum value? That's exactly what we're talking about. And it's not where everybody thinks it is. I think that's always the thing, right?

[00:07:14] Like I always get the like, oh, well, you know, this is what's hot. I'm like, what's hot and of interest is not always where the budgets are spent. It's always an interesting dynamic when I look at the data, right? Because I like to talk about a lot of things. And my company might be doing new processes in places. But where I'm going to spend my money is often very, very particular to what's going on in the economics and the market. And we're going to talk a little bit about that with the World Economic Forum, right? Yeah, absolutely. We've got a lot of news. I want to jump into the biggest news.

[00:07:40] Well, actually, before I do, I want to mention another bit of big news that happened last year where we moved to YouTube. So most of you, we know, listen to this as a podcast. But if you were on YouTube, you'd see. And I swear we never coordinate our outfits. It's we've got sort of a inverse color thing with the black jacket and pink that Stacy's wearing. And then I've got the pink jacket and the black. And it just looks fantastic. I'm amused every time I look in the camera. But let's get into the real big news. This was major.

[00:08:10] Paychex has bought PayCore. This has repercussions all over. I was wondering. Well, let's see. They have put in the intent to acquire PayCore. That's a good point. Based off of all the financial. They've got to still go through all the financial analysis. But based off of the feedback from the market, it's an all cash acquisition. We expect it to go through. So it's intent to acquire. So sorry. Just want to add that. No, that's a very good point. And we definitely don't want to get any trouble there. Both sets of boards of directors.

[00:08:40] Boards of directors. That's right. Has agreed to this as well. I was wondering in terms of just sort of size or repercussion, you know, was this bigger than when ADP bought workforce software? And of course it is in terms of cash. And we'll go into that. But the big one for me was that my sister, who although she studies business in school, you know, she's not in the HR world. And she called me and she's like, have you heard about this?

[00:09:09] So that tells me, you know, Kai Rizdahl and all of those are talking about it. So that's really huge. So getting into the brass tacks. And you did some extra research on this, Stacey. So I'll let you get into it. But we know it's going to be around $4.1 billion. That is figured because these are public companies. And it's going to be 22.5. So $22.5 per share. So you did some research on kind of what that would be in terms of an increase in valuation, right? Yeah.

[00:09:39] So that's a 21% premium on the unaffected stock price, 5.6x on the valuation, the revenue. And I think the big thing on this is, one, I want to say that we think this was a good move. I think that this was not a situation where there was too much overlap in customer base, right? Like there's going to be some, but not a huge amount in the size ranges, right?

[00:10:05] Paychex has very much always been kind of that zero to 500 employee company. You have customers that are upwards of 1,500. Our data showed that. But that was a very small percentage of the offered. And they usually got fairly good vendor satisfaction ratings there at UX. What if I told you that your boss skydives, Tim in marketing is a magician, and Sam in accounting does sums in his head while standing on his hands. Seeing sides of the people you work with but never see,

[00:10:35] sides that inform and inspire their work and that can inspire yours, is what The Talent Show is all about. Email me, Tom Alexander, host of The Talent Show at talentshow at backboneinc.com and show us what you got. I look forward to seeing you on The Talent Show. But mostly what we realized when we looked through all the notes is that was because they kind of had, you know, there were only a few of the large ones. They spent a lot of time making sure they got what they needed, right?

[00:11:01] What I think was the real big thing here was that they knew that the market had to go upmarket. There was also a need to go a little global. And I think PayCorp is, again, not fully global, but more global than what we would see with paychecks at this point. So I think there was two things here. One, going upmarket, getting an application that served the upmarket basis. PayCorp has done a really good job of growing pretty rapidly, serving that upmarket population in a way with both the application and some of the services.

[00:11:29] They've acquired a really strong talent management set of solutions. And so I think, you know, that was a big win for both groups. The other thing I think that's sort of interesting, though, is that this was only 21% premium on the stock price. And that showed me that, and we're going to probably see more acquisitions and mergers, that maybe there wasn't as big a desire in the market for this. We think it's an oversaturated market with a lot of vendors who are meeting these needs.

[00:11:56] Just to give some sort of context there, when you, and I don't, I'm not a stock person, so don't take all of this, but I just kind of did my little Google. And like the Qualtrics acquisition by Silver Lake was like a 73% premium. Another one that I know was a big one, the SAP SuccessFactors acquisition, right, was seen at a 52% higher than their current price was. That, I think, you know, just gives you a sense of where this market is at

[00:12:24] and how much we can expect the other systems to kind of be garnering, right? We call them the pays for a reason because it is hard oftentimes to tell the difference because they are all very similar in a lot of their offerings. The PayCores, the PayLocities, the PayComms, the PayChecks, right? So, you know, that there's consolidation in that. They're just, their names are similar. I think PayLocity is probably the biggest one here that we're going to be watching

[00:12:51] because PayLocity took a different route. They really are trying to sort of compete head-to-head with what we're seeing come out of Rippling, which is that idea of doing more IT-adjacent applications and functionality to try and broaden what the SMB market needs. I'm waiting to see with Paychecks and PayCores, they sort of bring all this together. They will now become, I think, a major competitor to what ADP is trying to do

[00:13:20] with Workforce Now and Workforce Ready, right? This will be, did I get those right, right? It's A&P. They'll let us know if not, but that sounds right to me. Yeah, Workforce Now and Workforce Ready. Yeah, and then we've got UKG's smaller product right on that one. So I think this is going to be a market. We know the SMB market is very heavily situated with a lot of new people who are coming into the market like Rippling, like Gusto. And we know the mid-market is very saturated, which is a lot of buyers

[00:13:49] because you're seeing the work days, the day forces, the UKG's very heavily focused on their top priorities as well as the pays, as we oftentimes call them. Now the really interesting thing is as we see organizations start to move up market, do we start to see with the acquisitions that it just makes more sense than to see sort of more focus up above 5,000 employees for organizations like UKG Pro, right? Like that's where they're spending a lot of time at.

[00:14:19] Yeah, Dayforce is another one that we see kind of trying to move up market, right? So this whole market is shifting pretty rapidly. I was excited to see this for Paychex. I hope this bodes well for the Paycore family. I think there's a lot of strategic people in the Paycore audience. I hope that they're going to roll over and we're going to keep a lot of them. There will be some redundancies like in every acquisition. That's going to happen no matter what. I hope service stays strong. That is one of the things Paychex has done very well.

[00:14:46] We've seen their numbers increase over the last couple of years and their vendor satisfaction ratings, particularly in that sort of 100 employee to 500 employee space. I hope that this kind of acquisition, Paycore has always got fairly good vendor satisfaction ratings. I would like to see them try and keep their vendor satisfaction as high as possible with a merger and acquisition. We generally see about two years after an acquisition like it's a big major one. The vendor satisfaction falls off a bit. The question is then can you get it to pick back up again, right?

[00:15:16] So this is big. I think the market's going to see other ones come out of this one, right? Yeah. I think a good example of that, that we saw that was UKG Kronos, right? Yeah. They were aware of that and worked ahead of time. Yeah. I'd add it too that a lot of what you said was echoed, in fact, by the CEO of Paychex, Sean Gibson. He mentioned that the very first thing he mentioned, although he didn't sort of rank them,

[00:15:42] was that it would enhance their capabilities upmarket was the very first thing he mentioned in terms of acquisition. So that's clearly top of mind when they were thinking of the reasoning there. And he concludes the quote from the press release talking about how Paycore's customers will benefit from the services and advisory that Paychex provides. So they were thinking in terms of that sort of complementary connection that you mentioned. So that's very interesting to see.

[00:16:11] So yeah, that's a bang to start the new year. Yeah. Just three pays to keep track of now. Yeah. And I do want to make it up because I just checked. It's UKG. I don't know where my head was at. It's just been the too many pays and too many. Is it going to be roll and run? Yeah. Yes. It's a roll and the run. And then UKG is ready. You know, I'm really hoping some of these come down and they separate out the names a little bit. Sorry, guys. It's early in the morning for me today. So I will hope you will bear with me on it.

[00:16:39] But that whole space is just overwhelming with all this change, right? So I'm excited to see where it goes. Yeah. Yeah, absolutely. So we have another acquisition. Yeah, no disrespect to these companies. They're just not as big in terms of the market. But Zealous acquired Element Suite. Now, Zealous is one. Neither of these are of the size of the companies we mentioned, but still another acquisition here. Sort of combining Zealous, who we know, I'd say mostly as a payroll company.

[00:17:08] And Element Suite, I'll admit, you know, I had to do a little research. Wasn't as familiar with them. I do more workforce management, but, you know, have some major customers. They mentioned McDonald's and Five Guys. So clearly in that, you know, franchise, very well-known names with lots of restaurants. So some of those specialties there, industry-wise. And both of them mentioned heavily within the press release their AI capabilities.

[00:17:34] So they're really looking to be future-focused, modern technology uses. And again, saw a sort of complementary set of capabilities within the two companies as part of the acquisition. You know, combining both the payroll side and the workforce management side. Not dissimilar to the aforementioned ADP and workforce software. Perhaps at a smaller scale, but still worth keeping an eye on and being aware of. Yeah.

[00:18:01] And I think the one thing that was a little bit of an addition to this one was that they added learning to this one. So, and Zealous comes up at write-ins in some of our data. We don't see them in our charts yet. But whenever you add more to it, like the elements we hear. So this is an interesting one. So Zoho is one that's starting to show up in our data set just slightly, right? When you start to acquire and merge and get bigger, right, we're probably going to be seeing more of a few others. Employee Navigator is one that came up a lot this year. And that was because of their acquisition, right?

[00:18:31] They had made of a couple of HCM suites, right? Then you start to see them show up in our data case because they really do generally have to have over 500 customers to kind of get organically into our data set. We always, anyone can get into our research as long as we get enough 15 to 20 responses from, you know, your customers to show up in our vendor stat and user experience charts. But it is harder to get a lot of customers if you don't have that many customers, right? And so this just makes them bigger.

[00:19:00] I think we'll be watching Zealous. I think Europe is a very fast growing market. When you're looking at 20% growth numbers for HR, it is much more likely at this point to be in the European market and the Asia Pacific market, right? Those are places where, again, not as much money in those spaces, but they are growing much more rapidly because there's just more to do there, more green space than we've got left here in the United States, right? Yeah, absolutely.

[00:19:27] And speaking of that European sort of expansion, there was some, we saw a funding increase to a company, Mackie, M-A-K-I. They're out of Paris, France, not Texas. And they do a AI-based talent acquisition, sort of using AI tools to help evaluate potential candidates or candidates based on skills and competencies.

[00:19:52] So kind of, you know, they want to sort of revolutionize, as they say, the hiring process. That's something we're going to talk about a little more when we talk about the findings from the World Economic Forum. But they already, Mackie, another one where I'll admit my ignorance didn't know them very well. But, you know, adding $23 million to their funding and looking to expand into the U.S. market. So that's already 30% of their business. Their CEO is going to relocate to New York City.

[00:20:23] So, you know, really looking into it. So maybe a company worth keeping an eye on. Also going to be doing some hiring. So, you know, more expansion of AI-backed products. Clearly, talent acquisition is seen as an area of growth. And we'll talk a bit about the job market a little later on. But pretty interesting and a nice sort of segue, too, from what you were talking about with the European companies.

[00:20:47] Yeah, I think there's just a lot more focus because a lot of organizations, Europe is much more mature when it comes to the concept of talent management and recruiting and contingent workforces because of the labor laws they have there, right? They just have to do a much more sophisticated approach to managing that talent because they don't have the ability oftentimes, depending on which country you're in, to just automatically say, okay, well, I just don't have work for this person. I'm going to lay them off, right?

[00:21:15] Like there is a lot more that goes into hiring, letting people go in an organization than here in the States where it's an at-will employment model. And that has caused them, I think, to think differently about their technology and sometimes go a little bit slower in technology acquisition because it is more about the people component than it is about the tech. In many cases. But I do think at this point they're realizing that AI and talent and conversations about workforce optimization are part of where the market has to head.

[00:21:43] And so we're seeing a lot of adoption in that space, right? Yeah. Now, as mentioned, we were going to talk about some people moves. So I think the biggest one might be Arlen Schenkman joining UKG as the chief financial officer and president. So we've been talking a lot about UKG's personnel moves. They have really hit the ground running at the end of 2024, beginning of 2025 with making these sort of strategic moves of these people.

[00:22:10] So he's going to be working with the CFO, John Butler, who's going to be retiring after 30 years. So joining him and then sort of taking over that role, succeeding in that role. So, yeah. And I always like to look at the history, the background of where they've been at, right? And Arlen has a history with Citrix Systems, which I think, and then SAP. So I think what you're going to see there is a little bit more focus on sort of larger tech-based conversations, right?

[00:22:40] UKG has been heavily a service-based industry, too, for many years. They have a big services component to what they offer. I think that we're going to see how do those two things sort of play together. Definitely, too, the other thing about the Citrix and the SAP background there is an awareness or experience working with partnership models, right? Lots of focus on partnerships at these big vendors right now.

[00:23:03] So, you know, whether or not we're doing implementation partners, whether or not we've got big partners with other software technology, that kind of a thing. And how does that financially work for us, right? Yeah. And another interesting facet of Arlen's background at SAP was that he was in charge of mergers, M&A. I don't know if you want to put on your fortune teller shirt, if that means anything or it's just, you know, part of the background. But I think, yeah, mergers and acquisitions, we've already said that's going to be big.

[00:23:31] But the next conversation for a lot of these organizations is, do I need to buy clients? That's always the conversation. Do I need to buy tech? Do I need to buy talent? And I think every company is kind of making that decision. Regions, geographies, regions, right? So I think, you know, global is a big move for UKG. So I'd be looking, you know, global, right? I think for some organizations, it's just we need to be, you know, move up market.

[00:24:00] That was the paychecks, pay core conversation, right? Some organizations, it's going to be focused on, I think, a lot to do with maybe just you look at what Cornerstone has done in the learning market. Cornerstone got to a point where they're just, we're just going to buy up the competition at this point, right? So there's a lot of different ways to do this. But this market is definitely going in those directions, right? Absolutely. And here's another person who has a pretty interesting background that we want to maybe want to do some prognostication about.

[00:24:27] But 15.5 has added Larry Donovan to its board of directors. 15.5, a company we know very well. We know them closely. Shout out to, you know, Mike and Jeff over there, Mike Flores, Jeff Smith. But Larry is another interesting one that's showing them, Larry Donovan, because he was just most recently the chief revenue officer at Dayforce. But he was also at Mitratec, or Mineral, I should say. Yeah. The Mineral when he was there, now Mitratec.

[00:24:57] And Namely. And when he was at Dayforce, he oversaw their 2018 IPO. Again, not saying anything, just interesting background for a company like 15.5 to put onto the board. Yeah. And I think that's flipped, because Larry was at Dayforce before the Mitratec and the... So, one, that's where I met Larry. And so we're going to have another sort of Dayforce friend that we'll be talking about in just a minute. But at that point in time, he was doing sales and the revenue and all that model, right?

[00:25:27] And Larry will remember this. We used to sit next... Like, whenever we did, like, analyst dinners, I always got sat next to Larry. And we would get into so much trouble, because Larry and I had so much fun just talking about just not analyst stuff, just stuff that was going on in the world, politics, things going on in the market. And then we would get everybody at the table, have them into the conversations. And it was a very fun time with Larry.

[00:25:54] So, I'm looking forward to seeing Larry involved in the board of directors for 15.5. I think he's got a really good perspective on the market. I think he'll add a lot of value to what they're doing over at 15.5, because I think they've got a unique perspective on the market. He saw the vision of what was the Mineral Mitratec. And Mineral, we should shout out that they, for multiple years, have won one of the best user experience of vendor satisfaction ratings and learning for the SMB market.

[00:26:23] And they were just acquired then by Mitratec, right, recently. And part of that was because of the fact that Larry had worked with them on pulling together a lot of disparate ideas into this sort of platform concept, right? Because it used to be very much just a services company, and he created them as much more of a tech company. I don't know if that's where their heads are at with 15.5, if they're kind of looking at Larry kind of bringing his long-standing industry knowledge there. But it was a good move. I was happy to see his name come back, back up on things. I had no idea.

[00:26:52] Listeners, viewers, we spent like an hour in the green room before this, and I didn't even know about this. We usually sort of, you know, pulling back the curtain, we usually kind of talk about what we're going to talk about, at least to make sure that, you know, we're ready. But I had no idea. That's so interesting. She was another one I would sit with, and we'd get in trouble. Yes. Those people are like, oh, we're going to get to sit next to this person again. Yes, and then we get in trouble for it. But it was fun.

[00:27:20] Yeah, Larry was one of my favorite dinner partners at Nesradian Events. Well, speaking of people joining companies, I thought I had known this gentleman, but it turns out we met for the first time. We just sort of knew each other through name. And that's Howard Turnoff, who's joining possibly the greatest company. I have to be unbiased as an analyst, but Sapien Insights Group. He will be joining us. I forgot. Is he head of sales? Yeah.

[00:27:46] So Howard's title is VP of sales and revenue here at Sapien Insights Group. And so I'll give you a little bit of insight. So as many of you know, we're still a very small company. We've been growing, though, pretty rapidly for us over the last 10 years. We've doubled our employee base. And what we realized is that a lot of anybody who works in a small business knows that as business owners, you're always splitting your time between sort of making sure there's enough pipeline and work coming in the door to support the people that you've got working

[00:28:14] for you and doing the work and then running the company. And myself and Susan Richards and Terry Zuber have had a lot of conversation about the fact that sales is part of the job when you own a small business. But it does take away from us being able to do a lot of the work that we want to do in the industry and in the market. And so we really did start looking last year for the right person to fit into the culture on a sales level. So I could go in and keep the conversations going while we're running with other stuff. And we had the conversation.

[00:28:44] I had reconnected with Howard Turnoff. And I think the most important thing to know about Howard Turnoff, he's been in a lot of organizations over the last couple of years, but he also was another Ceridian Dayforce sort of alumni, right? In that group that had all grown up over there. And he'd spent many years over there creating what was, I thought, one of the most impressive customer care programs. He used to call it the XOXO program. And that's what he ran a lot of. He also did a lot of the marketing and the analyst stuff.

[00:29:14] Or for their good friend, Jason Saba, who's now over at UKG. And so when Howard was, he'd worked for a couple of small companies, ran a couple of small companies after that. He also had gone over to iSolve for a little bit. When he said, hey, I'm looking to join someone at small where I can leverage my experiences and background and just feel like we're having a good time as we're building something. I was like, well, this is kind of the place. I think that's the culture that we're building here. And he's really passionate about the HR industry.

[00:29:42] He built that customer care program with the idea of let's make sure that people know how to help each other. Right? And that was a really powerful thing that he brings to this conversation. So we're excited to have him join. Maybe at some point we'll have him on with you and me, or he'll join a Terry's HR huddle program to just talk about his background a little bit. But yeah, I mean, I think one of the things, this kind of brings up a conversation about, if you guys haven't seen what Lexi Martin's doing on career pivots, go out, follow her

[00:30:12] on LinkedIn, because there is so much wealth of knowledge, so much connection in a lot of our leaders who have led many of the big functions and organizations. They don't want to be quite as busy or as active maybe, but they want to stay involved in the market and they want to do something maybe different or new. We're seeing a lot of that right now, right? Board members, sales roles, advisory roles, marketing roles, you know, new types of research like Lexi's doing.

[00:30:41] She's calling it the pivot project. I think it is a real testament to our industry, to our market that we understand how much depth people have in this concept of people and building people relationships and growing the workforces that we've been with. So I think that's going to be a real powerful thing. We're going to see across the board for the next at least five or six years as people kind of want to get more balance in their lives, but they still want to stay involved in the industry. So yeah, welcome, Howard.

[00:31:11] We're excited to have you join us. Absolutely. Wonderful. Get to meet you and get to know you more. So this is, I'd normally try and do a little segue. I don't know really a way to segue this. This was an interesting bit of news that we heard from UKG that is a little different. So they're working with Dell Technologies, who's actually done about, let's say, 48 of these. And they're calling them solar community hubs. Now on this one, Dell's done 48, but UKG is working with them specifically on one of these

[00:31:41] solar community hubs in Mexico. This is in collaboration with Tecnológico de Monterrey and Computer Aid International. And what they are is the best I can sort of think of them as a shared workspace. And the model of, there's places in Austin that are like this, Austin, Texas, if you know it, where there's a bunch of shipping containers. They're all completely powered by solar panels, all renewable energy. And there'll be co-working space, but they'll also have education programs, teaching things

[00:32:10] like computer skills and graphic design. You can access local services. So they truly are community hubs, right? Like healthcare and infrastructure. Yeah, exactly. And help, you know, maybe create jobs, kind of be a little entrepreneur space, entrepreneurial spaces, you know, helping support small and local enterprises. So pretty interesting space for UKG. You know, this will be a philanthropic movement, but pretty topical.

[00:32:36] It resonates a little bit with me because I've seen a lot of the spaces here in Florida, where I live in sort of central Florida, taken over and turned into solar farms. That's different than this. But even still, it does show this movement away from the old sort of agriculture and taking these space and going, what can we do with this? And how can we use this to grow local businesses rather than just being, you know, here's a whole bunch of stuff. But how does this all work together with, you know, I could see where UKG is saying, you

[00:33:05] know, this is part of what we do, right? Is the education and upskilling and, you know, finding people jobs. So there is a fit there. Whereas at first, I was like, okay, that's what they do now. That's confusing. But it makes sense the more you dive into it. Well, if you ever go to like any of Oracle's events, I mean, their opening keynote oftentimes is Larry talking about all the work they're doing in sort of solar farming and all the

[00:33:33] work that he's doing in renewable energy and in healthcare, right? I think we're going to see a lot more of this from organizations who it isn't just being socially beneficial, which is always good. It is also good business when you think about what's happening economically is that we really have to understand that we have, we're talking to organizations all the time right now are saying, hey, if new administration is going to be raising tariffs, I need to have a new location to acquire both staff and resources from maybe, right?

[00:34:01] So investing in Canada, investing in Mexico is a really positive business thing for some organizations who are trying to get ahead of what could be challenging environments, both economically and politically, right? So I think we're going to see more of this kind of thing, which is just understanding that we are a global community, which means you got to work kind of globally, right? Yeah. And it's interesting. More and more, as we've talked about, it's not just HR software, right? It's business software.

[00:34:31] And it really just shows like, okay, well then what does that mean in the future? And speaking of that, a video that actually, Stacey, you turned me on to, I had not seen anything about this. This was from Jensen Huynh from NVIDIA. Yeah. And the point that he's making in this video, and as always, there'll be links to all this, is that he says that the IT department will be the HR department for AI agents.

[00:34:57] We've talked about AI agents, those sort of consolidations of all of these different information sources that are sort of little decision makers, right? And so that IT is going to be like the HR department for them, right? You know, if you're using a help desk or using AI agents, it's actually IT that's going to be the one sort of running that. We bring up in the paper, you've brought up in multiple talks, this ongoing struggle, let's call it, between HR and IT.

[00:35:26] And who's going to be in charge of this? Because there's, as we just said, more and more crossover between what HR does and what IT does, especially in the world of AI. And who kind of controls the data will sort of control that, you know, the information flow and the security and the compliance and just how these things are run. You know, he's sort of making a light point that this will be the HR department.

[00:35:54] But I, and I'm not going to mention who it was we've talked about on the show, thinking of AI as an employee. Remember that? I'm sure they don't want their name mentioned. But this is following up with that thought. It's like, if they're employees, then who's the HR for them? And then, but HR should be thinking if I've got human employees that are being bolstered by AI technology, and that AI is being run by IT, am I, where do I fit in, right? It's in that office space.

[00:36:22] Like I take the papers from here and bring them to here, right? You don't want to be in that spot, right? So you've got to really understand how to integrate these AI technologies and all of the data that's in your organization and not just let it, let it be handled by IT because otherwise, you know, as we're going to talk about on the very next report, there's going to be some changes happening in how jobs are structured in the future. Yeah, let's get right into that. Okay.

[00:36:49] We're looking out for a report because I think that video really led to, and then right after that came this, because I do think the market is changing and we all know that, but HR is kind of stepping back right now and doing a bit of a pause watching to see what's happening. I think where they need to be preparing for is how do we manage this plethora of AI that's coming into our organization, right? Yeah. And we're really diving into the complete blurring of lines between what's HR and what's business because these all blend in.

[00:37:19] The number one concern, this was, again, they weren't looking at this. It's not an HR report. This is the World Economic Forum. And you're going to start to hear a lot. They go, wow, this is really an HR issue, isn't it? But, you know, the number one issue that they saw was that cost of living is going to be, that was the second number, number one trend. Number one was digital access, right? 60% of employees expect that to transform their business. But number two is cost of living and 50% of employees expecting it to transform their

[00:37:49] business in the next five years. Because obviously that's going to affect everything from salaries to benefits and everything else going on. Climate change, we mentioned the very top of this show, having a large effect right now and considered the third most transformative trend. So that's obviously got a big effect on employers as well. We're seeing things like job roles where we're starting to see frontline job roles are the

[00:38:14] largest in terms of absolute volume with farm workers, delivery drivers, construction workers, sales people, food processing. Number one, in terms of percentage growth, we're seeing roles in technology, big data, AI and machine learning, fintech, all things that we have brought up and talked about on this show and that you're seeing out there. So the one that kind of jumped out to me, though, and that really resonated, especially

[00:38:42] considering what you had presented on at HR Tech last year is that 39% of workers can expect their existing skill sets to transform or become outdated in the next five years. And we're seeing skills or what we'd probably call more like competencies, I think is probably the language we would use, where we're seeing things like analytical thinking is the most sought

[00:39:06] after from employers seven of 10 considering an essential 2025 this year, followed by resilience, flexibility, agility, leadership, social influence, you know, basically what we talk about in our cohorts. It is not surprising. I don't think any of this was earth shattering. I think what it was. And they also made a very big note that there will be a pretty high percentage of new jobs being created, right? Like, like, we're going to be losing some jobs, but there was a higher percentage of new

[00:39:35] jobs being created than jobs that were being lost, although the skill sets would be changing. What I really liked about sort of how they approached us, and I'm pretty sure this is going to be the biggest conversation all through what they'll be talking about at the Davos event is that they were really focusing on understanding what I as an individual need to think about for me and my career. And I think that's, if anything, businesses are accountable to understand what their employees want and what their businesses need.

[00:40:06] But you as an individual employee are going to be responsible for being somewhat involved in this transition, more so than we were maybe in the knowledge era transition and in the industrial age transition, because those were very much, I'm going to go to a place or go to a location. I'm going to get a degree, and then the businesses will just need this and they'll teach me how to do it, right? Like that was the, like, I'll go there and they'll teach me. I don't know that we're going to see as much teaching people how to do this because a lot

[00:40:34] of those skills, as you've noted, are more what we would call more durable skills as a word term, but they're more skills about sort of how you think, how you manage your time, how you manage information, very personal components about how people work. So I think that's probably maybe the biggest difference from what we've seen in the past on this is that sort of ownership of this growth, right? Yeah. I have a couple other sort of highlights. And again, there's a lot here just in the key findings. It's multiple pages.

[00:41:03] And, you know, it's nice too, because this is a study that's done, you know, obviously completely independently of us, but kind of a different group of people that they're reaching out to. But it is almost lockstep with ours. It's a good validation of what we're doing. Great validation of what we're doing. It's some interesting ones as a sort of follow up to this idea of rising cost of living that by 2030, 52% of employers anticipate allocating a greater share of their revenue to wages.

[00:41:33] Only 7% expect that to decline. So basically over half of companies are saying, yeah, we're going to have to start paying people more, more or less. And also as stories that had been sort of, at least in the US, this is sort of a counterpoint, I would say to some of the stories you might hear in the US, is that in their survey, they found that DEI initiatives is highly on the rise. So 47% of employers found that expanding the pool of talent by getting into diverse talent

[00:42:02] pools, you know, is an option for them, right? They say we should really expand our talent 47%. Two years ago, that was only 10%. Yeah. So that, you know, despite what you might hear, DEI is extremely important to these companies as they're going, hey, we've got to find this talent for these skills. And how are we going to do this? Not by looking in sort of the traditional ways. Like that we have before. Yeah. It's a shame that we've got to run because I know I've got meetings that I'm running up against.

[00:42:29] We're going to put the links and all this in the notes for this, this year. And we'll probably talk a little bit more about this at our next call. The other thing maybe we'll talk a little bit about is sort of where some of the market's heading on, where information can be accessed. We'll talk a little bit about what's happening with maybe with Blue Sky then next week. I think we may even get into some new job posting reports next week as well. So, but unfortunately, because we are running late and because Cliff and I love to have these

[00:42:57] conversations, we do need to wrap up today. So my apologies, everyone. As we wrap today, a couple, like I said, just a reminder to download your most recent annual HR System Survey report. If you haven't done that, if you were one of our participants, be sure that you got your email. The full event will be launching this year again in May. So watch out for the new link for the annual HR System Survey research effort for 2025. Oh, we are in 2025 already. I know. All right.

[00:43:24] Go to our website to sign up for our newsletter to get ongoing updates and research launches where we'll be speaking on visiting and all the other stuff that's important to know about us. Be sure to listen to our sister HR Huddle podcast. HR We Have a Problem, hosted by our CEO, Terry Zipper. And if these HR Huddle episodes have been valuable to you and you are getting a lot out of them, we just ask that you support by hitting subscribe wherever you're at, leaving a rating. I think we'll have some update in our next podcast about some transitions as to where we can be found and how you can find us.

[00:43:54] So we'll give you some news there. Stay up to date with immediate breaking HR tech news. And to get all the behind the scenes content, you can follow us at Sapient Insights on LinkedIn and on Instagram and Facebook. I think they're now doing. Thanks, Cliff, for all the work that you've been pulling all this together. Thanks to our production team, including Brand Method Media Group, who helps us produce our podcast run by their amazing founder, Kelly Kelly, and our marketing team, Summer Orlano, Cindy Maurer, and a few other people who are always just making this happen every week. And you as well, Cliff. And thanks to our listeners and community. We couldn't do this without you.

[00:44:29] And that's it for this episode of Spilling the Tea on HR Tech. We hope it's been just the brew you needed to start the engines running this week. We'll be back in just two weeks with another pot of boiling hot HR tech updates and insights. Thanks, everyone. Thanks, everyone. Bye.