Nucleus Research – 2022 HCM Technology Value Matrix With Evelyn McMullen

Music: This is Recruiting Daily’s Recruiting Live Podcast, where we look at the strategies behind the world’s best talent acquisition teams. We talk recruiting, sourcing, and talent acquisition. Each week we take one overcomplicated topic and break it down so that your three year old can understand it. Make sense? Are you ready to take your game to the next level? You’re at the right spot. You’re now entering the mind of a hustler. Here’s your host, William Tincup

William Tincup: Ladies and gentlemen, this is William Tincup, and you are listening to the RecruitingDaily podcast. Today, we have Evelyn on from Nucleus Research, and we’ll be talking about the 2022 HCM Technology Value Matrix. Because it’s a research company and I run a research company, I can’t wait to talk to Evelyn. So Evelyn, would you do us a favor and introduce both your self and Nucleus Research?

Evelyn McMullen: Absolutely. It’s great to be back, by the way. Thank you for having me.

William Tincup: Sure.

Evelyn McMullen: So I am a research manager at Nucleus Research. We are a technology analyst firm, except instead of focusing on the technology itself, we focus more on the financial value that it delivers to organizations using it.

William Tincup: Thank God somebody’s doing it.

Evelyn McMullen: Right?

William Tincup: Much needed, much, much, much needed. So when we sought out to do the 2022 HCM Technology Value Matrix Workshop, I would assume the research started probably in ’21, what were we trying to achieve? What was the goal of the research?

Evelyn McMullen: Yeah. So the Value Matrix annual report that we do, we do one for every space that we cover. So it’s kind of like a buyer’s guide where we assess prominent vendors in each space on usability and functionality. Of course, functionality is what products they have, what kind of features they have. Then usability we assess based on end user conversations. So there are four quadrants, leaders, experts, facilitators, and core providers. We like to say there’s no bad quadrant. So for example, facilitator would have high usability, maybe a little bit less functionality, but would be really great for an SNB that don’t want to pay for functionality they’re not using. It’s also very easy to adopt, whereas an expert would have more functionality that a larger organization might need, and they would have the necessary IT resources to be able to drive value from it. So it would work out for them.

William Tincup: There are no bad quadrants, but as I know, because I’ve dealt with the technology vendors for 25 years, they all want to be leaders.

Evelyn McMullen: They do. This is true, but I say it’s good to be in the other quadrants-

William Tincup: I do too.

Evelyn McMullen: Because you meet a certain need.

William Tincup: Yeah. Again, to your point about the SNBs, you don’t need all of it. Even if you have access to all of those features, you’re not going to use them.

Evelyn McMullen: Exactly.

William Tincup: It’s just going to be a wasted feature. So you don’t need those things. So I can see where you get… The functionality is just… I said just. I should never say that. It’s analysis on the functionality, and you’re looking at apples to apples to apples to apples to apples of what they actually provide.

Evelyn McMullen: Yes.

William Tincup: Usability is a bit more detective work there, because you’re going past the buyers and into the actual users and let what their usage, what they see, what they feel, how they use the technology, etc.

Evelyn McMullen: Right.

William Tincup: So take us into both sides of that, because people I’m sure would be fascinated to understand kind of how you look at functionality. Then we’ll deal with the usability second.

Evelyn McMullen: Yeah. So like you said, it is an apples to apples comparison for the functionality part of the value matrix process. So conducting vendor briefings, looking at their website, just taking stock of what they’ve been up to, maybe what their roadmap is going forward. That’s also something we take into consideration, whereas usability is a little bit, like you said, detective work, setting up calls with end users, asking them what they were using before. Surprisingly, a lot of it is going from manual to a solution, so it’s always a pretty positive response. Maybe if there were other vendors that they looked at, why they chose the one that they went with, and then ask them what the main benefits were of using the system, maybe any KPIs they were tracking, things like that. So just seeing what the value is from an end user perspective, because these are the people that are using the product day-to-day.

William Tincup: Right. So the difference between… So first on the usability side, so functionality I think the audience probably understands how you go about that process. With usability, you’ve got two things that you noted, I believe. One is what’s being displaced.

Evelyn McMullen: Yes.

William Tincup: So I’ve argued for a long time that Microsoft Office is the largest HR tech vendor in the world, which of course no one wants to hear, but I still believe it’s true.

Evelyn McMullen: Right. I also do. I agree with you there.

William Tincup: So what’s being displaced could be Post-It notes, could be another technology or whatever. Then the other is the bifurcation between users and buyers. So sometimes they’re the same.

Evelyn McMullen: Yep.

William Tincup: And often times they’re not. There’s people that buy the technology, especially at larger companies. People that buy or even a committee buy that buys the technology, and then you’ve got this other class of folks that are in it everyday. Payroll is a great example of this. You’ll have someone that buys payroll. Then there’s payroll clerks that are in it every hour of every day. Do you try to talk to… So on the displaced, are you trying to dig in to find out what’s being displaced and where and how and why? Then the second part with the users versus buyers, that might be a false construct, but I’m just curious as to how you dig into and learn from both buyers that buy the technology, but also users that use the technology.

Evelyn McMullen: Right. So we have a healthy mix of buyers and users, and there is obviously sometimes going to be overlap where there’s a one-person payroll team that implemented the software, selected it, and is then using it everyday.

William Tincup: Yeah.

Evelyn McMullen: I would say talking to someone who is both an end user and was part of the selection process is very valuable, just because they remember what they were using before. They remember why they didn’t like it, and they wanted to move on to a new solution. They were part of the process in selecting a vendor, so going through the whole RFP, an are the ones that are able to speak to the value that they’re deriving from it.

William Tincup: Well, unless-

Evelyn McMullen: But the end-user perspective is also very valuable, because some of them have been on long enough to be able to find the delta between what was good and what was bad about the old system, and how they are able to use the new system to drive further value.

William Tincup: I love that. I love that. Then again, different insight for different people.

Evelyn McMullen: Definitely. It’s always very interesting. I love it. That’s the best part of the value matrix process for me.

William Tincup: 100%. I love talking to… Because people that buy and they’re buying for a large organization, let’s say, they might be distant from the software, but they know how to buy and they understand the questions to ask and the evaluation process, etc.

Evelyn McMullen: Right.

William Tincup: So I love their take on things, but if you can ever talk to somebody that’s in the software every day and get their take on, “What do you like? What if you could change anything, magic wand?” That type of stuff. There’s always great conversations that come there. So findings. Let’s talk a little bit about what you learned with this part of the annual report. What did you learn this year that maybe was different from last year?

Evelyn McMullen: I think that the past three years were a blur. A momentous blur, but a blur nonetheless. I think now it’s just really investments and catching up with the other players in the space. I feel like there are a lot of full-suite providers, and they’re trying to help their customers kind of adapt to what has become just an ever-changing environment. So I can talk a little bit about… I’m sure we’ll get to the great resignation. I know it’s on everyone’s minds.

William Tincup: Let’s do it. Let’s just go straight there.

Evelyn McMullen: Sure. So that’s definitely the number one trend that’s driving investment right now. I do like the concept of the great reshuffle a little bit more. It seems a little less like your employees are just disappearing into the void, because of course some people are retiring early-

William Tincup: Although, I have to admit, Evelyn, I saw yesterday, it was Fairygodboss that put this out on a tweet, is the resignation letter. They literally put out a tweet that says, “Here’s your resignation letter.” It was like a Sniglets, it was like you fill in the blank… No, a Mad Libs. You just fill in the-

Evelyn McMullen: Oh my gosh.

William Tincup: No, I’m serious. You can go look at their Twitter account.

Evelyn McMullen: [inaudible 00:08:57]

William Tincup: It’s, “Here’s your resignation letter.”

Evelyn McMullen: That’s incredible.

William Tincup: I thought it was fascinating on one level and terrifying on another.

Evelyn McMullen: Right.

William Tincup: But yeah, reshuffle resignation. The idea is that there’s a lot of ways to tackle this. If it’s engagement, if it’s comp, is it internal mobility, is it retention? What are some of the tentacles that y’all are seeing that kind of… Whether or not it’s reshuffle or resignation, how do we shore it up? How do we fix it?

Evelyn McMullen: Sure. So of course that’s where the tech comes in, because now employers have to get more creative. So I would say offering competitive benefits, I think having a compensation management solution, making sure that you are offering competitive pay. For hourly workers, we see a lot of on-demand pay, which is becoming more and more ubiquitous. We actually ran a survey of hourly workers, and 70% of them said that they would leave a current job for one that offered on-demand pay. So I see that being a much larger trend going forward.

Evelyn McMullen: Let’s see. In terms of recruiting, I think rethinking talent acquisition strategy. I don’t think taking an inbound approach is as successful as it might have been a couple years ago. I think now that you really need to go for the candidates that you know you want, instead of just waiting for them to magically appear. So outbound recruiting has definitely been an interesting thing. I know hireEZ now has a platform that is entirely dedicated to outbound recruiting.

William Tincup: So with benefits, let me go backwards for a second.

Evelyn McMullen: Sure.

William Tincup: The offer’s an offering something that’s both competitive, because this data has been trapped historically in benefits management, benefits comp, and benefits team, comps over on one side of the office, and recruiting is on the other. How have you seen technologies or companies address, how do you bring those things closer together? How do you rightsize the right benefits, which is one thing, the right comp, whether or not that’s above market or at market or below market, let’s just say that? Then how do you get it into the recruiter’s hands? Have you seen a shift of those things moving together or technologies pulling those things together?

Evelyn McMullen: I think technology is definitely eliminating these silos that have historically been between these two departments, because now the comp is really coming into recruiting, because you’re looking at recruiting as more sales, right? You’re selling a job. So they need access to that information. I think that the way that the technology market is moving is really bringing those things closer together.

William Tincup: I love that. I love that. Then with recruiting, as you said, more of an outbound, more of an aggressive kind of a stance.

Evelyn McMullen: Definitely.

William Tincup: The days of posting a job on Indeed and getting 10,000 people to apply, okay, that might not happen.

Evelyn McMullen: Exactly.

William Tincup: All right, so now what, smarty pants? What do you do now? I think you’re right. I’ve seen some of the same moves with hireEZ, but also with others which are saying, “Okay, we can’t leave it to chance. We have to be more aggressive.”

Evelyn McMullen: It’s not viable anymore. Right, because things have been so uncertain, and it’s never been a better time to find positive candidates, although talent shortage, it’s more of a shortage of willing talent, I’ll say.

William Tincup: Right. You can find them.

Evelyn McMullen: Yes, you can. You just have to go searching for them. It’s not like a set it and forget it type of approach.

William Tincup: Yes, yes, what we used to call post and pray.

Evelyn McMullen: Yes.

William Tincup: So what are the findings? Did you see anything in inter-mobility or in learning paths or upscaling or other types of things?

Evelyn McMullen: Yeah. So we’ve seen, of course, that one of the largest reasons that employees are quitting their jobs is because they see it as a dead end. They don’t see any opportunity for advancement. So talent management, of course, I think has taken a bit of a back seat to talent acquisition, just because talent acquisition has been so big over the past 18 months. But being able to up-skill, re-skill, promote, and really empower existing employees that are a value add and a culture add is critical.

William Tincup: I love that. We’ll go to the other side of this. What were you shocked by, or maybe shocked by is heavy language, but whenever you do a report like this, whenever you do major research like you do with something like this, you always kind of look at the data at one point and go, “Huh. What? What? Why is that there?”

Evelyn McMullen: Right.

William Tincup: So if you had one of those, what was some of that?

Evelyn McMullen: I’d say that I was shocked that I wasn’t shocked. Maybe an area that people haven’t been paying as much attention to is the importance of having a strong payroll solution, because when you’re hiring remotely, of course you need to make sure that you are maintaining compliance with the payroll taxes in the states that you now all of a sudden have employees. So I think that’s been an oversight, but no, I don’t think anything has really shocked me, which is shocking.

William Tincup: Which is shocking in and of itself. Has anything lost its, I’d say prominence, but some people would say fad? A couple years ago, we talked about DEI, and in a way of you have to do this, you have to. If you’re not doing it… And pay transparency or pay equity. If you’re not doing this, you’re just not going to get these folks. Have you seen anything kind of lose some of its luster?

Evelyn McMullen: I think it’s only gained traction, but I think we are still in that era where it’s something that some people just think you need to do. Job seekers can sense that from miles away. You need to actually… What is the phrase? Talk about it and be about it.

William Tincup: Right. Right, that’s what I was about to ask you. Talking about it’s one thing, but you’re in the mix on the buy side. You get to see where people are actually buying. So do you see a separation, and no just with those things, but other stuff as well, do you see a separation between talk and action?

Evelyn McMullen: I would say I’m sure that there is still a lot of buying for optics or selecting this because someone said that’s what you need to do. On the end user side, I haven’t heard too much of that. That’s actually very interesting, because DE&I does not come up a lot in my customer conversations, but of course I’m talking to people that are doing payroll and is core HR for the most part, especially in HCM. I know when we get to the talent acquisition value matrix, which will be later this year, we’ll be having a lot more of those conversations around specific hiring, recruiting, retention efforts.

William Tincup: It’s interesting that you mentioned what we call pay on demand. You mentioned it in the context of hourly. I’m also seeing, I wanted to just get your take, I’m seeing that also in the professional, which I would have never guessed. It kind of makes sense as an uber driver or as someone that’s working at an end of a shift of a restaurant. You want to tab out. Okay, makes sense.

Evelyn McMullen: Absolutely.

William Tincup: But I’m starting to see with accountants and consultants and people in professional services that, okay, at the end of the day, tab out.

Evelyn McMullen: I know.

William Tincup: Are you seeing some of the same stuff?

Evelyn McMullen: I am, actually. A colleague of mine wrote a bit about Payactiv, which is one of the largest on-demand pay providers. Some of the customers that he ended up talking to were not ones that we expected. So like you said, people in finance, people in other salaried industries. So I think I definitely will see on-demand pay kind of creeping its way into a much broader range of companies.

William Tincup: Which is fascinating.

Evelyn McMullen: I know.

William Tincup: On so many levels from an engagement, retention perspective, and especially if you can do it, why not do it?

Evelyn McMullen: Exactly.

William Tincup: If the technology is there.

Evelyn McMullen: All the benefits. On-demand pay is super simple to implement. For the company, it really doesn’t affect their bottom line, because at least with Payactiv, I know it acts as a no-interest loan that they just pay back once they go through the payroll process. Then on the user side, I think they pay a small fee if they transfer to their bank account, but it doesn’t exceed $5. I know a lot of people are very familiar with that using money transfer apps like Cash App and Venmo.

William Tincup: So you mentioned benefits a second ago. I wanted to get your take on any movement you’ve seen there, in terms of mental health or wellness or wellbeing or anything that you’ve seen coming out of the… We’re still technically in COVID. Okay, got it. Probably never-

Evelyn McMullen: I know. I see post-COVID in like, “Oh, I don’t know about that one.”

William Tincup: Yeah, it’s like post-breathing air. Yeah.

Evelyn McMullen: Flexibility is a benefit that you don’t even need technology for. I think that the pandemic really redefined the work-life balance. Th is is now an expectation of job seekers. It’s, “I want to be able to take vacation. I want to be able to take mental health days. I just want the flexibility to be able to live my life and be able to bring my best self to this job.”

William Tincup: I’ve seen the [inaudible 00:19:00] called radical flexibility of people just being able to, again, if you want to work four days, you can work four days. It’s outcome-based.

Evelyn McMullen: I’ve seen that. Yeah.

William Tincup: And mental health, the ramp-up around mental health is probably a long time coming. Of course, I think COVID ramped that up.

Evelyn McMullen: Definitely.

William Tincup: But also the work-life balance, I’ve seen a lot of folks move their language to work-life integration.

Evelyn McMullen: Oh, I like that.

William Tincup: Like, okay, you’re not going to balance the two. Your cats are going to be in the background. Kids are going to walk in on calls, okay?

Evelyn McMullen: Yep.

William Tincup: So it’s more of an integration than basically separating the two and balancing, somehow mystically balancing the two. So when you get dealt with a report like this, major research like this, what does Nucleus, what do you do to get it in the hands of people that need it?

Evelyn McMullen: So every customer that we talk to, we offer to send them a copy of the report. It’s funny, I talked to a customer once that I had never been introduced to, but he had talked to nucleus in the past, and that’s why he ended up choosing a certain vendor. So that was definitely gratifying. We have LinkedIn, we share to LinkedIn, we put out a press release, and hope that it falls into the hands of the right people that need it.

William Tincup: So because you have both sides, you have vendors that I would assume are clients and practitioners that are clients, and so you can get it out in the hands of all of those that need it. Vendors need it to be able to understand where they’re at and where they’re going and who’s also in kind of a relative space. The practitioners need it as a buying guide.

Evelyn McMullen: They do. Yes. I see that we have more circulation on the vendor side, as far as sharing it. Of course, it gets in the hand of these sales teams.

William Tincup: Right.

Evelyn McMullen: A lot of engagement there. But no, I would love to see more engagement on the end user side and on the practitioner side, because I think that’s the purpose of it. That’s where they’re getting the most value from it. More than the vendors do, I assume.

William Tincup: So last question, and it’s for practitioners. Advice that you give, and this is based on the matrix of this last research, but also just in general, advice you’d give them in terms of when they’re buying or evaluating, and then ultimately buying software. What’s your best advice to them?

Evelyn McMullen: That’s a great question. I would say right now in the current work climate that we are, uncertain is a word that we’ve heard all too often these past few years. I would say if it’s taught us anything, it’s to expect the unexpected. I know I see that a lot in product investment on the vendor side. I think on the practitioner side, you need to obviously not think about what you’re going to need, because you don’t know, but try to stay on top of using the most modern technology that you can.

Evelyn McMullen: Something that I was going to mention earlier but totally overlooked was the people analytics. So things like that where organizations have had this wealth of data that they haven’t really been able to use, especially in HR, because you used to need a team of data scientists. Now it’s kind of making its way down market, and organizations are able to use it.

William Tincup: Yeah. What’s great about that is it give you insight, and that insight-

Evelyn McMullen: It does.

William Tincup: … you can then turn into recommendations or actions, etc.

Evelyn McMullen: Exactly.

William Tincup: It was harder before, because they were trapped. The data was trapped in these disparate systems, and now it’s less trapped. There’s still some trapped, but less trapped. Then you can do something with the data.

Evelyn McMullen: Right. It’s so wonderful that now HR people are able to use this data that’s been there, and we’ll help them not predict for sure, but prepare for the unexpected once again.

William Tincup: At least have some insight, whereas we were blindsided by so many things before that now, with data, we don’t necessarily have to be blindsided by.

Evelyn McMullen: Right.

William Tincup: Evelyn, I could talk to you forever, and ever call-

Evelyn McMullen: Same.

William Tincup: … I feel the same way. So thank you so much for carving out time.

Evelyn McMullen: Of course.

William Tincup: Thanks for the research and the work that you do, A. B, thanks for just coming on the show and just waxing philosophical and breaking down things for us.

Evelyn McMullen: Wonderful. Thank you so much, William.

William Tincup: Absolutely. Thanks again for everyone listening to RecruitingDaily podcast. Until next time.