Fosway Group is Europe’s #1 HR Industry Analyst focused on Next Gen HR, Talent and Learning. For 25 years, Fosway has been analyzing the realities of the market and providing insights on the future of HR, Talent and Learning.
Specifically, 9-Grid™ is the only market analysis model that is used to understand the relative position of solutions and providers in the learning and talent systems market. The report has been in evolution since 2008 and is driven by demand for analysis and insight designed for European-based companies.
And that’s what David and I are discussing today; continual research and dataset on corporate feedback about their experience working with vendors.
Listen in, let us know your thoughts, and even pull up the 9-Grid™ explanation and report access while you listen. This will give you a great visual to follow.
Listening Time: 31 minutes
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Ladies and gentlemen, this is William Tincup and you are listening to the RecruitingDaily Podcast. Today, we have a friend of mine, a friend of the firm, David Wilson on, and we’ve talked about this in the past, but this is the update because every year he does a study, and it’s talent acquisition, it’s 9-Grid™ in particular. And because I love research, I love talking to people that do great research and that study talent acquisition, so this is going to be great. David, would you do us a favor and introduce yourself and also The Fosway Group?
So first of all, hi, William, and great as always to be here, and I look forward to our conversation. Fosway Group, we’re an HR industry analyst based in Europe, based in the UK actually, and we research the market around what we call Next Gen HR Talent and Learning, and typically working with mid and large corporates, either in Europe or international businesses, really trying to understand what they’re doing, who they’re doing it with, what works, what doesn’t and what drives success for them.
So the first thing folks are going to wonder, as they do when they look at great market research, because this is primary research, you’re going out and talking to practitioners and vendors and consultants and the whole market when you study these things, is a 9-Grid™. Explain the markers of a 9-Grid™ for you. For your company, I should say.
Yeah. So the 9-Grid™ is the tip of, as you said, the research iceberg, I guess that goes behind it. Firstly, it’s a visualization of what we see as where the different vendors sit in the market, weighted towards typically a European or international buyer. Typically, looking at really a number of different dimensions as always with any grid, but in particular looking at the potential of those organizations to serve particularly enterprise customers. The performance that we see as measured by market success, customers, advocacy, and satisfaction. Then a few other dimensions, so we look at total cost of ownership. We look at the presence of the vendors within the market and we’re also looking at their trajectory relative to themselves and as a market as a whole.
9-Grid™ is based around, as you could obviously tell, nine boxes. This is not a leniently scored process, what we’re looking at effectively each year, we zero-base it, and then we’re looking at banding into high, mid and lower for each of those characteristics we’re talking about, and then trying to visualize that in a way that helps buyers make informed buying decisions. Obviously, the graphic itself is the top of the iceberg effectively, and then within the report, we talk about the key trends that we see and how that’s impacted the market and so on, and we update that annually.
So that the primary lens that goes into that is from the corporates themselves, the customers, the practitioners, their experiences of working with organizations. To be on it, you’re typically looking at who are the companies they’re using already? Who are the companies they’re considering using? And obviously, to some degree who are the innovators that are potentially going to join that party? That’s where most of the thing comes from. We do do obviously a lot of primary vendor research as well, engaging directly with the vendors, but we use that to cross validate and cross correlate the answers, rather than to drive the primary positionings.
Well, when you talk to vendors, sometimes it’s not about honesty, sometimes they’ll tell you what’s really going on. But by and large, they have a really optimistic view of their solution, and they should have that. I don’t want to take that away from them. But balancing that out with what you know, talking to practitioners that are using the technology, implementing the technology, et cetera. So the first thing we need to do, because we’ve done this before is from last year to this year, looking at the research, there’s two things that I really want to ask. One is what just shocked you when you looked at it even comparatively like, “Oh my gosh, this changed”? And what was things that you’re like, “Okay. Yeah, that makes sense. That tracks. I’m not shocked.” So shocking versus not shocking.
So first of all, in terms of the really big changes, this is the first year that we’ve published a Talent Acquisition 9-Grid™ which has a strategic leader in it. Whether that’s shocking to other people, but one of the things that was shocking before is that we didn’t have a strategic leader at all.
I think that was really a reflection of the historic trajectory of the market as a whole, some of the companies that would have historically been there. So strategic leaders are typically serving larger enterprise customers with a relatively sophisticated capability, an ecosystem around them that enables them to do that. I think obviously, a lot of those legacy platforms that you would have put in that box, the wheels had slightly fallen off the road, and they’d typically been acquired, they were either being end of life’d or the vendors were moving away from them. What we hadn’t yet seen was, I think new players, really. Lots of people claiming to be in that space, but nobody really that was really stepping up into that. So that’s a big change for this year. We put three different vendors into the strategic leader space. I’ll come back in a second and talk about who, because I think that’s relevant.
I think the other thing we tried to do this time is when we first produced the 9-Grid™, so last year, 2020 was actually the first official version of it. We did create an interim before, which we talked about with you. One of the things that we did was in the production process or in the research and production process for this, which was over about a four to five-year timeframe, we moved away from that historic ATS CRM type classification model to talk about talent acquisition suites and specialists, basically. So effectively, because most of the vendors that were big in one part were trying to move across to cover more of the suite capability across multiple components, but what you saw was this whole explosion in specialist players that would come in and really try and be disruptive within one part of the story.
But actually, we took that suite and specialist classifications into our other 9-Grids as well. But the first one that actually had it publicly was the interim version for talent acquisition because we thought that made a hell of a lot of sense. So one of the other things we’ve done is hunted, looking at more, who are the other specialists? So we’ve started to build that out the specialist ecosystem within the 9-Grid™, as well as obviously looking at the suites.
I love that because it’s the hub and spoke, right? And the spokes, somebody developed a chat bot, for example, fantastic chat bot for, let’s say, early candidate conversations and maybe even has a little scheduling into it. That’s fantastic. In your language, that’s a great specialist bit and vendor and application. But also as a practitioner, you’re looking at all of your technologies and how they work together, did you have conversations, did anything come out of the data about again, you’re using the hub and spoke or suite and specialist model, did you have conversations with practitioners about how these technologies work? We typically call it a stack, right? An HR technology stack, recruiting technology stack, whatever you want to call it. But basically from sourcing the onboarding, how these things fit and work together. Did you learn anything there?
Yeah, absolutely. I think the other thing we shouldn’t kind of things is the stack is continuing to change as well because you’re seeing massive disruption coming in some of those specialism plays, and some companies really making massive progress in that as well. Someone like Phenom People, for example, that are growing hugely and obviously raising lots of money as well, but also making acquisitions and growing very fast. But then, for some companies, the stack has shifted away from being maybe ATS centric to almost becoming HCM centric. So with obviously, the rise of Workday and Oracle coming back in the game now with the recruiting cloud as well, and so on.
So some cases, the stack itself is changing as well as obviously all the disruption potential. Where people are really focusing on maybe less around maybe the transactional process and more around obviously candidate experience and a bunch of other disruption areas that really potentially for them make a big difference. I think the timing here is really interesting as well, because this was published in end of April and the previous 12 months for everybody were dominated by this magical thing, a challenge called the COVID-19 pandemic. So this has had a massive obviously impact in companies.
I think it’s interesting looking at that transition as a period, because what you seen is early on when I was looking at this, I started talking about the implode-explode dynamics. So you had companies which were positively impacted, like if you’re an Amazon of this world, and you’re hiring 100,000 more people to go and deliver all this stuff online, then obviously, they had a massive explosion in their volumes of what they were trying to do. Then you have other companies that pretty much shut their recruiting functions straight down, because they were so busy laying off people or furloughing staff and so on.
I think what that implode-explode dynamic has been really interesting, and then the way that the companies have then looked at the technology and thinking about it. So we’ve seen quite a lot of people where maybe they imploded a little bit from a recruiting point of view, but what we knew is coming into that period, for many of them, they were struggling because they were on legacy platforms and their ecosystem, which is a thing we talk about a lot, which is around the stack and the connectedness around this, the ecosystem was dysfunctional. It didn’t really work, and some of their components within the stack were actually legacy and they wanted to change. So we’ve certainly seen some companies take the opportunity to refresh and to transform their stack a bit, and so on. Maybe not so much in early March, April period last year, but fairly quickly afterwards, I think certain organizations on the practitioner side, were saying, “We have an opportunity to fix this. Maybe we won’t have that window again.”
Obviously, if you were on the exploit camp, then they had to scale massively. So being able to automate those things, the things that were partially automated, not really connected before, they really had to fix very fast just because of volumes. I think that distorted what was already going on in terms of the shifting technology ecosystem and the change in relative roles and importance of the components. But obviously, that’s been further distorted by that change driven by the pandemic.
Right. Let me ask you a question on vendor satisfaction. When you’re talking to practitioners, because there’s an element of being vulnerable, that you’ve maybe made a bad purchase. So we won’t get into any names or any of that type stuff, but let’s say you’ve made a bad purchase and now you’re stuck with it for a year or two, or five or whatever, but you don’t really want to talk openly about how you’ve made a bad decision. Well, that’s just life. Because you’re an expert at this, how do you get them to be vulnerable enough to where you really understand what’s going on with practitioners?
Yeah. Well, to some degree, a lot of these organizations we’ve been talking to for a long time, so-
… that’s about building trust and everything else, of course. I think the other thing I was smiling when you were saying about the decisions, because a lot of the time it’s not their decision, right?
But somebody else’s decision that they’re trying to live with and make work.
That obviously plays through into the HCM dynamic as well, where we’re finding sometimes the TA leaders basically are not really in control of their own destiny there, and they’re getting these imposed by the CIO and the CHRO or whatever that their strategy is going to move to somewhere, and they’ve been trying to work out how they make it work. There’s still more people in that camp, making that transition towards that then are necessarily realizing that it doesn’t work in the way that they want it to do it.
But to come to your question, I think what we’re trying to do is we run a whole series of layers to this. We’re running obviously survey-driven inquiry stuff that we’re trying to get wider views, and we’re looking at individual customer-referencing type conversations, and then plus obviously what we’re already dealing with is proactive inquiries, where companies come to us, looking for what they should do next. Or their round tables, we run quite a lot of round tables where we get a bunch of people in the room and say like, “Okay, open the kimono here. We know it’s not beautiful. Just show us what it is.”
So if we know many of the times where their skeletons are buried, they’re actually more open in sharing that a little bit in terms of those private conversations. I think the key thing is that generally what we find is everybody in that situation, the practitioners, if you’ve got them in the right conversation environment, this is not an internal marketing thing that they have to be scared of.
They’re just trying to find out how they can be more successful, faster, right?
How they avoid mistakes and so on and things like this. So I think most of the time, once you build that trust conversation around it, generally we find people are pretty open to do it, and in some cases you can almost hear them egging each other on, if you’ve got two or three of them in a conversation, or 10 people or something. But it is the critical thing. You can sit there and listen to the marketing story, and the corporates are as guilty of talking about the marketing story-
Oh, yeah. 100%.
… about how successful then the vendors are, right?
So getting them into the reality of this is really where it starts to really show.
I think from my perspective, it’s trust, respect, all the communication, all that stuff that makes a great marriage, a great marriage. It also helps when you’re talking to practitioners, and I would say it also helps when you’re going deep with vendors as well. When you’re doing demos of things that they’re just launching or coming around the corner.
We’re in the business of keeping secrets on some level. If you’re talking to a practitioner and they’ve opened up the kimono and they’re telling you where they’re vulnerable and they’re telling you where things are not quite as efficient as they’d like for them to be, part of that is in diagnosing that and then giving them some advice, and part of that is just not talking about it. Talking about it, as you do with your research, you’re then bringing that up to a meta level and then saying, “Here’s, what’s going on in the market.” You’re not saying, “At Sally’s firm, here’s what’s going on,” which is, I think helpful that again, you hit trust, which I think encapsulates the secrets part. But we’ve got to be a great therapist when we’re talking about vendors and practitioners.
Well, I think sometimes it’s like you are not alone in this, right?
That’s right. 100%.
I think sometimes when you see that sensitivity around it, they feel like they’re uniquely failing, if you like, and you go, “No. No, no, no, no. This is a common problem,” and then you can start to deconstruct that a little bit and maybe understand what aspects of those are maybe more self-inflicted and which bits are more systemic and they’re fundamentally part of it. I think the thing is there is a danger obviously, as we know, with any tech marketplace that people overbuy, that they buy into the promise of what something can do and then really struggle to see the manifestation of it.
Same is true on the vendor side. Let’s think about the AI story in a lot of the vendors. It’s been a massive part of the roadmap for so long, but yet, they really struggle to evidence it into their products in a way that really generates profound value. At the same time, they’re still dealing with issues, whether that’s around bias or whatever it is, that it’s actually not easy to make some of this transformational stuff really work, and to come back to the point you made earlier and also to connect in and work with other parts of the stack.
So there is an assumption. Skills is a great area around that at the moment. So obviously there’s a lot of focus around skills, re-skilling, up-skilling as consequence of COVID. It’s interesting when you look at this because obviously we’re not just looking at this for talent acquisition, but we’re looking at it in cloud HR, we’re looking at talent, the people’s success and learning. Every bit’s trying to own that issue. Nobody wants to share nicely, so that creates some challenges as well.
Yeah. We all understand the importance of skills, now we’re going to silo them.
That makes sense never. I wanted to ask you a question about US vendors servicing European clients, because you’re the best analyst firm that covers Europe and you’ve covered it for a long time and you’ve seen a lot of the comings and goings and whatnot. But when US vendors serve European clients, what do they get right? We’ll start with some of the positive stuff. What do they get right, and where would you like to see them in terms of being a bit more successful?
Yeah. So, first of all, we see there are waves of this, where it becomes… Waves of success. Let me put it like that. I think the thing is Europe as a target for investment tends to wax and wane a little bit with some of the US firms. As a whole, we’re in definitely a point of view where it’s waxing, so we’re seeing big increases, investment and focus on EMEA from the US firms in general, and that’s leading to acquisitions, it’s leading to shift in things like product roadmap, and where R&D is getting done.
I think the things that they do well is that they can bring in innovation, they can bring funding. We know that from a funding perspective, the US is the richest market in terms of attracting funding into the vendors. If they can leverage that effectively and grow internationally at the same time, I think that’s fantastically positive. I think there is a lot of innovation that they can take notice of, obviously from the US side of things. I think that there’s obviously, frankly, a lot of US-headquarter global companies where that drives the footprint for them into, into a EMEA, in APAC as well, and other geographies.
So I think there’s a lot of positive elements around it. I think, what do they not do well. The smaller ones read each still don’t get, I think, the data-related restrictions and GDPR, et cetera. Many of them, I think, are to some degree, a bit lazy in the sense that they assume that the rest-of-the-world buyer is similar to a US buyer or that the audiences are similar, and the reality is obviously in Europe, there’s a lot of complexity. It’s not a single rest-of-world type market. There are many, many submarkets, there’s lots of regulatory complexity, there’s data complexity and so on. I think organizations-
And Brexit didn’t make things easier, not that it was easier before.
Well, whether I’m in the right or wrong place to make that comment, I don’t know.
Yeah. No, that’s fair. Fair, fair.
Yeah. I think the other thing is what’s interesting is for European-headquartered companies or European-strong global companies, you don’t get very big in Europe before you’re multinational.
One of the things that we see around our typical buyer profile or corporate client, is that they are more multinational in their DNA. They’re dealing with that complexity all the time. They’re not US centric, and then you roll out the rest of the world, or they’re not one-country centric and doing that. I think understanding the differences and the complexities around it. Talent acquisition is an ecosystem market at the end of the day, but it’s not a single ecosystem market, and that ecosystem is going to be very different in Germany than it may be in the UK, is going to be in the US, is going to be in Japan or wherever it is.
Being strong at playing into that, understanding a local buyer, understanding how to execute and having the partner ecosystem around you, the connections with the other pieces of the tech stack that you need to be successful in Europe, it means being able to do it in multiple countries. I think that’s sometimes where we see that that fall down. I think the other thing is they can just basically underinvest from a sales and marketing perspective, really basic, because they’re seeing that there’s a reflected glory syndrome coming. I think where we’ve seen companies that are being most successful, what you’re seeing in them is them playing European cards more strongly as part of their investment strategy, as part of their product roadmap, their R&D capability and their wider ecosystem strategy.
Yeah. The only thing I’d add, and you’ve said it in a way is I always give them the advice, have localization, have boots on the ground that know the terrain. So if you’re selling into England, have people in Manchester, have people in London, have people that are local that understand how things get bought and sold.
And who you need to be partnering with or connecting within the local market.
Exactly. Yeah. Exactly.
Got to have that. The other thing is, and you said it, but you were really nice about it. I think one of the areas that American vendors, what works in the US might not work anywhere else. So it’s rethinking sales, marketing, customer service, all of these other things you talked about, data and privacy security, et cetera. But essentially, you look at the US and even though there’s 50 states, they’re really 50 little countries, they’re all a little different. But when you go to continental Europe, or if you’re going to the UK, everything’s different. So take the playbook and you might want to test things. Some stuff might be the same and might work, but don’t assume that it’s going to work just because it worked in San Francisco or New York.
Yeah. Well, and you know even San Francisco to New York, there’s some pretty different dynamics of it.
Vastly different. Oh, yeah.
I think one of the things I would say when we look particularly around the innovation roadmap and so on, and AI again, I referenced it earlier, you see you talk to companies and they’re very fixed in some cases, what I would call the Bay Area mindset. So they’re designing for a set of firms that operate under a certain set of premises with a view of talent, and I don’t know, share options and things like this, et cetera. That doesn’t really translate probably even into East Coast, let alone Midwest in the US, but certainly doesn’t translate across to Europe.
I think you have to be very careful around the assumptions that you’re making or a lot more worldly, if you like, about the way you’re looking at the assumptions that are baked into what you’re trying to do in the model that you’re trying to have. Now, having said all of that, there are a lot of underlying trends, of course, that we are importing into Europe. There are obviously a number of European companies that are now focusing on US market. Obviously, that’s also a key area as well.
A lot of innovation.
Yeah, a lot.
A lot of innovation coming out of, you said EMEA earlier. A lot innovation coming out of Israel with HR tech that’s crazy.
Well, let me ask you just two quick things on the way out. One is because you study the whole space from hire to retire, if you will, what’s your next 9-Grid™ that’s coming out?
So our next one we’re working on, we’re looking parallel actually on cloud HR and what we call talent and people success.
So one of the things we did last year was we really moved away from the traditional talent management life cycle.
The reason they happen in parallel is because there’s a big overlap in the functional model between the two things, but obviously cloud HR has a whole bunch of HR transactional service process stuff on top. But what we’re also looking at what really drives that democratization of the talent processes, and what’s a modern spin on those things away from the traditional? As I said, maybe talent life cycle, a lot of which has got sucked up into HCM, of course.
Right. The next 9-Grid™ for TA will be the one in 2022, so you’ll be working on it.
And then you’ll publish somewhere, April-ish of 2022.
Yeah. There’s a couple of other things that we’re doing. We’re also working on a thing we call TA Realities, which is some more market trends research stuff that we’re doing. We also had a project looking at the TA ecosystem and deconstructing that a little bit more.
Looking at some of the characteristics around it. So you’ll see some outputs from that, certainly in the second half of the year and maybe hopefully sooner.
Well, I’m definitely interested in learning whatever you’re learning there. As always, first of all, David Wilson, Fosway Group, you can go to his website, go to LinkedIn, you can find him. He’s relatively easy to find on the internet, and he just does a wonderful job. David, thank you so much for carving out some time, talking to us about the TA 9-Grid™. Again, year after year, the more we do these, I love being able to go back and look at, “Okay, here’s what we learned this year. Here’s the Delta between this year and last year.” So I’m already looking forward to the one that you produce in 2022. So just thank you for the time.
And thank you, as always William. It’s always a pleasure.
All right. Thanks for everyone listening to the RecruitingDaily Podcast. Until next time.