Recorded live at the HR Tech Conference from the Fuel50 booth in Las Vegas, Chad & Cheese connect with Zachary Chertok, Market and Industry Analyst at IDC to dive into the realm of HR tech and employee experience. Chertok has a strong professional background in the Human Capital Management (HCM) space, and addresses shifts in workforce management due to the pandemic, the ever-evolving tech stack, data centralization, and the overall challenges faced by HR professionals. Chertok also highlighted the importance of aligning HR strategies with business goals and the complexities of HR navigating between advocating for employees and organizational constraints. Notably, he also shared some interesting observations from HR Tech, such as a trend towards emphasizing the data use case over functionality, and noted advancements in areas like skills taxonomy, benefits tools, and more nuanced vendor differentiation. To learn more about Fuel50, visit https://fuel50.com.
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Intro: Hide your kids. Lock the doors. You're listening to HRs most dangerous podcast. Chad Sowash and Joel Cheesman are here to punch the recruiting industry right where it hurts. Complete with breaking news, brash opinion, and loads of snark. Buckle up, boys and girls, it's time for the Chad and Cheese podcast.
Joel: Oh, yeah! What's up everybody? It's your rabbi's favorite podcast, AKA, the Chad and Cheese podcast. I'm your co-host, Joel Cheesman. Joined as always, the Bob to my Doug McKenzie.
Chad: Yeah.
Joel: Chad Sowash is in the house. And we are happy, excited, giddy, to welcome Zach Chertok...
Chad: Giddy. [chuckle]
Joel: To the podcast. He is Research Analyst of Employee Experience at IDC. If you don't know IDC, they're a global provider of market intelligence advisory services and events for the IT telecom and consumer tech markets, summaries provided by our friends at LinkedIn. Zach, welcome to the podcast.
Chad: That was in ChatGPT.
[laughter]
Zach Chertok: I was gonna say it's good to be here, but yeah, that's probably the most intense summary I've seen in a long time of what we do. But we kind of live at the nexus of the buyer, the investor and the vendor. So providing guidance to all three so that the cycle knows what's going on.
Joel: I want listeners to know that Zach is really smart and I feel smarter before we even push record.
Chad: Yes, yes.
Joel: So put your thinking caps on kids. We're gonna go deep.
Chad: You don't know where this is gonna go.
Joel: We're gonna go... Not just the tip. We're gonna go deep in on this one.
Chad: We're gonna go deep on this one.
Joel: So, Zach, before we get to that, we like our listeners to know who they're listening to. So give us a little bit about you as a person and then we'll get to all the company stuff.
Zach Chertok: Well, sure. So I'll start professional and then go a little bit more personal into what I do when I don't have a hat on.
Joel: Do you Zack?
Zach Chertok: But professionally, I've been in and around the HCM space for the last 15 years. Kind of fell civil engineering by training out of McGill, fell backwards through project management into the tech sector. Consequence of graduating in the financial crisis. Nobody builds anything when capital's slow, but...
Joel: It's crazy, isn't it?
Zach Chertok: Yeah, I know.
Chad: Imagine that.
Zach Chertok: You know from the vendor side with Kronos for four years, then went off into the analyst side and I have kind of been on all sides of the sector. So investor, developer, practitioner, analyst, the list goes on, kind of creates a unique flow of...
Joel: Don't forget Virgin Pulse. You need to throw a little Virgin Pulse in there.
Zach Chertok: So, the wonderful thing when you change analyst firms is when you live in a state that stands by non-competes, you tend to... Yeah, analysts tend to go into the product marketing world for a while.
[laughter] So I ran end-to-end HCM coverage for Aberdeen for four and a half years. And during the pandemic, transitioned back into the product marketing world with Virgin Pulse and WorkForce Software for a bit. I got a lot of exposure to worlds... One world I hadn't necessarily been independently yet. And another one that I was kind of returning to with Virgin Pulse was the new one, mainly integrated wellbeing. And from a functional standpoint, inside organizations I always kind of knew what it was about, covered it from that vantage point, but learned a lot about its impact on the overall benefits management realm, getting exposure to the healthcare side of it and the mental stress side of it.
Zach Chertok: By working and sifting through everything VP was looking at and honestly post being there, it's wonderful to see sort of how they've been evolving as well in the time now that I've been at IDC and with WorkForce Software, I really got thrown into the nexus of workforce management, employee experience. They were going through the acquisition of what is now workforce experience. And again, it was great to see how that played out and how it really filled niches and for frontline workers that were kind of really going... Statically going unmanaged by some of the broader experience space. And then got the call one day, fortunately from one of my earliest mentors in the field, Lisa Rowan, who was running HCM for IDC, they were looking for a new employee experience analyst, I agonized about it for about four days 'cause I was working for an organization that I loved, but opportunity to go work for a mentor and ultimately made the jump to IDC.
Joel: Come on, Zach, give me some personal stuff. This is HR. Give me some walks on the beach, give me some poetry reading, give me something.
Zach Chertok: So I will tell you that when you're covering HCM, I joke with a lot of people. The good news is market high, market low. Everybody needs to reorganize a company, so I'll never be out of a job. The bad news is nothing is transactional or rational about this. So you need borderline a degree in clinical science... In clinical psychology rather, to be able to understand which end is up. The nature of that means is that when I'm in my off time, I wanna go someplace where nobody can reach me. So I'm either hiking on a mountain or I've got my head underwater swimming. My two sort of offsite passions.
Joel: I'm hanging with Aaron Rogers in a unlit doomsday machine. [laughter] Anyway, alright, so we were talking before the episode about your role at IDC, the cats that you're herding. Let's dig into that. Tell us about it. Set the table and dig in.
Zach Chertok: Well, as I said earlier, at IDC, we work a lot both with the buyer, the investor and the vendor side. So we kinda have this trifecta of personas that we drive sort of to and around each other. And the last three, four years since the pandemic loosened... The restrictions loosened up, organizations started opening up, hiring, picked up, all of that have been just dramatic for transition in every corner of how the workforce is managed, how it's engaged, what the frontline looks, and how it's even defined. And what that means is within the three areas of coverage that we have at IDC, talent acquisition, modern HR, which really focuses on core HR and HCM for the HR stakeholder, and then employee experience, which is frontline automation, resource personalization, everything for the frontline and the front office. We all three spaces have been drawn really tighter together to look at how they relationally interact as the nature of the tech stack is changing for organizations. So we're moving on from kind of this functional solution proposition into the concept of the data use case.
Chad: So do you guys... Do you actually help with the tech stack in being able to identify where were there redundancies? 'Cause, I mean, many, many companies have way too many solutions in their stack as it is today.
Zach Chertok: Oh, yeah.
Chad: You take a look at some of the core offerings from their applicant tracking system or their HCM and they've either acquired or they've created features that do what their point solutions do. It seems like there's just all this feature bloat redundancy. What do you guys... Which obviously is a great job for you to slim them down.
Joel: Well, we had J and J on. All he said was three figures in terms of how many tools they had, which blew my mind.
Zach Chertok: Yeah. I mean, even when you get it down into the s and b scaling... I mean, look, the pathway to automation and digital transformation still, not that they're the same thing, but still follows the traditional path of small business organically grows... Automates by need, hits the mid-level and either they can organically transition into whichever one of the major solutions that they're using a part of fulfills consolidation. But more often than not, they end up in this, okay, we gotta pivot and think strategically here and get our solutions pulled together. And then the suite play comes in. And we're dealing in a market now with Suite 2.0. 1.0 was six to 10 years ago where each functional silo had its suite and Turn-Key HR could turn the lights on and IT wasn't really needed.
Zach Chertok: It turns out, oops, IT is kind of needed. 'Cause all the data sets have to talk to each other. [laughter] Because finance and ops need to know what people are doing. HR needs to know how budget is thinking and all the decisions have impacts on each other. So now we're a functional suite 2.0, where the data lake is being created cross functionally operationally, and through one mechanism or another, whether it's a functional suite box that sits on top of the lake or it's a direct reach into the lake. We're seeing the functional users still have their functionality ownership. But the data ownership is really spread organization wide. So we're seeing a lot of demand for Suite 2.0 come first from the mid-market and then scale up into the enterprise. I think the enterprise just really to the J and J example, needs to inventory their landscape.
Chad: Oh God! Yes.
Zach Chertok: Understand and start to consolidate their buying centers, and not necessarily say one person's gonna be in charge for a huge disparate conglomerate like that. But that there's gonna be sort of buying guidelines as to how it all needs to fit together and how the data management gets consolidated.
Chad: So that data lake that you're talking about, how big of a disruption and/or just impact overall is large language models and contextualizing all that data and then being able to scale faster. How's that going to change that next suite?
Zach Chertok: Yeah. So the concept of LLM, it's funny, every time I go out to San Francisco, I always catch up with a friend for dinner who works in... I just call the field a digital simplicity, 'cause it's the easiest way to describe what he does. But when I always start talking about these concepts, 'cause it's very easy to live in the HCM Tech bubble, and all that, and get wrapped up in the language. He just constantly looks at me, he says, "Okay, simplify it." And we just... We go through these cycles. He describes things like GenAI, LLMs, as really machine learning that learns from itself. So it kind of whittles it down into more of a core concept. And so when we're talking about the use of LLMs, and again, at the broader concept of GenAI in these massive data sets, we're really kind of in the early stages of what it can do.
Zach Chertok: So we're using it for kind of guided speech breaking writer's block, basic guided functional recommendations. But steering away from decision frameworks, which is good, 'cause we still don't want people to be dependent. We wanna augment kind of the synthesis of information so that the decision makers can stay in the decision timing. And not in the aggregate research timing. So for the knowledge segments, the decision makers, it's a pretty powerful time reducer. What we kind of expect, kind of in the dream state, if you were to have a world's fair tomorrow, what could we do with this? Is that LLMs do potentially hold the capacity to reconcile disparate data sets without a direct data link. So when you think about could we integrate systems at the data level without literally having them physically talk to each other having a physical pathway?
Zach Chertok: Could an LLM do that? Conceptually, sure. Reconcile into a common language and translate
and bring the data sets together. Does that mean that we're gonna sustain a lot of solution disparity further than we should? Probably not, because then it bleeds into the functional use case and employees get unhappy. But then we have vendors like a ServiceNow, for example, who will sit over the top and build a single portal regardless of how many solutions you have. So what we're seeing is an explosion in really the opportunities for how you can come at your solution space based on how your buying centers are structured, how centralized or disaggregated your organizational decision lines are, but with the fundamental component of the fact that your data needs to be centralized. So no matter what happens, that part is becoming non-negotiable. So the data use case is driving the sale more so now than the functional use case.
Joel: And I loved how you framed the issue of all the... Everyone's using the same data or you're building bridges to different departments, which I think is your role or part of your role. Talk about what IDC is using to get marketing, to talk to HR, to talk to whoever. 'cause that's gotta be a hell of a challenge.
Zach Chertok: A whole lot of buyer guidance. When I have calls with buyers... Now, imagine... I mean, I've been a student and rather a snarky student of management philosophy and cycles for the last 15 years. When it came time for grad school, I kind of said, "Okay, you're not gonna do the MBA, 'cause I'm getting paid to study it. So why would I pay to study it?" Not that I don't talk to the experts. I mean, I get access to researchers at different institutions all over the place because of what I do. So still in the vein of having more questions than answers, contrary to what this sounds like. But [laughter] the first thing is when I get on the call with a buyer is I find out who's in the room to really understand and dive deep into what kind of influence do they have, just to find out what they really need.
Zach Chertok: If HR is in the room without a doubt, they're gonna need a business case, otherwise they wouldn't be coming to us.
Joel: Yeah.
Chad: Right.
Zach Chertok: But they also need a little bit of functional guidance to understand, okay, is what you're thinking you need actually what you need. So let's dig into your deeper problem and see if there is a causality that you haven't looked at yet. So that before you go down the road of this particular functional piece, is there a way that you can better connect it into your core strategy, into your inner strategy? Or is really just the extension, what you need because you've already done the rest. More often than not, they haven't done the rest. Not to their discredit, it's just that they have so many challenges that come to their desk. If it's just the HR person that they're just trying to manage through it because...
Chad: They're fighting fires.
Zach Chertok: Well, and their staff counts, honestly, have not increased. And we know this, and their budgets are kind of stagnant, same as they've always been. So they're trying to make the best of what they have. And I don't blame them. More often than not though, where I can, if the conversation gets to a point where I'm in violent agreement with the HR person, [laughter] okay, fine, go pull your finance person out of whatever meeting they're in and bring them to the call. Or we're gonna schedule another call. And I'm gonna talk to them about it because I can tell you about the budget need that you need to make to realize the investment on the back end. Because we've looked at this a hundred bazillion times. Finance people are fun. [laughter] I'm probably the only person that's gonna describe them as fun because I discovered the reason why they... I keep telling them what they're doing wrong and they keep coming back for more is because I was in a meeting with a vendor a couple of weeks ago and I finally heard how it was coming out of my mouth. And I realized I sound like they're mothers. It's the discipline they either did or didn't get as a child, and it dust off nostalgia, so they keep coming back for more. [laughter]
Joel: Oh come on, are you gonna name some names or not?
Zach Chertok: No, I will protect the innocent from this one, but...
Joel: Ah, ain't no fun.
Zach Chertok: But I realize that's really what it boils down to is that to take, for a lack of better words, squishy subjects in HR and people management, the behavioral stuff that finance really doesn't wanna have to care about that is not... It is too behavioral for operations, transactional management styles to take all of that and put it into language that they're gonna respond to, they need a certain air of confidence when the proverbial experts come into the room to convince them and get them over the edge, which is where HR has a challenge. I mean, when I teach students. I teach... Teaching for Columbia HCM for five years, the first thing we do is teach them the difference between an HR leader and the BHR, the Business HR. Because you have to walk in with that confidence. You have to know your numbers. You have to be able to answer these questions and develop your wit to be quick on your response.
Chad: Well, you have to know what the business does. And HR doesn't understand... Again, when they're trying to go after budget, they have to understand how they impact sales, how they impact marketing, how they impact engineering.
Joel: How do we make money again? That's...
Chad: Yeah, I mean, that's the thing.
Zach Chertok: But the other challenge that they face too is HR is caught between... Is caught almost in a no win win, no win sandwich here. Because I think it's cute that everybody thinks that with the advent of a CHRO, HR got a seat at the table.
Chad: No. [laughter]
Zach Chertok: Here's what really happened. Finance and ops moved their seats slightly further apart so the CHRO could bring a folding chair to the table. [laughter] That's what happened. So you think about the picture of fighting, fighting, fighting to get a position where your face, your visage is seen among the people at the table. But you have to toe the line or you'll be easily kicked out of the room. And so once, HR is advocating for the organization and is listening to what is bubbling up from the line of business, but is caught with just how far they can advocate for that at the table, or risk losing their seat.
Zach Chertok: So even as employee experience, for example, starts to come to the fore as a line of business mandate, with the data managed between, with the HR, IT partnership, we're seeing a lot more of the responsibility for that come from line of business management as a challenge to HR's remit, because line of business management has not fought for the seat at the table. They don't have anything to lose in standing up for what the employees want and need to see. So we start to see in some organizations the HR line of business partnership forms well, in other organizations we see line of business management kind of threatening what the remit of HR should be and adopting some of those characteristics.
Joel: We're here at HR Tech a big shoe where everybody samples their wear.
Chad: Really, really big shoe.
Joel: Why are you here? What have you seen at the show that has piqued your interest? What technologies or companies have you excited give us your HR tech experience breakdown?
Zach Chertok: Well, I will admit it's colored by probably the seven conferences that I've been to before this. But on the sweet side, when we look at the big players, like I call the big three what's your Workday SAP Oracle from an integrated standpoint, they're definitely pursuing the data cap ownership across the entire operations layer. So we've seen a lot of transformation in the full tech stack from them, which has been an interesting journey. We see sort of more strategic alignment and unity. Again, the big concept really is going to market on the data use case for a lot of vendors, still promoting functionality but at the end of the day, the data use case is setting the value proposition. It's more committed to this year that than it was last year. I always joke that, what's the buzzword this year that's gonna make me wanna throw up walking on the floor?
[laughter]
Zach Chertok: I had a toss up between GenAI and skills. Not that either one is lacking in value. I just challenge people to say define it. [laughter] It turned out to be responsible AI.
Joel: Ooh.
Chad: Ooh.
Zach Chertok: Now mind you, good concept, but there's no standard definition, so make me believe it. So it's the one that I kind of challenged them. "Okay. About maybe a third of you actually have a good definition for it." So that was what it turned out to be. But like last year, I'm up in the analyst room, we do a lot of briefings with vendors across the board. This is the best place for us to meet everybody all in one place. See what they're doing. Talk about our upcoming research, what else should be in the purview, and kind of have that meeting of the minds.
Zach Chertok: And like last year, we're not getting a lot of marketing buzz speak from them. They're being very... All of you are being very... Fuel50, as we're sitting here being included, is being very frank with what is coming to market, what we see that they're not doing. There's a lot more humility in the room. And not just among the vendor space among both myself and the analyst too. That pretense is gone and it was gone last year. It's nice to see that it's sustaining into this year. And then at a functional level, seeing some of the gray spaces between some of these new concepts getting filled. So skills, great. It's come on the board. I get it. Organizations want better adaptability and maneuverability and skills does it, it decouples the employee's sense of value from their role to how they actually contribute. And so that there's opportunities for growth personalization, to put it short.
Joel: Yeah.
Zach Chertok: But organizations need guidance into building their foundational taxonomies before they can get into a dynamic skills architecture. So a lot of folks want to get there, they just don't know how to start. 'Cause a lot of HR isn't trained on the ontology framework.
Joel: No.
Chad: No.
Zach Chertok: So we've seen some vendors come forward with guiding that foundational ontology creation, whether at a service level or an automation level, that's an example of a gray area. On the benefit side, we've seen a lot of employee dashboard guidance to decisions based on tie-ins on variable benefit structures and wellbeing alongside benefits data from historical health records. If I had a benefits tool that would allow me to equitably select my plan based on my health history and participation, oh my God, benefits would be a breeze. I wouldn't dread sifting through those 150 day page document nonsense from the insurers or even using a basic comparison tool and having to sift through 70,000 boxes.
Zach Chertok: So those are the examples of the gray areas between functional peak triangles that we're seeing start to get filled in. Because the world is in transition right now, there's a lot of opportunity as more of those areas are opening up that we're seeing vendors differentiate themselves into. Even if their original core propositions are still comparable. So there's a lot more differentiation between even like vendors than we've seen in previous years.
Joel: Can you dig it? I knew that you could.
Chad: Amen.
Joel: Zach, for our listeners who wanna know more about you, where would you send them?
Zach Chertok: You can feel free to either find me on LinkedIn under just my straight last name... First and last name rather. Or you can certainly reach out at Z-C-H-E-R-T-O-K@idc.com.
Joel: Big brain, lots of snark, and he says visage, not visage. [laughter]
Chad: Check that.
Joel: Chad, that is another one in the can. We out.
Chad: We out.
Outro: Wow. Look at you. You made it through an entire episode of the Chad and Cheese podcast. Or maybe you cheated and fast forwarded it to the end. Either way, there's no doubt you wish you had that time back. Valuable time you could have used to buy a nutritious meal at Taco Bell, enjoy a pour of your favorite whiskey, or just watch big booty Latinas and bug fights on TikTok. No, you hung out with these two Chuckleheads instead. Now go take a shower and wash off all the guilt, but save some soap because you'll be back, like an awful train wreck. You can't look away. And like Chad's favorite Western, you can't quit them either. We out.
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