The unemployment rate may be at a record low, but there are still vast pockets of workers in the United States struggling to find jobs.
Global hotel chain Hyatt Corp. is tapping into one of these talent pools with RiseHY, its new community-hiring program, which uses virtual reality and gaming to introduce young people looking for career opportunities to the hospitality industry.
As part of the initiative, Hyatt hotels around the world have committed to hiring 10,000 “opportunity youth” — people ages 18 to 24 who are neither in school nor working — by 2025. According to data from Brookings Institute, 4.7 million young people fall into this category.
“This program is a labor of love,” says Jessica Schultz, Hyatt’s senior manager of community engagement. Part philanthropy and part talent development, RiseHY was designed to support the community while helping Hyatt fill its talent pipeline. “This is a pool of untapped talent who have skills and ambition,” said Audrey Williams-Lee, vice president of corporate HR and philosophy. “They could be a great fit for our organization.”
Immersive Hotel Tours
However, RiseHY is more than just a targeted recruiting effort.
Audrey Williams-Lee
Opportunity youth often come from disadvantaged neighborhoods and have limited work experience and education. “Hospitality jobs aren’t even on their radar,” Schultz said. When Schultz and Williams-Lee began designing the project, they knew they would need to close that gap and find a way to help young people imagine building a career in hospitality.
To give them a sense of what life would be like working in a hotel, they worked with a vendor to build a virtual reality app, called YouVisit, where candidates can take a virtual guided tour of a hotel, see what workers do and learn what’s required of different roles including room attendants, hostesses, wait staff and concierge. “The virtual reality lets them see what their career path could be, and to think about whether this is a good fit for them,” Williams-Lee said.
Gaming the System
Priyanka Jain
Interested candidates are also invited to complete an online assessment, built by Pymetrics, that uses artificial intelligence to assess a candidate’s skills and attitudes through a series of games and reasoning exercises. The games use neuroscience and reviews of past assessments to measure things like how well candidates multi-task, whether they can filter distractions, and their willingness to take risks, explained Priyanka Jain, head of growth and lead product manager for Pymetrics.
The system then determines where a candidate would be a good fit. “There are no good or bad responses,” Jain said. Rather, it helps the candidates and Hyatt understand where candidates are likely to thrive in the absence of a resume or past job experience.
Jessica Schultz
The virtual reality app and game-based assessments are meant to ease these young people through the early recruiting process, but it is also expected to help increase retention and job satisfaction by ensuring the right people are put into the right roles, said Schultz. “It will create a better flow for our talent funnel.”
Once candidates are selected, they are either hired directly and given a mentor to support them as they ease into the role, or they are placed in a three- to six-month training program developed in partnership with community groups to give them the skills they will need on the job.
Once the training is complete, they may be hired by Hyatt or referred to other hospitality employers. “We aren’t just doing this for Hyatt,” Schultz said. “It’s about helping these kids find careers in hospitality.”
Expanding the program ensures every interested youth has an opportunity to find a job and that Hyatt doesn’t have to slow the program down during low hiring seasons, she added. “We expect to hire at least 10,000 youth, but this program will impact so many more.”
In most jobs, employees are likely responsible for a lot of different things, no matter what the job description says.
They must communicate certain information and manage certain tasks and resources. Workers definitely have to manage their time and stress levels and measure their responses to requests.
Their job is not to complete a goal plan or fill out a self-evaluation of their performance, engage in learning and development courses, complete an engagement survey or any of the other HR-type tasks employees are frequently asked to do. But to many employees it probably feels like HR thinks that is their job.
And the frustration of being taken out of productivity to complete these tasks is just part of the workload.
The truth is, human resources has struggled for a long time to figure out how to embed these kinds of tasks in day-to-day work of employees so that productivity is uninterrupted. But they have a mountain directly in their way in the form of the HR technology used by many of today’s organizations.
This technology may comprehensively meet the needs of HR, giving them one automated place to track employee goals, completion rates of performance forms and report on employee data. But when it comes to meeting the needs of the people using the technology to get things done, it almost always falls short.
Here’s a secret human resources technology vendors won’t typically tell you: It’s because we purposely built it that way. For a long time, human resources technology was designed to automate processes, enabling users to get from point A to point B. It was designed to be deployed across an entire workforce, driving consistency and scale across departments and teams. And it was designed to meet the needs of one group: human resources.
So, what happened? Over time the workforce changed, the nature of work changed, and the role of technology in our lives became unrecognizable from one year to the next.
Now solutions that focus on processes instead of people, force consistency instead of choice and meet the needs of one stakeholder while remaining disconnected from the rest of the business are quickly becoming obsolete. Consider today’s employee who can get directions from their phone just by asking, or use a voice command to learn about the weather.
Then they come to work and break away from job-related tasks to edit a performance goal in a clunky, outdated system through a series of clicks and menu options that get them there — but without much of a sense as to how or why. Is this sounding familiar?
The focus of enterprise technology is going from business process automation to delivering exceptional employee experiences that connect them to the business in new and meaningful ways. Where the human resources technology of the past was process-centric, rigid and disconnected, it must now become people-centric, flexible and holistic.
As the owners of employee experience and the ultimate stakeholders in whether the workforce is engaged, performing and thriving, business leaders must give their people tools that help not only processes, but people in doing their jobs — wherever their jobs take them, and whatever it is they’re working on.
This is the guiding principle influencing how human resources technology should be designed. An efficient tool must be built to be people-centric, focused on supporting and enhancing how people think, work, and connect. Solutions should also be flexible, with intelligent, adaptable tools that know who individual people are and what they need most in order to be successful.
Above all, they must be holistic and connected, with multiple channels of access, embedded analytics and emerging technologies like machine learning. By creating a comprehensive ecosystem of business solutions and extensions, organizations can ensure alignment with, and visibility to, the business.
The days of human resources as a hindrance to doing great work are over. The new era of HR technology and tools in the hands of employees and leaders is here.
If HR solutions are designed to be truly people-centric, flexible and holistic, businesses can ensure their employees are getting superior experiences and are connected with the business in meaningful ways.
Gabby Burlacu is a human capital management researcher at human resources technology firm SAP SuccessFactors. Comment below or email editors@ workforce.com.
Lie detector tests, have been all over the news lately. Reports suggest that Donald Trump wants to administer these examinations to the entire White House staff to identify the author of the anonymous New York Times op-ed.
There are no laws prohibiting the White House from using polygraph tests in this manner. The federal law that regulates their use in the workplace — the Employee Polygraph Protection Act of 1988 — does not apply to the government.
For private-sector employers, however, the EPPA imposes strict prohibitions on the use of any device to render a diagnostic opinion as to the honesty or dishonesty of an individual.
It prohibits employers from:
Requiring, requesting, suggesting, or causing an employee or prospective employee to take or submit to any lie detector test.
Using, accepting, referring to, or inquiring about the results of any lie detector test of an employee or prospective employee.
Discharging, disciplining, discriminating against, denying employment or promotion, or threatening to take any such action against an employee or prospective employee for refusing to take a test, on the basis of the results of a test, for filing a complaint, for testifying in any proceeding, or for exercising any rights afforded by the EPPA.
Despite these strict prohibitions, there are limited exceptions when an employer can administer polygraph tests (but not other forms of lie detector tests).
One exception covers prospective employees of armored car and other similar security companies. Another covers prospective employees of companies that manufacture controlled substances.
Of more general application to most employers, the third exception covers employees who are reasonably suspected of involvement in a workplace incident that results in economic loss to the employer and who had access to the property that is the subject of an investigation. Thus, an employer who reasonably believes that an employee has stolen is able to administer a polygraph test to confirm the employee’s culpability.
Even if this exception applies, employers cannot use polygraph tests carte blanche. There are certain key limits on their administration:
Prior to the polygraph examination, the employer must provide to the to-be-examined employee a written notice
explaining the employee’s rights and the limitations imposed, including the prohibited areas of questioning, restrictions on the use of test results, and the employee’s right to file a complaint with the Department of Labor alleging violations of EPPA;
explaining the specific incident or activity being investigated and the basis for the employer’s reasonable suspicion of the employee’s involvement;
reasonably describing the date, time, and place of the examination and the employee’s right to consult with legal counsel or an employee representative before each phase of the test; and
describing the nature and characteristics of the polygraph instrument and examination.
The employee can refuse to take a test, terminate a test at any time, or decline to take a test because of a medical condition.
The results of a test alone cannot be disclosed to anyone other than the employer or employee without their consent.
The polygraph examiner must be licensed, and bonded or insured. Also, the examination is subject to strict conduct standards.
Employers that violate the EPPA are subject to a civil money penalty of $20,521 per violation, in addition to legal and equitable relief such as lost wages and reinstatement, and, in the case of a private civil lawsuit, reasonable costs and attorneys’ fees.
Polygraph tests provide employers a powerful tool to confirm and confront employee certain limited employee issues. Employers must carefully follow the EPPA’s requirements so that a slam-dunk termination does not turn into a sure-fire lawsuit for the employee.
Jon Hyman is a partner at Meyers, Roman, Friedberg & Lewis in Cleveland. Comment below or email editors@workforce.com. Follow Hyman’s blog at Workforce.com/PracticalEmployer.
In August 2017, Patrick McMullan and more than 50 of his employees had microchips inserted in their fingers live on NBC’s “Today Show.”
McMullan, the president of Three Square Market, a Wisconsin-based company that sells self-service break room vending machines, said it was one of the most exhilarating and nerve-wracking experiences of his life.
An employee who was to be chipped approached him 10 minutes before he was going on air and asked, “Should I do it today or not?” McMullan said “No,” to the employee’s surprise.
“If you’re asking me, it means you’re not certain about it,” he said. “And the answer is ‘No’ until you can be at peace that it’s something you want to do.”
Three Square Market received a lot of media attention after its chip party — both negative and positive, McMullan said — but in the past year Three Square proved that it’s possible to be forward-thinking with technology while also contemplating and respecting employees’ privacy.
“What that has done is inspired our employees to be far more innovative in finding solutions,” he said. “It’s helped all of our businesses in the past year. We’ve had a phenomenal 12 months.”
As more monitoring devices — phone or video recorders, wristbands, microchips, and wireless sensors that measure employees’ brain waves — are developed, and as these tools become more powerful, there’s greater potential for invading employees’ privacy.
Perceptions toward monitoring devices depend on what type of analysis is being done — an issue that becomes more complex as devices with elaborate capabilities enter the market, said Laurel McNall, associate professor at The College at Brockport, State University of New York. Her research interests revolve around employee attitudes, specifically around perceptions of fairness in the workplace.
“I do think there is a danger of setting up an electronic sweatshop,” McNall said.
What once appeared a dystopian, futuristic theory is a reality, at least from a technology perspective.
It would be naive to believe that companies will curb their use of monitoring devices that they think will improve business. But it would also be naive to assume that there aren’t organizations or managers that would take advantage of surveillance technology — and the lack of oversight — and cross a line when monitoring employees. In many cases workers are stuck in the middle, feeling as if they don’t have a choice in the matter or any sense of privacy at work.
As employers face the scattered legal landscape of employee monitoring and the often-skeptical reaction of their employees — Three Square Market workers notwithstanding — they must tread carefully and respectfully to find success.
Employee Comfort Levels Toward Monitoring
Most employees find it unacceptable to monitor personal, non-work-related activities, according to a 2018 survey conducted by the HR Metrics & Analytics Summit, “Workplace Privacy & Protection: Is Your Employer Watching Your Every Move?” It’s inappropriate to monitor physical movements around the workplace, for example through wearable technology such as a Fitbit, said 57 percent of employee respondents, while 56 percent said it’s inappropriate to monitor personal interactions with these devices.
The survey also found that 48 percent of employees don’t trust their company to protect their data.
Contextual factors are important in how employees will likely react to monitoring, said Dave Tomczak, an industrial-organizational psychology doctoral student at George Washington University who researches electronic monitoring in organizations. One of his most recent studies analyzed workers with highly complex jobs requiring a lot of creativity and whether they respond the same way as employees with less autonomy in their role.
“When someone has a flexible job, they expect the organization is going to give them the discretion to carry out their work,” he said. “Some of these people will see monitoring as hindering their ability to do their job. They perceive less autonomy in their day-to-day operations.”
It has the opposite effect on people with low-complexity jobs, like cashiering, he added, where it’s more likely that people will feel as though it helps them perform better.
“When monitoring gets in the way of people doing their jobs, that’s where the problems come in,” he said.
People find monitoring that is close to the body — for example, devices underneath employees’ desks that sense body heat to tell how long employees are away from their desks — as the most invasive, he added.
Tomczak’s adviser, Tara Behrend, associate professor of I-O psychology at George Washington University and an expert on privacy and ethical implications of workplace monitoring, said that not all surveillance is equal, and not all people respond similarly to it.
“Talking about what those variables are that make the difference is really critical,” she said. “We don’t want to give into hysteria, we also don’t want to ignore the potential dangers of doing this the wrong way.”
Three Square Market has tried to keep a healthy balance between taking advantage of the new chip technology while respecting the boundaries of some employees, McMullan said.
The radio-frequency identification, or RFID, chips that were implanted don’t track employees’ movements or location but do store data that allows employees to open doors, unlock computers and make payments. The next iteration of this chip technology will store medical and health data, and Three Square is conducting beta testing on that technology. Religious and privacy concerns are two major reasons employees express disinterest, McMullan said, and such objections can’t be ignored.
“Our mission is not to tell people to go get chipped,” he said, adding that one of his key staff members is adamantly against it and keeps him in line.
“Having that voice that said, ‘I’m not comfortable with this,’ has been one of the most valuable pieces because we’re in constant communication, talking back and forth, how would you do this?” McMullan said.
The Privacy Legal Landscape in the U.S.
Policymakers are likely to face confusion on how to deal with the challenges that arise from emerging technology, according to the 2018 “Emerging Tech Trends Report,” written by Amy Webb, founder of The Future Today Institute. The report explores emerging technology trends that will likely impact business, government, education, media and society in coming years.
As this tension between privacy and security continues, the report states, both large tech companies and small tech startups could face problems with “rules and legislation that are either too restrictive or don’t acknowledge that science and tech are in constant motion.”
While this is the prediction, though, and while that might have some truth in Europe with the advent of GDPR — General Data Protection Regulation — the current landscape in the United States is relatively devoid of regulations.
There’s no federal law regarding employee privacy, and if there are any rules, they’re on a state-by-state basis, said employment law attorney Jeffrey Dretler, partner at the Boston office of law firm Fisher Phillips. The closest federal law is the Electronic Communications Privacy Act of 1986. While the act protects wire, oral and electronic communications in transit, it does not protect privacy and was not intended as a privacy protection regulation.
Across the country, if an organization gets an employee’s consent, especially in writing, it can monitor anything. When there’s no consent, that’s where employers run into risks.
Many states have two-party consent laws, meaning both parties have to agree, while others have single-party consent laws, in which an employer could essentially monitor without notifying employees. Still, Dretler advises that best practices dictate that employers get consent no matter the state they’re in.
“It’s not always necessary to get consent, but it’s better to because it insulates the employer from potential cause of action an employee might try to bring,” he said.
Certain states have created explicit laws for specific types of monitoring. States including California, Missouri and North Dakota have passed laws prohibiting the use of microchips, while Illinois and Washington state have protections on employees’ biometric data.
“As tech advances, certainly states pass laws regulating what can and can’t be done,” he said. “But for the most part, the laws focus on informing employees of what the company wants to do, informing employees on how the data will be used and getting employees’ consent for it. They’re not express prohibitions. The prohibition is on doing it without telling anybody or doing it without consent.”
This poses a challenge for privacy-concerned employees, who can’t bring a claim saying they want to work at a company but not have their data collected. The idea is that, as long as an employer tells a potential employee what it intends to monitor, the employee can agree and work there or not agree and find another job.
“As more and more companies start to collect and use this kind of data it becomes harder and harder for employees to find a place to work that doesn’t do it,” Dretler said.
Best Practices for Employee Monitoring
Just like the technology itself will continue to advance, ethical concerns among employees also will increase. Organizational psychologist McNall said there are steps an organization can take to reduce this idea of an electronic sweatshop.
Psychologists are interested in people’s emotional needs and how to develop a workplace environment that meets those needs, said McNall, who studies employee attitudes specifically around perceptions of fairness in the workplace. Two major needs are autonomy — the ability to have freedom and independence over how to do something — and competency — the ability to do something successfully or efficiently.
Technology is supposed to help employees be more productive at their jobs, thus increasing their competence. But they still want autonomy at work, McNall said.
“Autonomy is at risk; competence potentially could be enhanced,” she said. “How do you help make people feel like they’re still autonomous, that they still have some degree of control?”
Employers can provide that independence by giving employees the ability to turn the monitoring on and off in a protected space in the office, which helps deter feelings of invaded privacy. The caveat is that employees often need to take home and use some tracking devices — like wearables to count steps or track health data — so there may not be a truly protected time or space for employees to disconnect.
Employers can also be smart about communicating the technology, how it works and its ultimate purpose, she said. The decision to monitor employees requires thoughtfulness and strategy, and organizations should not track for the sake of tracking but because it brings value to both the employer and employee. Employees should know that the potential value is for them.
“Make sure you spend time,” she said. “Be intentional and deliberate in how you word it. Have an adequate, well-thought-out explanation.”
Employers should tell employees what they plan to do with their data and give them a voice in the process, allowing them some level of participation, George Washington University’s Tomczak said. If employers aren’t giving their workforce this information, employees may be skeptical about what’s going on in the background.
“If it’s not transparent, if it’s not feedback-based, then it’s authoritarian,” he said.
McNall also emphasized the importance of building this trust. Although monitoring technology is itself neutral, there’s potential for of privacy invasion and lack of fairness.
“There’s no way monitoring is going away,” she said. “So how can we take an issue like that — this is reality; this is where we are right now — and still make the workplace a better place using science?”
Andie Burjek is a Workforce associate editor. Comment below or email editors@workforce.com.
There’s an app for that — that meaning almost everything. I covered mental health apps for Workforce a couple years ago, exploring how technology solutions can benefit employees with mental health issues, which is why I was intrigued to find a ComPsych survey in my inbox the other morning. The findings? If employers want to help depressed workers, apps may not be the answer.
Workforce covered technology in our latest HR tech-themed issue, including a few stories on the negative and positive impacts of technology. While this information was also valuable, I found the survey by ComPsych, a Chicago-based employee assistance program provider, to be especially noteworthy because of the specific population it addressed: depressed workers. We can argue pointedly on both sides about how technology has both positive and negative effects on people’s lives and well-being. But when we’re talking about mentally ill people getting help, I think it’s better to be a bit more careful.
I can’t speak for this hypothesis, but I can share some of the findings from the ComPsych research. The EAP, considering the loneliness epidemic and the need for more face-to-face interaction, advocates for in-person counseling. The role of apps in getting mental help? “Using them as means to draw people in to receive more in-depth help.”
“There’s a human function and a human interaction component — you can call it empathy, you can call it connectedness, you can all it a lot of things — that you miss regardless of what you employ in the technological realm that an in-person experience with another human being provides for a person seeking care,” said Richard Chaifetz, founder, chairman and CEO of ComPsych.
He added that any way we can improve, increase and expand people’s ability to access care is positive and that technology has a lot of value in mental health. Take, for example, a different technology in health care: telemedicine. This solves some issues related to access and availability of care, but for serious illnesses or comprehensive medical problems, in-person care is preferable. The same could be said about mental health.
Take this instance. Years ago, people would took paper surveys about their mental well-being. Am I depressed? Am I stressed?
“Those moved to internet-based questions, and now they’ve moved to online cognitive help for people to walk through different scenarios in their lives and provide resources and counseling online,” Chaifetz said. “It’s a way to stimulate thought, [and] it’s a way to bring people under the tent to explore issues related to mental health or mental well-being.”
He also added that at ComPsych, when people are online, they constantly are reminded that in-person care in available. Here’s the number you call, here’s how you get something scheduled, here’s what you need to know. It’s a way to make sure people know their options.
Most employers understand that technology is not the answer to everything in medical care, and more employees than in the past are open to getting care for mental health needs, thanks to the stigma disappearing over time, Chaifetz said.
Still, I find this important to bring up because understanding something and taking action are two different things. For example, quality and access in mental health care are still current issues, even if people understand the importance. Chaifetz mentioned that most large and medium sized companies have mental health services beyond basic counseling mandated in their health plans, but that leaves me curious about the state of health plans for small employers, where many employees work and get health insurance.
Looking at this from a broader perspective, this pitch reminded me of something that it couldn’t hurt to remind employers. Wanting to help your overall workforce with their general mental health and wanting to help your mentally ill employees with specific mental health issues are two different beasts.
Both are important, and both require different considerations. It’s the difference between someone needing to take a mental health day to sleep in and do something relaxing and someone needing to take a mental health day to see a counselor for an emergency session. Or the difference between someone wanting to use HSA dollars to help pay for an exercise class and someone wanting to use HSA dollars for medication.
The amount of mental-health pitches I get a day is great and I believe a good sign that employers genuinely want to know what they can do so as not to negatively impact their employees’ mental health.
In other benefits-related news this week:
Can This New Employee Benefit Help You Hack Death?: A blockchain startup has adopted a stem cell storage benefit, saying that these young, healthy cells can potentially be used in the future for “health maintenance.” However, experts in stem cell research say there’s not yet any scientific evidence that stem cells could be used to reverse illnesses (be in heart-related illnesses, brain-related illnesses or blood cancer) when people age. Is this benefit promising more than it can deliver? (Bloomberg)
IRS Clears Way for Student Loan Benefit Tied to 401(k): This company has introduced a new benefit in which debt-straddled employee with student loan benefits can begin to save for retirement by paying off student loans. When they make a loan payment, their company puts money in their 401(k). My benefits sources say this is not yet a trend, for a variety of reasons, but it’s definitely something to have your eye on moving forward. (Employee Benefit News)
While employee negligence (that is, employees not knowing or understanding how their actions risk your company’s data security) remains the biggest cyber risk, another is growing and also demands your attention—the malicious insider.
According to one recent report, malicious insiders are responsible for 27 percent of all cybercrime. Over at her Employment & Labor Insider Blog, Robin Shea suggests that one recent workplace embarrassment for an employer was the result of internal cyber-vandalism, and not external hacking.
Dark Reading reports on a recent survey, entitled, “Monetizing the Insider: The Growing Symbiosis of Insiders and the Dark Web.”
“Recruitment of insiders is increasing, and the use of the dark web is the current methodology that malicious actors are using to find insiders,” explains researcher Tim Condello, technical account manager and security researcher at RedOwl.
Cybercriminals recruit with the goal of finding insiders to steal data, make illegal trades, or otherwise generate profit. Advanced threat actors look for insiders to place malware within a business’ perimeter security. …
There are three types of people who fall into the “insider” category, says Condello: negligent employees who don’t practice good cyber hygiene, disgruntled employees with ill will, and malicious employees who join organizations with the intent to defraud them.
No amount of training, however, will stop a disgruntled employee with ill intent, or a malicious employee who joins to do harm.
These latter two categories need more specialized attention—an insider threat program. The Wall Street Journal explains:
Companies are increasingly building out cyber programs to protect themselves from their own employees.… Businesses … are taking advantage of systems … to find internal users who are accidentally exposing their company to hackers or malicious insiders attacking the company. These “systems,” however, can prove costly, especially for the small-business owner. While investment in a technological solution is one way to tackle this serious problem, it’s not the only way. Indeed, there is lots any company, of any size, with any amount of resources, can do to develop an insider threat program.
Aside from the expense of costly monitoring programs, what types of issues should employers include in an insider threat program? Here are seven suggestions:
Heightened monitoring of high-risk employees, such as those who previously violated IT policies, those who seek access to non-job-related business information, and those who are, or are likely to be, disgruntled (i.e., employees who express job dissatisfaction, who are on a performance improvement plan, or who are pending termination).
Deterrence controls, such as data loss prevention, data encryption, access management, endpoint security, mobile security, and cloud security.
Detection controls, such as intrusion detection and prevention, log management, security information and event management, and predictive analytics.
Inventories and audits for computers, mobile devices, and removable media (i.e., USB and external hard drives), both during employment and post-employment.
Pre-employment background checks to help screen out potential problem employees before they become problems.
Termination processes that removes access as early as possible for a terminated employee.
No company can make itself bulletproof from a cyber-attack. Indeed, for all businesses, data breaches are a when issue, not an if issue. However, ignoring the serious threat insiders pose to your company’s cyber security will only serve to accelerate the when.
Jon Hyman is a partner at Meyers, Roman, Friedberg & Lewis in Cleveland. Comment below or email editors@workforce.com. Follow Hyman’s blog at Workforce.com/PracticalEmployer.
If you ever dreamed of starting an innovative new HR technology company but worried you couldn’t secure the capital, now is the time to make your dreams come true.
The venture capital world is doling out deals to these companies at a record pace with no signs of slowing down. Both funding and deal activity hit new highs in 2015, with firms landing $2.4 billion across 383 deals. That follows similar high rates of investment in 2013 and 2014 alike.
It’s not surprising, said Holger Mueller, principal analyst and vice president at Constellation Research. “Investing in HR tech is a strong model from a macroeconomic perspective,” Mueller said. He argued that a number of talent-focused business trends, including the aging workforce, war for talent, breakdown of performance management strategies and the need to drive retention and productivity makes HR technology an easy sell for investors. “Every company needs better talent.”
According to CB Insights, a venture capital and angel investment database, HR technology firms by the end of the first quarter of 2016 already had received roughly $600 million in venture capital across 106 deals. The deals this year include on-demand hiring startup SnagAJob, which raised $100 million in Series E funding; recruitment marketplace Hired, which raised $40 million in a Series C round; and background-checking platform Checkr, which raised $40 million in a Series B round.
Looking back, 2015 presented a similar spending spree, according to CB Insights research. Deals ranged from relatively small Series A round funding to start-ups like Lytmus, a virtual machine-based platform for sourcing tech talent that secured $7.2 million in September from Andreessen Horowitz and another partner; to much larger investments, including the $150 million that went to OneSource Virtual, a business process as a service (BPaaS) provider that utilizes Workday technology. That deal was led by Technology Crossover Ventures and closed in June 2015.
The fact that most of these companies are cloud-based makes even tiny start-ups a viable option in the eyes of investors, especially as demand for cloud-based HR solutions continues to rise. More than 40 percent of all companies are currently in the process of replacing their core HR technology with cloud systems, according to Deloitte’s 2016 Global Human Capital Trends report. The move will lessen their reliance on on-site infrastructure and allow them to take advantage of innovative new technologies without a significant investment.
“HR is leading the migration to the cloud,” said Wes Bryan, co-founder of OneSource Virtual. “Those legacy systems are going to break down and HR leaders are ready to take chances on where they want to go next.” This transition is enabling greater integration between systems, and more robust talent analytics to help these leaders identify talent trends and improve the employee experience.
Cloud-based companies also require a lot less overhead to ramp up so their leaders can focus more on developing innovative solutions rather than ramping up infrastructure, Mueller said. “Two guys in a Starbucks can build a product and reach HR decision makers in a matter of months.” That’s good news for HR leaders looking for new solutions to their HR problems, because it is easier for companies to take a risk on a cloud-based vendor, he said. “If it doesn’t work they just don’t renew the contract.”
Performance Management and Payroll
Venture capitalists are particularly interested in companies offering performance management solutions that promise to make this process faster, easier and less awful for employees. “Everyone agrees that performance management is broken,” Mueller said. “There is definitely an opportunity for disruption in this space.” One company drawing a lot of attention — and capital — is Zugata, a provider of mobile software that lets employees provide and receive performance feedback on their smartphones. The company secured $3.1 million for General Catalyst and other investors in October 2015, a mere 10 months after its initial launch.
The key benefit is that the feedback flows in an easy ongoing process, rather than a once a year event, which is less annoying and more useful, according to Zugata co-founder Srinivas Krishnamurti. “We think it’s more important to help employees develop versus just giving them a pay raise. They need to understand what they’re good at and not good at,” Krishnamurti told Fortune.
Start-ups that are willing to play a longer game are also finding some success in the ripe-for-disruption payroll sector dominated by ADP. Gusto, the payroll and benefits service provider (formerly ZenPayroll), raised $50 million in December 2015 and another $25 million in March. “They are modernizing the way companies do payroll,” Mueller said.
HR leaders interested in expanding beyond their current systems should see these investments as an opportunity to dabble with new innovative solutions and see what sticks, Bryan said. “It can be scary to take a chance on a start-up, but you’ve got to take risks if you want to move your business forward.”
Despite financial woes, a battering in the media and the loss of CEO Parker Conrad, Zenefits is still the most well-funded HR technology firm of the past five years. To date, the cloud-based health insurance and HR software provider has secured $584 million in multiple funding rounds.
“Even after losing two-thirds of its value, Zenefits is still a good investment,” Mueller said.
Sarah Fister Gale is a writer based in the Chicago area. Comment below or email editors@workforce.com.
While pursuing her MBA from Harvard Business School, Danielle Weinblatt was looking for a way to solve the various problems she thinks plague the interview process. In 2011 she used her previous experience as a hiring manager to help her launch Take the Interview to eliminate her perceived lack of communication between managers and recruiters, coordination issues and transparency with candidates throughout the interview process.
Weinblatt, 31, created the company’s interview management platform, which uses video interviews and data analytics to help clients make well-informed hiring decisions. More recently, Take the Interview launched a new interviewing platform powered by Google Glass with hope that wearable technology will soon transform the recruiting industry.
It took more than seven hours before a congressional hearing on spying by Hewlett-Packard got around to a discussion about the impact of the scandal on employees.
A day that featured 10 former HP executives and security consultants exercising their constitutional right to decline to testify and the relentless grilling of former HP chairwoman Patricia Dunn concluded with a query from Rep. Michael Burgess, R-Texas, about the company’s outreach to its workers.
“We’ve made an effort to communicate with them as often as possible,” HP chief executive Mark Hurd replied to Burgess, whose district includes an HP facility. “We’ve communicated with them about our governance changes and the issues around the investigation.”
Hurd was the last witness in a hearing of a House Energy and Commerce subcommittee on September 28 that lasted from 10 a.m. until nearly 6 p.m. The panel delved into the unfolding drama surrounding HP’s efforts to ferret out boardroom press leaks about company strategy.
The investigation involved HP’s obtaining phone records and other personal information about board members, journalists and its own staff through clandestine methods, including the use of false identities, or “pretexting.”
Even as HP tries to recover, lingering concerns about corporate spying may become an issue for employers.
“Every company in America is examining itself to see if it has the same kind of problem,” says Nell Minow, editor of the Corporate Library, an independent research firm in Arlington, Virginia, that specializes in corporate governance.
Congress may also take up the issue. “This gives us a good opportunity to open the window on some of the practices going on in companies around the country,” said Rep. Diana DeGette, D-Colorado.
HP, which has built a reputation as an exemplar of ethical corporate behavior, may now find itself lumped with other rogue companies, according to Rep. Tammy Baldwin, D-Wisconsin.
Enron and WorldCom shook American’s confidence in the finance and accounting arena. “HP is shattering their expectation of telecom privacy,” Baldwin said during the hearing.
The company’s employees may have similar concerns, which could even outweigh the fretting about damage to HP’s brand. “It’s not the reputation issue; it’s the paranoia issue,” Minow says.
House members on both sides of the aisle spent the first hour and 15 minutes of the hearing castigating the company with variations on the same theme: What were you thinking?
Hurd apologized for HP’s behavior and said that he is ultimately “responsible for everything that goes on at Hewlett-Packard.”
Although he admitted to approving the content of a bogus e-mail to a journalist, which was intended to monitor her sources, Hurd said that he ignored the scope and tactics of the investigation.
In part, he blamed the demands of running a huge company. “A CEO cannot be the backstop for every process in the company,” he said. “I pick my spots when I dive for details. There’s no excuse for that.”
But at the end–perhaps because the questioners were exhausted after working over Dunn and others–Hurd was both unbloodied and unbowed.
“We are committed to our core to redefine our company in a way that not only we can be proud of, but in a way that all corporations in America can be proud of,” he said.
Information technology is the study, design, development, implementation, support or management of computer-based information systems—particularly software applications and computer hardware. IT workers help ensure that computers work well for people.
Nearly every company, from a software design firm, to the biggest manufacturer, to the smallest “mom & pop” store, needs information technology workers to keep their businesses running smoothly, according to industry experts.
Most information technology jobs fall into four broad categories: computer scientists, computer engineers, systems analysts and computer programmers. HR managers responsible for recruiting IT employees increasingly must become familiar with the function and titles of the myriad job titles in demand today.
Some of them are listed below:
Database administration associate
Information systems operator/analyst
Interactive digital media specialist
Network specialist
Programmer/analyst
Software engineer
Technical support representative
SOURCE: “Building A Foundation for Tomorrow, Skill Standards for Information Technology.” NorthWest Center for Emerging Technologies, Bellevue Community College, Bellevue, Washington.
Workforce, July 1998, Vol. 77, No. 7, p. 53.
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Most employees find it unacceptable to monitor personal, non-work-related activities, according to a 2018 survey conducted by the HR Metrics & Analytics Summit, “Workplace Privacy & Protection: Is Your Employer Watching Your Every Move?” It’s inappropriate to monitor physical movements around the workplace, for example through wearable technology such as a Fitbit, said 57 percent of employee respondents, while 56 percent said it’s inappropriate to monitor personal interactions with these devices. 
Take this instance. Years ago, people would took paper surveys about their mental well-being. Am I depressed? Am I stressed?
