Category: Technology

When human resources leaders talk about China there’s a fair chance they’re referring not to the Asian nation but to China Gorman, the one-time Great Place to Work CEO, former Society for Human Resource Management chief operating officer and longtime industry thought leader, adviser and speaker.

HRN, a European-based event organizer that’s behind a fledgling U.S. HR technology conference, is counting on Gorman’s strong personal brand and deep industry connections to boost its presence stateside.

The outfit tapped Gorman Oct. 23 to manage its North American operations, including helping it rebrand and run its second U.S. conference. The event, once known as HR Tech World and rebranded as Unleash as of Oct. 24, is set to take place next May in Las Vegas.

In building its American operations, HRN is going head to head with the existing HR Technology Conference. The LRP Publications-run event all but created the HR technology exposition phenomena when it kicked off its first gathering 20 years ago.

HRN’s focus on the future of work and unique programming separates it from existing conferences, Gorman said. “This isn’t our parents’ HR tech conference, that’s for sure,” she said.

An HR Technology Conference spokeswoman declined to comment.

The rival conferences hope to appeal to HR practitioners at a time when companies are using more cloud-based services for payroll, benefits, performance, learning and other aspects of people management. At the same time, venture funds are pouring an unprecedented amount of capital into HR technology startups.

The trends, along with a low barrier to entry for software-as-a-service providers, have led to an explosion of workplace apps, and to new platforms for helping HR technology departments navigate available options. Close to 500 vendors exhibited at the HR Technology Conference in mid-October, which also took place in Las Vegas.

The past few years also have seen a proliferation of HR tech blogs, review sites — including some with crowdsourced reviews — and other content devoted to assessing HR technology. HR executives need help understanding how HR systems can help them innovate instead of succumbing to thinking of them as a “silver bullet,” said HR tech consultant Nov Omana, chief executive and co-founder of Collective HR Solutions Inc.

Today, information on what’s available comes in many forms, including news sites, webinars and whitepapers. “Tech conferences are getting less attendance by buyers and more by vendors, especially startups looking for” partners, Omana said. “We need to change how we seek knowledge on technology and what it can do for us, and it won’t be through conferences.”

Economic and other trends make it critical for organizations to focus on their people, not just when they’re at work but in their personal lives, and HRN and its founder Marc Coleman get the repercussions that has for HR technology, said Jason Averbook, co-founder of workplace consulting firm LeapGen, and a speaker at previous HR Tech World and HR Technology Conference meetings. “We live in a world where the focus must be on the workforce, the changes required to service a new workforce and everything needed to unleash that workforce to reach its full potential,” Averbook said.

Technology is just part of what Unleash will cover, Gorman said. Of equal importance is helping organizations understand the changing nature of work and its impact on business growth, competition, budgets, innovation and people. “Unleash will focus moving forward with people at the heart of everything we do,” she said.

Gorman will work for Unleash part time from her home base in Las Vegas. “I see myself as a rocket booster for the Unleash team,” she said.

She remains a director at for-profit companies Motivis Learning and Swedish-based Universum Global, nonprofits Human Resource Certification Institute and Jobs for America’s Graduates, and continues as a member of Kronos’ advisory board. She’s also continuing as managing director of the Future Talent Council, a startup members-only group on talent and the economy.

From 2013 to 2015, Gorman was chief executive of Great Place to Work Institute, the San Francisco management consultant that teams with Fortune magazine to produce the annual “Best Companies to Work For” list series.

She was SHRM’s COO from 2007 to 2010 and before that held management positions at several outplacement and HR services firms.

Michelle V. Rafter is a Workforce contributing editor in Portland, Oregon. Comment below or email editors@workforce.com.

U.S. employers, including domestic divisions of India-based outsourcers, are curtailing their use of the controversial H-1B visa, which allows organizations to bring highly skilled foreigners into the United States to work. Simultaneously, other businesses are bulking up overseas offices or sending employees who are foreign nationals to work out of offices in their home countries.

Employers that have used the visas have been scrambling to revise policies ever since President Donald Trump’s victory in the 2016 presidential election when the controversial program was targeted for overhaul. Whatever workplace policies are being implemented, a sharp dip in 2018 fiscal year applications for H-1B visas makes it clear that employers aren’t waiting on legislation or federal edicts from new officials before they take action.

Applications filed by the April deadline declined for the first time since 2013, to 199,000 from 236,000 for fiscal year 2017. The 16 percent decrease is a sharp reversal from the previous five years, during which time applications for the visa rose a cumulative 90 percent.

U.S. Citizenship and Immigration Services, the Homeland Security department that administers H-1Bs, grants 65,000 of the temporary work visas annually to foreign workers with specialized skills, plus another 20,000 to foreigners with advanced degrees. The visas are good for three years and can be extended for another three.

In mid-July, the USCIS said it had returned all applications not selected in the annual April lottery the agency holds to award the visas. The USCIS has not released names of employers whose applications were accepted or signaled when that data would be made public.

To bypass potential H-1B problems, U.S. companies are increasing hiring in their overseas offices. Nicole Sahin runs a PEO, or professional employer organization, that helps major U.S. companies and fast-growth startups hire salespeople in 150 countries. Since late 2016, Sahin has seen a 30 percent jump in clients sending foreign nationals back to their home countries or hiring locally, all direct responses to coming changes to the H-1B.

“There’s a lot of fear around it,” said Sahin, co-founder and chief executive at Globalization Partners in Boston. “Some employees want to leave the U.S. because they don’t feel like they’d have the security they had under the previous administration.”

Outsourcers Respond by Increasing American Workforce

Indian outsourcers, which accounted for 69 percent of all H-1B workers as of 2015, the latest available data, are taking some of the most drastic measures to deal with changing policies. After the Justice Department and USCIS announced stepped-up H-1B audits earlier this year, a handful of Indian outsourcers said they wouldn’t use the visas to bring as many workers into the country.

Infosys Ltd., which has received thousands of H-1Bs over the years, plans to hire 10,000 U.S. workers in the next two years and open four technology centers here. In June, Infosys paid $1 million to settle a lawsuit brought by the state of New York that claimed the outsourcer routinely abused the H-1B visa program, and in doing so, failed to compensate workers fairly or pay required taxes.

In late June, Wipro Ltd., another India-based outsourcer, said it had hired more than 1,600 U.S. employees over the previous six months, and that U.S. citizens represent more than half of its workforce here. That’s a substantial change from recent years, when the company was among the top five H-1B visa users in order to staff its U.S. offices with Indian workers.

Indian outsourcers’ new labor model will no doubt be welcomed by H-1B critics, who claim the foreign companies haven’t adhered to requirements of the visa program to attempt to fill jobs with Americans before handing them to immigrants. Critics also fault the program for allowing H-1B employers to pay local prevailing wages that generally are less than what most U.S. workers with similar jobs earn.

The same critics maintain loopholes and lax oversight have allowed companies such as The Walt Disney Corp. and Southern California Edison to lay off highly paid U.S. employees and replace them with lower-paid foreign workers, many of whom are outsourcer employees. In several highly publicized cases, the laid-off workers were required to train their replacements. Such practices have led to a number of lawsuits, including one filed by a group of former Disney World IT employees who maintain they were discriminated against for being American.

Big Boosts for Gig Economy, STEM Workers?

Uncertainty about the visa program could push employers to embrace the gig economy and hire independent contractors, said Yvette Cameron, senior vice president for strategy and corporate development for SAP SuccessFactors. If employers were using H-1Bs to lower costs, using gig workers who aren’t eligible for benefits or pensions is another way to keep labor costs low, said Cameron, whose job puts her in touch with thousands of SAP SuccessFactors customers.

Historically, U.S. companies relied on H-1B visas to hire foreign graduate students with science, technology, engineering and math degrees from American universities. However, H-1B reform and Trump administration immigrant policies have already put a damper on applications to U.S. colleges and universities from India, China and the Middle East. As a result, total applications from foreign students dropped 38 percent for fall 2017, according to the American Association of Collegiate Registrars and Admissions Officers.

Stepping up domestic STEM studies could help fill the gap left by fewer foreign grad student coming here. Companies have gotten accustomed to hiring employees who can hit the ground running, said Ron Hira, an H-1B expert and political science professor at Howard University in  Washington, D.C. Having government agencies subsidize on-the-job training “might be a way to fill genuine gaps,” Hira said.

Employees also need to step up their training, said Katherine Jones, a partner and director of talent research at consultancy Mercer. Starting STEM education in elementary or high school could help, Jones said, as could projects such as the charter public high school Oracle is paying for that opens this fall on its Redwood City, California, campus in the heart of Silicon Valley. Coding schools and other types of short-term bootcamps that teach STEM skills are other options, Jones said.

Reforms Pending in Congress, White House

Ultimate responsibility for rewriting immigration laws lies with Congress. Since the start of the current session, supporters and opponents of the current H-1B system have introduced bills that would expand or curtail it respectively. A bill re-introduced by Rep. Darrell Issa, R-California, in January would raise minimum salaries for H-1B visa worker to $100,000. A competing bill sponsored by Sens. Chuck Grassley, R-Iowa, and Dick Durbin, D-Illinois, would kill the H-1B lottery and award the visas first to holders of advanced degrees from U.S. universities, then to high-salary workers, then to people with valuable skills. The H-1B and L-1 Visa Reform Act, also introduced in January, would bar companies from having more than half their employees on H-1B or L-1 visas, and prohibit companies from replacing U.S. workers with visa holders, among other things. Both bills have been referred to committee but no other action has been taken.

Other recent attempts to pass H-1B reform laws have gone nowhere, and it’s a toss-up whether a Congress that’s been preoccupied with repealing and replacing the Affordable Care Act and other issues will get to it this term, said Leon Rodriguez, who ran the USCIS under the Obama administration from 2014 until Trump took office.

“There are those who think the number should stay where it is or go backward, along with tighter restrictions,” said Rodriguez, who now practices immigration and health care law at Seyfarth Shaw LLP, in Washington, D.C. “Then there’s the school of thought that says let’s expand the numbers but also put in more safeguards protecting U.S. workers and design the system in a way that favors getting the highest levels of talent we can.”

In a June appearance before a congressional committee, Labor Secretary Alexander Acosta said the administration supports increasing the current $60,000 minimum salary for H-1B workers — which hasn’t changed since 1998 — to at least $80,000 as a way to stop the flow of cheap labor into the country.

Opponents to the administration’s H-1B clampdown say the policy shift is ill-conceived and ultimately could do the country more harm than good, particularly for a U.S. tech sector that’s seriously understaffed. In an address earlier this year, Eric Schmidt, executive chairman at Google parent company Alphabet called it “the stupidest policy in the entire American political system,” according to Fortune.com.

But Trump fans and critics of the program in its current form laud the president’s moves to protect U.S. jobs for U.S. workers. The present H-1B program undercuts American jobs by allowing companies to shift positions to outsourcers who pay substantially less or send the work overseas, argues Sara Blackwell, a Sarasota, Florida, lawyer who’s represented laid-off workers in H-1B lawsuits.

“We have executives who are outsourcing for cheap foreign labor,” Blackwell said.

Michelle V. Rafter is a contributing editor in Portland, Oregon. Comment below or email editors@workforce.com.

To make it easier for resource-strapped small and midsized companies to set-up HR systems, Namely Inc. is borrowing from the past and selling its existing cloud-based HR technology platform as a managed service.

The New York-based company on Aug. 9 said it is offering a managed version of its HR technology platform called Managed Services, including core functions such as payroll, benefits and compliance along with features such as time keeping. Customers will have dedicated account managers who can do everything from run payroll to track benefits. Existing customers “frankly were asking for additional support,” said Namely founder and chief executive Matt Straz.

Straz said he is unaware of another company that runs payroll, benefits and compliance through managed services, which places Namely as the first to make such an offering. “There are companies like TriNet that run it through a professional employer organization, or PEO. And companies like Workday, Oracle and SAP” target much larger customers, Straz said. “As far as I know, we’re the only one that’s brought this type of offering to the market.”

Namely hopes its first-mover status will steer prospective customers toward it and away from competitors such as BambooHR.

Startups and fast-growth companies have been averse to adding sufficient HR systems, policies and personnel early in their life cycles. Whether by choice or accident, they wait too long and then develop serious people management problems, as a string of recent high-profile incidents at companies such as Uber, Tesla, Thinkx and Skip the Dishes have shown.

HR technology alone won’t stop sexual harassment and other illegal or unethical behaviors from happening, especially if a company’s upper management, board and financial backers condone it or turn a blind eye.

But a service with templates for compliance and other HR systems can save companies from building everything from scratch, which could make them more amendable to adopting the systems in the first place, Straz said. “I’ve founded three companies, and we had to build it as we went. It would have been nice to have been handed this stuff,” he said.

Managed services are a throwback to the HR outsourcing of previous decades, when major HR technology players offered to “lift and shift” large enterprises’ entire HR back-office operations. The transitions proved to be more problematic than anticipated, and thanks to the emergence of cloud-based services, HR outsourcing never grew as big as expected.

Regardless of size, any type of HR outsourcing might be a good short-term solution but bad in the long run because it encourages top management to view people as expenses not assets, said Bernie Aller, an HR industry veteran who now helps companies vet people-management systems.

“Would they consider outsourcing management of financial assets? That would never happen,” said Aller, who ran and sold an HCM and payroll processing business to Ceridian in 2000 before consulting. “As companies grow, at some point they recognize it’s their people who determine their performance” and are motivated to do better at managing them, Aller said. “Outsourcing it to a third party will never get you there.”

Managed services aren’t the only alternative for smaller organizations that can’t handle HR in-house. Technology vendors have offered comparable services through service bureaus. Small and midsized employers still use professional employment organizations for HR and recruitment process outsourcing for hiring.

HR technology integrators also fill the role of go-between for HR departments and vendors. Derrick Ware, founder and principal at Atriad in the Raleigh-Durham area of North Carolina, provides such services for his clients. At small companies, “The HR function is always overlooked,” said Ware, who got his start in HR technology working as vice president of global technology operations at PeopleFluent. “Or they bring someone in and call them an HR generalist and they don’t have the right background to keep the business out of trouble.”

Namely has been testing the service with an undisclosed number of customers. Managed services customers will pay a fee over and above the $12 per-employee, per-month subscription cost for the company’s technology platform. Target users for both the managed services and the platform are companies with 20 to 2,000 employees, with a sweet spot of 180 to 200 employees, Straz said.

Namely will run the managed service division from a year-old office in Austin, Texas, where it expects to add to a staff of 20 that’s already there. The company is using some of the $50 million in venture money it raised in December 2016 to fund the expansion.

Michelle V. Rafter is a contributing editor. Comment below or email editors@workforce.com.