Workday Fires A Cannon Into The HR Technology Market
This week was Workday Rising, the annual confab of 14,000+ Workday customers, partners, and fans. And as always, it met expectations. Not only did Jerry Seinfeld remind us that “we’ve lost interest in life, now we’re only interested in battery life,” but Workday unleashed a torrent of new talent applications, many of which are going to really change the market.
Don’t get me wrong: I”m quite familiar with the challenges companies have with Workday. It’s complex, sometimes hard to use, and the company keeps expanding its capabilities and can’t always keep up with innovative features. But this time I think Workday has hit a home run, and they’ve done it by thinking ahead and building what companies really want next, albeit not everything is quite finished yet.
To start with the basics, let me simply say that two existential people issues have become central to businesses.
First, companies are desperately worried about their skills, so they’re focused on reskilling, upskilling and reinvention of their people. Most companies don’t know what skills their people have, so the whole conversation is confusing and gives reign to lots of vendors, consultants, and cool ideas about what to do.
The second big issue today is what we now call the employee experience. While the term is hard to define, to me it represents a whole range of issues at work: we’re working too many hours, our jobs are too complex, we feel overwhelmed with too many digital disruptions, and we need more focus, simplicity, and clarity about what to do. All this happened because of the growing economy and the digital transformation taking place in companies, and HR teams are running around like crazy trying to design simpler solutions.
Well Workday, as a good listener to their customers, is taking both these on, and doing it in a big way. Let me try to explain just a bit of what was announced.
#1. The Workday People Experience
This is a big deal. Over the last few years, Workday has heard loud and clear that the innovative user interface they built has become hard to use. It is task-oriented, feature-rich, and complicated to learn. Companies like ServiceNow (and many others) have made quite a business selling tools that sit in front of Workday, and clients like IBM and Google have built their own front ends.
Well, Workday is putting this all to bed: they’ve built an entirely new “People Experience” front end – one that is both personalized, elegant, and journey-enabled. In other words, it doesn’t just make it easier to use Workday, it’s a toolset that helps companies build the “journeys” various employees need. (Imagine you need to look up the time-off policy, check your own PTO balance, and then schedule a vacation, for example. You don’t want to find screens to do this – this is a “journey” that solves the desired need.)
And to make it even better, Workday took a shot at ServiceNow (and other case management tools) and launched a case management system, a “case solver,” a knowledge management system, and a set of tools for service-delivery teams to prioritize, manage, and coordinate case resolution. These tools fall into the category of “employee self-service” or “service delivery applications,” a very hot market. And not only are they AI-enabled, they include email, chat, and integration with Microsoft Teams and Slack for user interface. They’re slick.
Now I’m not saying ServiceNow is going away: ServiceNow has a much more robust and integrated set of tools, and the company plays across HR, IT, and other functional areas. But for companies that are primarily focused on HR service delivery and integrated employee experiences, this is a major step forward.
I saw all this as it was being built, and it took the company several years to pull it together. Now that it’s being launched, I’m impressed at how flexible it is, how elegant it looks, and how well it integrates features like video-based communication, chat, and customizable employee experiences out of the box. In fact, I believe we will see a whole new category of jobs in HR: “employee experience designers.”
(Note, SuccessFactors’ new Human Experience Management interface, which they are building with help from Qualtrics, is also a move in this direction, but not nearly as mature.)
#2. Skills Cloud, Talent Marketplace, and Career Hub
The second big launch is Workday’s tremendous investment in skills and careers. As I’ve written about frequently, the biggest talent issue in business today is helping employees (and companies) adapt to a whole new type of career.
Today companies work in agile, networked teams and employees want to find new roles, projects, and assignments to grow. The old talent model of “succession management” is going away as companies look for skilled people to work on new projects and programs on an almost real-time basis.
I met with the CHRO of one of the world’s largest auto manufacturers a few weeks ago, and the discussion was all about building autonomous vehicles. How can a company assemble the set of technical and product experts needed, when they are buried in other functional areas and may have adjacent technical skills? Should we hire new people? Move the people we have? Reskill? And who should we reskill and how?
One answer to this is to “pour” L&D resources at people. While this is always a good idea, it has to be done in a complete way, and I like to call this new approach the focus on “capability academies,” programs that look at a broad range of skills, capabilities, and experiences needed to grow. But even if you do this (which many companies call “functional academies,” how do you give people the experiences they need?
The answer is to build an internal talent marketplace. (Read about Unilever and Schneider Electric’s talent marketplace here.) Let managers and team leaders look at people in the company, find experts they need, and recruit them to work on exciting things. And let people find opportunities most suited to their desires.
As I’ve said many times, all companies are turning into professional services companies, so we need tools and systems that let people assess their skills, find opportunities, and move.
Workday gets this completely, and they’re now launching a set of tools (Skills Cloud, which infers your skills from your activity at work), Talent Marketplace (which lets you find opportunities and lets opportunities find you), and Career Hub (a place to go to assess your interests and plan your career).
The Skills Cloud actually “mines” your skills by looking at your job, profile, feedback, and other experiences at work. (IBM does this in their MyLearning platform). Today more than 200 companies have opted into the Skills Cloud, and these companies have almost 75% visibility into the skills of their people.
Together these three tools, which are integrated with Workday Learning, disrupt a whole industry of fast-growing startups, many of which are gaining traction fast.
As I’ve written before, Career Management has now become mission-critical., spawning dozens of new vendors in the market. These include innovative companies like Degreed, Fuel50, Gloat, Instructure, PhenomPeople, SumTotal and IBM. Mercer has an entire service line dedicated to career management solutions.
As Workday formally introduces these tools, this market will get hotter, giving each of these vendors more opportunities to compete. For Workday, the vision is complete and right on – now the company really has to deliver.
I also noticed that Workday Learning is starting to look conspicuously like a Learning Experience Platform (LXP), one of the biggest markets in corporate training. While they didn’t brand it this way, I think the new Workday offerings could make LXP vendors nervous too. (Degreed, EdCast, Percipio, Valamis, and other LXP vendors are well established and growing fast.)
The third product I want to highlight is Workday’s blockchain-based credentials system. I’ve looked at this in detail (we likely to use it for the Josh Bersin Academy) and it’s an innovative and important new offering.
The simple description is this: there are many things at work we have to verify: our work history, background check, educational background, and of course our professional certifications, courses, and even experiences. In most industries (healthcare, financial services, energy, pharmaceuticals, manufacturing, tax) there are compliance rules, regulatory certificates, and skills-based certificates. And for managers there is a need to validate sexual harassment training, ethics courses, and more. Where do you put all this stuff?
The answer? Workday Credentials. This is a safe, validated, open repository where any employee can put their credentials. And if you’re not a Workday customer, you can download the new Workday app WayTo, which lets you create your own credential wallet.
How would you use it? If you’re a recruiter you can ask candidates to validate all their background in the wallet. If you’re a job seeker you can use it as a place to put all your history and experiences and give recruiters access. Just imagine where this could go.
There are many ecosystem partners to attract: will LinkedIn see this as a threat? How will badging providers (like our own Academy) get involved? Will they ignore it, or will they make it easy?
As I understand the system, credential providers have almost no work to do. Workday just has to drive adoption and value. We are checking it out now, and I’ll report back as we learn more. But as an analyst I have to say this is a very good idea: it’s a badly needed set of infrastructure, and let’s just hope Workday doesn’t try to start monetizing the system (that would kill it).
#4 Extensive Enhancements to Analytics and Workforce Management
The fourth area I want to touch on is a wide-ranging set of announcements in workforce management (time and attendance, gig work, contract management), payroll (real-time pay, new features for payroll automation and audit, called “zero-touch payroll”), and analytics (extensive enhancements to dashboards and a drag and drop report builder, called Discovery Boards). These are all important and incremental enhancements, which make Workday ever-more useful for the entire talent lifecycle.
Workday also introduced a module called People Analytics, which provides out of the box machine-learning driven analysis and stories about your workforce. Just as ADP recently announced an intelligent system called ADP Manager Insights (which literally tells you when things don’t look right). Workday’s offering moves in this direction. My sense is that it’s still young, and won’t compete well against highly mature offerings like Visier, but it’s a step in the right direction.
Workday has been focused on analytics from the early days. Since the system is built on a proprietary database, Workday always had to build an easy-to-use analytics system to help companies get access to the thousands of dimensions of their workforce. The efforts included Big Data Analytics, the acquisition of Platfora, and then the introduction of Workday Prism Analytics.
Each of these announcements came out as a big splash, and then a year later there was a “redo” of some kind. (Many clients do complain about how hard it is to get data out of Workday.) I think this time they’re turning the corner, and as best I can tell these new offerings make People Analytics easier than ever. (Note: Oracle and SucccessFactors already have extensive People Analytics offerings of their own.)
That all said, the People Analytics domain is exploding with growth, and companies now want to look at organizational network data, location and mobility data, skills data, engagement data, feedback data, and of course many types of business performance data in conjunction with HR data. So this whole area is a work in process, and I think Workday will have to continue to open up its system to accommodate all the analytics needs companies have.
Bottom Line: This Is A Cannon Shot
Have you ever seen the cartoons where a cannon rips through a population of trees and brush, leaving a huge tunnel of devastation and wake in its path? That’s kind of what I think Workday has done here. And some of the vendors in the market are going to feel this cannonball rush by. (They’ll want to stay out of the way.)
While not all these products are fully available yet, they push the envelope in the areas of employee experience design, career and skills management, and end-to-end workforce management. Yes, Workday is an ERP system, so it’s not as snazzy and feature-rich as all the hot startup tools you can buy in HR – but suddenly the platform is very innovative and forward-looking again.
Workday spends almost 30% of its revenue on R&D (nearly twice that of its competitors), so the company has a lot of innovation in its roots. While not every talent feature of Workday is best of breed, these particular set of announcements are going to make companies sit up and take notice. The big ecosystem of Workday partners are going to jump on these new tools and help clients figure out how to use them, and the smaller vendors are going to have to run a little faster.
At the same time this is going on, Workday continues to build out its ecosystem. We (the Josh Bersin Academy) just soft-launched our own integration with Workday, and there were more than 50 different tools providers showing off their ecosystem partnerships at Rising. I know for a fact that Workday has gotten religion about being an open platform, and the company’s development platform Workday Cloud Platform, is going into production next year.
(Stay tuned for more details on the JBA Workday integration coming soon.)
This is not to say the other big vendors are slowing down: the trend toward a focus on capabilities and experience platforms is explosive.
ADP has an amazing new system that rivals Workday for its architecture and flexibility. ServiceNow continues to innovate in the entire employee experience with its new set of mobile enabling solutions. SuccessFactors is heavily focused on HXM and its deep integration with Qualtrics. LinkedIn and Oracle are innovating their product sets rapidly. And every other vendor is trying to pull together solutions to improve the employee experience, simplify work, and help people skill up for the future.
But in this particular set of announcements, I think Workday is essentially reborn. The company has now laid down the gauntlet and is essentially saying “the future is not a system of record, it’s a system of capabilities” – and they are focused on using their combined engineering expertise to bring this to organizations.
I’m excited to see the company push the industry in these important directions, and I’ll keep you up to date on progress.