The House Always Wins: Cashing In at #HRTechConf

So, another year at the HR Technology Conference. It’s the chance to see the newest and greatest cutting edge technologies from vendors that were founded decades ago or ones you've already gone through an RFP with.  It goes to show the fact that while HR relies on technology to justify spend, for whatever reason, the companies that provide that technology would put an average corporate recruiting advertising budget to shame.  In 2 days.  But risking it all to win it all is what Vegas is all about.

It’s an appropriate venue for the amounts of cash that will be carelessly flung away on a line bet with a billion dollar payout.  While HR isn’t the sexiest technology conference (that’d be CES, and its sharing a venue with the Adult Video News Awards), it’s likely one of the most lucrative.

Evidence of that will be on display in the guise of giveaways (an adult will do anything for an iPad), shameless in-booth promotions (take a goofy green screen picture while we add you to our lead list!)  and, well, you get the idea..

To wit: one of the big problems most of the vendors there will purport to solve is the fact that the average cost of a new hire – give or take the biased “white paper” margin – is $11,000.  That’s way too much money to be throwing away, right?

Let me show you to the premium bar at the priciest penthouse in Vegas after spending about that amount on hiring a dude to dress up in a furry costume for two days to stand in my booth.  It’s kind of a weird phenomenon, but at the end of the day, it all comes down to one thing: cost savings.

I’m scheduled to do a bunch of briefings at HR Tech, and I’m grateful for the opportunity, because there are a ton of cool companies doing cool things with cool technology in a field that, in truth, is anything but.  Because it’s the must-attend event of the social season, a nerdy Truman Capote black & white party, and my dance card is full, I’ve already had a few briefings in lieu of the in-person meeting.  

And almost without exception, their products are evolving to meet real needs in the marketplace, produce real results and, most importantly, real value for human capital management.  A lot of that, naturally, gets clouded in a focus on features and functionalities that aren't really going to be adopted by the average end-user, but superfluous sells in this industry.  In many cases, it’s a business model.

I’m excited about where the industry is going, and think the HR Technology Conference provides great value to both practitioners and vendors, and the combination thereof that constitutes the case studies so prevalent on the actual agenda. 

It’s one of the only events where ‘vendor’ isn’t a four letter word, and where the content actually puts HR Technology companies on the agenda instead of in the expo hall, where real products are talked about instead of buzzword-driven hypotheticals.  And, as the biggest in the industry, it’s got the biggest upside of any show in the industry, speaking strictly in dollars, of course.  Which is the mutual language of the venue and the general vibe of unbridled capitalism meets human capital.  Powered by drink tickets.

I will tell you from the early briefings and every piece of product marketing produced by any HR technology vendor ever, cost savings and/or price point is going to be a major component of any company’s pitch or RFP.  There’s obviously plenty of cash in this space to not only go around, but to attract budding tech entrepreneurs and established tech brands branching out for the first time in the marketplace who without the billions at stake wouldn’t be caught dead being associated with something as unsexy as HR.

Doing the math, the aggregated annualized spend on all HR technologies would be enough to buy out publically traded MGM Grand and Wynn Resorts outright (according to market cap).  Take out the casinos, the median household income of $52,000 at the $14 billion dollar HR tech market estimated by Josh Bersin, you’re looking at 3.7 million brand new jobs. Which, after all, is what we’re all about.

So, instead of having to have the biggest party at HR Tech, the most memorable booth, the coolest giveaway or the most hashtag activity, it’d be nice if the vendors who are ultimately responsible for pulling in enough scrilla to be included in the OECD would invest in actually, you know, investing it in meaningful innovation rather than short-term gratification.  I’ve never been sure how, exactly, you sell cost savings as a business imperative while blowing VC on sponsoring off-premise parties, but then again, I’ve never exactly understood why there’s so much competition in this space, and so little collaboration.

In the interests of the bottom line, here’s my wish for HR Tech: that the practitioners and purchasers who are attending the show look past the glitz and glamor and really think before falling victim to the house, whose existence is predicated on their ability to take your money with enough margins to exude extravagance on the expo floor and off.

Vegas is great at showing you a good time, but at the end of the day, what happens in Vegas actually matters at home, particularly if you’re a big spender, which, obviously, you are, at least in aggregate.  And whatever technology you buy there probably won’t look so sexy when you’re actually implementing and using it.

That’s the fundamental question of the HR Technology Conference for buyers: can this actually help me do my job better?  And don’t let any third party tell you how they can help you do that job better, because they don’t do it, you do – there’s a reason HR tech isn’t HR, and why HR technology companies almost unilaterally neglect their own in-house HR function. 

The fundamental answer of the HR Technology Conference for vendors: don’t be afraid to tell someone if your solution can actually work for them.  If you’re actually a true multi-tenant SaaS solution, as I’m going to guess will continue as the preferred delivery model of almost every exhibitor, then selling to a single customer’s needs, however big that deal might be, might not make sense for the rest of your users, so don’t task your programmers with giving that ridiculous RFP checkbox to the rest of your client base.  Task them with making the product’s core competencies better.  Sell solutions when you sell solutions, not challenges only your system can solve because your content marketing created them.

Of course, that’s never going to happen, but hey, Vegas is all about illusion. Kind of like requisite features on a product roadmap that are “coming next quarter."

Views: 299

Comment by Keith D. Halperin on October 3, 2013 at 11:51am

Thanks Matt.  A big part of the problem is that most of the people who go to these things and buy these recruiting goods and services and the ones (like us) stuck using the pieces of ****. "They" don't ask what problems we need solved, processes improved, costs saved. IMHO, companies could do a lot better by having an offsite meeting with recruiting asking those of us who actually do the job what we need to make it better, and go from there.

 

Cheers,

 

Keith

Comment by Matt Charney on October 3, 2013 at 11:58am

Keith: Everyone's pretty much stuck using a piece of crap solution, but don't worry, everything is on the product roadmap to make it awesome. That's why I think people should buy consumer tech and apply it to HR. It's cheaper and more effective, as a rule, unless you're talking about a few odd outliers, but those companies who reinvest their margins generally can't pay to make any magic quadrants.

Comment by Keith D. Halperin on October 3, 2013 at 3:35pm

Thanks, Matt. Could you elaborate some more?

It sounds as if companies did what you're suggesting, then the slick hucksters with high-level connections there at HRT who're ready to sell the latest recruiting "snake oil" or “magic bullet” to desperate and not-yet insolvent recruiters and their superiors (who fail to recognize that in most cases they are futilely “rearranging the deckchairs on the Titanic” of their companies’ ill-conceived, over-blown, grossly-dysfunctional hiring practices) would largely be out of business.

 

Cheers,

 

Keith

Comment by Matt Charney on October 3, 2013 at 3:45pm

Keith: Long term, you're right, but the consolidation in the market means that it's about being acquired, not being sustainable, which is why the model you're describing is exactly what happens, but those aren't funded by customers but VCs, admittedly - and those that aren't bootstrap their entire budgets just for the cost of entry. Either way, there's no correlation between profit and visibility (or viability) in this market - just the fresh coat of paint it takes to flip any property before moving onto the next one. Look up any of the "Cutting Edge" CEOs on CrunchBase and you'll see almost without exception, this ain't their first rodeo.

Comment by Keith D. Halperin on October 4, 2013 at 1:47pm

Yep, and clearly not yours neither, Padner.

I suspect there's a lot more money to be made selling things to these JARS (Just Another Recruiting Startup) than hooking up with one (like the 49's mainly didn't get rich, but Levi Strauss did), but what do I know, I'm just a dum ole country recruiter from Portales, New Mexico with hay in my hair and dirt under my nails....

 

Cheers,

Keith

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