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Workday Acquires Peakon: Employee Experience Matters

Yesterday, Workday announced plans to acquire Peakon, an employee engagement provider, in an all-cash deal worth $700 million. Peakon is an employee engagement survey platform that collects feedback and measures employee sentiment in real-time. For anyone following the engagement survey market, this acquisition is no surprise. Companies spend millions each year on surveys, and pressure from C-level executives has increased this investment recently. If an executive is concerned about the company brand, personal reputation, or employee retention, surveys are the go-to response.

Over the past few years, companies have switched from the expensive, traditional consulting model (Aon, Willis Towers Watson, and Gallup) to SaaS providers that offer real-time insights and a better experience. Providers like Glint, CultureIQ, CultureAmp, SurveyMonkey, Perceptyx, and of course Qualtrics have thrived in this market. And 2020 was no exception. Even the traditional consulting firms have invested more heavily in technology. Willis Towers Watson (now merged with Aon) has experienced significant growth in its pulse surveys and engagement survey platform.

But, the engagement survey market is not just a tech play. It requires deep domain expertise, services, and some significant hand-holding as companies look to take these insights and turn them into action. Some providers have focused so heavily on the tech component that they lose sight of the partnership. Providers that have balanced both will see the most success (CultureiQ and Perceptyx are two examples).

So, what does this acquisition mean for the market?

  • 2020 has accelerated the demand for a better experience. The events of 2020 have forced companies to engage with employees in new ways. According to a study we did this summer, 1 in 3 companies increased their investment in surveys. And, many companies had to think differently about the insights they were collecting. Questions around safety, childcare, and mental health are a critical part of the employee experience today.
  • More acquisitions will follow. Qualtrics also made news this week and went public, just two years after SAP acquired it for $8 billion. All eyes are on engagement surveys and people analytics right now and providers like Oracle should be evaluating their options.
  • Engagement surveys need to align with business priorities. One key differentiator of Peakon is that companies can integrate employee engagement data with other key performance indicators like customer retention in one dashboard. The future of engagement surveys is not just in measurement but in the actions and alignment with overall business priorities.
  • Acquisitions are part of Workday’s strategy. Peakon is undoubtedly not the first major acquisition that Workday has made in the HCM space. It continues to become a leading provider in this market through its development, partnerships, investments, and acquisitions. I don’t expect this to be the last major announcement from Workday this year.
  • Partnerships will continue to be a differentiator. The speed and engagement that these next-generation survey providers offer are valuable for any company looking to engage its workforce. Still, companies should not lose sight of the importance of partnership. Understanding what support, expertise, and change management is available should be an important consideration when evaluating these providers.

The next year will be interesting. Companies will continue to invest in these providers, and we can expect more acquisitions. But, whatever happens, this is an impressive market to watch, and it is reassuring to know that companies are committed to understanding their workforce.


New Research: The Informed Candidate

Today’s candidates are making smarter decisions about what they want from an employer. They are diving deeper into job sites, career sites, and social media to get a clear picture of an organization before making a connection. They want to understand if the skills they have are the skills needed for the job. This more “informed candidate” brings significant benefits to organizations by improving efficiency and helping companies stay more strategic in the hiring process. And it is becoming clear that companies that want to successfully compete for talent need to embrace the informed candidate and manage their online brand to provide the most accurate and relevant information.

According to Aptitude research conducted in 2018, companies define the informed candidates as having the right information for an interview, the right skills for the job, and someone who has conducted his or her own research. When candidates know what to expect, recruiters are able to better meet those expectations and provide a positive experience. Last month, we published some new research on how companies can do a better job engaging the informed candidate. Here are some of the key findings and recommendations:

• Provide Accurate Information: Only 22% of companies communicate with candidates in a timely manner and much of the information provided is not accurate. In fact, only 32% of companies are confident that they know where they are advertising jobs to candidates. Companies need to pay close attention to the information they are providing candidates whether through advertisements, career sites, or even job descriptions. The more accurate and relevant the information, the more likely the candidate will be the right fit.

• Invest in Employer Branding: Thirty-eight percent (38%) of companies say that employer branding is still a significant barrier in the hiring process. In Aptitude Research Partner’s 2018 Hire, Engage and Retain study, companies identified employer branding tools as one of the top 3 most effective sources of hire for every position from executive level roles to hourly workers. Companies that invest in employer branding efforts are empowering the informed candidate with information that can help them through their journey. It gives them information about the company as well as relevant jobs.

• Manage Online Reputation: Candidates are doing their own research and companies should be involved in that process. Eighty percent (80%) of candidates have accurate information from companies that manage their online reputation compared to only 36% of candidates from companies that do not manage their online reputation. Managing an online reputation could include employer branding efforts, social media sites, as well as employee feedback sites. Candidates are 40% more likely to apply for a job at companies where they recognize the brand.

The key to building a successful candidate experience is understanding that it begins well before an individual is actually a “candidate”. It begins during the attract phase of talent acquisition when employers leverage a variety of channels and content to engage and inform both active and passive candidates early in the process. This experience begins when a candidate starts to gather information on a job or an employer.


The Role of Innovation in the Employee Experience

The customer experience dictates organizational success. It is the driving force behind where individuals shop, eat, and spend. More importantly, experience creates loyalty between customers and companies. Executives know this and they believe in this. But what role does experience play in organizational success? How is the experience impacting employees and how can we get executives to recognize this impact? Similar to the consumer world, the power has shifted from the organization to the individual. Employees have greater demands, greater expectations, and a greater influence over their employers. This shift is not only an indication of a maturing economy, but also a shift in what drives value in these relationships.

According to research by ARP, 83% of companies plan to continue to improve the experience of candidates, employees, and managers. But the reality is that most companies are not clear about where to start and most executives are not clear about the impact this experience brings to the company. Lighthouse Research authored an eBook that helps companies articulate the value of the employee experience to senior leadership. It offers insight into how companies can think about the impact of the employee experience on business metrics including customer success, revenue and productivity.

One interesting recommendation included in the eBook that often gets overlooked is the impact employee experience has on innovation. According to research by Gallup, 61% of engaged workers feed off of the creativity of their peers compared to just 9% of their peers. By creating an environment where employees are encouraged to be creative and present innovative ideas and projects to their managers, companies will not only engage those employees but improve retention and performance.

Experience has a powerful influence over the consumer world and now needs to be part of our workforce. In order for this to happen, companies must shift their view to empowering the individual.


Four Trends Impacting Employee Recognition

Employee recognition is something that feels right: motivating employees and encouraging positive behavior feels like something every organization should be doing. We know this. And for a long time, these “feelings” of corporate responsibility have driven the employee recognition market to reach $46 billion (as estimated by Josh Bersin in 2012). But, in 2017, is this enough? Or does employee recognition need to be tied to something bigger than a feeling of “right or wrong?”

For the first time, we are seeing a shift in how companies evaluate recognition software and measure results. Recognition is becoming less about employee satisfaction and adoption rates and more about business outcomes. I was at the Achievers Customer Experience event last week and business performance was a recurring theme. The CEO of Meijer Supermarkets – a company with 70,000 employees (mostly non-desk employees) – took the stage to talk about how employee recognition drives customers satisfaction. Companies like Meijer are actually looking at how consistent recognition drives retention, engagement, and productivity. This type of correlation is becoming the standard in an industry that was at one time considered HR “fluff.”

Fortunately, we are seeing an uptick in the investment in employee recognition providers and the number of startups entering this space. It is a market we are watching closely and a few themes definitely stand out:

  • Recognition is Not a Replacement for a Performance Management System: Some providers are complicating their messaging and seem to be going after performance management in a way that is confusing to their buyers and existing partners. Recognition is recognition. It has an established budget and the value is far greater than what a traditional performance management solution can offer.
  • Recognition Needs to Be Tied to Business Outcomes: Customers are asking for this and the providers that can show how recognition impacts retention, customer satisfaction, and productivity. Research Aptitude conducted earlier this year found that companies with a recognition program are two times more likely to improve the employee experience.
  • Recognition is a Communication Tool: It is no surprise that one of the greatest challenges companies face is communicating with their workforce. Ninety-six percent (96%) of companies we surveyed last year believe that communication is critical to achieving company goals. Social recognition technology provides a way for communication to be frequent, consistent, and meaningful.
  • Social Recognition is a Solution for HR Leaders: Recognition has historically been a priority for compensation and benefits practitioners. As the market matures and technology becomes smarter and more strategic, recognition is becoming a priority for HR Leaders.

We will be publishing some new research on employee recognition next month and will be looking at what differentiates providers and how companies are showing the ROI from their investments.

Blog Talent Acquisition Strategies

I Can’t Even: HR Trends We Are Over

At the start of each year, HR Trends are hard to ignore. Everyone has an opinion. Everyone has a message. Everyone has an idea of what happened in the past year and what should happen in the New Year. And yes… I am guilty. Trends are important because they help companies understand their priorities and benchmark their progress against industry standards. They give us a guide for what matters and what will drive success. But, the reality is that sometimes trends can go wrong. Especially when trends go unchanged year after year (mobile and social, I’m talking about you). Even when they are important, we are sick of hearing about them. But what if the problem is not about the trend itself and instead about the way we are talking about that trend. The way we talk about its value and its relevance and its impact on our organization.

Below are a few trends we believe need a new conversation and a few we want to stop talking about altogether.

  • Quality of Hire: Quality of hire is not a new trend. In fact, it is a very old trend that has been misused and misinterpreted for years. Yes, everyone wants to hire great people. But the challenge is that there is no standard for defining what quality of hire is how it can be measured. Some companies define it simply as someone that completed an application. Others ignore other important recruitment metrics like time to fill, conversion rates and source of hire. The good news is that several of the ATS providers (Lumesse and Cornerstone OnDemand to name a few) are helping organizations create this standard by defining what quality of hire is and pulling in performance and succession data to help measure it.
  • Integration: Integration is important. Very important. It’s important because HR professionals do not want to open 10 different solutions to do a simple task and it is important because the HCM landscape has become so complex it is hard to make sense of how these providers and strategies work together. There is not a simple solution to integration and so many providers try to pretend that there is. Open API’s are great but how can we help companies understand the full ecosystem. How an technology providers offer a better experience. Some providers like ADP, SmartRecruiters, and iCIMS are tackling integration through a Marketplace- providing both a network of partners and the guidance on what might be right for your company. Additionally, Andy Rice and my friends at Black-Box Consulting have the best approach I have seen to consulting on integrated talent management and helping companies overcome integration challenges.
  • Innovation: We differentiate providers by their functionality. And each year, new functionality and innovation becomes a trend. Sophistication and product enhancements are something we pay attention to and while the product capabilities are important, so many of these solutions have become too complex. HR and talent acquisition buyers want solutions that will save them time and provide a good experience for their candidates and employees. Our upcoming index report looks at differentiators beyond capabilities (the ATS report will publish early next month). Yet, too many areas of HCM technology focus on depth in functionality over simplicity. Fortunately, there are new solutions that make our jobs really easy and even fun such as GreatHires for interviewing, BrandAmper for employer branding, SkillSurvey for online reference calls, Engage2Excel for recognition and The Marcus Buckingham Company for team performance.
  • Engagement: Writing about how engagement is no longer a trend is becoming a trend. When we are talking about engagement, we seem to be stuck on the same challenges and strategies year after year. Mollie said it best in her blog last month. Let’s talk about something that will change the way we treat our employees, our managers, candidates, leaders and stakeholders. We need to talk about the experience (more to come on this next week). Let’s talk about better communication. I love the work GuideSpark is doing with providing better communication between employers and employees.

So, join us for a new conversation as we tackle some of these issues in our latest survey and don’t miss next week’s post on trends I wish we would start talking about again.