0:00:05: Welcome to The HR Tech Spotlight podcast. I’m Deanna Shimota, CEO of GrowthMode Marketing. The HR technology market is crowded, and we know it can be hard to find the best software solutions for your business in the sea of sameness on this podcast, we shine a spotlight on some of the best up and coming technology options out there. Check it out if you are interested in learning about new, innovative solutions available in the market, and if you are with an HR tech company and interested in being considered for a guest bot, stay tuned for details at the end of the show.
0:00:48: Hi, we’re exploring a technology platform called SOLVE on this episode. This technology, created by Human Capital Management Institute, is a predictive analytics workforce planning software that provides a workforce decision hub for transforming data from disparate HR and business systems into critical insights to drive business results. Joining me for this conversation is Jeff Higgins, founder and CEO of Human Capital Management Institute.
0:01:14: Welcome to the show, Jeff.
0:01:17: Thank you, Deanna. It’s a pleasure and an honor to be here.
0:01:21: So I always start with this one question. First, tell us about your background in the HR tech space.
0:01:28: I’m sorry, what was the question?
0:01:31: Tell us about your background in the HR tech space.
0:01:34: Okay. Yeah. So have been doing this in the HR tech space. HCMI, our parent company, has been around for 14 years. We’ve had software, which is really a culmination of a lot of the work that we do around consulting and training. So have been working in this space for more than 20 years. Originally as a practitioner. Before that, as you may hear in my background, once in a while I’m actually recovering CFO. So I actually worked in corporate America across to HR, which my finance colleagues thought was crazy, but turned out to be the best thing I ever did because found my true passion in life, which is analytics.
0:02:15: So did that as a practitioner. And then we started ACMI in 2009 and started working toward building software, but we bootstrapped it. So we built it using consulting and training revenues. So it took a number of years to get the software off the ground, and today it’s now serving clients in different parts of the world with predictive analytics, workforce planning benchmarks, and other kinds of customized solutions.
0:02:42: Let’s dig a little more into what SOLVE does. Can you give us an overview, in your words, of how it helps companies out?
0:02:52: Sure. So the typical organization and most of the companies we work with have 500 or more employees, although we do have a few that are very small, but typically they’re middle to larger, even enterprise or multinational type companies. And they have all this data on human cap, unlike customer data, because customer analytics is a huge market. They have all this data on their people, their talent, and they can’t get it all together. So even just integrating all this data, standardizing it to get intelligence out of all this data, is a challenge.
0:03:27: HR often gets beat up by ceos or other senior management members. Hey, we need to use this data. We need some intelligence. And all they can get is, like, little tiny pieces, not a comprehensive story. So what we do is we take data from a wide variety of sources, including payroll, HRIs systems, learning management systems, LMS, applicant tracking systems, engagement systems, listening tools, as well as we can even take a fine slice of finance data and operational data, integrate it, standardize it, cleanse it, and then send it back to them as a series of interactive and predictive dashboards. So we basically sit on top of some of the best and worst Hris systems in the world and help them get advanced analytics with dollarized numbers. So one of the things that we do that a typical analytics platform doesn’t do is we turn all the HR metrics, of which there are over 600, with combinations of permutations. Eight.
0:04:25: Not that you need that you don’t need all that, but nice to know they’re there like a library if you ever want them, just like, pull it a book out of the shelf, and we dollarize them. How much is it worth so that business leaders can understand it? Otherwise, what we found, and what I found, having moved from finance to HR, is business leaders nod on the HR, like, oh, yeah, turnover. Oh, problems with applicant tracking. But they really don’t understand what that means.
0:04:49: So they might say, oh, well, HR, you just need to be more efficient in hiring HR. You need to make sure we retain more. They’re only working at 50% capacity now. They don’t know what to do. Oh, let’s pay a lot more. No, you can’t do that, HR, you have no budget, but you have to get more people to stay. Okay, so, short of magical spells, how do we do that? And so, analytics can help give true root cause, deep dive analysis and predictive, and then dollarize it. How much is a 10% improvement in employee retention worth? How much is 10% increase in quality of hire getting better people who are a better cultural fit for your company worth?
0:05:25: And that enables business leaders to say, oh, wow, why didn’t you tell me that? Of course. Here’s a budget to go launch some training. Here’s a budget to hire another body. Here’s a budget to go deeper in terms of analytics.
0:05:39: So you mentioned you started out as a CFO, and then you found your passion and started the company with consulting. What are the pieces of the puzzle that came together for you that made you decide to develop SOLVE?
0:05:55: Well, I used to work for a company called Inform that was acquired in 2009, and they were actually a SaaS analytics tool before SaaS even got coined as a term. So I always had the idea to move it to software. However, when I was at this company, inform, and in the early years, once we went on our own, they got acquired by success factors, which got snapped up by SAP, by the way, we did a lot of consulting for large multinationals, and they had problems that they just couldn’t seem to SOLVE, like why do people leave?
0:06:29: What would make people leave? What would even more important, what makes people stay? Is there something we can do more of that will get more people to stay recruiting? Why can’t we find good people? Or are we finding good people and our managers are just messing it up when they get with poor onboarding or management? And we got asked actually multiple times, do leaders add value? What’s the value of a good leader? And we’ve actually used analytics to SOLVE a huge variety of questions and problems. And so whenever we’d get asked to do something really difficult by a client and we SOLVEd it, we then would put it into our software tool, pun intended, SOLVE.
0:07:09: So the tool has benefited from literally hundreds of engagements with small, medium, and some very large multinational companies that quantify, address and enable the solution or solving of really complex issues like how much is a great leader worth and who are our best and who are worst. Our software can actually stack rank leaders from first to worst. Not that you go fire the bottom leaders, but why don’t you carve out a training program and take your top 10% or 25% of leaders and have them do some best practice sharing with your bottom 25%, which, by the way, UPS did.
0:07:45: What was that worth? The Ups? Over $1.2 billion. Basically, great leaders got 15% more productivity. At what marginal cost? Zero. Just like the marginal cost of highly engaged workers at JetBlue Airways, they figured out that their secret sauce for great customer service and engagement and what they called net promoters was highly engaged workers. Allah net promoter employees. So now it’s called ENPs employee net promoter score. They actually invented that, and they use it to survey their workforce every month. So they have a regular pulse. They hold management unusually accountable to that, and it’s been a guiding light for them to deliver fantastic service and better profitability, because we actually were able to quantify same thing, dollarizing it.
0:08:30: 1% improvement or 10% improvement engagements worth 1% of revenue. 1% of revenue is $26 to $96 million for JetBlue. And that’s the difference between many of the airlines that don’t make any money and those who do. And they’ve since expanded many times over the years. We’ve also done work for companies like Starbucks. What’s the secret sauce to make a store work better? Target stores. What’s the value of the best people? Hire retail organizations. If somebody stays longer than a year, does the benefit exceed cost?
0:09:04: All kinds of interesting things. And the whole idea is you want your software to help you do this. Because many companies have an analytics function or an analytics team, but they spend all their time doing reporting, which means they’re just pulling data and giving it to customers, who, by the way, most of them management, don’t know what they need. They’re all phishing and learning. So they come back for ten or 20 iterations of it before they ever get their question answered. And if only they told the HR, the analytics team, what they were really looking for, they could have probably cut that to two iterations and given them a much more advanced business case.
0:09:37: I love the examples that you’re giving, Jeff. It really puts into context for our listeners the way to kind of frame this up and think about how to use your technology as you’re going out in the market and you’re talking to all these different companies and installing. SOLVE. What is the big challenge or problem that you’re seeing HR departments face today?
0:09:59: It’s the same problem that we had when I was in HR. As a practitioner, HR typically has the smallest budget of any major functional area, and yet they’re asked to do this incredible work with the workforce. They’re supposed to improve recruiting, improve retention, improve employee engagement, improve the quality of our leaders. Well, okay, just throwing training against the wall if you don’t even know where to start.
0:10:26: These are problems that companies really don’t have the ability to SOLVE. In fact, when I was in HR as a practitioner, we’d all get called into a room every year around April, May, June, because management at this big financial services company was very upset. Too many people were leaving. We need to SOLVE this. HR, this is your fault. This is your problem. We’re being told people aren’t paid well, people aren’t being communicated to all these issues.
0:10:48: Hr, SOLVE it. Go. And we’d work away at it. And by the way, they’d usually tell us what to look at. Look at pay, look at this, look at that. We’d look. We wouldn’t find much in terms of correlation. So is pay important? Of course, it’s always important. Is that the singular reason why people are leaving? No, there’s usually something else behind it. Come to find out that. And then, by the way, by November, December, after we’d worked at it for months and months, we’d find some answers and they actually didn’t care anymore.
0:11:16: And then again, come April, May, June, again, they were back. HR, why didn’t you SOLVE this last year, by the way? We called it turnover season. And isn’t it amazing that every year around March 15 to March 31, bonuses got paid out, and shock and surprise, turnover rates started going up. Management basically had zero institutional memory. And every year when turnover rate would start to spike, they would get concerned.
0:11:40: By fourth quarter, when nobody’s leaving, unless you do a layoff or a restructure, everybody’s staying, so not a problem. They don’t care anymore. So the whole idea is we had to figure out how to show them that, in fact, the root cause was people actually already had pent up reasons for wanting to leave. It wasn’t pay, it was the other factors. And we actually were able to figure out what were the drivers of not just turnover, but retention, what would make people stay. And they were actually able to successfully reduce the turnover rate by 40%. Not a full cure, but I would argue a partial cure for turnover.
0:12:14: What would you say your company’s unique point of view or differentiation in the market is compared to some of the other competitors that are out there?
0:12:23: First, that we dollarize all the metrics. So we pioneered something way back in 2011 that actually got printed in CFO magazine a couple of different times. We were the COVID story way back then, which is called human capital financial statements. And it was basically, if you were going to build a set of reports that were all about talent, people, human capital, if you will, and you were going to put numbers to them, not just numbers of, like, how many people got hired, how many people left, but what’s it worth?
0:12:52: What’s that change in engagement? What’s that change? And by the way, internal mobility. Is it better to build or buy talent? That’s also a differentiator. We’ve got a model that can actually quantify whether or not it’s better to buy outside or build internally. A spoiler alert. 75% of the time, it’s better to build internally. You know what you’re getting, and it’s cheaper. So there’s an Roi to growing your own talent. And so all of these components support that dollarization that we do in the metrics.
0:13:20: Also, we are able to do what’s called workforce planning. So you probably hear that bandied around a lot. Everybody wants workforce planning. In fact, many organizations have people dedicated to workforce planning. Fun fact, 95% of the companies that do workforce planning never actually complete a workforce plan. What’s that all about? Right? They’re doing workforce, but they do it on this, like, span of control or a certain critical job role, or they get some competitive data, but they never put the puzzle together to see what the puzzle is revealing.
0:13:49: And that’s what keeps companies from really getting more advanced in terms of their human capital or talent decision making. They’re often in that groundhog day of reliving the same day over and over and over again, eventually hoping they’ll get it right, and of course, management changing. So then they kind of start the cycle over because they don’t know what the last group knew, that we’re all in position.
0:14:12: So that challenge, that story, if you were to actually build a workforce plan, like a playbook for pro sports where it’s football season, so you could say, do you have a play you’re going to call or soccer or any other sport, what play do you do when it’s third period or third quarter and here’s the score and you’re up or you’re down, or you need. And most organizations have no such playbook. They only have a few buttons that the CEO knows to push, and they don’t know what else they can do. And having that workforce plan would be fantastic.
0:14:43: You’d also hear a lot of leaders in this space, and I hope at some point, Deanna, you catch somebody on the show asking a tough question or two about workforce planning, because everyone says they know it, but most people have actually never done it. How can you know it if you haven’t done it, let alone that it’s like brain surgery? Have you done it a hundred times? A thousand times? If you’ve done it, know, would you go in and let a doctor who’s done a single surgery operate on you?
0:15:04: Probably not. So the whole point of that is our tool can actually help you do a workforce plan. And that’s why we guarantee companies we can do it in 30 days or less. If you talk to the big four consultancies, they’re happy to build a workforce plan from scratch in six months and seven figures.
0:15:22: I think one of the things that you said was a really good point about how companies will get this data, but they don’t necessarily do anything with it, whether it’s a workforce plan or it’s data of some other source. I think that’s a real challenge for organizations and a misstep at times to make the investment, to gather a lot of data around the workforce and identify those trends. But it’s only powerful if you actually take action and do something with it and learn from that data and evolve. Right.
0:15:56: How do you see organizations? I mean, you probably run into this from time to time, too, where it’s like really great data, but now what? Right? How do you make sure that they don’t just sit on that data, but that they get the actual value out of it?
0:16:11: Oh, great. You hit on two great points. One, let me add to what you said, which is it’s not all about the data, but what we normally hear from organizations, like, oh, this analytics stuff sounds so great, but our data is so bad, we don’t think we can get what you’re showing out of our tool because the data is bad. Every time we try to run something, we get all kinds of noise and errors and outliers and stuff. And we say, that actually makes you normal.
0:16:41: So every company’s data is imperfect, non standard. It’s not necessarily dirty, but it’s inconsistent. Right. Because a lot of these HR systems, even the most modern ones, I’ll call one out. Workday, great system, very modern, but it gives you probably 150 ways you can process a transaction. So what happens in HR? 150 ways transaction gets processed. So when you try to aggregate those transactions to see a pattern, what do you get? Nothing. Because you just get a frequency of 150 times. That’s not interesting at all. So what we actually do, and again, the accounting hat can’t all the way come off. So feel free to pick on me for that.
0:17:24: HR doesn’t have GAAP. Accounting generally accepted accounting principles for HR. So when I started, when I crossed for finance to HR, I was in charge of reporting. So I said, hey, HR professionals, I’m new to the field. Can you really help me? Where do I get the guidebook or the standards or the rules for how to measure and report the workforce? They handed me the employee handbook, which told me how many days of leave I get, what the sick policy is.
0:17:50: I’m like, no, how do you measure and report all this data on the workforce? They said, oh, we don’t have anything like that. We just give management whatever they ask for. Okay, whether it’s right or wrong. And by the way, a lot of times you pull data badly, you get bad data. So, in fact, we’ve created something that supports those human capital financial statements called digital blueprint or integration blueprint. So we have, think of it like standardization for all transactions, HR. And we do that behind the scenes. And that’s really the secret sauce of how we cleanse and integrate data so that when you push it back out, whether it’s a dashboard or reporting or benchmark or a metric, it’s clean and it makes sense. And we enforce standards. If a company wants, well, we only measure it this way. Fine, we’ll give you your custom metric, but you’re going to get the standard metric, too, because that’s what’s benchmarkable.
0:18:40: The second piece is once you give them all this insight, how do you get them to actually take the next step? That was really kind of the meat of your point. So I’ve actually written multiple articles, and by the way, I teach at USC, the University of Southern California, on people analytics. And a part of that course that I teach every year is actually how to tell a business case, how to build and tell a compelling story and business case. So we actually train HR as part of a, literally as part of the services subscription, or they can get it on a consultative basis, how to put together all the numbers in such a way that a typical CFO controller like I used to be, who may be clueless, like I used to be, people might even know a finance colleague in their company who’s like me, or how I used to be, and basically make such a compelling business case that they can’t ignore it, they have to act.
0:19:34: And at a minimum, it’s like a rock in their shoe, even like, we can’t do it, we don’t have budget, but they often come back because you’ve really put such a strong case together. They think about it, think about it, and then they come back and say, can you present that to me again? Or I can’t find my copy, can you share it with me again? And then, funny thing, like weeks or months might go by, and then all of a sudden they’re proposing it as a new strategy, and it was their idea all along.
0:19:57: That’s another great thing, HR. When you do really great work in analytics, oftentimes somebody else is going to take credit for your amazing work. But hey, that’s sort of the cost of working in HR. But they’ll probably privately acknowledge that you were a key part of it. But as long as you move the needle, right?
0:20:15: Yep, absolutely. And I can relate, Jeff. I’m in marketing, and it’s the same. Like, if you do really good work, it makes them look good and you don’t get any of the credit. Right. What type of companies or what scenarios would you say make a company a perfect fit for the solution or likely to see the biggest impact?
0:20:37: Oh, great question. So our sweet spot is probably companies with 500 to 25,000 employees, because they have all the complexity of a 50,000 or 150,000 person company, but they generally don’t have the resources. They don’t have an analytics and workforce planning team of 20 people. They might have two. And that’s not enough to go from basic to advanced to do all that data integration, standardization, and cleansing, all the proof points.
0:21:05: You could reengineer the car, but, wow, that takes so much time. Why not get a car that’s already built, and then you customize the color, the shape, the windshield, the cup holders, which is basically what our software does. It’s all pre built, but you can get it highly so configured. It’ll look like something custom at the end if you know what you want. If you don’t know what you want, we can give you something that’s really good right out of the gate, like the standard Tesla.
0:21:30: And so for these organizations at that size, they have the complexity, they have the challenges, but they don’t have the resources to kind of build from scratch or run their own experiments and do all that. And they want to be advanced like everyone else. So the best way to do that is partner with us, because in addition to the software, another differentiator is when you call us, you don’t get call center customer service, you get a data scientist.
0:21:55: We actually offer a fractional data scientist as part of the subscription for SOLVE. And for some of our clients, that’s a huge difference. They load up on kind of consulting hours to ask us to customize something or even to build them a PowerPoint presentation that they can present at a management meeting.
0:22:14: So you’ve kind of sprinkled in some examples throughout the conversation. But I’m going to ask anyway, what impact have you seen organizations that work with your company experience?
0:22:25: So typically we work, and it’s just part of our mission and vision. We work until they get some ROI. We even have offers. We’ve put in contracts where we’ve guaranteed them to save at least 1% to 10% of their total labor cost, or a million dollars. And we have finance people, again, kind of like me in the past, we go, oh, that’s a lot of money. So you’re telling us if you don’t find us a million dollars in ROI, we don’t have to pay you?
0:22:52: No, we can go down that path where we can put all the money at risk on a contract track, sure. But then we’re going to want 10% of whatever we save you. And they’re like, oh, that’s great. They love it. Because now the risk just went to zero and say, yeah, just one thing. What happens if we save you $10 million? What happens if we save you $50 million? What happens if we save you $100 million? You’re going to cut us a check for $10 million? And they’re like, what are your consulting rates? Again.
0:23:21: I love it. What is your future vision for SOLVE?
0:23:28: And we’re actually very close. We want to automatically generate a workforce plan for somebody you literally fill out a bunch of things about, because every company is unique. Tell us what’s unique about your company. What’s your business strategy? What’s your workforce strategy? What problems are you facing? Where are you trying to go as an organization? And it’s not 100 questions. Maybe it’s 2025, and they’re all from drop menu. So you fill it all out in drop menus, and you say, okay, what do you want to do? Do you want, like, dramatic improvement, or do you want just significant improvement?
0:23:57: I want significant improvement. It’ll actually auto generate a plan that you can print out. We have an ongoing discussion. Once we do that, will they actually follow the plan? Will they believe it? Will they buy into it? Probably. They’ll need a little more presentation and story behind it, but that’s what many organizations need. They’re like, what should we be doing? Here’s where we’re at. What should we do a little more of? What should we do a little less of that would add value to do that.
0:24:25: That’s what I would call prescriptive analytics, and that’s the penultimate. That’s where everyone’s trying to get to. Not just predictive, but prescriptive. What are you good at, and what do you need to do to move ahead? So that encompasses workforce planning. You have to have a diagnosis. So we actually are pioneering or partnering with a couple of our clients right now, what we call SOLVE diagnostic, which is an automated diagnosis. Like, a doctor goes in, looks at all your data, and then it comes back and gives you a dashboard or two that tells you what’s wrong and what you should investigate. And even some recommendations about where you might want to look for interventions. It’s not giving you the prescription yet, but it’s basically giving you the diagnosis. And that was actually from customer said. You know, Jeff, all these analytics are great.
0:25:08: Can you just give it to us in one or two pages so I can just go present it? If it all looks good, start acting on it. And so it has that, and the next step is going to be building on the diagnosis. Like a doctor going to the doctor’s office, we’re going to write you a prescription, and it’ll be fun to see if companies do that. And of course, it wouldn’t be fair if I didn’t bring it up. Yes, we’re leveraging Chat GPT for some of that work.
0:25:31: I think there’s a lot of companies out there, whether it’s Chat GPT or another engine, are infusing AI these days into their technology. So it’s definitely a theme that’s popped up in the HR tech industry, I think. So what final thoughts do you want to leave our audience with?
0:25:52: I think every company today is an analytics company, whether they know it or not. And you have all this human capital talent data that just sits there in your payroll system. And by the way, when I was in finance and even with clients in prior years, you know what everyone does with their payroll data? They download it and they put it in Excel, and then they mess with it to try to get some insight that is valuable, but probably not the best use of time for HR. That’s usually trying to put out fires on a regular basis and trying to get ahead of the curve to prevent fires.
0:26:23: So much better to have some sort of analytics tool that does all that standardization, lifting, integration, and just gives you a readout. And if you’re like, hey, this stuff’s amazing, but I don’t have the analytics background. Can you literally tell me what I need to do? You can actually call a data scientist and they can help you put together a deck that says, here’s where you’re great, here’s what you should do, and that’s the penultimate. As well as provide training. So we’re full service. We will actually train you, give you consultative advice, and give you a tool that makes it all much, much easier.
0:26:53: So that’s what I’d argue every company today, and certainly going forward tomorrow, especially with which we didn’t talk about increasing talent shortages, there’s more people leaving the workforce than joining it. So the kind of power to the worker is only going to increase over time, which if you’re an employer means it’s going to get harder and harder to find good people and harder and harder to retain good people.
0:27:17: Lots of great information and insights. Jeff, my last question for you. Where can our listeners go to learn more about SOLVE and human capital management institute?
0:27:27: Yep. Thank you, Deanna. So yeah, in case it’s confusing, it’s basically SOLVE by HCMI. So HCMI is sort of the IP house and SOLVE is the software. And you can go to ww HCMI co or you can go to WW SOLVE Co. And that’ll all get you to our website. And for a company our size, we have tons of case studies and white papers, lots of thought leadership type materials you can get. We also have an online training academy. You can take our online training and we’re happy to provide a demo or more information about our product and what problems we could SOLVE to anyone who would like to know.
0:28:03: And I’m at Jeff Higgins at Hcminst shortforinstitute.com excellent.
0:28:12: If you’re listening to this episode, be sure to check out, SOLVE and reach out to Jeff. And Jeff, thanks so much for coming on the show. It was great to have you.
0:28:21: Thank you so much for the invitation and opportunity. Deanna, it’s been a pleasure.
0:28:24: My pleasure.
0:28:33: Thanks for listening to this episode of The HR tech Spotlight podcast where we showcase some of the best up and coming HR technology options in the market. If you are an HR tech company leader who would like to be considered for a guest spot on this program, please contact me via grossmodemarketing.com or reach out to me Deanna Shimota on LinkedIn and if you found this show informative, subscribe, connect with us on social media and leave a review.
0:29:02: This is Deanna with GrowthMode Marketing signing off. Thanks for listening. We hope you’ll tune in again next time.