(00:00:05) - 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 spot. Stay tuned for details at the end of the show.
(00:00:45) - Good afternoon. Today we are shining a spotlight on a technology platform called WageScape. This solution provides labor market intelligence with an extensive real-time labor market data set, tracking over 24 million new jobs each month across all industries. This includes data on hiring demand, pay levels, access to labor and key skill requirements for over 9.8 million organizations worldwide. Here to tell us all about the platform is Cary Sparrow, founder and CEO of WageScape.
(00:01:16) - It's great to have you on the podcast.
(00:01:18) - Thanks, Deanna. It's great to be here and talk to you.
(00:01:20) - So, Cary, tell us a little bit about your background in the HR tech space.
(00:01:25) - Yeah. So I started getting involved in HR tech when I was in consulting, about 20 years ago, and helping companies, set up HR capabilities, optimize their HR capabilities, around making sure that the talent was available to drive superior business performance and work with all different types of companies. And a lot of times, the kinds of projects that I led, involved installation or optimization of new technologies, and so got to work with all kinds. When I left consulting, I went and worked for a very large corporation where I was responsible for upgrading their HR infrastructure worldwide across about almost 70 countries, and about the same number of business units, and so really got to see the evolution of HR tech as it migrated away from server based platforms, into a cloud environment.
(00:02:17) - Got to look and see firsthand, what are the barriers that are really holding back, performance of HR leaders, HR teams and business leaders as they try to, you know, really drive, business results through their talent. And one of the things that was really obvious was that a lot of work had been done on the technology platforms, a lot of work had been done on HR processes, but all of those are fed by data, and not a lot of work had been done by data. And most of that work was focused on companies own internal data, but, you know, we operate in a, you know, a world that includes, you know, outside of companies and the data that's available on what's going on in the labor market. So the market for jobs, for pay for skills, was really bad, and it was really causing a lot of inefficiencies that companies deal with every day. And also, importantly, a real lack of innovation. And I, you know, in talking with lots of consulting firms, lots of technology firms realized there was an opportunity to do things a bit differently that could have a really broad impact that most of the people, most people weren't paying attention to.
(00:03:27) - So that was the genesis for WageScape, founded in 2015, and really focused on building a platform that other companies could use to build technology solutions to serve all kinds of different purposes, power the work of savvy analytics shops. Talent analytics was really, you know, was accelerating very rapidly. But also, financial services companies, media companies, lots of different companies that pay attention to what's going on in jobs. And that's what we did. We built what became very quickly the largest platform for real-time market intelligence on hiring, pay, skills, supply of talent and so forth. And it's continued to grow. We started in the US, in, and launched the platform in 2016. We expanded it to include, just shy of 60 countries a couple of years ago. And along the way we've, you know, acquired great, great clients. We, you know, we got, a lot of visibility and the market for us for WageScape really changed, early in the pandemic, because, the need for an understanding of what's happening with jobs and pay just became so pronounced, the entire labor market went completely out of bounds.
(00:04:45) - Historically, you'd see wage inflation of about 2 to 4% per year, which meant that you could put up with data that was based on pay decisions that were, you know, 1 to 3 years old, which is what most people use even today, but when, you know, we went into lockdown and we started seeing, you know, significant labor shortages in certain sectors and companies responding by raising, the pay that they were offering to employees, nobody had visibility to what was going on, nobody had visibility to who they were competing against and what others were paying. Every time somebody got on the news and said, we're, you know, coming out of the recession or we're going into a deeper one, or here's what it was. All those, any facts so-called, that were being cited were based on information that was just really bad. And we were sitting on data that showed exactly what was happening. And so we were able to, you know, significantly broaden our exposure, as, as a result of that.
(00:05:42) - And, you know, today. You know, we we continue to be growing, you know, very rapidly, our data, is built into applications that we offer. But also, you know, most of our revenue comes from, partners that build our data into their own applications, whether it's, compensation management or talent analytics applications or recruiting applications, where our data gives their users, you know, immediate, kind of, immediate views of what's happening. If you want to hire somebody, you have to know what the prevailing rate is in the local market that you're in. It's not good enough to know what national rates are based on what people you know are paying people in those current jobs. You have to know what people are offering. And recruiters don't want they don't want, to have to open up another app in order to, you know, and then and then do the analytics to see that they want the answer, you know, right in their face, in the, you know, in the environment that they're working in.
(00:06:42) - And so that's that's really kind of our approach to delivering real-time market intelligence. We've got, you know, a really, really powerful data asset. And we've got lots of different ways that the intelligence from that asset can show up for the benefit of users.
(00:06:57) - So you've talked about this a little bit, but what are the different ways that your clients and partners are using the data? Because obviously it's a very rich and robust data set. There's a lot of different, I think, use cases for it.
(00:07:12) - Yeah. Yeah, it's really powerful and it's really flexible, and so I'll just start listing off some different use cases in the human capital space compensation management, folks are now recognizing that an essential tool for any business leader and any compensation leader is an understanding of what's happening with pay for jobs they care about in the markets that they operate in real-time. So moving, you know, beyond just, salary surveys and including real-time market intelligence. So compensation management is, is one of the key use cases.
(00:07:48) - It's especially important for industries and companies where they have, you know, a significant population of their employees. That's what we would call very pay-sensitive. So they'll leave if they get offered, you know, $0.50 or an hour or a dollar more an hour from somebody nearby, which is happening all the time. So that's one. Recruiting is another one in the human capital space where, you know, in order to be competitive, to attract talent, you have to know two things. You have to know, what to pay. You have to know how to adjust that pay based on the skills that, you need. And you have to know, who's competing for the same talent because, you know, the folks that are competing for your talent for talent are competing for your current employees, but they're also source for potential recruits as well. And so all of that, is intelligence that, that we provide to support recruiting, we support in both the cases of compensation and in recruiting, we support consulting firms and professional services firms and technology companies that support those kinds of use cases.
(00:08:46) - So, creating new revenue streams for consultants, new revenue streams for technology providers, where, you know, real-time intelligence is very valuable to their users. And they're able to, you know, create greater distinctiveness for their offerings. And in a lot of cases, create revenue. You know, all of our partners, I can say, all of our technology and consulting partners make money off of our data. So we are really kind of a revenue source there, talent analytics, is another, is another, field that our data supports, research and higher education, in terms of what's going on with labor markets, especially with skills, long before the rest of us had heard about ChatGPT, the world's leading, labor market researchers, we're using our data to understand which jobs were going to be impacted by large language models, based on kind of the, the content of those of those jobs. So we work with the world's leading, universities to help drive their research and their instruction is as well.
(00:09:55) - And then there's a whole space of financial services, which, is different than, than HR tech per se. But the folks that are investing in companies or have invested in companies are very interested in, what the organization capabilities of those companies are in order to, you know, drive business results that will deliver superior investment returns. And they're also very interested in what's going on in the labor market as a general environmental factor, that influences business conditions across a wide range of industries in our kind of data, specifically supports those use cases as well. We keep coming up with more use cases, to be honest with you. There are lots of different ways that understanding what's happening with jobs, with pay, with skills, with who's out there that has the necessary experience and what are they doing? Are they staying in their current company and or are they moving that kind of intelligence, has lots of different applications. And the most recent one that's really starting to pick up steam, I would say is around equity.
(00:10:52) - So wage transparency and wage equity is, getting a lot of investment. And a lot of technology companies are diving into the space to help their clients be able to see kind of how they're how they're hiring pay and, and, talent mobility decisions are viewed from an equity standpoint. And that's one where understanding what other companies are doing and understanding kind of, how you stack up against, you know, the rest of the market is an important consideration. And that's where our data can, can kind of help out, the final thing that's also kind of emerging is the market for skills. So changing kind of the perspective, to say instead of looking at individual jobs like a marketing manager or an Hvac technician or a sales manager, being able to look, in within your own organization and also, you know, across the market and say what's going on with the skills that are necessary in order to perform in those kinds of roles going forward. What does the market look like through the lens of skills like sales management?.
(00:11:57) - Regardless of what your title is, or digital marketing or e-commerce or, you know, I obviously gets a lot of attention, but it goes well beyond well beyond that. And that's another space where there's a lot of money going into HR tech. There's a lot of companies that are getting traction in terms of helping create a whole view of organizations and the labor market through the lens of skills. And because our data specifically captures what's going on, you know, with skills, what the demand and the supply of skills looks like, we're able to help, help those companies bring a market value to, to their users. So that was kind of a long-winded, you know, wide-ranging view. But it goes back to my point that understanding what's going on, I mean, think about it. The labor market touches every single one of us, it touches, you know, us individually. It touches our families, our communities, our companies, governments, any organization, it is a significant part of the economy, worldwide.
(00:12:54) - It represents, over $80 trillion in spending every year. So it's huge. And so there's lots of different ways that, folks need to understand what's going on with jobs and pay. And until now, until just a couple of years ago, when we when, you know, when we launched and, there wasn't a really good way to see what was happening right now, you go and you buy, you know, you want to go buy a stock. You can, you know, down to the, you know, the fraction of a second, know what the price of that stock is and what the volume of trading looks like. If you want to understand what's happening with pay, for a general laborer in the North side of Chicago, until our data was available, you weren't you would never be able to answer that question. I mean, it would cost more to answer that question than it would be worth to, to try to do it, and now, you know, so making the market more transparent is one of our, you know, one of our driving missions.
(00:13:49) - And, you know, that's really what we're all about.
(00:13:53) - I can see where that data could be really powerful for organizations, as they're looking at how to be competitive as employers out there in the space.. Looking at the HR, tech space, and labor market intelligence and the competition that's out there. You know, the choices that our tech buyers have. What would you say is WageScape's unique point of view in the market, or what makes you different from the other options that are out there?
(00:14:23) - Well, so there's a couple of things, there are several different sources of, you know, real-time market intelligence. They tend to be focused on specific use cases, so they tend to be kind of narrowly focused, and they have applications that are designed to support specific kind of categories of users, whereas WageScape is, you know, is a platform. And we're designed to be able to support the needs of a wide range of users, yes. We sell applications.
(00:14:56) - , but really our platform is designed to bring intelligence into the environment of any user through whatever tools that they're already using. So that's one big difference. And we make it really easy for our technology partners to bring our data in very reliably, and create the kind of, you know, the kind of value that their, their users need, that's one thing. There is one thing as, as our name implies, that we do distinctively well, which is we understand what's going on with the pay that companies will be offering to employees that they're hiring right now. We understand that way better than anyone else, we have methods that have been developed, you know, over the last 8 or 9 years, that really go beyond just reading the text in a, in a job listing. So, for example, a lot of, even with wage transparency, it's typical that you'll only see, companies publish the wages, for their jobs in about 15% of the job listings.
(00:15:52) - So there's a huge number of, of jobs that, you know, it's, it's, you know, if you're just reading a job listing, you don't know what's going on with actual pay. And anyone who's claiming to be able to say what's, what's going on in real-time and pay, that's how they do it, right? So they're missing a huge, huge part of the market, whereas we take information from a whole bunch of different sources, all real-time, all publicly available, all originated from the company, and we're able to get that, that percentage up to about 70%. So, you know, we track about 85% of all the new jobs in, in the US and developed countries, and we're able to get, pay on expected pay on individual jobs, in about 70% of the cases. So that's over half the economy that at an individual job level, we have a pretty reliable, view on what that's going to be paid. And because all the data starts in the public domain, you know, in the first place, it's totally transparent.
(00:16:46) - And this is the thing that blows people away. They're able to see what are their who are their competitors for certain jobs, which are more than, you know, they they expect. And then what are their competitors paying for those jobs? And also what kind of skills are they asking for and so forth. So there's a level of transparency that's never been never been available, you know, before. So you know it's a relatively new space. We've got a good leading position in this space. There are competitors of ours that are also, you know, that are also strong. But I would say that we're especially distinguished because we're a platform and not a specific application, and because we're particularly good at figuring out what pay is.
(00:17:24) - And what type of companies would you say are a great fit for your technology?
(00:17:30) - So if you've got a pain point where,. You're struggling to find and keep talent, and you're struggling to figure out what you should be paying that talent and who's competing with you, then you're an ideal fit for the intelligence that we offer.
(00:17:50) - There's different ways you can get it, but and we cater to lots of folks, we have really small companies that are our clients. And we have big, huge, you know, like fortune five companies, two of the three largest HR consultancies in the world are, users of our data, the certifying body for all compensation professionals, offers, access to WageScape as a benefit to their members, so it ranges all the way from small to very large. But the fundamental kind of unifying factor is if you're, if you're in a highly competitive market and you need better visibility to what's going on right now, then that's exactly what we offer.
(00:18:31) - And what type of impact have you seen organizations that work with WageScape experienced?
(00:18:39) - There's really broad-based need and there's broad-based pay pain. Sorry, for understanding, what's going on. So what we hear from our clients is that they're able to significantly cut through the noise in their organization about what's actually happening.
(00:18:57) - So a very common situation is a hiring manager at a local plant is having difficulty getting the talent they need. And they see that another competitor just raised their starting wages to, you know, some, you know, some much higher, you know, pay level. And they get very frustrated with the pay policies in the organization and with the HR leaders because they feel like they're not keeping up with pay, with the rate of change of pay in their specific location for those specific kinds of jobs. And lots of back and forth goes on in those kinds of situations. Those situations are happening all the time as we speak right now, where there's lots of internal frustration because folks, you know, can't get the talent they need, and they think they know what's going on in the market. But there's others who say it's a different situation and that's just totally unproductive. So we, our clients have really cut through that clutter and now have a source of truth to be able to go in and say, this is exactly what's happening.
(00:19:56) - In some cases, wages are going up, faster than management is comfortable with. But that's the truth. In other cases, there's just a lot of anecdotes that really are, you know, should be, not factoring in in a big way into pay policy decisions. And so having that source of truth is a big, is a big impact for technology partners, our technology partners, the impact is on their top line, because they're, they're getting more revenue from, from what, what our intelligence provides, they're able to package solutions, around that intelligence and then, bring more value and make more money from their clients or create, you know, greater competitiveness. And usually it's not an Or it's it's both, right? Where they're creating greater distinctiveness, for themselves, our company, you know, the, the clients of ours that have been using our data the longest. Have built it in as a mission, mission-critical capability for them because it has enabled them to, really compete for talent and and retain talent at a level that is a distinctive competitive advantage for them.
(00:21:07) - And I'm not going to get into the names of our clients, but there's some of the biggest companies in the world, and they are constantly looking at new ways to use our data because of the value that it's delivering.
(00:21:20) - What is your future vision for WageScape?
(00:21:23) - You know, I started waking up with, you know, an idea and a mission of making the labor market more, you know, more transparent, and that's exactly the direction that we're going in. We're looking at how can we bring real-time intelligence about anything related to the labor market into the hands of more and more of the population, so that the, you know, the source of truth, you know, the view of what's true with jobs, with pay, with talent, with opportunities, is a much more accurate and transparent picture and a much more real-time picture. And we're an essential part of, of creating that picture.
(00:21:59) - And Cary, what final thoughts do you want to leave our audience with?
(00:22:04) - You know, the world has changed.
(00:22:07) - , the, you know, especially, since about 2021, the labor market has been in disequilibrium. So all of your assumptions about how jobs and pay work, are, you know, that that you had before the pandemic no longer really apply. And that's a horse that's not going back in the barn. Things are not going to go back to the way that they used to. At the same time, there's real exciting capabilities, like what we offer that allow you to see new opportunities. The biggest thing about bringing better information to a really big and inefficient market, like the labor market is not only do you create efficiencies, but more importantly, you create opportunities for innovation, opportunities to do things in ways that are much more compelling and interesting. And so there's a world of opportunities when you've got better information. And that's what I'd encourage people to pursue.
(00:22:52) - And my last question, where can our listeners go to learn more about WageScape?
(00:22:56) - You can go to WageScape.com, and you can also find me on LinkedIn.
(00:23:01) - Awesome. Cary, thanks so much for joining me on this episode of the HR Tech Spotlight to talk about your company.
(00:23:07) - Hey, it's been my pleasure.
(00:23:09) - I will be sure to put the links below to your website and your LinkedIn profile so people can connect with you. Thanks everyone for listening today. We hope you'll tune in again next time.
(00:23:25) - 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. For a guest spot on this program. Please contact me via GrowthMode Marketing.
Speaker UU (00:23:44) - 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.
(00:23:54) - This is Deanna with GrowthMode Marketing signing off. Thanks for listening. We hope you'll tune in again next time.