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Goodbye 2022, Hello 2023
Another year over...
What a week! Instead of writing my newsletter, I spent time finding a new home for it. I’m glad you decided to stay, and I hope you enjoy this issue!
I stopped writing end-of-year predictions long ago, since HR & Tech don’t change on a calendar year. Instead, I’ll share some observations that might shape your future of work strategies going forward, from remote working to payroll to Web3.
It’s the last newsletter of 2022 – I take a break in December to start planning for 2023, and read up on topics I might have missed. I’m also working on a brand-new keynote!
Thank you for being such a great audience to write for! I appreciate all of you and wish you a wonderful holiday season. Stay happy and healthy and see you in 2023!
Do you need a Chief Remote Officer?
In the last newsletter I wrote about LinkedIn’s Talent Conference, and shared that while only 14% of LinkedIn vacancies are remote, they receive 51% of all applications. A reader looked at the chart and noticed that the total number of remote vacancies was lower than a few months ago. Is remote working on its way out?
I don’t think so. There are two things to keep in mind. Over the past two years we’ve seen an enormous increase in remote positions, and many of these have been filled. So as a percentage of Total Jobs, the number is up, but it can’t keep growing as fast as before. Not all jobs can be done remotely.
Secondly, LinkedIn only distinguishes between onsite and remote jobs. It has no “hybrid” category. Hybrid jobs are offered as onsite vacancy, with a remark in the text that the company supports working from home. I take it as a good sign that hybrid is getting normalized.
But it also leads to the question: do we need a Chief Remote Officer? Some companies seem to think so. But whenever I read the reasons, their responsibilities overlap with those from other executives. CRO’s should focus e.g. on compensation, culture, technology, talent acquisition and so on. Which would lead to the other board members focusing on onsite workers, and the CRO handling remote workers. That seems very complex to me.
In my experience, it works well to make one board member the executive sponsor of the remote worker group. I was in that position for a couple of years: with every board decision we made, I evaluated the consequences for the remote workers, just like my colleagues evaluated them for the onsite and hybrid workers. That ensures there is always attention for all employee groups, but it doesn’t single one of them out, or sets them apart. This approach worked for us, but we were all experienced remote workers.
Most company leaders were faced with remote employees as a result of the pandemic. There were no policies in place, leadership had always been done face to face, and no one had the time to properly think this through. The inability to lead remotely is one of the largest reasons for employee dissatisfaction, and also a major CHRO concern. The chart below is from Gartner’s ReimagineHR conference and illustrates the issue:
Leader and manager effectiveness is the largest priority for 2023 - we have to equip managers with the skills to lead people, no matter where they are. Location should be irrelevant. And if this is new for your company, it might be an idea to have a CRO for a defined period, to get everything in place. But I wouldn’t recommend this as a long term strategy: remote workers are part of the team, and should be treated as such by leaders and managers. They should be represented at board level, but not require a full-time advocate. You don’t split your Chief Revenue Officer in Enterprise clients and Small Business clients either, do you?
It makes more sense to have this position filled at the level below the CHRO, and make it a temporary position until it’s people business as usual. Do you have a Chief Remote Officer or are you thinking of hiring one? Let me know what your experience is!
Do you even need Payroll People?
Yes, this is a hypothetical question! I know how important the payroll team is. But it seems not everyone is convinced of their critical contribution to the business, and we’re seeing that experiment in action at Twitter. Their whole payroll team left last Friday. And while we won’t see the fall out until the next round of salary payments, it sparked a debate on Twitter. Why did they even have a payroll team: don’t they use payroll software? And why isn’t payroll automated or outsourced?
I put together a short overview of the tweets questioning the necessity of employing payroll people. Read it and weep. But also: what will it mean if the next payroll is delivered accurately and timely???
Just in case you need a last-minute gift for a payroll friend: I wrote the book!
HR Tech Investments in 2022
I’m going to call it: 2022 will be a good year for HR Tech funding, but not as great as 2021, when companies raised $12.3B. Unless we get a few surprises, we’ll probably end the year around $10B. Is that a problem? I don’t think so. 2021 was over the top, and too much money went to companies that were not ready. With all the attention on labor shortages and employee satisfaction, investors were afraid of missing out on the next big thing. Most of these companies are still around, but with rising interest rates and economic headwinds, customers are reviewing their costs. I expect to see contract terminations, especially for point solutions. This is not HR specific, it’s happening in all business lines.
M&A activities are sharply up, and by the end of 2023 we’ll have fewer independent HR Tech companies. Some of these point solutions are simply too niche and won’t survive as stand-alone businesses. And while a best-of-breed strategy can be useful, CHROs don’t want or need a point solution per service. It’s easier to have a focused solution that covers a few adjacencies in an integrated way. You’ll receive a write-up of this topic in the first newsletter of the year, including detailed charts and services overviews.
In the meantime, if you are using HR Tech point solutions, it’s always good to have a backup plan. I did not expect to write this newsletter on a new platform, but here we are.
Is Web3 on the way out?
I recently wrote an update on blockchain, and now it seems that’s not the future of Web3. At least, that’s what Tim Berners-Lee, the inventor of the world wide web, said during the Web Summit Tech conference last week. And given that we are in a dark crypto winter, with once extremely valuable companies collapsing overnight, he might have a point.
What he does not question is another Web3 concept: the need for decentralization. Too much personal data is in the hands of too few companies that monetize it without permission. People are starting to question that business model, and rightly so. But using blockchain to return power into the hands of the data owner might not be the best way to do it.
It’s in line with some of my earlier observations: it sometimes seems that blockchain is the answer, no matter the question. And in many cases, blockchain isn’t the best or most elegant solution. A modern database could be faster and more secure. It all depends on the problem you are trying to solve. And it’s time to solve data ownership.
When we separate the technology conversation from the fundamentals, what remains is the vision to give users the ownership of their data back, including how it’s accessed and stored. Imagine if you have a personal data vault somewhere on the internet, and you can give and remove access to (parts of) it. For HR that would mean a complete redesign of the current solutions, that store personal data in several places. It requires a fundamental rethinking of why you need personal data, and what you use it for.
Because, let’s be honest, are you really storing as little employee data as possible? Or has it slowly spread through several solutions and applications, and you are not exactly sure where it all ended up? Try to answer this question: when an employee exercises their “right to be forgotten”, how confident are you that you can execute that request without missing anything?
If a person would operate a personal data vault, that individual could grant and revoke access as needed. Instead of copying the data to the HR solution, you would access the data in the vault, e.g. when a salary payment needs to be made. In order for this to become a reality, local legislation should change as well - in many geographies, companies must hold a copy of certain data elements of an employee for a number of years after that person resigns. What would happen if an employee revokes access right after termination, and the employer can’t access the data anymore?
There are many questions to be answered, and I will write more about Web3 in the new year. Not because I think that Web3 is upon us, but because the underlying concepts are starting to gain footing. New ways of collaborating are being piloted, as are payment methods, and they have the potential to change how people look at work. I will use December to learn more about the concepts, so I can update you on what’s happening in the next year.
Until then, have a great day, Anita
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