What is the future of work? Stuart Sackman, chief information officer and chief technology officer at ADP, tells CXOTalk how data is helping employees manage their careers better with new technology, different skills, and work-life integration – as well as enabling other companies to manage their teams better to meet job trends.

“…Technology is replacing a lot of manual, low skilled work, so workers themselves come to the workplace with different skills and they’ll need to continue to develop those skills,” Sackman explains. “Organizations have to be willing to adapt to these trends if they’re going to be able to recruit and retain the best workforces to get their work done…”

“One of our core concepts is that employees are most successful when they leverage their strengths, which makes sense, or common sense. But, do employers have an easy way to measure the strength of their employees? They don’t really, so we’re providing tools that help measure their strengths.”

Sackman joined ADP in 1992 and currently leads ADP’s Global Product and Technology (GPT) organization, overseeing both client-facing product development and internal technology (CIO/CTO) operations. He previously served as Corporate Vice President and General Manager of Multinational Corporations (MNC) Services, which includes the ADP GlobalView and ADP Streamline businesses, and also played a leadership role in developing the organization’s product and marketing strategies.

Transcript

Michael Krigsman: Everybody talks about the future of work. But, you know what? Most of those people have no idea what they're talking about. These are guesses that they're just making stuff up. Today, on CxOTalk, we're speaking with somebody who literally is defining the future of work.

I'm Michael Krigsman. I'm an industry analyst and the host of CxOTalk. I want to say thank you to IPsoft. We are in their innovation experience lab in the heart of New York City. It's a beautiful location. Literally, IPsoft helps keep CxOTalk going.

Now, before we continue, I want you to invite your friends, and I want you to tell your family. Invite them all to watch and, very importantly, subscribe on YouTube.

We're here with Stuart Sackman, who is the CIO, the chief information officer and chief technology officer at ADP. Hey, Stuart, how are you? Thanks for being here.

Stuart Sackman: Happy to be here, Michael. A shout out to IPsoft because it is a beautiful facility. I can't wait to talk about the future of work.

Michael Krigsman: We hear everybody talking about the future of work. What does it actually mean?

Stuart Sackman: The future of work isn't just one thing. It's lots of things. It's the culmination of a lot of trends that are coming together that are changing how people work and how people work in the future. I think people are generally familiar with the big trends, but technology is having a huge impact on the nature of work as more and more tasks are being automated and we're entering a world where there'll be more machine and human collaboration. Maybe we can talk more about that, Michael. That's one big trend.

There are also structural trends in our society. The rise of the gig worker is a big change that's going on. The growth of 1099s in the U.S. are growing quickly. W-2s are growing a little bit as the economy has grown, but not nearly as fast, so many people are in the freelance economy. That's a big trend we can talk about.

The other thing that's changing is actually the way people and companies work together to get their jobs done. This idea of more agile organizations and dynamic teams that are cross-functional, that form and reform around projects, those are three areas that maybe we can talk more about that are affecting, again, how work will get done in the future.

Michael Krigsman: When we talk about the future of work, that refers to what? It refers to demographics? What are the components?

Stuart Sackman: I think it's, as I said, many of those things. The demographics are changing. Millennials are taking over the workforce, I think, by 2020. I think already more than half of the workforce is millennials, and that will continue to grow.

Millennials come to the workforce with different values and expectations about how they're going to be treated in the workforce. I'm a little older. I'm a baby boomer. As I was coming up to work, we used to talk about work/life balance. Millennials want work/life integration. They want to take their lives and their work and blend them together.

When I was coming up, companies tended to be more hierarchical. Millennials don't deal well in hierarchy, so we need more flatness versus hierarchy. That trend is really, again, affecting the workforce and how work gets done.

Michael Krigsman: Stuart, you have the demographic forces of the changing composition of the workforce. You have shifts in technology. It sounds like you have expectations of employees, and that's playing a more important role today.

Stuart Sackman: Absolutely, Michael. I think it's really important. For every employer that wants to develop a productive, engaged, and effective workforce and retain their employees, you have to address the mindset of millennial and young workers. Purpose is probably more important today than it has been ever because people want to work in an organization that has a well-defined purpose that they can get behind. Social responsibility is more important

Michael Krigsman: Everybody talks about the future of work. But, you know what? Most of those people have no idea what they're talking about. These are guesses that they're just making stuff up. Today, on CxOTalk, we're speaking with somebody who literally is defining the future of work.

I'm Michael Krigsman. I'm an industry analyst and the host of CxOTalk. I want to say thank you to IPsoft. We are in their innovation experience lab in the heart of New York City. It's a beautiful location. Literally, IPsoft helps keep CxOTalk going.

Now, before we continue, I want you to invite your friends, and I want you to tell your family. Invite them all to watch and, very importantly, subscribe on YouTube.

We're here with Stuart Sackman, who is the CIO, the chief information officer and chief technology officer at ADP. Hey, Stuart, how are you? Thanks for being here.

Stuart Sackman: Happy to be here, Michael. A shout out to IPsoft because it is a beautiful facility. I can't wait to talk about the future of work.

Michael Krigsman: We hear everybody talking about the future of work. What does it actually mean?

Stuart Sackman: The future of work isn't just one thing. It's lots of things. It's the culmination of a lot of trends that are coming together that are changing how people work and how people work in the future. I think people are generally familiar with the big trends, but technology is having a huge impact on the nature of work as more and more tasks are being automated and we're entering a world where there'll be more machine and human collaboration. Maybe we can talk more about that, Michael. That's one big trend.

There are also structural trends in our society. The rise of the gig worker is a big change that's going on. The growth of 1099s in the U.S. are growing quickly. W-2s are growing a little bit as the economy has grown, but not nearly as fast, so many people are in the freelance economy. That's a big trend we can talk about.

The other thing that's changing is actually the way people and companies work together to get their jobs done. This idea of more agile organizations and dynamic teams that are cross-functional, that form and reform around projects, those are three areas that maybe we can talk more about that are affecting, again, how work will get done in the future.

Michael Krigsman: When we talk about the future of work, that refers to what? It refers to demographics? What are the components?

Stuart Sackman: I think it's, as I said, many of those things. The demographics are changing. Millennials are taking over the workforce, I think, by 2020. I think already more than half of the workforce is millennials, and that will continue to grow.

Millennials come to the workforce with different values and expectations about how they're going to be treated in the workforce. I'm a little older. I'm a baby boomer. As I was coming up to work, we used to talk about work/life balance. Millennials want work/life integration. They want to take their lives and their work and blend them together.

When I was coming up, companies tended to be more hierarchical. Millennials don't deal well in hierarchy, so we need more flatness versus hierarchy. That trend is really, again, affecting the workforce and how work gets done.

Michael Krigsman: Stuart, you have the demographic forces of the changing composition of the workforce. You have shifts in technology. It sounds like you have expectations of employees, and that's playing a more important role today.

Stuart Sackman: Absolutely, Michael. I think it's really important. For every employer that wants to develop a productive, engaged, and effective workforce and retain their employees, you have to address the mindset of millennial and young workers. Purpose is probably more important today than it has been ever because people want to work in an organization that has a well-defined purpose that they can get behind. Social responsibility is more important today than it was in the past, and I think it'll be even more important in the future because, again, people want to work in an organization that's socially responsible, that supports their community.

The actual physical work environment matters. Putting people in six by six cubes and tied down to their desks sitting in front of monitors just isn't going to make it in the future. There are lots of changes that are going to be required around how we recruit and retain employees.

In addition to that, the type of work itself is changing because, again, technology is replacing a lot of manual, low skilled work, so workers themselves come to the workplace with different skills and they'll need to continue to develop those skills.

Michael Krigsman: Stuart, what are the implications of all of this for employers, for organizations?

Stuart Sackman: Yeah, so organizations have to be willing to adapt to these trends, again if they're going to be able to recruit and retain the best workforces to get their work done. I work for ADP, and we provide a lot of technology and systems to help companies manage their human capital. We're making changes in our technology to help employers engage their people more effectively.

One of our core concepts is that employees are most successful when they leverage their strengths, which makes sense, or common sense. But, do employers have an easy way to measure the strength of their employees? They don't really, so we're providing tools that help measure their strengths.

Then, leadership still counts. Despite the changes in automation and the changing demographics of the workforce, leadership still counts, but not leadership at the CEO level. That's important at the executive level. Leadership at the team level because the work in companies takes place, the day-to-day work that affects the business's result takes place in the frontline teams, the team leader and the employees that do the work.

That team leader is critically important. We're developing technology to help team leaders be more effective, so they can better manage and coach their team, and make sure their teams are engaged and using their strengths. If employers can get that right, they have a better chance of being successful in developing a better workforce.

Michael Krigsman: This coincides with what you were describing earlier about the flattening of organizations because historically, of course, organizations were command and control. The role of teams was to simply execute what the top management in the company wanted. Now you're saying that we need to pay more attention to what's happening at the team level.

Stuart Sackman: You need to pay more attention. Exactly, Michael. You need to pay more attention at the team level. You need to empower your teams if they're going to drive innovation because, again, as we know, with technology disrupting virtually every industry, innovation is more important, and innovation can't be managed top-down. You have to get down into the teams.

Again, for employers, the challenge is that today's systems that they use, even if they're using modern cloud-based systems, really are designed around the traditional hierarchy. I might get an engagement score for my R&D team, and that could be high, but my project team one that includes R&D, finance, HR, user experience, and operations, which could be a critical project, they could be very low. Knowing, overall, what the engagement of my R&D team is, or the turnover of my R&D team, aren't the metrics that are going to help me manage my organization.

I need to be at the team [level]. I need to know what's going on, where the work is happening, and employers need systems to help them do that because today's generation of systems don't do a good job there. That's a handicap for employers in trying to manage their workforces.

Michael Krigsman: Can you give us some examples of the kind of data that you're collecting?

Stuart Sackman: Yeah. We collect data against the full range of key HCM metrics. Some are traditional, so knowing things like your turnover and your average time to hire, again, with the difference now that you really want to know that at the team level, not at the corporate level. That's a different spin on the way metrics are collected.

We're also collecting data around performance, and we're measuring performance in a very different way. We've reversed the way we think about performance. Instead of asking me to assess whether you're strategic, which creates what we call the idiosyncratic grader bias, we've reversed the question. We say, "When I have a problem, I always go to Michael." Then I'm talking about my own feelings about Michael, and that's a more accurate way to assess. Then if I always go to Michael, and I never to go person B, then that helps us understand the relative performance. That's one area.

We also look at, we also collect data, we also have data in our systems around salary trends, which are very meaningful, [and] annual increases. We're collecting data around traditional career paths, so we can help employers and individual employees see, from their position, where people go, and we're connecting that with the skills they need.

We're going to help employees manage their careers better by giving them the options and letting them profile other people that have started from where they are, where they've gone, and what skills they've attained. We're able to do that because of our 700,000 client-base of employers. We have lots of data about lots of people, and we're trying to use that to help our employers better manage their workforce.

Michael Krigsman: In a moment, I definitely want to talk about how you're aggregating that data and then operating on that data. But, just to drill down further, can you give us some concrete examples of the kind of data that you collect off of a team and how do you collect that data?

Stuart Sackman: Yeah. We've deployed a set of tools that allow team leaders to garner feedback from their teams. One of the new applications that we released is a weekly check-in. What we do is the team leader does a weekly check-in every week with their team, and their team just answers it. It's a five-minute check-in, and their team answers a few questions like:

  • Did you use your strengths this week?
  • Did you add value this week?
  • What are your short-term priorities?
  • How can you, my leader, my team leader, help me?

We collect that on a weekly basis. Then we can help the team leader literally see the trend lines because, if your team isn't using their strengths, or their team doesn't think they're adding value, then you have to take some action.

We also look at other metrics at the team level like engagement. Again, if you see engagement is low, you have to take some action.

If you have high turnover in a specific team, we have dashboards that help do that. That likely means something is going on if it's higher than the rest of your organization. That might imply a problem with the work they're doing. That might imply a problem with the leader of that team or the interrelationships, the dynamics.

We're still trying to unwind that because the real secret sauce and the real magic of data is when we can go from right now what we're doing, as many of our competitors are, is around predictive data, and go from predictive to prescriptive. When we get the data, now we can tell you, "It looks like there's a problem here," and we can predict the outcome. "If you don't change, that turnover will continue at this rate."

What we'd love to get to is prescriptive. "Here's a problem, and here's what you need to do to solve it." I think, given technology today and the rate at which we're able to collect and analyze data and the machine learning algorithms and AI capabilities, I think that's something that we'll be coming to the future of work to help managers and companies be more effective.

Michael Krigsman: Okay, so we'll get there in one moment.

Stuart Sackman: [Laughter]

Michael Krigsman: But I'm still stuck on the data itself because it's so foundational to doing the things that you were just describing. I'm not meaning to put words in your mouth, but part of your core expertise then is developing the standard questions or standard categories of types of data and embedding that in your tool so that your customers are then gathering data in a systematic way that's best for themselves and allows you to then aggregate that data later. Is that more or less right?

Stuart Sackman: Yes. We're absolutely trying to do two things at the same time. We're trying to collect data in companies that will enable companies to manage their teams better. We have a lot of data that we provide for them. Some of it is hard data. It's all real data. Some of it is turnover, and some of it is feedback data through engagement polls and other types of pulse surveys from the employees, productivity, and we're melding all that together to help organizations.

Then, we're also providing them benchmark data. We have a process with our client base where we've gotten their permission to use their data in an aggregated, anonymized way, and then we provide that back to them in the form of benchmarks because that's another big challenge for companies. They know how they're doing and they can compare their teams, but they also need to know how they do versus their industry, versus their geography, versus their company size. There are no real sources in the market for real data about that.

We have a lot of real data, so we're able to provide really insightful benchmarks on average salary. We have 2,000 job codes, so we can give you salary at a very granular level on positions, turnover, promotion rates, spans of control, and average increases. It's a lot of critical information for companies to benchmark their organization against their industry peers and other local competitors.

For predictive analytics, we introduced; probably about a year ago, maybe, we introduced a flight risk indicator. Now we can tell companies who inside their company is at risk of turnover. We have a proprietary algorithm for that, and we tested it because we're able to go back in time, because we have so much history of data, and apply the analytic and then watch the people through the path, so we know it works.

Once we tell you someone is a flight risk, we also show you the factors. We uncover for you what the items are that might be impacting, that are impacting, their probability of leaving. That gives you better insight into how to potentially address those.

Again, in the future, what we hope to be able to tell you is, "Michael is a flight risk. If you want to retain Michael, you need to do this. Let him work from home on Friday because his commute is such that, in the summer, he gets stuck in beach traffic and he's getting frustrated, but you don't have to give him a raise."

"Stuart is underpaid, given his performance rating, his tenure, and his skills. He's in high demand. You need to raise his salary." Those are just a couple of examples. There are many more.

We have a flight risk indicator. We have overtime predictors. We have productivity predictors around what drives performance and productivity. Those are some predictive measures that we've been developing.

Again, I think that's valuable. But, as you said, it will be so much more valuable when we can send you a notice saying, "You're at risk of high overtime in your retail store in downtown Manhattan. Get on the phone and get three extra people into work right now," because that's better for your quality and delivery in the store, and it'll actually cost you less than the related overtime. That's prescriptive, and that's the nirvana of the use of data, in my opinion.

Michael Krigsman: You mentioned the gig economy earlier, and so what's going on with that?

Stuart Sackman: Yeah. The gig economy is growing, and it's growing quickly. There's the big gig companies that we're all familiar with like Uber and Lyft, but there's a broad group of people that act as freelancers. Many of them have full-time jobs also, so we have this change, socioeconomic change, where people work full-time and also have gig jobs on the side.

Companies are taking more advantage of freelance workers. There's higher demand in companies because of the need for specific skills around specific projects. Teams in companies, whereas yesterday teams in companies were largely employees and they were organized very hierarchically, now they're dynamic teams, which we talked about, but they're dynamic teams that include full-time employees and freelance workers at an ever-increasing rate.

A challenge, again, for employers is, as they deal with their workforce, freelance workers today, believe it or not, in most companies are managed by procurement. You buy a freelance worker the same way you might by a computer or a roll of toilet paper. [Laughter] That's probably very disparaging for employees, but freelance workers are hired through procurement, and employees are hired through HR. The systems that support them are independent.

Our systems that we build for dynamic teams apply equally to freelance workers and employees because, to know what's going on in a team, it doesn't help if your team is half full-time and half freelance if you just look at the half that are full-time. You need to know everything about what's going on if you're going to manage your teams. That's also a big change in how companies need to modify their systems to make sure that they're leveraging the freelance workers. Then there's also a lot of statutory compliance issues around freelancers because of the government regulations about what defines a freelance worker versus a full-time worker.

Michael Krigsman: Is it just a matter of technology for companies to do a better job in terms of how they hire and manage freelancers, or are there also cultural mindset changes that have to be made as well?

Stuart Sackman: Yeah. I think there are both. You absolutely need the systems because your HR systems, the reason why we have HR systems is to help our workforces be better, be more productive, be more engaged. Again, if you have, in some cases, 50% or 30% or 20% freelancers and you exclude them, how could you manage your workforce? You need the systems.

The cultural aspects, that's a little bit different because we talked earlier about the trends with millennials taking part in the workforce and this idea of less hierarchical workforces. They don't view it like, "Oh, you're a freelancer and I'm full time, therefore somehow you're different from me," because they don't see the world in those terms, just like they don't see diversity in the same way maybe we have in the past. They're more colorblind and gender blind and, I think, this freelancer thing. That cultural shift is happening already at the worker, at the team level. It may be a little bit of a stretch for some executives to recognize that when they talk about their workforce and think about their workforce, they need to think equally about how they engage their freelance workers that do meaningful important work for them, as well as their full-time associates.

Michael Krigsman: When we talk about the future of work, is there a way of defining metrics for where "we're doing well" with the future of work?

Stuart Sackman: The importance for companies understanding the future of work is so that they can compete, be successful, and win in their respective markets. The measure of a company's success in addressing the future of work will be their business results because, in the end, it's the business outcomes. But with the technology trends and the fact there's a high degree of automation, the workers, the employees have so much bigger impact on the outcomes so that you can't get the business successes without the engaged workforce.

The reason why the future of work is important is assembling, again, engaged, diverse workforce that's helped by technology to eliminate the routine aspects, so they have more time to focus on the critical business issues. Assembling dynamic teams that include full-time workers and freelancers in a cohesive, tight-knit organization, those are what I believe will be sort of the leading indicators of business success, which is why we focus so much on those aspects of the future of work. If you fail at that, it's hard to imagine that you can be successful in business. Then I guess you'll be out of work, and it won't matter. [Laughter]

Michael Krigsman: [Laughter] I think that's a great way to end. Stuart Sackman, CIO and CTO of ADP, thank you so much.

Stuart Sackman: Thank you, Michael. Thanks for having me. I really appreciate it. Thanks again, IPsoft, for having this wonderful facility.

Michael Krigsman: You have been watching a fast conversation and a rich conversation about the future of work. We've been speaking with Stuart Sackman, who is the chief information officer and the chief technology officer of ADP. Again, a heartfelt thank you to IPsoft for setting up this beautiful studio in their innovation center in New York City.

Tell your friends. Tell your family. Tell your mother. I know my mother asks me about this. Tell everybody you know and be sure to subscribe on YouTube. Thanks so much, everybody, and have a great day.