Workplace Tech: Bridging HR and Business Through AI (with Anthony Onesto, Chief People Officer, Suzy)

🎧 Listen Now:

I’m thrilled to have Anthony Onesto join us. Anthony is not only the Chief People Officer at Suzy, an AI consumer research platform, but also a product and innovation advisor to HR tech platforms like ADP and Lattice. 

We’ll discuss which tech is worth investing in, the role of AI in the future of work, and why data is the new oil. Here are five key highlights:

1. HR leaders need to speak business

Any platform or program you’re introducing needs to lead to a business outcome. 

2. Data is the new oil

‍To tie HR efforts to business results, you need to be analytics-focused, you need to have data underpin every decision. And you need that data in one place, not in fifteen. ‍

3. Centralization of workplace tech

‍To get data in one place, you’ll likely be better off working with one core platform that offers most of what you need. While there are some data warehousing solutions, they rely on vendors’ API access, which is getting more and more limited as everyone makes a play for becoming the ‘one platform.’‍

4. The Opportunity in AI

‍While AI could negatively disrupt us, Anthony still sees opportunities. For example, he sees opportunities to replace bad user experiences with ChatGPT-style chat interfaces and create new workflows with a simple prompt. ‍

5. Start Today‍

That leads to our final insight. If you haven’t already, start today. Pick something, regardless of how small, where AI can automate a workflow, freeing up your team to do the work humans are uniquely good at.

🔔 Available on:

‍

You can find the full episode and transcript here:

Transcript:

Daan: I want to kick off with a question about workplace technology. I think it is really the big topic for this season, and you are a veteran at implementing many different HR tech solutions. I know a lot of HRs are toggling between platforms all day. I think there are an average of 16 platforms per HR person. Most employees are toggling between 35 different apps every day to just get to work. 

What does the landscape look like right now in terms of workplace technology? How are you looking at it? 

Anthony: Glad to be here, and thank you for having me for an hour when I feel like my brain is actually at work. It's wonderful to be here. I mean, it's a meaty question you're starting out with, which is great. I have been in HR for 20+ years. I have implemented, like, 60. This is a badge of honor, maybe the 61st customer of work day. My IT folks are like, We're not going to host your HR software and be responsible for it.

I'm like, Oh, there's a company that's doing it in the cloud. So we're just going to do that. They might still be implementing it, by the way. But anyway, I digress.

I think it's work tech; we're saying HR recruiting. I think it's at its watershed moment. I think you're seeing an incredible opportunity from an investment perspective.

I don't think I've ever seen more work-tech startups that are happening, and the interesting part is that a lot of them aren't HR folks or recruiting folks, but frustrated operational leaders or managers that were like, Why am I doing it this way? This is HR stuff.

So I think it's really interesting. You still have the larger players in the space, and they continue to hold a lot of what I would call the enterprise market space because they work. I wouldn't say they work perfectly, but they work. And some of the HR stuff is, naturally, plumbing. I like to say it's plumbing and electricity. It works until it doesn't, and then you freak out when you try to put your lights on and they don't go on, or you get a leak in your plumbing.

So it's an interesting landscape of these sorts of traditional players that are out there that are controlling a lot of the marketplace that they are also buying. So I was a big fan of a platform called Peakon, which was an employee engagement platform that just grew and was doing such innovative work, and they got bought by Workday, and now it's part of their employee experience package.

I think we're going to see a lot more of that continue to play out. I think you're going to see a lot of the larger players building and getting rid of this. You said it before 16, like it's Frankenstein. I mean, if you like that kind of analogy, I'm a kid from the 90s; I say more like Voltron if you get the reference, so little lion bots for one big bot. It's all different because not one system really does everything really well. Oftentimes, your core HR system is different from your performance system, which is different from your engagement system. I still think there's a marketplace for that.

I really thought, when I was talking to the folks at ADP, full disclosure, that I should advise their data product group, but this was even before they had a small skunk project called Lifion. And I thought it was going to be interesting where they were thinking of it almost like an HR iOS, where they would have this core software but then be able to plug in like you would in an iPhone. I don't think it's come to fruition to any degree.

I think there's going to be a consolidation because budgets in HR were never large, and they're just getting smaller. So I think you're going to see a consolidation, but I also think at the same time, a lot of the HR folks are looking for, or at least some of the folks like me who are early adopters, what is AI, like how can AI play a part in this space?

I'm excited about it. I advise a bunch of different late-stage HR, work-tech, and recruiting companies that are doing some interesting things.

But from a practical perspective, as I think about it, I really want to figure out that there's such an incredible opportunity to have all your data in one system to be able to report on. I always feel like there should be a layer on top of all my HR systems that handles both the data aggregation and warehousing but also the employee experience. So that way, employees aren't going into multiple systems.

I think there's still a market opportunity there. We have a company we work with called Orgnostic that's pulling data from all our different systems, including our recruiting system, HR system, and performance system. So more to come from that perspective, but I think it's a really interesting time.

Daan: You think that the existing players will try and maybe M&A up quite a few of the kind of upstarts right now, which obviously is a great incentive for people to start in HR tech today because everyone is trying to build out their platform so that you have this one-stop solution.

You just look at something like Microsoft; obviously, whenever you have everything under one roof, they're never going to be like the best-in-class system for that particular application. 

In your own role or when you speak to other kinds of CPOs, do you then see people debating that trade-off between, okay, yes, it would be nice to have everything in one system, both for the administration side, for the people group, but also for the employees themselves? 

But then also trading it off with, but maybe there's this much better, much cooler, much younger approach to performance management that you can like, but you're not able to get it.

Anthony: Yeah, I think it's a really good question. 2023 is not a great indicator on the M&A front because there wasn't a lot of M&A activity just globally from a business perspective, and only a small percentage of that was work-related.

But I do think, especially with the proliferation of AI, you're going to see some of these larger players definitely making acquisitions. And absolutely. I think some of them have tried to do a marketplace-type scenario where they arguably have pre-approved vendors within their marketplace that connect to ADP. I will tell you that the first time I tried it, the vendor did not work. much love to that promise.

When you buy an app on iOS, it pretty much works every time. So I think the more progressive core players in that HR space are going to definitely think about, okay, let me look at this new player here. I think it's probably going to be something in the AI space, most likely because some of them have already tried. You see, Workday does recruiting; it does performance; but if you talk to most HR folks, they don't love Workday.

I was actually talking to the new CEO of Lattice, Sarah Franklin, and I said, I think you have an incredible opportunity because I'm a huge fan of Lattice. Again, full disclosure: I do some product advisory services for them, but I think they're one of the better platforms from a user experience perspective. It's almost a consumer application-like experience on the Lattice. They're getting into the HR space.

That's why I've actually helped them with their product and gone to market for it. I'm talking to their AI folks. I think there is definitely an opportunity in a homegrown way to the degree that a player or a mid-market player can go up a little bit. but you still have your work days for the 10,000 employee space, but we can talk about even the future of organizations. And are we ever going to see another hundred thousand-employee organization with AI?

I do think there are going to be opportunities, and there are going to be mistakes made.

Daan: For sure, and I would love to talk about the future of AI for organizations. We'll table those. I just want to go back to one thing that you just talked about, basically like Lattice getting into maybe more core HR.

This may just indicate that everyone eventually wants to become the one platform that everyone chooses, which obviously also makes it a very confusing time for people in your position, especially those that are not as close to the tech space as you are in terms of what you then choose.

Why do I go with a younger system that is basically still trying to build those kinds of applications? We even recently saw Deel launch their HRIS, and they are just bot-savvy to boost their employee experience. I don't think, 2-3 years ago, anyone would have expected someone like Deel to become your HR system.

When you're thinking about making these difficult decisions because, as you said, it's like electricity and plumbing, the moment it's in there, it's going to be pretty hard to rip out. I'm sure you've made those transitions from one system to another.

How would you approach that decision right now for people who are looking to either implement their first system in a smaller company or maybe switch to a system in larger companies because there is so much out there today? 

Anthony: It's a great question. I've always said again to pick on ADP folks; they do own 80% of the world's payroll, and because payroll is very difficult to unplug and move and requires full disclosure, we're an ADP client. We use their Workforce Now product. To answer your question, I think the way I personally think about it is that I do it from a data perspective.

Ultimately, for me, I think, there was a LinkedIn nudge today about what advice you would give someone who wants to be a director of HR. And as I said, you have to be analytics-focused. In this day and age, you have to be data-focused. Every decision you make has to be influenced, if not wholly imparted, by the data that you're getting from your systems. I'm in the market research space with Suzy as a platform. So, we think it is both qualitative and quantitative. So the quant is the data, and the qual is the conversations you have with employees, the focus groups, and that kind of stuff.

For me, it's super important. So when I think of that, I think of the best scenario. It's data in one place, and I think that has been the challenge with work technology, particularly in HR. You've had all these disparate systems: core HR here, performance over here, succession planning here, skills database here, and, by the way, unless you're really sophisticated in terms of business intelligence and you have a warehouse and a bunch of analysts, it's hard to get all that data into one place.

There aren't many solutions that allow you to collect that data. For me, the gold or the new oil is data, and most of these tech platforms know it, which is why they limit their API exposures because they all want to be the data aggregator now.

So I think if they continue to limit the API exposure to certain data because they want to be that dashboard company, I think you're going to be forced into, okay, I want to go with the Lattice because it has everything. It has my core HR. It has my performance, it has engagement, and it has comp.

I think we're going to see an interesting movement there unless there are players like Orgnostic, like I talked about, that allow API connections into the data and almost become your data warehouse. But again, because of the API limitations on the work-tech side, on those core systems, they're limited in terms of what they can do, unless you just do a data download into one system.

Again, I would think of it from a data perspective. And then, if you think about it from a data perspective, you could start thinking about how AI sits on top of that and what kind of correlations there are at the end of the day. Again, I was talking to Sarah Franklin about this. I said that what most HR people want is an equation for how doing this impacts the business. That's the equation we want, like the math equation. We want to be able to say that if you do one-on-ones, it increases performance, and performance increases compensation. And the company increased its revenue or became more profitable.

One system with all the data in it will get me some of those correlations to say, you know what? Actually, as we're analyzing the data, we're noticing that because you're putting in your Salesforce data your revenue data in there, there is a correlation between having, and then I could go to my sales leader and I could say, This is not my thesis anymore. This is a fact. Here it is. If you increase your one-on-ones by 5%, you'll increase revenue by 2%. Whatever it is, again, I'm making stuff up. That's the piece.

Daan: This is what you said before. This is really connecting the HR piece with the business piece. And so maybe just a few notes on that before we go into product and AI.

I think a lot of the time there is a little bit of a stigma or an image that HR is really focused on HR stuff rather than really being a business partner or being in the business.

Are you also seeing a shift from other practitioners that they are starting to think more about these kinds of things, like what the things that we do actually impact in terms of business results, revenue, profitability, etc.? And then, practically, where do you start on that journey? Because I think a lot of people have heard about data for decades, but the way that you just explained it, that's probably not something that many people are currently practicing. 

Anthony: It's a good nudge. I think some of the smartest people I've ever met are in HR, and that's smart, generally in terms of EQ and IQ. I think we just have to start talking about business in the language of business.

Typically, what I talk to my team and other HR folks about when I get phone calls is, Okay, what are you measuring? They're like, We want to make sure we retain our employees. And I'm like, okay, great. Everyone knows that's important, but why is that important? What is the business? And is it that you do want to retain every employee?

So even the average or lower-performing employees. No, you want to retain your high performers and figure out how to enable them. But it's always continuously pushing for the business result. And by the way, business results for us at Suzy are simple. It's revenue and profitability. That's it!

We want more revenue. We want higher profitability, which means we have to be more productive and do more with less, however you want to engage that. Now it has come back from that. Some of it is very linear.

In sales, you can make that correlation really easy. Did you hit your quarter and not hit your quarter? When you get into engineering and other places in HR, it's a little bit more difficult, but it's having that business conversation.

For me, in the profession, I think some of the smartest people are, but we're often talking about the wrong things, the HR things, when we should be talking about those things, but how they correlate to the business.

Daan: It's like Stephen Covey's The Habits of Successful People, where you start with the end in mind. So, actually, our end point is not to retain employees; our end point is to make the company more profitable, because then we will all do well. Then you almost back out and say, Okay, how do I achieve profitability? Or what is the role that I can play in achieving that? 

Then, you say, you can look at initiatives that basically drive profitability, and that can be maybe really direct in something like sales, but engineering can be measured by something like the amount of product that they ship. 

Then maybe where are the barriers for them to ship more or ship more often, and then you get maybe into what is the right program to launch right now. 

Maybe again, going back to the previous conversation, what is the right technology to do that? I think we've been dancing around the topic of products and AI. I think we have to dive into the last 10 minutes of this conversation. 

I basically just have two questions. One is that you're advising a lot of companies. So you've mentioned ADP and Lattice, but I know you've advised quite a bit of startups as well, who are a bit earlier stage, where maybe you can still prevent them from making some of the mistakes that maybe some of these enterprise platforms are really hard to change now.

But if you were to start something today, or as the founders that you're talking to, what would you build today? What do you feel is still missing in the market? Or what do you feel is one of those areas that is still really ripe for innovation or improvement? 

Anthony: All of it. That's a quick answer. We'll do a whole series on this. And if you look at my Burn the Box newsletter on LinkedIn, it really is that. How is AI impacting this or that? It's a great question.

I talked about before this layer that sits on top of all your different systems and is able to aggregate data but even create an employee experience. Historically, what has happened with HR systems is that they didn't have an HR person advising them. That sounds so self-serving, but I do believe that is a fundamental barrier. That's not how the world works. I will also say that could be a barrier to innovation because it's like the same thing, but I think it helps having an HR person's perspective as you're rolling out.

And that's what I love about whether it's ADP, Lattice, or these other groups; they're coming to me because I have that experience. Also, I'm a New Yorker, and I have an opinion. They're giving me advisor options. There's no B.S. I'm not going to tell them what they want to hear.

I think there is a layer of reporting and other things that indicate there's an opportunity. If I were to start something, it could be something like that because I do believe if my employees go into ADP or if I go into ADP as an employee, I'm picking on them today, but just pick any change in the acronym. So whatever HR system ACME Co. has, you go into the system and you want to request a PTO. It is not clear where you do that. It is not clear at all. It is buried in some menus.

No offense to engineers, but they're not UX experts. I think these traditional systems have been created in the spirit of compliance and legality, not with the user at the center of them.

What I would do is, I wouldn't get rid of all of it, but I would put a layer on top of it, which is the chat experience. To say it another way, I want to take a PTO next Tuesday. Can you put it in the system? Puts it in the system. It triggers a bunch of workflows in the backend. So your manager approves that all that stuff is there, but the interface is simple and easy.

What did I get paid? Think about the questions, like even for an HR administrator, and that's why I love that I'm doing advising for ADP's data product, and I have first looked at their chat experience overlaying their metrics. It's awesome.

I have never used those two words together in a sentence, but it is awesome. ADP is doing an awesome job here because, at the end of the day, we have all these dashboards, but we all have questions. What is my attitude? What is my year-over-year head count? We're always asking a question. Why are we getting all these charts when all we need is an answer?

Now, the great news is that you not only get the answer but also a chart that you can download. There's a lot of stuff they need to work on, but so far, so good. Orgnostic is the same thing—a system that we're using to overlay all our systems. You can ask it questions. I can't wait to have it all in one place.

But I think it's something to think about, and this is such an easy answer and so obvious, but it's the AI. So I advise one company that is in the workflow employee experience, like onboarding space, a very young company out of Berlin, redacting name; you could find out on my LinkedIn who they are, but I'm trying to get them to think through.

If someone wants to create an onboarding experience, they're making it super easy. We have a system called Workato here at Suzy. It requires training and an IT engineer to help us build workflows. In this day and age, no.

AI, I want to put in an onboarding workflow that does this, touches that, and goes into this system. You hit send, and it builds something for you. And then the backend connects everything. And I've tried to explain to them that, yes, you're simpler than where we are today. The next phase of this, where I think you can really, because I think the biggest friction on these things is really getting the workflow set up. I want to create a workflow that onboards our salespeople a lot faster. So can we connect to our training systems? Just a simple sort of chat AI experience that creates these workflows versus going in and having to program these things in.

So I think what I advise folks to do is think about the integration of AI, not only from a data perspective but really from a user experience perspective. I fundamentally believe that ChatGPT has seen the fastest growth of any software because of the chat experience for everyone. Argue with me; tell me someone who understands chat. Everyone does. Everyone has text messages. You and I connected on the platform. So it's that kind of experience.

That, to me, is the exciting part. It's the user experience within chat, not necessarily just the generative AI and the AI on top of it.

Daan: Is that then okay? So you have all of these newer startups that can be AI natives and build these AI experiences. So maybe yes, they have that perfect workflow builder, but then you have all these legacy systems where, maybe due to a bit of an innovator's dilemma, maybe also due to technical debts, and all the other things that are preventing typically larger companies from innovating, those two worlds somehow have to come together.

Because eventually people will not accept the fact that a system is hard to use because someone will disrupt it. 

Do you see that in the coming years, those two worlds will become closer together as both sides innovate?

Anthony: I think so. I think the legacy systems have a couple of options.

One, and I always say this, is that even for young startups, there's a competitor you're probably aware of. It's called Do Nothing, Inc. So do I buy your software, or do I do nothing? And that's a real thing in the startup space.

Same thing for larger companies. They could do nothing. We know what happens if that is the case. They can innovate and try to get to a place where it's more progressive. It's difficult. These constructs of an organization of legacy thinking will unfortunately be very difficult to move into, and we've seen them. We've been in this digital space for quite a while, and you still see a lot of laggers in it.

If they haven't made it at this point, unless AI makes it so easy for them to transform, whether it's code or a different story, But at least for now, I think the thinking is hard, and then they can acquire it. I think part of the problem is that you're integrating this progressive, quick-thinking startup into a large organization. Sometimes that doesn't work.

Sometimes it does, and you integrate, and hopefully some of that cultural or that thinking penetrates the large organization, and sometimes you often see that sort of startup CEO becoming the CEO of the large organization, but it is very difficult. What I predict is that there really isn't a private equity group that's focused on this, but I do believe that there's going to be a market to take all of these small, different startups and put them together in a private equity play and say, We're going to go after these large companies.

I think JazzHR did this. They bought it, but I forgot the name of it. It's JazzHR. It was The Resumator at one point, which is a much cooler name than JazzHR, by the way. But they're putting it together; they bought Jobvite. They have a private equity play to bring all these plays together.

The problem is that they bought legacy players. So they're bringing in all these legacy players. It's like putting things together, and I appreciate it. When I was younger, I loved the USA basketball team with Michael Jordan and Magic Johnson.

You put that team together now. It's not going to be as good, unfortunately. Same thing here. I think there's an opportunity for that. Let's grab some of the more progressive players, and okay, you have one part of the HR cycle and work tech; you do recruiting, and I think we could potentially do something together that goes up against.

I think Lattice is getting there, to be honest. I think they're at an early stage, but I think they're definitely thinking pretty smart about that.

Daan: Shout out to the PE community. If you're listening, here's your homework. Connect to Anthony and get it done. 

The last question to really ask is going back to your side of things in your Chief People Officer role. I think people are inundated. Not everyone is as techie as you are. So people are inundated with all these innovations and new platforms, and platforms are expanding. And I'm on a couple of mailing lists, and everyone is launching new features and having new innovations. It's hard to keep up. 

If you're looking at workplace technology right now, where would you start? What decisions would you make? Is it worth switching? Is it not worth switching? How should people look at a tech in 24?

Anthony: I think it's good. HR, as an industry, is not an early adopter. So I'm a bad person to ask that question because, usually, iOS comes out with a new 17. I'm literally hitting refresh because I want the new stuff. But I think it's a wait-and-see. I think you have a thesis on how you're thinking about AI, and there are so many ways, whether it's on the recruiting side with automation and reaching out to people or whether it's building job descriptions.

Lattice just announced its AI for performance and engagement. There's so much happening. I think it's a wait and see, but if you have a thesis, like, where do you want to start? And start small, like an experiment. I think there was a lot of trepidation about even just using ChatGPT. We're beyond that now because people are going in and going, holy cow, like this.

It hallucinates, and there's a lot of concern now with what it's putting out, but I think for the most part, a lot of people are seeing value in it within the HR space. So start small. Pick a specific area that you want to test it on. It could be recruiting, it could be more internal, like how do you automate more of your internal processes, but definitely pick a few small pieces, is my advice.

I would say don't stick your head in the sand because then everything is going to pass you by. This is a watershed moment. This is not some hype. This is a big deal. Get on board. It's real. It's the internet. I knew a world before the internet, and I got into startups and tech right at the internet.

So, it's definitely something you don't want to ignore.

Daan: Amazing. That is definitely a call to action for everyone who is listening. Pick a small problem, but pick a problem and see if there's a better way to resolve it. 

The last question, then, is the same one for every guest, which is, any wish for the future of work? 

Anthony: Yeah, it's a good one. I think my hope is that with all of this innovation, there is going to be job loss. There just is. And we're starting to see some of that, Klarna announced. Whether you think that's real or not, even if it's half real, there's a lot of folks that just lost their jobs there.

I want to figure out a balance of how we bring AI into organizations to create a better human connection, and I do these, what if things on LinkedIn, and I believe it is like, what if AI actually brings us closer as humans? So that's my hope. All right, if we're going to get rid of all this sort of tactical stuff, what does that open up for us as humans? How does that connect us more?

There was a really great book written about 12 years ago called Race Against Machine, written by two MIT economic professors. So with this whole AI thing, history repeats itself. So back then, IBM Watson beat Ken Jennings in Jeopardy, and everyone flipped out.

They did some research and said AI was going to take over, and what they found is that the equation is that humans are going to be good at some things, better at some things, and machines are going to be better at some things. It's the combination of the two. That's going to be the final equation. So it's that augmentation that I'm really excited about, particularly in the future of work, but there's going to be some disruption. There's going to be a bit of chaos, unfortunately, whenever you see things like this.

Daan: But there's still stuff that humans are better at, and that's what we'll focus on. I think that's the main message there.

Anthony: For now, I don't know if you've seen it, but there was a video on X of a robot powered by Gen AI, and the person asked, What are you looking at? They were in a kitchen with plates in a sink, and the robot took the plate and put it into the drying rack, and who knows? I was like, This is pretty incredible because robotics has always been a struggle, particularly with automation. And it was just pretty amazing.

Daan: There's still a lot to happen, but I love your focus on, okay, let's do what humans are uniquely good at, and hopefully there will be a future for all of us. 

Thanks so much for being here, Anthony. I definitely have to do an episode too. 

Anthony: Thank you. I'm happy to be here. Thank you for having me.