100
The Future of HR: Chad Richison on the Evolution of HR Tech
HR Break Room1.0 X
1.25 X
1.5 X
2.0 X
Transcript
| MASTERS: 00:06 | [music] HR Break Room is brought to you by Paycom, digitally transforming workforces nationwide with HR technology that's easy for all employees to use anytime, anywhere. Discover how Paycom does more for your world at Paycom.com. [music]
|
| MASTERS: 00:30 | Hello, everyone, and welcome to HR Break Room, Paycom's podcast dedicated to having quick conversations on the hot topics in HR and HR technology, one cup of coffee at a time. I'm your host Caleb Masters, and as always, HR Break Room is the podcast helping you discover how far your workforce can go. And today, we are celebrating Episode 100 of the podcast with a special conversation with Paycom founder and CEO Chad Richison. Richison will be joining us to tell the incredible story about the legacy of Paycom and how its vision has evolved. We'll also discuss how the everyday use of apps positively impacts businesses before taking a look at how employee-driven technology strengthens an organization, and then we'll close out the conversation by diving into why a continued employee focus represents the future of work. Now, if you are a long-time listener or maybe you're tuning in for the first time today, to join in the online conversation surrounding HR Break Room number 100, make sure to head on over to hrbreakroom.com to find links to our greatest hits as well as a few special HR Break Room 100 blogs that you can find as part of a special series. You can also share your favorite HR Break Room episode or memory on social media using the hashtags hashtag HR Break Room or hashtag HR Break Room 100. And I couldn't celebrate the 100th episode alone. Joining me today in HR Break Room will be Paycom's Director of Public Relations and Corporate Communications Jason Bodin. Jason, thanks so much for joining us today.
|
| BODIN: 02:07 | Oh. Thanks, Caleb. I'm happy to be here, and congratulations on reaching Episode 100.
|
| MASTERS: 02:12 | Thanks, Jason. Well, I couldn't have done it without the support of listeners and good folks like yourself. You've, of course, been a champion of HR Break Room over the years, so I just wanted to very quickly get your take here. I mean, what has been your favorite thing about the first 100 episodes of HR Break Room?
|
| BODIN: 02:27 | I don't even know where to begin there, Caleb, because it's been such an amazing ride from rolling out the first few episodes to watching it grow along the years. I couldn't be prouder of what you've accomplished with this. I'll say there have been some great ones in there. You got Barbara Corcoran. You've got Steve Boese, John Maxwell. The list just goes on and on. So, again, kudos to you and the whole Paycom crew.
|
| MASTERS: 02:51 | Thanks so much for sharing, Jason. As always, it's a pleasure to share the mic with you. Now listeners, now that you know the voices around the table today, let's take a closer look at today's topic. In 1998, the World Wide Web wasn't yet a household necessity but something that tied up phone lines. I don't know about you all. I remember that ominous dialing tone whenever there was something on the internet and on the phone at the same time. That did not stop Chad Richison from bringing his idea of businesses seamlessly processing payroll entirely online to live with Paycom. From the days of dial-up internet to the smartphone boom and beyond, Richison has led Paycom through every major electronic advancement of the 21st century. And throughout the evolution, Richison has maintained a belief that HR tech is at its most effective when employees use the technology to enter and own their own data, just like they do as everyday consumers. And with the company's recent launch of Beti, a revolutionary employee-driven payroll experience, Paycom continues to reflect his vision, improve how HR technology can transform an organization for the better. Richison's focus on an employee-centric HR experience has made Paycom an industry-leading technology. And his position makes him intimately familiar with the trends of technology and its impact on the workforce. So what exactly does Richison have to say about how consumer trends are influencing the HR industry? Jason, are you ready to take our 100th trip into the HR Break Room?
|
| BODIN: 04:19 | Absolutely. Let's do it.
|
| MASTERS: 04:33 | I can't believe we are entering HR Break Room for the 100th time. And we can't do it without a very special guest. Today's guest is Paycom founder and CEO Chad Richison. In 1998, Richison founded Paycom where he serves as its president and chief executive officer as well as its chairman of its board of directors. In early 2020, the organization was added to the prestigious S&P 500. For four consecutive years, Mr. Richison's leadership has propelled Paycom to the top of Fortune magazine's 100 fastest-growing companies list of domestic and foreign publicly traded companies while also accelerating the company to reach a market cap of approximately $27 billion. In 2015, Richison started Green Shoe Foundation, a nonprofit organization devoted to helping functioning adults reconcile childhood traumas so that they can live a life of peace and maturity. Chad, welcome to HR Break Room.
|
| RICHISON: 05:31 | Thank you.
|
| BODIN: 05:32 | Thank you so much for being with us here on HR Break Room Episode 100, Exciting Times. Walk us through the founding of Paycom back in 1998 and what that experience was like for you.
|
| RICHISON: 05:43 | Yeah. So 1998, things were a little bit different. If you think back to even the internet in 1998, very few businesses even had it. Those that did, maybe if you use the internet, you had a website. E-commerce wasn't even really set up very well at that time. It was more of a website that you might hit and see what a company does, who the people are that work there, and so it was rare that someone used the internet at that time for business or even the transfer of data. And so with Paycom, we started off as an internet product even back then because what we had realized, though, even though at the time the internet was slower, it gave easier connectivity to those people that were processing payroll or implementing HR strategies or what have you. And so we had decided at that time to go ahead and put our software on the internet. And what that did is it decentralized the traditional HR function and payroll function, which had traditionally been at one location where the data might exist, and maybe they had some type of peer-to-peer network where they were communicating with systems. But at that time, we decided with Paycom to put it on the internet, and we did so. And the early days were a little bit difficult as a lot of the companies that I would actually go out and present our product to didn't have the internet. And so I would carry the 25-foot phone cord, the 50-foot phone cord, and the 100-foot phone cord, along with AOL and Prodigy diskettes because I didn't know how far their fax machine was from their PC. And I was going to have to run those cords down the hall to dial up the internet and then show them what it was.
|
| RICHISON: 07:33 | And so back then, really the benefit of the internet was easy access to information that was otherwise a little bit more difficult to access. And then also, we could broaden the number of people who could access it, right, before maybe one person could access it if it's in a peer-to-peer type of network setting. But on the internet, everyone could. So even from the early beginnings at Paycom, our strategy was always to have more and more people interact with the data directly so that you're able to eliminate some of the interactions that happen when you have an intermediary to make data transfer.
|
| BODIN: 08:13 | So talk about today and the importance of employees being able to enter and own their own data. Now that's very unique in the industry that you saw back then, and now it's really come to fruition.
|
| RICHISON: 08:26 | Yeah. As part of our IPO slide deck, we kind of had showed that historically, your major users of a system from a data point change was all on the user-buyer level. And so that was really your payroll department, your HR department, your recruiting department, your compensation and planning department, and what have you. One thing that we showed in that was how in the future, more usage would be moving to the employees. And in fact, we predicted that if you look further into the future, you're going to see that the employees actually are making the greatest amount of changes on any of the database, so. And that's really where we're at today as we've made that shift. And why is it better to have employees do that? Really, we watch consumer patterns and how employees use consumer-based technology. Before work and after work, we're consumers. While we're at work, we're employees, but before and after, we're consumers, and as a consumer in our daily life, we interact with a bank through technology. We're probably not necessarily walking up to the teller line. We buy our tickets-- our plane tickets, we buy them online. It's rare that we would walk to the counter.
|
| RICHISON: 09:48 | As we've gone through the pandemic, you started seeing people shift to apps to buy their coffee even, and you've had organizations that even require you to use that type of connectivity. And so really, the whole world's somewhat conspired to help businesses with their employees be able to provide this type of technology because they're already using it. For the first time during my life, during the pandemic, I bought a shirt online. And actually, I bought six of the same shirts because that's what I do. But I don't know that I'll walk back into a lot of different stores for this same type of purchase. It's somewhat changed even my buying habits. And so I think as we look into the future, you're going to see more and more of employee-driven usage. And it's not just them making the change; they get to confirm it. If somebody else makes the change, it's very difficult for me to confirm what change was made. And all that's to say this: HR, payroll departments, compensation planning, recruiting, learning management groups within a company, none of them are reading employees' minds. This data has to be transferred. And one single easy-to-use app is easier for an employee to use than actually multiple systems or sending emails for some things and phone calls for others. And so by having a consistent usage strategy, it makes it very easy for employees to use products.
|
| MASTERS: 11:18 | You've been at the forefront of a number of innovations in the industry, copywriting, Employee Self-Service, launching the direct data exchange, Ask Here, and, more recently, Beti. How has your vision continued to evolve through these major developments?
|
| RICHISON: 11:31 | Yeah. Well, you start with a problem to solve. And the problem that we're trying to solve is to make it easier for both businesses as well as their employees to do very important tasks. When you're talking about enrolling someone in benefits or a payroll or expense reports or even giving somebody a pay increases and walking them through that, these are all very critical and very important tasks that people have to get right. The problem that we tried to solve is easy access to the information to make it correct because in our industry, the data hasn't really been that correct. You do have a lot of data integrity issues, and where it comes from is people using multiple systems. And they use one system over here for benefits, and what's important in there are my benefits. And then you use a system over here for learning, and what's important in that system is my learning. Then you have a system over here for payroll. What's important there's my payroll. But the data that exists in all systems could be inconsistent because you may have an address over here that's different from the address here. And because employees aren't interacting with it themselves, they don't feel that responsibility to make those changes and to update the information. And so what we've done at Paycom's really drive that by making it easy for employees to interact with the database themselves.
|
| BODIN: 12:59 | So you talked a little bit about Beti, which is the latest innovation from Paycom, and employees doing their own payroll. Walk us through what went into your decision-making to launch this industry-first product.
|
| RICHISON: 13:10 | Again, we looked at the problem. What are the problems? And in payroll, oftentimes you have after-the-fact issues with payroll. Right. An employee might say, "Hey. You've got this wrong on my check," or, "This expense wasn't included," or, "I didn't receive holiday pay," or, "You didn't approve this vacation, and this time wasn't on my check," and, "I don't agree with that commission. I don't agree with that bonus. I thought that my pay increase was going to be on this check. I forgot that my dental insurance only comes out one pay period a month and that we already had one." Take it however you want it, but when you give the employee access to the information and you engage them a how a check's processed and what happens, they take ownership. And what happens from there is you end up having perfect payrolls, and you eliminate all of the after-the-fact manual checks, voided checks, and adjustments that come into play when employees don't have access to their payroll information.
|
| RICHISON: 14:15 | And why are they kept from it? They clock in and out or they fill out timesheets. They request time off online. They request vacation time. They might be doing their expenses. They've chosen their benefits selection, whether that's health insurance or 401(k) plan or what have you that they've got going. And so they've made all these selections, and for some reason, they're blindfolded as to how those selections impact their check until after the check's already been in their account. And then they're still even, at that point, somewhat blindfolded because they weren't involved in the calculation of it. A lot of people don't really even understand how a check's even calculated to begin with. So to me, it's a very simple fix when we take the blindfold off and we allow employees to interact with their check throughout the pay period and even approve their check throughout the pay period so that they have perfect payrolls, which is what every HR and payroll department wants. They want a perfect payroll.
|
| MASTERS: 15:16 | Chad, earlier, you talked about the benefit of HR tech for both the employee and the employer. And just to further that thought, In a July 2021 updated report, Ernst & Young found the average cost per manual data entry made by an HR professional increased from $4.51 to $4.70, and we've since updated the cost calculated within direct data exchange to match that report. So could you elaborate here for us? What does that $4.70 mean from an employee usage of technology perspective?
|
| RICHISON: 15:52 | Yeah. So $4.70, which has actually been updated, as you said, which is the second time it's been updated, actually calculates the cost of duplicative data input. All right. And the concept there is that only the employee knows what days off they want for vacation. Only the employee knows what expenses they had. Only the employees knows exactly what hours they worked to be able to verify. So you have all these data points that really only the employee knows and the traditional model that employee tells somebody or fills something out, and someone else may do input. Maybe the employee does a little bit of input in one system, but then there's coming in from other systems that other people have input for that employee. And so that employee doesn't necessarily have an easy way to access, confirm, and work through everything.
|
| RICHISON: 16:48 | And so what happens, and in answer to your $4.70, is that what Ernst & Young has determined, which we agree with, is that anytime payroll or HR makes a data input change for an employee, there's a cost associated with that because the employee would have made that themselves. Right. And if the employee made it themselves, that means the employee understood and confirmed the selection, which reduces the liability and exposure for any one business. Well, if an employee doesn't make it themselves, then they're not confirming it either. Right. I mean, if you're making my selection for me, the likelihood that I'm confirming the selection that I asked you to make is very low. So that increases the liability, it increases a business's exposure, and it also increases a business's exact raw cost associated with making that change in the system. Right. And so when you calculate all that together, the actual time that's spent doing it, the fact that the employee now is not doing that themselves - it's not being confirmed - and you also include the additional liability exposure created for a business that had to go back and fix it later, whatever it may be-- an employee didn't get enrolled in a benefit, you left two hours off their timesheet, you left two expenses off their expense-- whatever it is, there's a cost associated with fixing that, and that cost is $4.70.
|
| BODIN: 18:17 | We're in the midst of the great resignation. How big of a role do you think technology plays in hiring and retaining top talent?
|
| RICHISON: 18:26 | I definitely think technology-- I mean, it plays a role in all that. I think technology plays a role in retaining. Technology also allows you to do more with less. A lot of the things that may have been done in the back office, not only were they-- maybe was it a less efficient way to do something, it also required more people to do it. And so by implementing good technology, you're also helping out the back office and then engaging with those employees. All employees work, and they do their job, but you got to give them the right tools. You have to give employees the right tool. And so the right tool for me changing my address or enrolling in benefits or requesting time off, that's just as important as the right tool that you're giving me to do my job in accounting or the right tool that you're giving me to groom the animals that I may be grooming or the right tool that you've giving me to unload that boxcar full of lumber. It's just as important that I get the right tool when I'm working with my data as that I get the right tools that I actually need to do my job. And so that's what we've done.
|
| RICHISON: 19:38 | You can imagine different situations where you've asked an employee to do a difficult job and you did not give them the right tools to do that. It becomes impossible for them to do that. And if I ask you to make all of your data transfer changes manually in six different systems, I've equally set you up to lose. It's the same thing in payroll and HR. Give the employee the right tool, and they will do it correctly, and you'll have less issues. You have to have the right tools for the right job. And if you don't, you produce employee frustration. And so having the appropriate tools can reduce turnover, and it can definitely automate to an extent someone's actually is having a significant reduction in force, and they need to replace that work. Automation is a great way to replace manual data input and make a business a lot more efficient.
|
| MASTERS: 20:38 | All right. Well, Chad, as we begin to wind down the conversation, I think you just hit on Beti. And you alluded to this earlier at the top of the conversation, but I want to, as closing remarks, just hear your thought here. Where do you see the future of HR technology?
|
| RICHISON: 20:50 | I would say this: I would say the future of HR is really determined by our clients as far as what that may look like. For us, it's about automation and making it easier and easier for people to interact with one another. We want our clients to be able to interact with employees in meaningful ways. And that's not changing your address from Waverly Street with two V's to one. That's not a meaningful way to interact with employees. And so it's our goal to reduce and/or eliminate those mundane task that are just about data transfers that oftentimes become major issues with any payroll and HR department if it's not done correctly. And the larger the business, the more data point changes that they have that really just needs to be accurate. There's a saying at our business here at Paycom that if we get payroll 99.999% accurate, we get an F because, again, an employee didn't get paid correctly, they may have NSFs through their bank account, they may not be able to feed their children through the weekend, depending on what their pay should have been versus what they get. And then on a business side, you have additional liability with tax deposits that could be wrong as well as just an overall employee morale issue when you're not paying people correctly. And so you get an F when payroll's not perfect. It's either perfect or it's wrong. And so that's really our focus.
|
| RICHISON: 22:20 | And then also, we have a saying where payroll's a task that's high risk, low reward. If I get your payroll in your account next Friday at the appropriate time, you expected it. I mean, it's not like you're going to call and thank me for it. "Hey, thank you for getting my payroll correct today." You did the work. Your pay period probably already ended a week ago. So you've done the work. You expect it. So payroll's high risk, low reward. If you do it right, so what? It's expected to be right. If you do it wrong, all the things that come into play of what I've been talking about already. And so through Beti, what we've launched, the Beti, it's really impossible for the payroll. I don't know how the payroll could be wrong if somebody is using Beti. At least you have the employee and the payroll department on the same page, and they both know and have agreed with what the check should be long before it was actually put in the employee's account and before that employee is negatively impacted or before the business is negatively impacted. We need to go ahead and punch this all the way into the end zone now because that's where we're at.
|
| RICHISON: 23:27 | Partial usage is not great usage. You're making me maintain multiple systems and multiple strategies for an employee base. A better strategy is having an employee use one system and refusing to make any data point changes for that employee. Said another way, it's oftentimes, even at Paycom, the number of service calls we're receiving continues to go down year over year. So we have more clients, but the number of people that call us for service actually continues to go down. And why is that? It's because it's an easier-to-use product. I use an Apple iPhone. I've never, not once, called them and asked them how to use it, right, because if it's good technology, it works well, and it's very easy, and it explains itself. And so that's what we've developed within Paycom. Good technology makes it easy for everybody that uses it, and that's what we're driving at at the employee level.
|
| MASTERS: 24:22 | All right. Well, Chad Richison, thank you so much for joining HR Break Room today.
|
| RICHISON: 24:26 | All right. Thank you. [music]
|
| MASTERS: 24:33 | Thank you for tuning into today's episode of HR Break Room with Chad Richison discussing the future of HR. We talked with Chad about the legacy of Paycom and how its vision has continued to evolve and how the everyday use of apps positively impacts businesses. We also discussed how employee-driven technology strengthens an organization before closing up the conversation by looking at why a continued employee focus represents the future of work. So Jason, I'd love to hear your perspective here. How was that for 100th trip?
|
| BODIN: 25:05 | Well, I talked earlier about some of the amazing episodes that you've hosted, and I believe this one has to rank number one. It's been awesome to hear from Paycom's founder and CEO Chad Richison.
|
| MASTERS: 25:15 | Awesome, Jason. Well, I'm so glad you could join us today.
|
| BODIN: 25:18 | My pleasure. Thanks for having me for the 100th episode.
|
| MASTERS: 25:22 | Listeners, if you found today's conversation with Chad helpful and you'd like to learn more about how to embrace the future of HR through employees doing their own payroll, you can head on over to paycom.com/beti. And, of course, that is linked as a resource in the show notes. Since launching in 2017, we've had the great pleasure of hosting conversations with a number of folks: Barbara Corcoran, Hill Harper, Adam Grant, Sharlyn Lauby, Amy Edmondson, Minka Fitzpatrick, Steve Boese, and the list really just goes on and on. It's been a real pleasure to host these conversations for you here in HR Break Room. We've covered everything from compliance trends to overcoming workplace drama to embracing modern innovations to be a more strategic HR business partner. And with 100 episodes of HR Break Room now in the books, I can't wait to share what we have in store for you next. So to join the conversation surrounding HR Break Room and to keep up with future episodes of the show, make sure to head on over to hrbreakroom.com where you can find links to our greatest hits from our first 100 episodes as well as a special HR Break Room 100 blog series. You can also keep up with every future and past episode of HR Break Room by following or subscribing on Spotify, Apple Podcasts, or searching wherever your podcasts are found. You can find us on Facebook at facebook.com/paycom, on Twitter @Paycom, or on Instagram @Paycomsoftware. Thank you for tuning into today's episode. We can't wait to join you again for another 100 episodes when we return to the HR Break Room. [music]
|
Guest:
Chad Richison, Paycom founder and CEO
In 1998, the World Wide Web wasn’t yet a household necessity, but something that tied up phone lines. However, that didn’t stop Chad Richison from bringing his idea of businesses seamlessly processing payroll entirely online to life with Paycom. From the days of dial-up internet to the smartphone boom and beyond, Richison has led Paycom through every major electronic advancement of the 21st century. Throughout the evolution, Richison has maintained a belief that HR tech is at its most effective when employees use the technology to enter and own their own data just as they do as everyday consumers. With the company’s recent launch of Beti®, a revolutionary, employee-driven payroll experience, Paycom continues to reflect his vision and prove how HR technology can transform an organization for the better.
Richison’s focus on an employee-centric HR experience has made Paycom an industry-leading technology. His position makes him intimately familiar with the trends of technology and its impact on the workforce. To celebrate the HR Break Room® podcast’s 100th episode, Richison shares his insight on how consumer trends may influence the HR industry from here.
In this episode of HR Break Room, Richison and host Caleb Masters discuss:
- the legacy of Paycom and how its vision has evolved
- how the everyday use of apps positively impacts businesses
- how employee-driven technology strengthens an organization
- why a continued employee focus represents the future of work
About HR Break Room
HR Break Room is a podcast from your friends working in human resources. We're dedicated to bringing you interesting break room conversations with experts on the latest buzz surrounding HR and HR tech, one cup of coffee at a time. HR Break Room brings together industry experts to discuss brewing trends and robust solutions to today’s workplace challenges.
