hrMatt Straz is the founder and CEO at Namely, the leading HR platform for mid-sized companies. Since founding Namely, Matt has grown the company to over 700 clients, 120,000 users, and has raised $158M from leading investors. Prior to Namely, Matt was co-founder of Pictela, an ad tech company he sold to AOL in 2010, and a long-time media and advertising executive. He’s a regular contributor to Entrepreneur and writes frequently for several other publications about human resources, startups, and technology.
MK: On average, mid-sized companies use nine different HR software applications, yet for many HR departments, “lack of integration” is their #1 technology-related pain point. How can HR professionals – especially those in medium sized companies – avoid problems with HR tech integration as they grow their tech stacks?
MS: We do see this often with mid-sized companies. As they grow, they have an increasing number of platform needs and end up with countless point solutions that don’t integrate well.
There are a few ways to build a better tech stack. First, think about your long-term needs. If you don’t have a formal performance review process in place today, will you want one in the future? Then, consider an all-in-one platform as your foundation. HR, payroll, and benefits—really, the core parts of your job—shouldn’t be compartmentalized. That’s why we built Namely as an all-in-one platform. Once you have that in place, you can add in ancillary systems, like an ATS or rewards vendor, that integrate seamlessly.
Lastly, I think there’s a lot of value in finding a technology partner that is open to your feedback and willing to grow with you. As your needs evolve, ideally your tech stack will evolve with you.
MK: The middle market is by far the largest segment of employers. As this segment continues to innovate all functions of HR, how are they most impacting the future direction of HR technology?
MS:That’s exactly right, and largely why we love working with mid-sized companies. Some of HR’s most inspiring and innovative leaders, many of whom are redefining the profession, are in the middle market. And despite all of this, they’re historically underserved when it comes to technology. So much focus has been put on helping lean startups and huge enterprises that a core part of the employer community has been overlooked.
The need to be “data-driven” has become a bit of a business cliché. But at fast-growing mid-sized companies, it really is true. Arguably few teams feel the pressure quite like HR, since they’re tasked with both increasing headcount and keeping turnover low. All that pressure has led to a greater focus on improving efficiencies and visibility into data and trends. We wouldn’t have launched Namely Analytics earlier this year if the demand wasn’t there, for example.
MK: Meaningful data and metrics are key for HR to be able to contribute to organizational business strategy. From a CEO’s perspective, what advice can you share with HR professionals when it comes to HR data and analytics. Which metrics are important to you as a CEO and which metrics matter most to organizational business strategy?
MS: People tend to think of data as detached, but for me it’s a meaningful way to check on the company and understand how people are doing. From within Namely, I regularly look at metrics like turnover, attrition, and job or salary changes. As a CEO, there are few things more rewarding than seeing people sign onto your vision, succeed in their roles, and grow as individuals. Believe it or not, data does a great job at telling that story and highlighting improvements.
I also think running a regular cadence of employee NPS and pulse surveys is key. Set yours up so you can segment it by department, manager, and other key demographics. I look at these results as a kind of company scorecard, and read every single response. To me, these metrics matter just as much revenue and sales targets.
MK: Feedback-based tools and systems are becoming a major trend in HR platforms as they are integrated with performance management and organizational development initiatives. Why are these real-time employee engagement evaluation tools becoming critical infrastructure for business?
MS: A lot has been said about whether traditional performance reviews are dead. While we still think they’re important, our employees meet with their managers regularly to check-in on projects, the week ahead, or just to discuss how things are going. With ongoing feedback, we’ve found that the conversations are more genuine and issues aren’t allowed to fester. In other words, no one is left surprised after an annual review.
Ongoing feedback isn’t just about managers regularly meeting with direct reports, though. Peer recognition also plays a role. Internally, we leverage Namely’s Appreciation tool, where employees can recognize an individual or team for a great job in real-time. Come performance review season, all those shout-outs are logged and easy to reference, giving managers a full picture of their direct reports’ contributions to the organization.
Companies invest a lot in their people, and when employees are engaged, that goes long way in driving business results.
MK: What are some ways artificial intelligence (AI) and machine learning (ML) will affect future HR best practices?
MS: I think AI has the potential to revolutionize so much of what HR does. Whether it’s using predictive technology to identify flight risks or leveraging chatbots early on in recruiting, there’s so much that can be done. That isn’t to say HR is being replaced by robots any time soon—to the contrary, I think it’ll empower practitioners to focus more on strategy and helping employees grow. These are the really meaningful parts of HR that drove so many into profession in the first place. I fully expect mid-market teams to lead the charge here.
MK: How can HR develop a smart technology investment strategy for the future based on what we know today — and predictions for what’s on the horizon?
MS: The future of HR technology isn’t about juggling nine different applications. If you’re reconsidering your technology stack, think about the long-term and evaluate your options carefully. Don’t be afraid to ask questions. If you’re growing (and you probably are), think about scalability. When you have a chance to consolidate core HR, jump at it. All-in-one is possible and worth the investment.
Matt Straz will speak at the 2017 HR Technology Conference & Exposition on Thursday, October 12, 2017: 4:00 PM – 5:00 PM at the session Integration: The Answer to Mid-Sized Companies’ Data Needs.