Episode 128: How HR Technology is Helping to Shape the Future of Work (an interview with Ronni Zehavi)
There is no denying that over the past few years the way that we work has completely shifted. From employee priorities to the way that we operate – the word of work is constantly evolving and HR technology is at the forefront of this change. On today’s episode of the Digital HR Leaders Podcast, David is joined by Ronni Zehavi, Co-Founder and CEO of people management software, HiBob.
As Ronni highlights in the interview, HR software is no longer a system of records. It has evolved to be an integrated part of the HR function that helps HR professionals focus on strategic initiatives, manage employee engagement and experience, and drive overall business success. But what can we expect for the future of work and HR tech?
Expect to learn more about topics such as:
How HR technology has evolved to meet the ever-changing priorities of the workforce
How to prepare for the future of talent
The increasing importance of people analytics
The role in HR technology in scaling the HR function
Top tips on choosing the best HR system for your business
Predictions for the future of HR technology
Enjoy!
Support from this podcast comes from HiBob. You can learn more by visiting: www.hibob.com/dhl
David Green: Today, we're diving into the future of work and what it means for the rapidly evolving world of HR technology. From the way we communicate to the way we onboard our employees, HR technology is constantly evolving to meet the needs of a changing workforce; and as more companies adopt remote and hybrid working policies and AI continues to impact day-to-day decision-making, it is more important than ever for us as people leaders and HR professionals to stay on top of these trends.
In this episode, I am joined by Ronni Zehavi, CEO of HiBob, one of the fastest-growing HR platforms and a company that has been referred to by none other than Josh Bersin as "The Instagram of HR".
Ronni Zehavi: If I need to choose one word, only one word, that explains the future of work, and why it is so important for C-level to realise and to understand the meaning of this word, I would say it's all about "flexibility". Flexibility is resilience; flexibility means that you can adapt your organisation to the changes around you.
David Green: We'll discuss the role the pandemic has had on HR technology, how HR can stay ahead of the game and prepare for the future of work now, and also, Ronni's very, very interesting predictions for the future of HR technology.
So, sit back, relax and join us for a thought-provoking conversation about the future of work and HR technology.
Ronni, welcome to the show.
Before we jump into the conversation, please could you give listeners a brief introduction to you and to HiBob, please?
Ronni Zehavi: Hi, David; thank you for inviting me to this podcast; I'm delighted to be here. I'm running HiBob for the past seven years. Actually, we're celebrating our seventh anniversary. HiBob is the name of the company, and Bob is the name of the platform. HiBob is my third business, and I used to live in Silicon Valley with my previous business, and we are extremely happy about the journey of HiBob.
David Green: And it's been quite a journey, hasn't it? I'm always fascinated, and I know many of our listeners are, to understand the story behind a successful HR technology firm. Obviously, you said you're just about to celebrate your seventh anniversary. Can you share with listeners more about the story behind HiBob, why did you create the company, and what's been your story to date?
Ronni Zehavi: When we founded the business, like many naïve entrepreneurs, I thought that building an HRIS is an easy and simple task to do, and I was so wrong about this assumption. It's one of the most complex platforms to build. I've built before security products, I've built before a content delivery network, and I thought this is an easy one. It is a very complex one; the bar is very high. If you asked me today, would you go and relaunch a platform and build it seven years ago and understand the complexity? I would definitely tell you, "You should think twice" because the bar is very high.
On the other hand, I'm extremely excited and thrilled about the journey. We were lucky in terms of the market and the timing that we came to power as a player. This market is one of the most fascinating markets to be in these days. If you ask yourself why, I think everything goes back to 10, 15 years ago. We thought that the generation transformation, the fact that a new type of people will dominate the world of work, call it the Y Generation, the Gen Z, we thought that would be the trigger for a revolution or evolution; it depends how you see it in this space.
When we built the business, and we designed what should be our vision, and we collectively gave thoughts about how this platform should look like in the future what value we will bring to our customers, we thought that would be the major driver. So we thought, from day one, to build a global platform. Why global?
Because if you build a start-up in Israel, Israel is a very small country and you have to think global from day one.
But usually, Israeli companies go to the US first, and then they expand to the rest of the world. We did the opposite way. We started in Europe, and only two, two-and-a-half years ago, we expanded to North America.
What happened, about two-and-a-half years ago, around the pandemic, I think 1.1 billion people all over the planet were forced to work remotely and not to have physical interaction within two or three weeks. I think this is a mega event in humanity in general that drove us as individuals, as managers, as businesses, organisations to change the way we think about people and the way we operate our business. So the combination of, I would say, the generation transformation and how the pandemic accelerated the process brought us to a very unique situation.
It was the beginning of summer 2020 that we realised that we have a fantastic platform that can serve our customers all around the world and that fit exactly to the need of what we thought the modern world would look like. So, on a daily basis, our platform, Bob, is basically the right solution for our customers. The combination of both basically helped me come to a conclusion that we were the right company with the right platform at the right time when everything was accelerating. And I think we were also very creative in going back to Europe first and then to the US.
Most of the players would tend to go to the US at the beginning. They are forced to make decisions that can impact their business; for example, payroll is a big agenda in North America. The variable position around the way people work in the US is different than in Europe, and many US players who started domestically and then have the vision to expand globally, they found it is a very challenging one, and you can see; ADP is still a local player and Ceridian and UKG. I think the only company who managed to expand locally was Workday in scale.
So, from our perspective, in sorting out the rest of the world, everything related to people management around the globe. And then, when we completely met product market fit, then we moved to the US, and I think this combination is unique. But from our perspective, it was a successful one.
David Green: And today, I see you've got a presence now, outside Tel Aviv, in London, in Sydney, in Amsterdam, in Berlin, in Lisbon and obviously in New York as well, so you've certainly expanded a lot over the last seven years.
And how many people are in the company now?
Ronni Zehavi: Round about 700 people in the company, about half our base in Israel, where we have our centre of excellence, our developers, designers, and product managers. And we serve about 3,000 customers. We win a little bit less than 400 new customers every quarter. We believe that we have a fantastic opportunity to invest now and to, build more into the product, expand to new geographies. So, when this cycle will be over, and I think it will take more than 2023, probably into 2024, we'll be in a stronger position to catch the wave and to grow the company even further.
David Green: Well, it's certainly very exciting; it's hugely impressive what you've already achieved, Ronni. You've touched on it already; the pandemic has really acted as an accelerator and maybe evolved what people want from their HR systems. So we've seen, as you said, a huge shift in employee needs and preferences, more flexibility, more purpose in their work lives. Has this changed what users want from their HR system and if so, what are those changes?
Ronni Zehavi: I think I'll divide my question to the HR persona and then to the digital platform they expect to get, as the ones who are responsible for people.
I think the HR persona made a dramatic change. Up until a few years ago, I'm not saying in every company, but in most of the industry, they were taking a back seat, more about compliance and organisation. It was not like a strategic move or a strategic role for the business. I think again, the pandemic accelerated that, in the beginning, to deal with the pandemic, what are the implications really to the pandemic? And then, more seriously, I think we see this is a trend that started before the pandemic, was accelerated during the pandemic, and today is de facto.
I think CEOs, C-level, they all realise, and they all understand that business growth equals people.
If I need to choose one word, only one word, that explains the future of work, and why it is so important for C-level to realise and to understand the meaning of this word, I would say it's all about "flexibility". Flexibility is resilience; flexibility means that you can adapt your organisation to the changes around you. Companies are the people. At the end of the day, if you need to grow, you need to invest in people. Probably 80% of your annual spend is on salaries and people. Topics like retention is mandatory for business; high turnover is a big risk for businesses. If you want to expand in new geographies, everything starts with people.
So, I think there is a full alignment that growth and people, growth and culture, growth and engagement, growth and retention, business growth, I mean, they are all tied together. So, everything related to the way people work is changing. And companies that will not be flexible enough to react to the changes that we see, they will be left behind, they will not be able to retain their people. If you're not able to retain your people or to attract the right talent, you can't grow your business going forward. So, I think the agendas around people are extremely important, way more than before.
By the way, David, I don't think it's hype; I don't think it's something that will end in a year or two from now. I think we are facing, as we speak, a huge change in our industry that we see only the beginning of it, and I think it will take 15-20 years. So, if our listeners are entrepreneurs and they're looking for a very interesting domain to get into and make an impact, I would definitely recommend work tech in general; HR tech as a very interesting market to be in.
I really like a quote by Simon Sinek. He basically said, "Customers will never love a company until their employees love it first". I think it tells a story about the importance of people. And companies that will not understand how to help their people to balance between their life and work; you know, usually you call it work/life balance, our work comes before, and life comes at the end. We see it the other way around. We basically said, "Life goes; first, work comes after, and balance is in between".
So, all those themes are changing as we speak. They were accelerated because of the pandemic, and the real HR leaders, C-level CEOs, when they're putting their people first and they really care about their people, and they should because without people, there is no business; I think this era is fascinating. We were lucky to be at the right time with a fantastic platform and to play this game globally.
David Green: And you touch on something really important there, which I think leads us quite nicely to the next question, that CEOs and C-level need to be people first, and that's something I know you're very big on at HiBob; you're very big on that work/life balancing and practising the flexible working, even before it became a trend in the pandemic. Would you say that this "practise what you preach", if you want to call it that culture at HiBob, has really helped you enhance the platform for clients who are now looking at these more progressive ways of working?
Ronni Zehavi: Yeah, I think I can speak for my company; there is a direct correlation between a fantastic culture and a "put people first" mindset from the top management all the way down. And it's not only the CEO and the CHRO; I believe it's every manager in the business, the line managers -- by the way, they are more important than the C-level.
The team leaders, the line managers, and the directors, they have much more influence on productivity; they have much more influence on setting the right culture.
So, if you invest in them and you give them digital tools to be better managers, and you automate workflows for them, so they have more available time to deal with their people, I think this is the right recipe for high productivity. So, in my company, in HiBob, I see a direct correlation between having a fantastic culture, people-first culture, and productivity.
Also, I see a great correlation between high performance and flexibility. And when you think about the culture, maybe something that we tend to use quite often in our business, everything starts with trust. You have to have trust, of course, it's obvious, but I think you need to set the right virtual psychological agreement between the manager and the people.
It is different than before because the way you gain trust by, I think one way is by being very transparent with the organisation. Companies with a high level of transparency, they view a very low rate of politics; you don't need to guess what's happening; you know everything, or you know almost everything. And I'm using in my company the same presentation that I'm presenting to the Board of Directors; I use the same slides when I'm presenting to my team, so they know exactly what's working what's not working. So, transparency and trust come together.
Then, the obvious one team building and team players; these are all, I would say, the foundation of a very strong culture. You need to walk the talk internally. We call it, "You need to drink your own Merlot". You cannot pitch for something, and in reality, you're basically behind it. Let me give you a few examples of things that we do in HiBob that I believe are so great in nurturing our culture. It's 700 people; it's no longer a start-up for 150.
One, we call it Bob Balance Day. So, at the end of every quarter, we take a long weekend, from Friday to Sunday. In Israel, we work on Sundays, and Friday is off; the rest of the world is different, and we shut down the business for the weekend. No emails are allowed, no messages, and no phone calls. You are allowed to log out from the platform and charge your batteries.
We have been doing it for three quarters. I saw that employees were planning to go on vacation together. I think this is a very good example of how you walk the talk, and it goes back to what I said before, "Customers will never love a company until the employees love it first".
So, you really have to invest in making sure that your employees love what you are doing. They will appreciate what you do, and if you are 100% transparent and there is a strong level of trust, then it works.
And I think we're a very good example of a business that adopted those themes and are collecting the fruits.
David Green: Our younger generations do want something different. I've seen you say that we're the last generation to work five days a week; that would be good, wouldn't it? What do you think HR leaders should be doing to engage and retain this future talent, this next generation of workers?
Ronni Zehavi: I think, first of all, they should set the right expectation and the right alignment with the C-level, you know, CHRO, CEO and the rest of the management team, on the role of HR, and agreeing as a business, "What does it mean for us to put people first?" agenda; so beyond the statement, "What does it mean for us to have a fantastic culture?" David, if you go and you listen to, or you read the books of very successful entrepreneurs, when they describe their journey, when they describe why they were successful, they always go back to the culture, and they say, "We had something special. Our culture was really unique".
So, what is this unique culture that you want to build, and how you nurture the culture down the road; to agree, there is a direct correlation between a very healthy and strong culture in DNA to productivity and company success. So, the role of HR is to set these expectations, make sure that the management team is aligned, and then how to propagate this agenda to the rest of the team, especially to the managers.
Secondly, is, do you really have the right digital tools to do it for you? If you decide that payroll is the only system, you will need to manage your people, so there is a gap between your strategy to put your people first and reality. It's like, walking to a CHRO that says, "I care a lot about revenues and forecasting, but at the end I'm doing it manually or with Excel spreadsheets"; you will go, and you buy the best CRM to manage your customers, or whatever.
The same goes to HR tech.
So, do you have the right digital tools; is it a mix of point solutions, what we call internally "the HR Spaghetti", or is it a consolidated suite with all the models are integrated one to each other? You should ask yourself, "Is your employee experience fantastic? Is it just a system of records to check boxes, clock in and clock out, or is it a system of engagement? Do you really bring the added value for people who will not have the chance to do a physical onboarding because they work remotely or because they work a part-time job?" So, how do you deal with these issues.
Another important topic is around diversity, inclusion, and D&I. Do you believe in diversity, and if so, do you have the tools, the data to help you plan your hiring for next year with some objectives around diversity?
And by the way, there is correlation direct correlation between diversity and productivity. So, to be a successful HR manager, you need to set the tone, together with a CEO, on what HR and people management means, but also get a fantastic platform to do it.
I think Bob is a great platform that basically enables managers in the business, including finance and HR and C-level, to put their people first. I'm more than confident that when I talk about the 10-, 15-year or even 20-year cycle, where we're heading to, I think companies with a very strong culture, companies that will put their people first, companies that will care about flexibility, will care about diversity, they will be the ones that will shine and will continue to be successful, no doubt about that.
David Green: Have you got a good example of how the Bob platform has really helped an organisation deliver on this people-centric and people-first approach?
Ronni Zehavi: Yeah, I'll give two examples, one with a client, a big one in the Nordics; I will not mention the name, but they are a transportation company.
You would argue, you would think that this company is blue collar and they care about their workers, not even employees; clock in, clock out. But the leaders realised they wanted to modernise their organisation. And they realised if they used the same ATM platform they used before that was designed 20 years ago, with no user experience kind of system of record, there is misalignment between what they pitch and try to change and the reality.
So, they decided to take Bob as their people management platform, and put behind a legacy, old-school ATM, one of the big ones, because they understood that the only way for them to deliver the message around culture, what we discussed before, is by choosing the right people management tool that they use on a daily basis, that integrates into their Teams or Slack and dozens of other models and systems.
So, this is an example of how, I would say, traditional industries that wanted to modernise and engage with their people choose a different platform; in this case, it was us to make the change.
I've seen other companies, many of them -- by the way, Europe, I would say, is leading with this mindset more than other geographies. When I say Europe, I mean the United Kingdom and I mean the Netherlands and of course, the Nordic companies and Germany. They realise that part of pitching a system of engagement is being able to have a great interaction between their people. Because if you ask yourself, "What is culture all about?" culture is a summary of relationships between people. Are you really able to improve the relationship between people?
Or, what we are hearing, with no exceptions, one of the big leaders in our industry, a big company, you ask the employees who are using the platform, they would say, "It's a nightmare, it's an annoying experience, we don't want to use it. It may be good for HR or finance, but us as individuals, we hate using it". Or, the opposite, this is the Bob case, that it's intuitive, it's in the flow of work, it's beautiful to the eyes. You use it, and you feel like you're on Instagram, and this is how you basically stand behind your vision as an organisation to put your people first, so they can engage with a platform.
By the way, maybe that leads to your next question. If people are engaging with a platform, and it's not only clock in and clock out, they are creating data, and the data can help platforms like us provide the ultimate information companies need to better manage their people.
As a CEO running a very successful and growing HR and technology business, which is collecting some of those data points, how does HR technology help to scale analytics?
Ronni Zehavi: Let me give you something that we've built, we use it internally in Bob, and we share it with our customers. So, turnover or attrition is a big risk for businesses, right? You don't want people to voluntarily leave your business. So, what we did with our machine learning capabilities that we have built into Bob, we basically analysed all the employees who decided to leave the business voluntarily, all of them. Then we say, "Did we see any recurring patterns in their behaviour before they decided to leave?" without even asking them questions, "Why did you leave?"
If you have data coming from different models, then you have a much better and more accurate visibility to this conclusion. The number one contributor for attrition was how many direct managers you have replaced in the past 12 months. If it was more than 4, you would leave the business. You can capture the level of engagement with company surveys, "Are you really participating in surveys?" I don't care if you are answering yes or no; I care about the participation, "Are you involved in the business?" Obviously, absenteeism patterns, "Are you taking days off or not; commute to work?"
So, there are so many indicators within the platform that if you measure them and you build kind of an algorithm around it, you can basically go back to the organisation to say, "You know, this is a flight risk indicator. We think that Ronni is at risk. Why? Because he is no longer participating in surveys because his direct manager was replaced rapidly in the past six months or so". So, all of a sudden, you create a map of people within the team or in the organisation to say, "Those guys are at risk. You should go ahead and try to do something with them".
It's not science, of course, but it gives you the right indicators, especially when the people are working remotely and you don't see them. This is only one example out of a few that shows why data is so important when it comes to managing people and respecting them. Another area is around wellbeing and employee wellbeing. It's a big agenda. In my opinion, this is going to be one of the most important agendas in the coming years, so what organisations and leaders in the company are doing actively to improve employee wellbeing.
In general, if you're happy with your organisation, you don't want to leave. It's like the same attitudes that our parents had before.
If you're happy and happiness means that you feel that you are making an impact, you feel that you are recognised and empowered, you think that you are developing your skills, you think that you are surrounded by great people that you can learn from, you think that you are working in a non-toxic environment, you feel that the culture is really a positive one and you get compensated well, it's not the first criteria, it's the last one, why should you consider to move to a new job if you have embedded in your organisation? This is the ultimate scenario because you don't want people to leave voluntarily because they are not happy.
This is all about engagement, David. System of engagement is the future, and this is the base for the system of intelligence, the data. It comes together, and that's the future of work.
David Green: For those HR professionals that are listening, and it is mainly HR professionals that listen to this podcast, Ronni, what guidance would you give for those looking at new HR technology, so they can assess what HR system or systems are best, or platforms are best for their business?
Ronni Zehavi: So, think about the evolution that we have as consumers. The reason why the B2C is so successful because somebody was brilliant to build a fantastic experience for me as a user. I can swipe to the right and swipe to the left on my Instagram or my Tinder, or just choose any consumer application.
So, nobody needs right now somebody to help you navigate in the platform. If it's not intuitive, you will not use it. I think the same thing goes for HR managers. You don't need system integrators to hold your hand when you do the onboarding; you don't need the heavy lifting of a platform that was designed 20 years ago, probably before your employees were born if it's not modern enough. You really have to look for a modern business that was built and designed for the future of work, what your employees and your manager expect to have as very educated consumers. Again, if it's not beautiful to the eyes, if it's not intuitive, if it's not in the flow of work, if it's not simple, you will not use it, and your employees will not use it.
So, look for the modern ones, look for the ones that have endless integrations to many other systems around them, seamless integration. In Bob, you can do integration in clicks to any system.
This exactly creates the experience.
I would not compromise on experience.
HR managers, you are living in an era that people are key for business success and because of that, you deserve the best digital tools, the best technology, intuitive ones, that you can really use without being graduated in computer science.
It's already proven in our B2C life, and we live in B2B2C, business to business and consumers, employees in this example, and you should deserve this. You should not compromise on quality; you should not compromise on experience. And whether your employees really like it; do they feel that by using your platform, it helps them and you to nurture your culture and drive up your DNA?
David Green: What do you think is next for HR technology, and looking to your crystal ball here, Ronni, what do you predict the future of HR technology will be?
Ronni Zehavi: So, first of all, we see more and more venture capital money invested into this space, and I'm really ignoring the market slowdown these days because of the microeconomy. I think the world of work is shifting, and when shifts happen, there's room for innovation, and we'll see more businesses trying to innovate and come up with some brilliant ideas. I think the future between point solution and suite, I think suite will win the game.
When I'm talking about our vision as a business, HiBob vision is to make an impact on the way people work in the modern world. And I think if you're an HR leader and you're listening to this podcast, unlike other industries, we saw a lot of evolution in marketing tech; we saw a lot of evolution in security. I think a new era is happening as we speak, more players more innovative approach.
It's not the old-school legacy platforms that we're all familiar with that were designed 20 years ago, and there's room for innovation and hopefully, HiBob is driving the innovation for our customers and future clients.
David Green: What tips can you share with leaders on how to foster collaboration in a hybrid team?
Ronni Zehavi: Trust, number two is transparency, and number three is teamwork.
I think this is the compass for every leader these days, especially when remote is a fact. There is no turning back. Companies will continue to work in hybrid. You will have to take into account that your employees if you really care about the wellbeing, there will be periods in their lifecycle that they will have to slow down because they have issues at home: their elderly parents, their relationship with their friends.
For Bob, I talked about the triple-D. I think for Bob is the triple-F. Functionality is number one, flexibility is number two, and number three is fun. It should be a fun platform to engage with.
David Green: What a great way to end our conversation, Ronni; I really enjoyed listening to you and talking to you today, and thanks for being a guest on the Digital HR Leaders podcast. Can you let listeners know how they can get in contact with you, follow you on social media, and find out more about HiBob?
Ronni Zehavi: Sure. So, I'm very active on LinkedIn, so you can reach out to me on LinkedIn, Ronni Zehavi, or you can go online to www.hibob.com, or reach out to any of our customer success or advocacy customers. It's very easy to find us, and I'm sure that somebody will reply. And by the way, if you don't get a reply within a few days, reach out to me, and I'll make sure somebody will come back to you.
David Green: Ronni, thanks very much for being on the show, I really enjoyed our conversation.
Ronni Zehavi: David, you're wonderful, thank you.