Finance Losing Ground to Tech as Employer of Choice for MBAs

Finance Losing Ground to Tech as Employer of Choice for MBAs

For a very long time, investment banks and other financial institutions were the preferred destinations for business school graduates. Those companies offered the highest salaries, the greatest prestige, and the opportunity to live in the world’s most vibrant cities, particularly New York. Today, thanks to numerous factors, the tech industry is displacing finance as the preferred employer for newly-minted MBAs because it can offer similarly high salaries, better office conditions, and the flexibility to either live in a major city or work remotely from anywhere—a growing preference among workers of all types. Even though tech jobs can be demanding, that’s less of a concern for people who have experienced the long-hour, high-pressure work of finance or consulting.

In October of last year, the Wall Street Journal‘s Kelsey Gee reported that Amazon had become the top recruiter at Carnegie Mellon, Duke, and the University of California, Berkeley; and the most prevalent internship destination for students at Michigan, MIT, Dartmouth and Duke. All of those schools’ MBA programs are ranked in the top 20 in the country by US News & World Report, and some are in the top 10. The Seattle-based e-commerce giant has deliberately lured these graduates away from the big banks with an aggressive recruiting strategy, which involves hosting events before school even starts, sending armies of recruiters to campus, and sponsoring case competitions. Gee noted that while tech companies had previously been hesitant to hire business school grads, they are finding an improved culture fit. Given that Amazon and other tech companies need to scale their businesses rapidly, it makes sense to have more people around who know their way around a balance sheet.

This week at the Financial Times, Jonathan Moules spotted this same trend developing internationally as well, noting that banks in Europe are also feeling pressure to compete for MBA talent with Amazon, Google, and Microsoft. JPMorgan Chase ceased its on-campus recruiting program at European business schools entirely in 2013, as it was hiring too few graduates. The bank continues to recruit MBAs in the US but has changed its approach, putting greater emphasis on quality of life, stable holidays, and international rotation opportunities in a counteroffer to some of the tech sector’s main draws. It’s not just big tech companies that are luring these grads away, however: One European student told Moules that most of his classmates wanted to start their own businesses.

In general, the MBA is currently at a bit of a crossroads. Full-time enrollment and applications have gone down for three years in a row while companies are less likely to pay for their employees to complete them than they have been in the past. More specialized business programs have also cut into their prospect pool, with many opting for programs in analytics, operations, or finance to better fit their needs. There will always be a market for managerial talent, but now that the tech sector is becoming a leading buyer in that market, business schools themselves may need to change to cater to students whose career goals lie outside finance or management consulting.

Google Funds IT Training for Thousands, Most of Which They’ll Never Hire

Google Funds IT Training for Thousands, Most of Which They’ll Never Hire

Google has taken its internal IT training curriculum and, in partnership with Coursera, taken it public in the form of a certificate program. The tech giant is also providing full funding to 10,000 students, despite the fact that the majority of them will never become Googlers. Still, this initiative will allow Google to build a pipeline of talent in a critical field—they’ll have an inside track to hiring top performers from the program—while also enabling diversity across the entire sector by upskilling candidates from non-traditional backgrounds. It burnishes the company’s public image as well: The program is available to anyone, the cost is highly subsidized, and Google will have a hand in closing the digital talent gap.

The cost of the program is $49 per month, and scholarships will be funded by Google.org grants and distributed in part through community groups such as Year Up, Goodwill, Student Veterans of America, and Upwardly Global, per Google’s press release. The goal is for students to be ready for entry-level IT support jobs within 8 to 12 months after they complete the training, which consists of 64 hours of video lessons as well as interactive labs and assignments.

Trainees will learn to handle tasks such as troubleshooting and customer service, operating systems, and system administration, automation, and security. Once students complete the program, they will also have the option to share their information with an impressive list of corporate employers such as Bank of America, Walmart, PNC Bank, and more, in addition to Google.

While Google is the trendsetter here, Coursera is working on similar programs with other companies, Quartz’s Michael J. Coren notes:

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US Labor Department Adopts New, Flexible Standard for Regulating Internships

US Labor Department Adopts New, Flexible Standard for Regulating Internships

Earlier this month the US Department of Labor announced that it was revising its test for determining whether interns count as employees entitled to protections under the Fair Labor Standards Act, citing recent federal court rulings that rejected the previous test:

The Department of Labor today clarified that going forward, the Department will conform to these appellate court rulings by using the same “primary beneficiary” test that these courts use to determine whether interns are employees under the FLSA. The Wage and Hour Division will update its enforcement policies to align with recent case law, eliminate unnecessary confusion among the regulated community, and provide the Division’s investigators with increased flexibility to holistically analyze internships on a case-by-case basis.

The department has issued a fact sheet explaining the standard it will enforce going forward, which is more flexible than the previous test and is based on the rubric the courts have used to judge who is the “primary beneficiary” of the internship and the “economic reality” on which it is based:

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Lessons from Last Year: HR Tech Leaps Forward

Lessons from Last Year: HR Tech Leaps Forward

Technology played a huge role in shaping the direction of HR strategy in 2017. As organizations struggle with the rapid pace of change, challenges in implementation, and digital skills gaps, being nimble enough to take advantage of emerging technologies has become more important than ever. If done correctly, effective leverage of tech can lead to significant progress for the HR function as a strategic center rather than an order-taking and operations-focused unit.

Here are some highlights from the year that was in HR tech:

Tech Titans Entered the Fray

In the past year, Google, Amazon, Microsoft, and Facebook have made major plays in the business services space, with implications for HR in recruiting, productivity/collaboration software, and more. Google launched an expanded job search offering in June, which serves job seekers as well as large and small businesses. Most recently, in November, the online search giant added functionality for tablet in addition to desktop and mobile and the ability to independently estimate a salary range for job postings based on publicly available data.

Following its acquisition of LinkedIn in 2016, Microsoft began to make some interesting plays in this space last year. To start, the Seattle-based software company has been hiring AI talent by the thousands and plans to develop connectivity between LinkedIn profile data and Office 365 services such as the Outlook mail client. It will also connect LinkedIn data to its Dynamic sales and recruiting platforms, allowing users to quickly get background information on prospective targets. Dynamic will also have an AI-powered virtual assistant to help users with troubleshooting and completing various tasks. Additionally, Microsoft Word will be able to suggest job postings on LinkedIn to users as they are updating their resume, which stands to streamline the job search process for many candidates. Microsoft is also reshaping the next version of its Hololens headset as a powerful enterprise tool.

Microsoft also launched a Workplace Analytics tool as an add-on to Office 365 enterprise plans. The software captures metadata from email and calendars to help companies understand how employees collaborate and spend their time. It could be particularly helpful for understanding how high-performing teams are different from average ones. Microsoft is also launching an AI tool on the Azure Machine Learning suite called Pendleton, which helps with data collection, preparing, cleaning, and analysis.

Amazon is hoping its voice-activated virtual assistant Alexa, which has proven very popular as a household convenience, can deliver the same value in the workplace. In early December, the online retail powerhouse announced the Alexa for Business offering at its annual AWS re:Invent conference. This comes as a marquee addition to a suite of existing offerings from Amazon Web Services, including Workspaces and WorkDocs. Alexa can be programmed with “skills” or apps for business uses such as turning on lights, connecting to conference lines, and managing schedules. Alexa for Business will also be able to connect with third-party services such as Microsoft Office or the Google G-Suite.

Perhaps the most surprising of the tech titans to make big plays in the enterprise market in the past year was Facebook, though in hindsight, it looks like a natural fit. After launching an employee collaboration platform called Workplace in late 2016, the social media giant partnered with ZipRecruiter to expand its job search capabilities and began testing a wide range of options and features to help connect its massive user base to prospective employers.

These forays by some of the largest and most successful companies in the world confirm that technology will continue to drastically reshape how business is done in the coming years. These titans are investing heavily in the talent and assets to get a piece of the enterprise software pie, in competition with some of the more established companies like Oracle and SAP. We can expect this heightened competition to continue driving innovation in this space in the coming years.

HR by VR

As the cost of virtual reality technology goes down, we’re starting to see it used in a variety of workplace applications. In addition to the Microsoft Hololens, Google Glass has emerged as a potentially valuable business tool, though the two technologies are designed for slightly different uses. Microsoft’s headset offering creates more of a closed environment and is capable of displaying much larger graphics, while all the computing power is contained within the headset. Google Glass looks more like a pair of glasses and is less disruptive to the user’s field of vision. It also needs to be connected to a smartphone or computer of some kind to operate. Facebook-owned Oculus and HTC are also selling VR technology directly to companies.

VR has also been used for training purposes, helping the learning and development function standardize and scale training that mirrors real-life situations more closely than any other available option. Walmart has been an early adopter of VR learning, while KFC has also released a campy, gamified chicken-frying tutorial. We have also seen VR being used to support employees’ mental health and wellness, with offerings for anxiety, ADHD, fear of public speaking, meditation, PTSD, and more.

Employee Monitoring: Big Brother or Benevolent Buddy?

Late in 2016, we started to see the emergence of employee monitoring tech in the form of badges that can track an employee’s whereabouts and even analyze their mood based on their tone of voice. Through this tool, companies have been able to make improvements in productivity, such as finding out that socializing improved performance and that adding lunch tables helped employees socialize more.

In 2017, this trend continued, with some employers even experimenting with implanting microchips in employees. The microchip functions like a badge, able to open doors or unlock printers “with the wave of the hand.” While this particular initiative, first undertaken by a Swedish startup, has little to do with monitoring of health or productivity, it’s easy to see how it could. However, corporate fitness tracking programs using bracelets like the Fitbit seem like a more practical option for companies interested in monitoring employee health.

Another application of monitoring technology has been to help companies use space more efficiently. Barclays was among the companies to experiment with the OccupEye devices, which are attached to desks to determine how much time employees spend there. Part of the bank’s success in rolling out this initiative was a clear communication strategy. “The sensors aren’t monitoring people or their productivity; they are assessing office space usage,” the bank said in an emailed statement. “This sort of analysis helps us to reduce costs, for example, managing energy consumption, or identifying opportunities to further adopt flexible work environments.”

Automating the Process

One of the primary obstacles to widespread adoption of HR technology has been leaders’ hesitation to dive headfirst into the newest technologies, due in part to concerns over which parts of the HR function are suited for a technological transformation. While there are theories for automating everything from performance management to keeping employees from overworking, the most practical applications of automation technology in HR are in more administrative or repetitive tasks. A survey from CareerBuilder found that employee messaging (57 percent), benefit setup (53 percent), payroll setup (47 percent), and background checks and drug testing (47 percent) were the most common processes currently being automated in organizations.

Recruiting is often compared to sales in the sense that certain best practices translate from one function to the other. In sales, automated solutions in lead generation are reshaping the way both B2B and B2C businesses are finding customers. Recruiting seems to be following suit in sourcing, a practice analogous to lead generation in sales. One of the most interesting emerging technologies is an AI-powered sourcing software called Helena by Woo, a recruiting platform provider, which communicates with and on behalf of both the company and candidate to automate the candidate identification and screening processes. The company claims that 52 percent of Helena-sourced candidates make it to the interview stage, whereas human-sourced candidates move on at a rate of around 20 percent. Woo’s founder steadfastly believes he can automate the entire recruiting process.

Additionally, with so many companies folding AI into their products, not just in the HR tech space, demand for AI talent has skyrocketed. Microsoft more than doubled the headcount for its AI division and Amazon gave priority choice in the hiring process for engineers to its new Alexa for Business offering. Even the auto industry is playing ball, as Ford acquired a majority stake in an AI development startup as it competes with the likes of Google and Tesla in the race to develop fully automated self-driving vehicles.

Enabling Diversity and Inclusion

A number of major companies and startups are working on solutions to help businesses improve their ability to attract and retain diverse employees. SAP announced intentions to add functionality to its SuccessFactors recruiting platform, which will scan job descriptions for terminology that indicates bias towards men and recommend changes to attract more diverse candidates. It will also monitor performance ratings to find women who are overdue for promotions or identify if they experience a dip in ratings after taking maternity leave. Many other companies are working on solutions for reducing bias in the hiring process. They have their work cut out for them, however, as algorithms are only as good as the data that feeds them and there is a lot of evidence that most companies’ data is highly flawed.

Ultimately, this investment in developing diversity-enabling technology shows that diversity and inclusion are becoming more than just PR initiatives, as Quartz’s Sarah Kessler wrote in August, highlighting some of our research at Gartner:

Analysts at Gartner predicted in a March 2017 research note that by 2020, more than 75% of large enterprises will include features that promote diversity and inclusion in their selection process for HR software. John Kostoulas, a co-author of the report, told Quartz that companies have historically monitored diversity mainly to avoid breaking anti-discrimination laws, but he believes that they will take a more holistic approach as evidence continues to build for the case that diversity contributes to businesses in other ways.

It can be hard for businesses to keep up with the rapid pace of change as the capabilities of software and hardware accelerate so quickly. Leaders of large organizations will need to carefully consider the costs and benefits of making technological investments that could fundamentally transform the way they operate. The most successful types of technologies will be those that take much of the busywork out of existing processes in a way that is minimally invasive. Though 2017 was another great year for innovation, adoption is still low as leaders are increasingly less confident in the direction to take their technology strategy. At CEB, now Gartner, our HR practice will be closely studying the best ways to implement technology over the course of 2018.

How Can We Nudge Employees Toward Better Cybersecurity Habits?

How Can We Nudge Employees Toward Better Cybersecurity Habits?

It’s not uncommon to think of cybersecurity as primarily a technological challenge, but it’s really more of a human one, Alex Blau writes at the Harvard Business Review, in that cyberattacks so frequently take advantage of human error. Most of the large-scale cyberattacks that have made headlines in the past year at some point involved someone making a mistake or exercising bad judgment and accidentally giving cybercriminals access to sensitive data. Behavioral science, Blau observes, help explain why people (including your employees) have a hard time adopting good cybersecurity habits:

One major insight from the fields of behavioral economics and psychology is that our behavioral biases are quite predictable. For instance, security professionals have said time and again that keeping software up-to-date, and installing security patches as soon as possible, is one of the best methods of protecting information security systems from attacks. However, even though installing updates is a relative no-brainer, many users and even IT administrators procrastinate on this critical step. Why? Part of the problem is that update prompts and patches often come at the wrong time — when the person responsible for installing the update is preoccupied with some other, presently pressing issue.

Blau’s insight here underscores something we discovered in our recent study of organizational culture at CEB, now Gartner. When culture change efforts fail, it is sometimes because employees are unable to manage the tension between the desired change and their day-to-day workflow. Getting employees to adopt a new habit at work means understanding the tradeoffs they need to make in order to do so, minimizing those tradeoffs as much as possible, and giving employees guidance on how to manage them. When best practices in cybersecurity (or any other area where you’re hoping to change employees’ habits) get in the way of an employee doing their work efficiently, the employees is more likely to sidestep them.

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Oracle’s Move to Host Charter School Highlights Big Tech’s Growing Role in Education

Oracle’s Move to Host Charter School Highlights Big Tech’s Growing Role in Education

Starting next semester, students at one California charter school will be going to class every day on the Redwood Shores campus of the enterprise software and cloud services company Oracle, the New York Times’ Natasha Singer reported on Sunday:

Oracle is putting the finishing touches on a $43 million building that will house Design Tech High School, an existing charter school with 550 students. The sleek new school building has a two-story workshop space, called the Design Realization Garage, where students can create product prototypes. It has nooks in the hallways to foster student collaboration. And when the school moves here in early January, Oracle employees will be available to mentor students in skills like business plan development and user-experience design.

Faced with a shortage of talent and a school system that has not been producing enough graduates with the necessary digital skills, Silicon Valley tech companies have been getting ever more involved in primary and secondary education in the US in recent years. Singer has covered that trend for the Times in several other articles this year, looking tech companies’ efforts to ensure that coding is taught in schools, their direct partnerships with middle and high schools to encourage innovation in tech education, and Google’s formidable expansion into education.

Yet Oracle is the first to actually play host to a charter school. Design Tech High School, known as d.tech, will pay Oracle just $1 a year in rent. The school will operate independently and be responsible for its own expenses, have its own school board, and Oracle will not participate in curriculum or hiring decisions. Oracle’s education foundation will offer two-week courses taught by Oracle employees, as well as unpaid internships for d.tech students, but any marketable product ideas the students develop in these classes will be their intellectual property, not Oracle’s. The company will even accommodate the school’s basketball team at its on-campus fitness center.

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New Apprenticeships Decline in England After Levy, Prompting Calls to Drop Target

New Apprenticeships Decline in England After Levy, Prompting Calls to Drop Target

The number of people starting apprenticeships in England declined by 59 percent in the final quarter of the academic year, May–July 2017, to 48,000 from 117,800 in the same quarter of last year, Rob Moss reports at Personnel Today based on new figures from the UK Department for Education. While not unexpected, the decline underlines the rocky start that has befallen the UK government’s controversial apprenticeship levy scheme, which went into effect in April. Both union and industry leaders suggest to Moss that the levy has been making apprenticeships more difficult to organize:

In the lowest level training schemes, intermediate apprenticeships, the number of starts fell by 75%. Tony Burke, assistant general secretary at Unite, said the trade union had concerns about the lowest grade of apprenticeships and whether these were beneficial. He added that there was “a great deal of frustration” with the new scheme. “Some businesses view this as a disaster. The levy has made things more complex so they are not taking apprentices on,” Burke said.

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