3 Key HR Trends of 2024, with Dayforce’s Amy Cappellanti-Wolf

Mo Fathelbab:

Welcome to today's episode of People and Strategy. I'm your host, Mo Fathelbab, president of International Facilitators Organization. People and Strategy is a podcast from the SHRM Executive Network, the premier network of executives in the field of human resources. Each week we bring you in-depth conversations with the country's top HR executives and thought leaders. For today's conversation, I'm excited to be joined by Amy Cappellanti-Wolff, EVP and CPO at Dayforce. Welcome Amy.

Amy Cappellanti-Wolf:

Mo, thanks for having me. Glad to be here.

Mo Fathelbab:

Great to have you with us. Amy, I want to start with a bit of a story about your career and how you ended up in HR.

Amy Cappellanti-Wolf:

Well, I wish I could say it was planned from the beginning, but it really wasn't. I had graduated with a degree in journalism, I think I'd be working on Washington Hill reporting on politics. At that point in time the market was really in peril, so I decided to stay an extra summer and go get my master's in industrial labor relations. I finished that in 18 months and realized how much I really loved the notion of working in human resources, especially the areas of organizational design, compensation, organizational psychology. So it all hit home for me. And then ironically on campus we had a very strong labor relations program where I went, so PepsiCo and Frito-Lay and US Gibson and all these other companies came on to recruit us. I was recruited by Frito-Lay in their associates program. From there I moved to Atlanta and got my first taste of working in human resources, working in a plant that was the oldest plant in the system working with unions. So all of the things I'd learned in collective bargaining, I was able to apply working at Frito-Lay in my initial time there. And then thereafter I got a chance to work with different clients, sales, operations, moving around the United States. The most important thing I learned, which I think has been the grounding of my career is, first you've got to understand the business.

It's absolutely the most important thing, speak the language, understand where the business is going so you can be most relevant. And two, you really think about change management and how you really think about, when someone's going to change in the organization, how do you make the clarity around why are you changing and what's the expectations of the change and how do people belong in that change? I learned that very, very early on, which was a gift. Sometimes when you're learning, you don't know at the time how critical it will be in your career. But I think those key aspects really have guided my success and my learning throughout my career, thanks to that academy kind of learning.

Mo Fathelbab:

That sounds like a wonderful career. Let's turn to the three HR trends that define 2024, integration of AI in HR, remote work and personalization. I want to start with the first one, integration of AI in HR. So first, what is the current state of AI in your view?

Amy Cappellanti-Wolf:

Well, I'd say first of all, HR, it was not their first probably function to adopt AI. It typically is invested in your customer support or your IT organizations or potentially in product. But I think now HR is starting to, one, be open to it and two, have the budget and the investment required to do it well. I think in HR our biggest opportunity would be, one, to embrace it because it's coming and to try and turn the other way, it's going to catch up with you very soon. Secondly, get really clear around the philosophy of how you use AI as an HR organization. There's lots of goodness around AI. There's also lots of peril if not used properly. So just recall that whenever you put something into the system, it will spit out something that's like what you put into the system. That bias can carry through throughout the entire aspect of the AI, so you've got to be clear about how you use that AI and how you actually see the AI for information. The last thing I would say is that everyone's being asked to optimize. Even though we have a very positive outlook for I think 2025, we see lots of transformations occurring in the businesses, that notion of optimization is super critical.

For me personally, I'm using it to really build out my shared services organization that was non-existent when I joined this past year. AI is a great way to help with self-service. It's a great way to help employees get what they need when they need it, and allow my employees to work on more strategic efforts around either operational excellence or helping the business grow and thrive. It's something that's here to stay. It's being used in TA, it's being used in talent development, it's being used in how we run operational business. So get steeped in it, understand it, don't be afraid of it, lean into it.

Mo Fathelbab:

How have you seen AI usage evolve over the year, over 2024?

Amy Cappellanti-Wolf:

I think it's become much more prevalent. I mean, taking a step back, there's lots of companies who suddenly said, we have AI and of course, their multiples skyrocketed. Everyone sees the long-term value of AI. So I'd say it's become much more front and center, not just because you want to be valued at a certain multiple in the market, but it's really what has now become table stakes. Before, it was very innovative, companies are using AI. They have the investment, they have the time to spend to really orient themselves to AI. Now it's becoming, it's part of your work world and if you don't have it, you're probably behind.

Mo Fathelbab:

Yeah. I want to talk about some of the key ways that you guys are specifically using AI at Dayforce. But first maybe, for those that don't know Dayforce, can you take 30 seconds and tell us about Dayforce itself?

Amy Cappellanti-Wolf:

Absolutely. I love Dayforce because it gives me an opportunity not to only head up Human Resources ... which has been a key, a success for me and something I have joy in. But I also get to be customer zero and I also get to be in front of customers like you, heads of HR or practitioners in HR. So we are a human capital management platform. We do everything from payroll and compliance, complexity there, workforce planning, talent acquisition, talent management and development, and lots of other aspects around how you build an end-to-end human capital management platform. The fun part is, I get to actually use it. I work directly with the product team. For those who have worked with product before, you've typically been an HR business partner to product, not actually in the product, which has been really fascinating. So I've been able to put through a process of how I get involved earlier on, and setting the requirements for products they're considering for the market, and also give them feedback on the actual usage of products. The last thing I'd say is, it's wonderful to meet with HR practitioners because, one, I'm not just talking about our platform but also sharing best practices.

So I get the best of both worlds. I get to interact with folks like you all on this discussion, as well as the opportunity to run HR for a growing and thriving business.

Mo Fathelbab:

Yeah, thank you. You mentioned some challenges with AI. What are some of the challenges that you foresee or have seen in using AI?

Amy Cappellanti-Wolf:

Well, I think, I mean, the one challenge in particular is the fear of AI. It's the fear of employees saying, gee, if you introduce AI, what does that mean for me? Will my job be still available to me? How do I get up-skilled to do other jobs? So it's that change management aspect I spoke about earlier, and bringing employees earlier on into your strategy so they're part of it and they can understand it and then be a part of the solution around, how do we help them to do the work we expect them to do? There will be things that get automated, things that maybe you don't need that particular talent, but the opportunity is to apply that talent elsewhere. That'd be the first thing I think is really significant. I think we jump into it very rapidly without understanding the potential fear impact it may cause, and the obstacles it may create if you don't get clear about why you're using it and how you're going to bring employees into it. The second thing I'd say, as I mentioned a little previously, is that AI is something that is repeatable and will continue to take practices and processes and make them more effective as you use them. It's like, bad in, bad out.

So if you put in bad practices or process, you put something that may have bias into it, it's only going to replicate and proliferate even faster. It means you have to be really critically careful about how you orient AI, how you introduce it into your environment, so to speak, so that it's using process and systems that you want to improve and you want to make certain have a life beyond today, but are also ones that are scalable for your company. That proliferated will be what you want it to be versus maybe proliferating bad things in your organization, such as the bias I described, I think that's really critical. And then the third thing is really, how do you interact with AI and other functions? For instance, customer support has AI to address customer inquiries. IT has it for how they think about their infrastructure and applications and also how they deal with their internal customers. Engineering has used it as part of their product, which I'm now therefore using as part of my product called Copilot, which is an AI technology that we use around shared services and helping employees have self-service. So how do all those interact?

Because even though they're addressing different cohorts, they are addressing employees and they are addressing the external market, which, all those touch in our roles every day. The opportunity is, how do you integrate that so you get the best of all the worlds in terms of learning, rapid innovation and using it as a way where it's going to help not only the business grow, but the people who are operating grow as well?

Mo Fathelbab:

So what about privacy? I know there are certainly some times when privacy has come up, because AI can start to really ask you some personal stuff. What do we have to know about that and how do we protect ourselves?

Amy Cappellanti-Wolf:

Yeah, and it's a great question. There's privacy and there's security, right, the personal information that we don't want to get distributed in a way that would be harmful for the company and the employee. So that's where I think you take a big step back, back to that change management. What we've created is an AI governance council that talks about how we're going to use it by function. What are the secure needs to make certain that we're not sharing information that would put us in violation of any sort of GDPR, or any sort of data breach? And secondly, making certain you've got the right security controls around it. So it's the usage and the environment by which you use it. This governance council also has a chance to bring in best practices, as well as, where did we have gaps or concerns? And ensures we've got that umbrella wrapped around our AI strategy and the philosophy and really the ethical considerations of how you use AI.

There's been some recent court cases in other companies whereby they've used AI as a way to assess talent, and there has been some court cases whereby people feel like that AI is biased to them. You have to really make certain your tools and practices take that out, because that can actually have a negative impact not only on potential candidates for your roles but also reputationally. So we're being very careful about it, but we're also using this council of people who are using it across the organization help set the stage for how we're using it going forward.

Mo Fathelbab:

I mean, that is a very interesting notion, that even AI can be biased based on what information you're feeding it.

Amy Cappellanti-Wolf:

That's right, absolutely. I don't know if people know that. It's like, once something's out in the Ethernet, it's out in the Ethernet and it's hard to bring that back. We will make mistakes, to think we're not going to is not realistic. But how do you make certain you don't hit the big pitfalls around privacy concerns, security breaches, putting bias in the system that's hard to extract back out, and then making certain people understand how to use it, and also what it means for them to use it in the roles they play today and for the future?

Mo Fathelbab:

Yeah. So what do you see for 2025? How is AI going to evolve even more in 2025, Amy?

Amy Cappellanti-Wolf:

I think it started in '24 more so than it has in the past. It's been around but it's been very nascent. So I think 2025 is going to be much more front and center, more people are getting comfortable using it. There's going to be an expectation that you ought to use it. It's going to require investment in companies to make certain they've got the right platform by which to use it, and also how you program it so to speak. So I anticipate it's only going to get bigger and I believe if you're not on the bus already, you're behind, as I mentioned previously. So get oriented to it, understand it, ask the questions of your business partners in IT or in legal or finance or cyber to see how you could use it to optimize your business, but also use it in a way that's good for the company and good for the employees.

Mo Fathelbab:

Yeah. Well, thank you. Well, let's shift to our second trend, remote work. You've mentioned that it's here to stay and over the past year we've seen several companies issue return-to-office mandates. So I want to start with, what is the current state of remote work?

Amy Cappellanti-Wolf:

Well, you just hit the nail on the head. I mean, it's everywhere right now. It's interesting because I know recently AT&T just had a return-to-office mandate, in addition to other firms that are out there. I believe, this is my thesis and what I've observed thus far is, the flexibility people have become accustomed to is hard to take back. I would love that the pandemic had never occurred, for lots of reasons, but it has changed how we work. So to think that you're going to be able to shift that very drastically by enforcing people to return back to work, is going to be challenging for a couple of reasons. One is, people like the flexibility, they like having the hybrid nature of what they do. Two, people have moved from areas where there's anchors of real estate, where there's offices for people to return to. When the pandemic occurred, people scattered to either their original homes or places they wanted to go live.

It didn't have to be in person, that's hard to unwind for sure. Then the third thing is culturally, people like to have choice. They like to know, I can do what I do really well and have the flexibility to go do it. And allows me to do my job now, but go do something ... maybe an appointment or go see the doctor and then come back and do my work at the hours that work for me, as long as I'm meeting the outcomes. If you begin to make that into an office-constricted environment, you may find either people becoming disengaged, you may see attrition or you may see just hard to attract. Because we, in my company, are remote first. So it's a big way we attract and retain our talent, that they can work from anywhere ... as long as it's a legal entity, so to speak, it's compliant, but it allows people that flexibility and that's a big qualifier. So if you're going to go do it, there's no wrong or right answer.

You just have to understand the expectations of your employees and what that may do in terms of that relationship to the employee ... which has already become super complex as it is, to ensure you're not creating breakage for yourself with the employees.

Mo Fathelbab:

Yeah. So at Dayforce, is it fully remote? Has there been any change in how you all have handled that over the last few months or year?

Amy Cappellanti-Wolf:

Not really. We do have anchor offices. We have offices in Toronto, Minneapolis, in India, in Singapore, et cetera, et cetera. So we don't mandate people come in, but we encourage them to come in a couple of days a week, if they're close to an office, for collaboration days. There's also the notion of bringing people into the office to learn, so we have learning to help increase people come into the office. Free food is always a great way to get people into the office, a reason to connect and be social. So we don't force it, but we encourage it. The other thing we're doing, which is an interesting thing is, every time you do short-range planning for the following year, it's a great time to put money aside for opportunities to bring people together. This year in particular, we put together a playbook with the finance planning team on the things we ought to be thinking about as we plan for the next fiscal year. One of them was, making certain you have the right investment to bring people together in areas where you've got a critical mass of people.

Meaning, as opposed to everybody come into a location, the executive team goes into an area, we get an office, like a [We Work's 00:16:01] office for a couple of days and use that as a way to connect with people, have them connect with themselves and maybe cut down the cost of what it would be to bring everybody into potentially the headquarters location.

We're finding that people really appreciate that. They want to see the leaders closer to home and where they're at, and two, they felt that connection they haven't felt before when you're distributed the way we are. But we have not mandated, we've encouraged, but we also understand that this flexibility is something that really is a key differentiator for us in terms of attracting and retaining top talent.

Mo Fathelbab:

I love that. So looking to the future, Amy, how do you foresee remote work continuing to evolve in 2025?

Amy Cappellanti-Wolf:

Well, back to the previous discussion around AI, I think hybrid is not going away as far as I can see. So what I think needs to occur is using different technology to create that engagement, whether it's AI in terms of how you learn, since you're not in the office walking around. It could be using automation in terms of how your work gets done. It could be just the connection you have when you're on a platform that allows you to have these kinds of discussions we're having today. That's going to be a big part of I think continuing to reinforce and make it even more productive. And two, it's equipping managers to, how do I work in a remote or hybrid environment? Because it's often the people that are closest to you, that you see in the office every day, are the ones you give the big assignments to or you think about promotional opportunities. How do you have that equity across the board so that you're valuing people regardless of whether or not they're sitting in an office next to you, or whether they're sitting in a state a couple of states over?

So giving them the tools they need to not only assess talent but also ensure that people are meeting the outcomes you've put forth, and ensuring that they're also part of the discussion and they're not forgotten because they're not next to you in the office.

Mo Fathelbab:

I think that is really important. Of course, if you evaluate people differently based on whether they're virtual, that could become a big problem, right?

Amy Cappellanti-Wolf:

Absolutely, yes.

Mo Fathelbab:

Yeah. So let's turn to our third trend, personalization. How do you see personalization happening right now in the workplace?

Amy Cappellanti-Wolf:

Well, it's a good hearken back to my days at Frito-Lay and I've been at Disney, Cisco, Sun, Symantec. I've had really wealthy and rich working experiences in large and small companies. But I think about personalization, even back to my days at Frito-Lay ... which, I won't tell you how old I am, but it was several decades ago, we were talking about customization and personalization. Because you treat your employees like they're your customers, much like you treat your customers in the sense of, you know their demographics, you know what their preferences are. You market to a potential cohort of customers to sell your product or upsell your product. We should be thinking about that the same way as we do our employees. It's been a topic of conversation for many, many years. I think it's becoming even more critical now because we have so many different generations working in the workplace today. You've got your early in career folks who really want to be more attached in the office or connected. You've got what we call the sandwichers, which are the folks who have older aging parents and then younger children, so they're burdened with trying to take care of both of those. You've got the folks who may be in the twilight of their career and want to teach those and knowledge transfer so that they can help the next generation grow.

So you've got these different generations working together and cohabiting together. You have to have different ways by which to address their needs, whether it's the benefits you provide, whether it's the way you communicate to them, whether it's how you create opportunities for them to grow and learn and develop. They have to be specialized in a way where it's still scalable. You can't do one thing for one person, you have to think about the enterprise. But how do you start to look at the different cohorts in your organization and begin to market towards, what are the things that would most attract them, retain them, and keep them engaged so they feel like they're covered on the things that maybe are obstacles to their life, that will allow them to do the work we ask them to do every day? I think it's going to take some effort, it's going to take some investment, and I think technology is a great example. I think about my iWatch that tells me, hey, it's time to go walk because you've been sitting too long or get in the car, you've got an appointment here.

That feels very personal to me, like someone's watching out after Amy. I think we can do the same thing in that customization by using technology as a way to enable that and having employees feel like, they got me, they understand me, they're talking directly to me.

Mo Fathelbab:

If I understood correctly, you're saying the personalization is for groups of people. It isn't on a per individual basis.

Amy Cappellanti-Wolf:

I'd love it to be, I just don't know how you'd scale that. I think there's enough similar things happening in terms of the generations across the organization, that you could tailor things to a group versus an individual. Now, there may be things if you have the right kind of technology ... which we have at Dayforce, that allows you to look at individual activities and what you use and what you have access to in terms of technology on your network, then you'll have personalization there. But that's largely through access points and having acceptance to things that you have access to, so those would be areas I think you'd personalize. But in terms of the programs I'm describing and how you look at marketing to an individual, it's through this generational lens, I think is the best way to scale it and probably the most cost-efficient.

Mo Fathelbab:

Yeah. So how are you using employee feedback surveys to personalize things?

Amy Cappellanti-Wolf:

A great question. We actually just completed our Pulse survey that was open for three weeks. We had 85.7% participation rates, and everything went up. It's funny because when you work at other companies you're like, "Oh, I wish it was higher," and then you come here and people are like, "Oh, I wish it was higher." I'm like, "You don't know how you compare to others. This is quite good." A lot of the preferences improved, MPS, executive MPS, desire to stay, opportunities for growth in the company. I think the big opportunity for the employee surveys are often, are executives listening to them? Are they actually taking actions to the gaps that are being raised? I think that's the first step, that if you don't do that right, you're going to maybe not enlist the trust that you would and people are going to become cynical about taking these surveys. So how we're using it right now is, we're really trying to dial into, what's the most important aspect of what we have here that we need to really focus on? I think very often firms pick three or four or five things that they're going to go fix, which are really hard if they're systemic and big. If they're little nit things, of course go fix those if they're easy and solvable.

But for instance, ours is around communication and how do we communicate more effectively, more transparently and more consistently both within the organization and across the organization? That's a big thing to go solve for, but if you can use that data and that momentum you're hearing from and focus on one or two big rocks, you can make a big difference. So for surveys, you've got to be clear about what you're asking for, reduce the questions. I think the days of the monolithic, 100-question surveys that happened once a year are out. Because by the time you're able to analyze those, it's like three or four months into having recently launched the survey. So you want to have real-time, real quick feedback and turnaround, employees expect that. If you don't, the next survey they'll just talk about what they already spoke about before and you won't have solved it again.

So quick, fast, nimble, responsiveness and frequently asking input from employees as you move up the [transom 00:23:27] of things you need to go fix and focus on.

Mo Fathelbab:

How frequently?

Amy Cappellanti-Wolf:

Quarterly, we like to do ours quarterly. And there's companies, which I would aspire to be, they do them weekly and they're one or two or three sentiment questions. So you get a sense of the vibe, of how people are feeling that week, especially in light of things that may be happening macro-economically in the environment and how that might be distracting folks. So knowing where people's heads are at, not on political notions but just, do you feel safe psychologically? Are you able to focus? Are there things in your environment that are getting in the way of you being productive? Do you have a best friend at work? I mean, things that really initiate around customer retention, employee engagement, productivity, profitability. There are questions out there that can actually yield feedback that allows you to know, where are we at on those transoms, and how does that actually cause an effect impacting those metrics I just described?

Mo Fathelbab:

So a couple more questions, Amy. The first is, what are your predictions for the HR landscape for 2025?

Amy Cappellanti-Wolf:

Well, first of all, AI, it's here to stay so get steeped in it. There's tons of symposiums and forums out there, round tables to get educated on it. I'm certain if you have a CIO or CISO in your organization, there's ways to get up to speed on what they're seeing in the market. So get steeped in it and really understand how you could use it and equally, if not more importantly, how your employees would feel about it and how you make certain they're prepared for it, number one. The second thing is, I think it's going to be a lot more transformations. We've been in this really, I'd say dormant period. I recall right before the pandemic happened there were lots of IPOs happening, lots of M&As occurring, and then things stopped for a period of time. One, because the market wasn't ready. It was hard to do it during the pandemic. I think now the market's coming back a bit. But more importantly, some of the companies who maybe were waiting it out need to think about market transitions and what does that mean for us as a company? I think you're going to see many more CEO transformations.

I just was reading a report and they did a survey, about 67% of CEOs that were surveyed expect they will do transformations in their organization. So it's an important time in HR to be lockstep with that CEO and C-suite, to be part of the change and potentially lead that change in terms of what you're trying to drive towards. But it's really important for us to play and we're very ready for that piece. The third thing goes back to, how do you engage a distributed set of employees if you are remote or have hybrid work environments? How do you ensure they're engaged and then, how do you help them level up? Because you're going to have to think about learning and development differently. The days, many years ago, have gone around sitting in the classroom all day. So it's that in the flow of work, how do you push information out ... either to when you're running an annual cycle process around performance, or you're getting ready to do your first hire as a manager in the company, to how do I up skills? I think about AI coming down the path and how do I improve my capabilities and be ready for the next opportunity for me, since potentially that AI will be doing the work that I was doing? You have to get ahead of that, and how do you do it in a way where folks are distributed?

So it goes back to use of technology, use of surveys to understand engagement, review of demographics to understand generational challenges or differences. And then wrapping around from day one ... all the way from you're attracting to onboarding, to benefits provisions, to performance management, to rewards and recognition, to career and internal mobility. How do you tie all that through with those demographics, to ensure you're meeting what those cohorts need in a way that helps them feel like it's personalized, but also helps you attract and retain those employees in the long term?

Mo Fathelbab:

Wonderful. Wonderful, Amy. Thank you for all that wisdom and brilliance. Last question for you, what is one piece of advice that has shaped your work or life the most?

Amy Cappellanti-Wolf:

Gosh, I've had such a pleasure of having so many mentors in my life. As I think about it, to always be present, never get caught up in the outcome. Who you know is who you're supposed to know, and where you are in your career is where you're supposed to be. It's rather Zen. But what I like about it is, that presence piece is pretty important. Sometimes when you're down a path and you have an outcome you're driving to, you're not present and you're just on this path. So I was early onset, look up around because things may have changed and that outcome may change. So don't get so tied up to something, that you miss what's happening right in front of you.

Mo Fathelbab:

That's where we'll end it for this episode of People and Strategy. Thank you again to Amy Cappellanti-Wolf, EVP and CPO at Dayforce. You can follow the People and Strategy podcast wherever you got your podcasts. Also, podcast reviews have a real impact on a podcast visibility. So if you enjoyed today's episode, leave a review to help others find the show. Finally, you can find all our episodes on our website at SHRM.org/podcasts. Thank you for listening and have a great day.