- The future of workforce management,
- What does that mean for people and customers, and
- What does that mean from a board and shareholder perspective.
The transcript is also included below
Jarrod McGrath: Good Morning everyone. Today I am here at the Deputy head office in Surry Hills in Sydney and I am delighted to have with me the CEO, the CTO, and the co-founder of Deputy. Welcome, Ashik.
Ashik Ahmed: Thank you Jarrod. Thank you for having me.
Jarrod McGrath: That's a pleasure. So, I thought what I'd do just to start with is just give the listeners a little bit of a background as to what we're going to do today. What we're actually here to do today is to ask Ashik three questions and the first question is going to be on the future of workforce management, the second question will be on what does that mean for people and customers, and then the final question will be what does that mean from a board and shareholder perspective.
Jarrod McGrath: Before we get going today though, Ashik, I thought it might be a great way to start just by asking you how did you get into the world of workforce management.
Ashik Ahmed: I'd be lying to say that's what I had talked when I first wrote an essay, what do you want to be when you grow up? Grade 2 or something like that. But that's not how it started. Look at me as chance had it, when I came out of university, through a common friend I was introduced to my current co-founder, Steve Shelly. He was running an aviation ground handling business, a very intensive business. By intensive what I mean is that it's 24 hours. It's very unionized. It's very compliant.
Ashik Ahmed: In aviation, there's no room for error because you're playing with people's lives. Running a workforce in there was extremely painful, especially a distributed workforce. Steve's business was here in Sydney, in Melbourne, in Newcastle, all the way up in Cairns and it was really hard to grow a business. By hard I mean it took about 10 years to grow the business from 2 people to 200 people, between '92 and 2002. After I met Steve, I observed all these inefficiencies in the business, even down to things like what happens when somebody calls in sick. By observing all the challenges we were able to build some internal systems, which then allowed to really scale the business.
Ashik Ahmed: By scale, I mean that over the next 3 years, we were able to grow the business from 200 to nearly 1400 people. Obviously, significant improvement in revenue and profitability. I did not do an MBA or something like that but I'm actually just a Bachelor of Computer Science and I realized that hey, people is the number one most important thing in the business. If you talk to anyone, people won't say, “Hey, my supplier are keeping me up at night, my customers are keeping me up at night.” People will say that their people are keeping them up at night.
Ashik Ahmed: For Steve, that was just a reality. A reality that he had accepted that can be improved but we were able to make a massive improvement. I suppose that's how I found myself in the world of workforce management; and now, through the journey to success, we actually then founded Deputy and today nearly 80,000 businesses around the world enjoy the same level of success.
Jarrod McGrath: Amazing story and I think one of the things for me that sort of stands out there in what you were saying is that even though you had that formal university background, most of your real knowledge came from the school of hard knocks; it just came from what you learned in a business that was growing, where you needed to make people effectively more efficient and more effective.
Ashik Ahmed: Absolutely, I learned it the hard way. What I mean by learning the hard way is that, like I would go and spend time with employees and they would complain, “Oh, finish working at 2 AM last night, have to come in at 5 AM again. Really, really tired” or “Our manager is always worrying that oh, my god, I've got no visibility in there.” I've seen things like people putting in timeshares that where they were working 14 hours days, every day of the week for ... and it's just inefficiencies all over. It's just inefficiencies all over. This is 2003, even before the world of cloud computing, mobile or anything like that.
Jarrod McGrath: Yeah, absolutely.
Ashik Ahmed: You know the sad story? Those problems are still with many businesses. I tell you what, on Saturday night I was at a family dinner and I was meeting someone, actually a family friend's father. I was inviting him for dinner and saying, “Hey, would you like to ... I'm having a dinner party on the second of June. Would you like to come over?” He's like, "Let me check my roster." So he goes to his wallet, pulls out, and there in a .... he has all these sheets and things, “How can I work? I don't know who else is working. I'll have to come back to you.”
Ashik Ahmed: I'm like, “Oh, my god. This is 2018.”
Jarrod McGrath: And you're there with your cloud technology, ready to go.
Ashik Ahmed: I'm pulling out my phone and you can just go and do this.
Ashik Ahmed: Anyway, there's a lot of work to be done.
Jarrod McGrath: That's probably a really good segue into the first question of today. Where do you see the world of workforce management heading? Here we are today in 2018 and we're at a point in evolution, where do we go from here? Where does the workforce go from here?
Ashik Ahmed: Look, there's two parts to it, okay? Part number one is, you know, fixing what's broken. What I mean by what's broken, you know, what people have accepted all along, this is like how life is. You turn on the news and there's just so much complaint about people not being paid correctly. There was something on the news this weekend about somebody who wasn't paying tips to their employee correctly. Also different things ... there was a massive article on Wall Street Journal over the weekend where some of the major airlines in the United States hasn't been tracking people's break correctly and currently there is a class action that's happening in there.
Ashik Ahmed: It's just that so many things that are broken right now. Even to the fact that ... one of our closest customers here in Deputy mothership is this café called Cuckoo Callay, (it's just across the road). Great coffee, everyone should visit there and Gelato Messina [greatest Gelato] is nice as well. I like to promote our customers wherever I can, including T2, so thank you Jarrod for helping there. These businesses, when you employ someone; the fair work award of paying somebody accurately is crazy complex! It's 104 pages.
Ashik Ahmed: Another funny thing, you might get your rental contract ... your rental agreement or any other agreement, it might be 100 pages but probably one need to focus on 2 or 3 pages. Probably the exit clause, that's about it, in any agreement you need to look into. The funny thing about the fair work word is that you probably need to know 100 of the 104 pages. That's just the level of complexity that exists today, where things are broken, but on the flip side, it's actually ... we need to be fairer to the employee as well.
Ashik Ahmed: Employee needs to be remunerated for the work they do. Nobody walks around, the manager doesn't walk around with 104 pages in their head to know exactly how the worker should be paid.
Jarrod McGrath: Correct.
Ashik Ahmed: These are things that are broken that needs to be fixed, that can be automated, and Deputy exists to do that.
Jarrod McGrath: Yes.
Ashik Ahmed: On this other side of improvement, is where the world is heading. Where the world is heading, in media it's labeled as the gig economy. I don't actually think of it as gig economy. I think of it as what I like to call this, instant gratification economy, where whatever you want, whenever you want, wherever you want, you will get it. I want to watch something, I can watch it anywhere in Netflix. When I eat something, I can Uber Eat or delivery it wherever I want. That's where the world of work will be headed because that's how we're getting trained; that's how our brain is getting trained. The fact that we have to conform to any kind of schedule or roster to do work, employees, or people, or those who are coming into workforce are not just going to accept it because they will go where they can get freedom and flexibility.
Ashik Ahmed: On the flip side for it is also true. If I have a business now, I have my customer that I have to service, if my customer service and customer experience is not tailored to that need, I will not survive. I will not survive. That's why when you think of Amazon, it's just going up and up and up, and there's all these retailers who are kind of either stagnant or going down. To meet that customer demand, you also need to meet that workforce needs, in terms of how you're scheduling your people. Your people, your employees, are the ones who are facing the customer, not you. It's not the board members or CEOs who is facing that and how do you ensure that they are the best people? Like if they have been trained. They're actually happy to come to work in there.
Ashik Ahmed: It's actually a massive analytical trade of job. I think that's where so much innovation will happen and I think through Deputy we will be able to make a significant difference. We are already doing that. We make some massive changes to many customers lives through the technology that we have and independent of Deputy, that's where the world is heading. If you're not thinking like that, you're going to be left behind. Once you're left behind, you will be disrupted.
Jarrod McGrath: Yeah, indeed. I think that's really a good way you look at it. It's very pragmatic. So the first part is really around compliance; making sure that what we're supposed to be doing, we're actually doing. The second part is really around an optimization or working more effectively with the way in which the world is heading at this point in time.
Ashik Ahmed: Absolutely, the theory of disruption is that to disrupt in incumbent, you have to do this cheaper and better. You can't just do better, you can't just do cheaper. You have to do it cheaper and better, and when you do cheaper and better, you can displace anyone. I think, there's quite a lot of people who will be disrupting how service is provided, and will be disrupting many industries.
Jarrod McGrath: Absolutely, and I think I've sort of noticed that myself. We very much live in a service economy now. Sure we need the technology to support the service economy but the world is very much driving down a service route.
Ashik Ahmed: Absolutely.
Jarrod McGrath: So moving on to [sort of] the next question now. What does that mean in practical terms from an employee perspective? How does that unfold for an employee?
Ashik Ahmed: Look, two parts in there as well. Let me break it down this way. If you look at the working population, there's 60% of the working population is hourly paid. What I mean by hourly paid is that they get paid for the hours that they work. They might be full-time but still you get paid for the hours you work. And there are those who are on a salary pay. It doesn't matter whether you work 40 hours or 50 hours or 100 hours, you still get paid the same amount, like me for example.
Ashik Ahmed: What's happening over here is that ... even on that side there're some regulations coming, like in France they recently passed a law that you can't email somebody after working hours.
Jarrod McGrath: Right.
Ashik Ahmed: There's quite a lot of changes happening in both sides. But the 60% of working people is hourly paid. If you look at the cycle of an hourly pay, paid employee, first of all, the average tenure of somebody working in a place when they're an hourly employee is only 9 months. Every 9 months they're going from one job to another job. That's nowhere near being true or anything like that for the salary worker where they're probably, depending on what part of the world you're in, they're probably anywhere between 12 months to 4 years.
Ashik Ahmed: Depending on how that industry is working and what are the working conditions. If you put yourself, and I'm only going to talk about the hourly one because that's my specialty, and that's what we study all the time, is that if you are going and changing jobs every 9 months, how are you doing that? Imagine if you're an employer on the other side, oh my god, every 9 months the whole workforce I have has changed. How do you go tackle that problem in there? You'll find that hey, you're constantly looking for new job opportunity as an employee in there, and if you're a manager, you're constantly hiring as well.
Ashik Ahmed: There's no such thing as a LinkedIn for an hourly paid worker, and that's obviously a completely new topic we probably spend another whole day talking about but from an employee perspective, I think if you are going to change your job every 9 months in there, here's the thing, you need to be finding work really quickly and easily. They will adopt the technologies they can use to get work really quickly, number one. Number two, on the other side of it, from a manager perspective, they need to be sourcing candidates really quickly, qualified candidates very quickly, because you don't want to give all your time crunching to just recruitment all the time.
Jarrod McGrath: Correct.
Ashik Ahmed: And then when the employee comes over looking to how soon and easily you can onboard those people. Once you onboard, how soon they are effective in the business as well. They need to look into that. From the manager side, how soon can I get them up to productivity? It's not like in 2 or 3 months of training and then they're in the productivity - you probably need to get the productivity really quickly, and very soon. Depending on the kind of industry you are in, it can be really hard. I recently heard a stat in United States that it takes about 18 months to find a nurse for an age care service and apparently their average tenure is 12 months. Think of that, in terms of how complex it becomes. What it means for employees is that they're going to continuously seek more freedom and more flexibility through every aspect of their work journey.
Jarrod McGrath: I think that's actually a really interesting thing to consider as well look at the other side of the equation in terms of what does it actually mean to a customer because if you've got a workforce that's changing over regularly, then how do you ensure that your customers are getting that great customer satisfaction, that great personalization of service? How does that gap get bridged from a workforce management, from an employer's point of view?
Ashik Ahmed: Look, I believe that first of all, the difference from vertical to vertical.
Jarrod McGrath: Yes.
Ashik Ahmed: What it might be for a hospitality kind of business might be completely different into a healthcare business, or retail for that matter. We need to maintain a deep customer relationship for quite some time to get meaning out of the service. But from the employer perspective, and from a customer perspective as well, let me just go back to the absolute root of it, and this is what I've observed with many customers. A founder goes and starts a business because they're good at something or they have an idea they can execute. They started on their own and really soon they realize that they can't do everything on their own so they go hire somebody.
Ashik Ahmed: The first few hires are really easy because they get that founder magic off a business and what they can truly instill, once again I'm going to use a hospitality example, this is how you make a coffee, this is how you smile at a customer. But as the business gets success and they scale up, you hire managers, and who becomes managers? Actually you don't hire managers most often, you probably will promote somebody in the business as a manager. Who do you promote as a manager? Your best employee. This is where the fundamental problem I see one on one is that given that the best employee has become a manager and all of a sudden this manager has to do all of this admin things, including that hiring that I was talking about every 9 months; what you have literally done is taken your best performer out of the front line and stuck them with a job, in a corner office, that they probably will not be enjoying that much.
Ashik Ahmed: Everything suffers. That's the funny thing. Business starts, they scale really high, and somehow they reach this cruising altitude where they're just tangled with all these problems where they can't go higher anymore, and then overtime, most businesses die of what I like to call indigestion. Not necessarily starvation. No business actually has ended up over here because they could not get enough customers. They actually have muddled up their processes and absorbed all these things that through indigestion they have died. I will say to avoid this sort of thing, with the change in work practices and employee desire of flexibility and freedom, you really need to get systems on very early.
Ashik Ahmed: Some businesses leave it really late and when they come to do it really late, what happens is that you have your culture or other things that are ingrained, this is how people are doing it, it's really hard to go and manage that change, that culture change in there, of how things are going to change. From the business owner perspective looking into the future, I'll say that you really want to put the customer need first and you also want to put the employee need there. There is a cross section where they both can be satisfied. That should be the goal.
Jarrod McGrath: Yeah, absolutely. Very tight crossover. I think it's getting tighter. There you go. You need to avoid indigestion.
Ashik Ahmed: Exactly.
Jarrod McGrath: Get the right processes in place to start with.
Ashik Ahmed: Absolutely.
Jarrod McGrath: I think that's some good advice. On to my final question today, with the customer, the employee, the technology in mind, as an owner of a business, as a board of directors or as a shareholder, to make sure that the business is future proofed to move forward, what should the owners and the share holders of businesses be thinking and doing right now to make sure that they're ready to stay current and to avoid that indigestion?
Ashik Ahmed: There're many ways I can answer this question. One of the best advice I ever received and it was given to me by George Roberts of Open View, when actually after we did the fundraising, after we signed the terms sheet that night, we went out to dinner and I remember George saying to me, “Ashik, everyday you're gonna have to go make decisions. If you follow this framework, you will never make the wrong decision. The framework is company, customer, employee, partner. Make your decision in that order. What's the best decision for the company? What's the best decision for the customer? What's the best decision for the employee and what's the best decision for a partner?” In that order. It's controversial.
Ashik Ahmed: Usually you should be able to make decisions that ticks across all those things, but if you ever come into a crossroad where you're finding yourself that it's a cross at the top but a tick at the bottom, in that order, you will most likely end up making an incorrect decision. Or a decision of not being right. To apply that framework, and by the way it's applicable to a business which is at growth stage, more so than a business which is at peace stage.
Ashik Ahmed: What I mean by being at peace is like the four banks of Australia. They've all carved up their territories and they're just happy. Competition for them is a big ship in the ocean that doesn't bother them. Whereas in many other industries, where they're really fighting hard to win market share, there are cases of winner take all, for example. Decision making is really important. Depending on where you are as a business, are you attacking growth or are you at peace, you need to look at it in different ways. From a shareholder perspective or a business owner perspective, the way I like to advise is that really putting the customer first.
Ashik Ahmed: The CEO they say has one [well multiple bosses], being the board of directors, but actually the CEO has hundreds of thousands of bosses. This is the customer. The customer can just fire and change their mind like that.
Jarrod McGrath: Indeed they can.
Ashik Ahmed: What will happen is that the business will completely die. All the hard work that has been put by everybody in building the business, including the employees, will be nothing at the end of it. You all need to go and read that shareholder letter that Jeff Bezos wrote. It's Day 1 [Click here to see letter]. I think it's Day 1 letter; in there he truly highlights this. From a shareholder perspective, when it comes to workforce management, it's about ... how do you utilize your workforce management to provide the best customer service? You need to look at it that way.
Ashik Ahmed: The next thing comes over there, most businesses spend about 50-60%, in some cases even more, for every $1 they earn on labor. How do you go optimize that to build an even better market share, a bigger market share? As I said, it's that fine cross section of meeting my customer demand, at the same time looking at the best thing for the employee; which is actually what we released as a feature a couple weeks ago, which was our Deputy order scheduling feature where you can actually build, plug in a lot of demand metrics from your business and then Deputy automatically builds your schedule looking after fairness, looking after the low cost, looking after ensuring all the workplace compliance and regulations and travel knowledge that exists there, is automatically handled as opposed to a manager doing it in their head. It's one button in Deputy and Deputy does it for you.
Jarrod McGrath: I think that's a great answer because it's far more than monetary value these days. Yes we all need to exist and we all need to make money to satisfy everyone but I think that's some great advice that you received. It's about the customer, it's about the employee, it's about the business, and it's about the partner network that's around you. It's a multi-dimensional decision.
Ashik Ahmed: Absolutely. If you follow me on Twitter you will see that I'm quite a fan of tweeting about Formula 1 and other things, I’m an avid follower in there. I remember reading this interview for Bernie Ecclestone, he was the former CEO of Formula 1, and known to be really money hungry and other things. He had this great quote, that money should never be the focus. Money is output of great work you do. It usually looks after itself if you get those other things right. For businesses today, as I said, I can put the customer first. If you put the customer first in there and augment your workforce strategy to meet that customer demand, revenue, profitability, growth, all those things will look after itself.
Jarrod McGrath: Fantastic. So that's it for me today, Ashik. Would you like to add anything else to complete the interview?
Ashik Ahmed: For many people, especially the white collar worker community or people who are board of directors, they actually probably don't understand the complexities that are involved in workforce management, and even like paying people in the right way, this is 2018, and to see that there are business that get caught up all the time because they're not paying the right wages. I think we need to do more work and Jarrod, thank you for doing all the work you do because you're raising awareness of things that can be done better, as well as need to be done. I think we have a lot of work ahead. Obviously as you asked, what's the present, what's the future; from a future perspective, I recently wrote an article on Forbes about what does block chain mean for example, like for HR [Click here to see article]. I think we're just getting started to be honest. I'm excited to wake up every morning and be in this mission to improve the lives of shift workers and to have partners like you is also really even more validating.
Jarrod McGrath: That's great. I think together it's a matter of everyone working together, from a whole community point of view too to improve everyone's lives.
Ashik Ahmed: Exactly, and the world will be a better place for doing what we're doing.
Ashik Ahmed: Thank you.
Jarrod McGrath: Thank you Ashik. Awesome.
Jarrod McGrath: Have a great day.
Ashik Ahmed: Thank you.