Workday Co-CEO on how AI can revolutionize hiring

Many companies use Workday (WDAY) platforms to aid in recruitment and the hiring process. This is another use case for AI in which a process and product can be enhanced with its adoption.

Workday Co-CEO Carl Eschenbach joins Yahoo Finance Anchors Brian Sozzi and Julie Hyman at the World Economic Forum in Davos, Switzerland to discuss how AI can advance the management software company's service and help both businesses and prospective employees in landing a job and, eventually, a promotion.

"We have taken a very measured and metered approach to talking about how we're going to price AI.W we fundamentally believe our customers pay us a subscription fee every year, they pay us an innovation index uplift each year for driving and helping us continue to innovate," Eschenbach says on product pricing. "We have not come to market like a lot of others and said, 'We're going to raise our prices by 30% or some percentage just because we have AI now in our platform.' We've been doing AI for more than a decade, so this isn't new to us, and we think our customers are entitled to innovation, so we are not rushing to market with a new pricing model."

It's all part of Yahoo Finance's exclusive coverage from the World Economic Forum in Davos, Switzerland, where our team will speak to top decision-makers as well as preeminent leaders in business, finance, and politics about the world’s most pressing issues and priorities for the coming year.Watch this full episode of Yahoo Finance Live here.

Editor's note: This article was written by Nicholas Jacobino

Video Transcript

BRIAN SOZZI: Yeah. One of the cool things about the World Economic Forum is that sometimes, you get to interact with leaders of products that you use every single day of your life, and we use that a lot here at Yahoo Inc. So let's get Carl Eschenbach, Workday CEO-- co-CEO, I should say, for another month. Welcome.

CARL ESCHENBACH: Thank you for having me. And thank you for being a customer and using the product. I hope it's a great experience.

We pay those bills. Absolutely. So when I'm on Workday-- and there's a lot of focus here on AI-- when I'm on Workday in 2024, where will I start to see the application of AI?

CARL ESCHENBACH: Well, I think you'll start to see things-- people talk about copilots-- it'll be in the copilot area. We'll have generative AI copilots that will help you navigate through things. I think it will start to push too recommendations around where you need to be skilled or reskilled and recommend to you what's next in your journey to advance your career.

I think also from a recruiting perspective, we can start to look at recruiting as a way to-- you'll be able to leverage AI. And then we have this thing called a career insights hub that will help both managers and employees navigate their careers and give those recommendations on where you should go and get new skills to advance your career. And it will help then with internal mobility of your people.

And lastly, I would just say, leveraging AI on the Workday platform. We're going to start to focus on reskilling and upskilling your workforce and driving productivity gains. And I think that will drive a step function change in how we think about people going forward.

BRIAN SOZZI: Let me just follow up quick, because I'm sending this video after it gets posted to our whole team. So I will be able to get a-- I get a prompt. If Workday's platform is signaling that my skills are outdated, I get a prompt say, Brian, go back to school and get a certificate, or this is what you should be doing and here are the skills you need.

CARL ESCHENBACH: Yes, exactly right.

BRIAN SOZZI: Wow, that's wild.

JULIE HYMAN: You know, we keep having all these AI discussions. We have talked less about how much it's going to cost and how willing clients are to spend for these additional abilities. And is that money going to be coming out of other types of enterprise spending? What do you think?

CARL ESCHENBACH: You know, Julie, that is a great question. And I'll respond by we have taken a very measured and metered approach to talking about how we're going to price AI. We fundamentally believe our customers pay us a subscription fee every year. They pay us an innovation index uplift each year for driving and helping us continue to innovate.

We have not come to market like a lot of others and said we're going to raise our prices by 30% or some percentage just because we have AI now in our platform. We've been doing AI for more than a decade. So this isn't new to us, and we think our customers are entitled to innovation. So we are not rushing to market with a new pricing model.

That being said, if we see significant value in a new SKU that we're bringing to market that our customers can truly realize that value, we will then obviously charge for it because it does cost us on the compute side to run those models and leverage the data that you're training off of.

So I think we're slightly different. I think it goes back to the core values of our company, right? We focus on our employees, our customers, And, we do everything with the highest level of integrity. And our customers have responded really well this past year in our pricing approach to AI in not rushing to market and asking them to pay more.

JULIE HYMAN: I mean, that said, if I'm not paying, say, more for your products but I'm paying more for an AI upgrade elsewhere, do you think that we will see some sort of pullbacks in some areas in order to accelerate AI?

CARL ESCHENBACH: Yeah. So I think you're asking, where does that budget come from, right?

JULIE HYMAN: Yeah.

CARL ESCHENBACH: You know, listen, if you go out and pull the market around IT spending, there is now a line item that we're starting to see emerge in the CIO organization or in the company's budget around AI. So where they're getting that I think is part of an investment, where they're maybe getting it from other areas of the business where you're going to leverage AI and get productivity gains.

What we're not seeing is we think it is an augmentation technology that needs to peacefully coexist with your existing workers because one of the things we're seeing is we're seeing this-- no one's really talking about it a lot here this week. They talk about AI. They talk about regulation. But we're seeing a potential divide when it comes to trust. Companies want to implement this to drive business benefit and drive productivity gains.

But workers are very nervous that it's going to be used to displace their jobs. We think it's going to peacefully coexist with the workers. You'll get the business benefit of productivity gains. But we're going to augment what people do so that they can go off and do other tasks that are much more productive and relevant and really think about growth of the company through a lens of productivity gains.

BRIAN SOZZI: Several folks that I talked to in the lead up to this have suggested you have a pretty big earnings unlock in CFOs and other organizations giving them-- or giving you their financials to, I guess, put in the cloud and store that. Where are you at in that? Because in the past, I have sensed a hesitance by CFOs to put all their financial data in the cloud.

CARL ESCHENBACH: Yeah. No, we have two real core platform products. We have our HCM product that you guys use and you say you engage with every day. And then we have our financials product. The financials product is a cloud-based ERP solution that we have leaned heavily into in investing both on the product side and the go-to-market side.

And the reason for that is what you just stated. Only 25% of the financial workloads or ERP is in the cloud. So there is a massive transition to cloud-based ERP in the future. And we think with our solution, we're going to capture a large market share of that, especially if they're an existing Workday customer on the HCM side.

And the other thing we're seeing uniquely is as we land new customers, they're buying a full platform from Workday. They're buying both HCM and financials because it's the same data, same architecture, and then you can do planning around both financial planning and workforce planning. So we are seeing that unlock happen.

We do see CFOs see the benefit of moving to the cloud. And I think they just now are much more trusting of partners like us, right? We've already been managing their most precious data assets, their people. There's no reason we can't do that on your financials in the cloud as well.