New World Workforce Management - NEAT EVALUATION FOR UKG
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NEAT EVALUATION FOR UKG:
New World Workforce
Management
Market Segments: Overall, Cost Value Focus, Employee Engagement
Focus, IoT Focus, Multi-Country Focus
Introduction
This is a custom report for UKG presenting the findings of the NelsonHall NEAT vendor
evaluation for New World Workforce Management in all market segments: Overall, Cost Value
Focus, Employee Engagement Focus, IoT Focus, and Multi-Country Focus. It contains the NEAT
graphs of vendor performance, a summary vendor analysis of UKG for New World Workforce
Management, and the latest market analysis summary.
This NelsonHall Vendor Evaluation & Assessment Tool (NEAT) analyzes the performance of
vendors offering workforce management services. The NEAT tool allows strategic sourcing
managers to assess the capability of vendors across a range of criteria and business situations
and identify the best performing vendors overall, and with specific focus on cost value,
employee engagement, IoT, and multi-country delivery.
Evaluating vendors on both their ‘ability to deliver immediate benefit’ and their ‘ability to meet
client future requirements’, vendors are identified in one of four categories: Leaders, High
Achievers, Innovators, and Major Players.
Vendors evaluated for this NEAT are: ADP Employer Services, Capita, Ceridian, Infor, Quinyx,
SD Worx, TCP Software, UKG, and WorkForce Software.
Further explanation of the NEAT methodology is included at the end of the report.
© NelsonHall 2020 1 March 2020
June 2021 1
Licensed for distribution © NelsonHall 2021
Licensed for distributionNEAT Evaluation for UKG: New World Workforce Management NEAT Evaluation: New World Workforce Management (Overall) NelsonHall has identified UKG as a Leader in the Overall market segment, as shown in the NEAT graph. This market segment reflects UKG’s overall ability to meet future client requirements as well as delivering immediate benefits to its workforce management clients. Leaders are vendors that exhibit both a high capability relative to their peers to deliver immediate benefit and a high capability relative to their peers to meet future client requirements. Buy-side organizations can access the New World Workforce Management NEAT tool (Overall) here. June 2021 2 Licensed for distribution © NelsonHall 2021
NEAT Evaluation for UKG: New World Workforce Management NEAT Evaluation: New World Workforce Management (Cost Value Focus) NelsonHall has identified UKG as a Leader in the Cost Value Focus market segment, as shown in the NEAT graph. This market segment reflects UKG’s ability to meet future client requirements as well as delivering immediate benefits to its workforce management clients with specific capability in supporting a value-based innovation approach, including a focus on cost savings. Buy-side organizations can access the New World Workforce Management NEAT tool (Cost Value Focus) here. June 2021 3 Licensed for distribution © NelsonHall 2021
NEAT Evaluation for UKG: New World Workforce Management NEAT Evaluation: New World Workforce Management (Employee Engagement Focus) NelsonHall has identified UKG as a Leader in the Employee Engagement Focus market segment, as shown in the NEAT graph. This market segment reflects UKG’s ability to meet future client requirements as well as delivering immediate benefits to its workforce management clients with specific capability in communications tools for shift management, employee helpdesk/chatbot offerings and sentiment analysis, as well as configuration flexibility for managers to create new employee groupings as needed. Buy-side organizations can access the New World Workforce Management NEAT tool (Employee Engagement Focus) here. June 2021 4 Licensed for distribution © NelsonHall 2021
NEAT Evaluation for UKG: New World Workforce Management NEAT Evaluation: New World Workforce Management (IoT Focus) NelsonHall has identified UKG as a Leader in the IoT Focus market segment, as shown in the NEAT graph. This market segment reflects UKG’s ability to meet future client requirements as well as delivering immediate benefits to its workforce management clients with specific capability for touchless punching and connecting to IoT technologies such as geo-fencing, geo- punching and temperature check hardware, and integrating with access controls. Buy-side organizations can access the New World Workforce Management NEAT tool (IoT Focus) here. June 2021 5 Licensed for distribution © NelsonHall 2021
NEAT Evaluation for UKG: New World Workforce Management NEAT Evaluation: New World Workforce Management (Multi-Country Focus) NelsonHall has identified UKG as a Leader in the Multi-Country Focus market segment, as shown in the NEAT graph. This market segment reflects UKG’s ability to meet future client requirements as well as delivering immediate benefits to its workforce management clients with specific capability in multi-country service. Buy-side organizations can access the New World Workforce Management NEAT tool (Multi- Country Focus) here. June 2021 6 Licensed for distribution © NelsonHall 2021
NEAT Evaluation for UKG: New World Workforce Management
Vendor Analysis Summary for UKG
Overview
UKG, with Its headquarters dual located in Weston, Florida, and Lowell, Massachusetts., was
formed in April 2020 through the merger of Ultimate Software and Kronos (both majority-
owned by private equity firm Hellman & Friedman), creating one of the largest global cloud
technology providers with a combined ~70 years of experience and with an enterprise value
of $22bn. Both companies were of a similar size, and the combined organization has ~13k
employees across all regions, with the majority based in North America. The legacy Kronos
company was formed in 1977 by MIT engineers who developed the first patented
microprocessor-based time clock and throughout its history has been positioned as a specialist
in workforce management.
UKG provides technology and managed services, which collectively support over 50k client
organizations across 165 countries, including:
• WFM technology:
− UKG Dimensions (launched in March 2018, with ~1.4k clients serving 6.5m users)
− UKG Ready (launched in 2012, with ~6k clients and serving 40m users)
• HCM Technology:
− UKG Pro (~5k clients): HCM platform targeted to midsized firms with >500 employees
− UKG Ready (~33k clients): HCM platform targeted to SMB firms withNEAT Evaluation for UKG: New World Workforce Management
• COVID19 symptom tracking and contact tracing
• UKG Workforce Activity Report (U.S. only), sharing benchmarking data on shifts.
UKG has ~4.4k employees dedicated to Workforce Management technology development,
implementation, and service delivery. UKG targets all sizes of organizations for its Workforce
Management solutions and an average Workforce Management client size has a population of
~5k employees.
Financials
UKG’s full fiscal year (FY) reported revenues for 2020, ending September 30, were near $3bn,
up ~9% y/y. As a private company, it is not required to report formally. The FY 2020 revenues
were announced as pro forma reported as though Kronos Incorporated and Ultimate Software
were combined.
NelsonHall estimates ~45% (or $1.35bn) of its total company revenues relates to workforce
management revenues.
Strengths
• AI-driven scheduler which supports forecasting through machine learning, including the
ability to set budgets
• Offers a robust mobile offering for manager and employee engagement
• Customer retention of 97% in its UKG Dimensions product
• Long heritage in WFM technology and significant client base, many with long relationships
(over ten years) carried over from the Kronos organization, enabling industry insights such
as the UKG Workforce Activity Report to be produced – this analyzes high-frequency shift
data for ~3.2m employees at ~30k organizations to gauge the impact of COVID-19 on U.S.
workplaces.
• Complementary products such as UKG HRSD (formerly PeopleDoc) support document
management and storage and enable written warnings to be automatically generated due
to disciplinary items such as late attendance. Further, there is an ability to store policies
online and search for policies via the mobile app which is relevant to employee location
• Open API platform allowing bi-directional integration to be built between UKG Dimensions
and external systems and giving access to many business processes to import from
external data sources (such as footfall). These can then be applied to support processes
such as forecasting
• Services component with PeopleAssist HelpDesk and case management support
• Ability to offer integrated cloud HCM/WFM suites with a unified experience from a
product and service
• Significant capability in the U.S. and Canada
• Industry-specific solutions for Manufacturing, Healthcare, Retail, Gaming, and Public
Sector
• Strong corporate culture to attract and retain employees. In the U.K, Great Place to Work
ranked UKG #6 on its Best Workplaces in Technology, Fortune 100 ranked UKG #6 on its
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2021 Best Places to Work list, Forbes ranked UKG #2 on its 2021 list of America’s Best
Large Employers, and it rated 4.2 on Glassdoor.
Challenges
• Consolidation and standardizations across products and services to offer one customer
experience across multiple products while converting legacy clients onto cloud solutions.
Growth is often easier with new clients rather than converting legacy clients. UKG has 55k
clients across all its services
• Maintaining its culture that accommodates the Ultimate and Kronos legacy companies,
the corporate integration plan is multi-year
• Limited chat features (including chatbot) in the product
• Lack of built-in benchmarks in its UKG Dimensions product.
Strategic Direction
During 2021, UKG plans to develop its business in the following ways:
• Cross-selling the UKG Dimensions product into the legacy Ultimate HCM Suite client base
• Upselling UKG Dimensions into UKG Workforce Central legacy on-premise client base
• Integrating and training its sales teams to support new sales of both UKG Dimensions and
HCM Suite as it increasingly looks to target bundled solutions that can address pay and
time needs. Also HR services, such as employee file and case management, have become
embedded into the UKG Dimensions solutions where applicable, tailored for certain
scenarios
• Positioning its Planner suite to all clients, as more clients across a range of industries show
interest in planning to manage unexpected changes in disruptive business environments.
PlannerTM solutions can enable companies to manage furloughs better, hiring freezes,
and a mobile workforce. Traditionally, only a narrow set of industries required scheduling
solutions. With the advent of more remote workforces and an unprecedented number of
ad hoc unpredictable business events, planning software has become more important to
more industries. As such, UKG will target non-traditional workforce planning industries
such as white-collar industries
• Investing in planning functionality. As part of its 2021 roadmap, a time off heatmap feature
is due to be released. Its scheduling tool is also expected to have a new UI
• Increased investments in advanced analytics and AI to drive greater operational
intelligence, mainly focusing on industry-specific solutions so business logic can be reused
to support recommendations to improve outcomes
• Developing deeper integrations and process automation to support effective, compliant,
and timely decision-making underpinned by a drive to ensure data is accurate and reliable
• Further developing global capability with sales, operations, and services support through
integration activities across each of the geographies in the UKG organization
• Focusing on communications and employee engagement, enabling employees and
managers to trust information, trust decisions, manage autonomy and help employees
attain corporate objectives through a closer alignment between corporate needs and
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employee needs. An example of this is the human emotion insights that are captured
through the employee survey
• Ensuring solutions continue to support agility. COVID-relevant solutions will continue to
be developed to support COVID-compliant workplaces. Recent key developments include:
vaccination attestations, contact tracing and privacy. Roadmap items planned for 2021
that support greater flexibility and stronger communication going forward include:
− Community broadcast features
− Wi-fi geolocation
− Proactive alerts
− Flexible workweeks.
Outlook
The pre-pandemic focus of most HR functions was to attract and retain talent. As HR functions
have become increasingly operationally focused, required significant operational agility over
the last year, the strength of both UKG’s payroll and WFM solutions have already seen
increased interest, which has been evident in reported activity. UKG experienced the highest
number of client go-lives of its Dimensions product in Q1 2021 than in any previous quarter.
UKG is one year into its newly formed organization and has seen continued strong subscription
revenue growth of 16% (Q1 2021). It has ambitious goals to become a company with $4bn
revenues by FY24. It reported ~400 bundled WFM/HCM clients across the group at the time
of the acquisition, and after one year, it now has ~1,200 bundled clients. As a result of the
cross-selling and new go-to-market approach, the share of bundled service deals is expected
to increase as capability develops, likely to be focused on North America.
However, it is worth noting that UKG only natively operates two net payroll engines as part of
its product (U.S. and Canada); therefore, expansions of bundled payroll and workforce
management globally may be somewhat limited. UKG supports global payroll for over 100
countries through partners and API extensions to countries outside of U.S. and Canada, and
North America represents 90% of its business.
NelsonHall expects that once the integration of the legacy company’s solutions Kronos WFM
and Ultimate HCM has further cemented and the new client experience and UI defined, tactical
payroll acquisitions could be considered part of its longer-term growth strategy. UKG already
operates in many regions worldwide, many of which have come through the legacy Kronos
organization bringing workforce management capability. Payroll acquisitions in geographies
outside North America to build out broader payroll capability and thus greater bundling
opportunities would be a natural next step. Europe and Australia are expected to be key future
markets.
The merger also has brought greater opportunity to grow the UKG Dimensions client base.
UKG Dimensions, a legacy Kronos solution by origin, can now be cross-sold into the UKG Pro
client base. Further, there will be migration opportunities for the legacy Kronos on-premise
solution (Workforce Central). The Workforce Central legacy product had ~6k direct clients.
Over the next years, it is expected to migrate these clients to UKG Dimensions, and it has
already begun this process.
NelsonHall expects UKG to achieve strong revenue growth in its workforce management
offerings of 17 to 20% for the calendar year 2021.
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New World Workforce Management Market Summary
Overview
The ‘new world’ workforce management market is adjusting to a post-pandemic era, defined
by greater people engagement to support fluid workforce needs and availability. This is based
on a consumer approach, higher speed digital deployment, and improved use of automation
to better manage the speed of business change.
Key market developments include:
• The market experienced significant consolidation in 2020 with the coming together of two
large players, Ultimate and Kronos in April 2020. Further, Quinyx acquired AI company
Widget Brain in October, and in December TCP acquired Humanity
• Improved compliance and cost management becoming key benefits
• The top characteristic of a transformed workforce management function is the ability to
support flexible configuration. Buyers continue to look to providers for industry best
practices and next practices
• Employee communication functionality was a key development focus over 2020, enabling
the democratization of the process. AI investments advanced scheduling capability across
vendors through recommendation engines and automated approvals.
Buy-Side Dynamics
2020 was the year of unprecedented sicknesses, shut-downs and industry disruption, with
some industries experiencing significant ramp-ups. Deskless staff often could not easily work
from home and challenges managing staffing needs and availability were heightened. The
2021+ challenges are increasingly focused on digital processes, cost savings/containment,
compliance and the increased importance of employee health and employee communication
tools.
Organizations have responded with greater investment in workforce management technology.
Over 2020, adoption beyond the deskless worker population to include remote office workers
increased as availabilities and preferences were just as important in recording time as
absences during COVID-19. Deployments were fast-tracked to support COVID-19 responses,
and many projects were completed at breakneck speeds, especially in relation to the set-up of
COVID-19 testing sites.
Growth is expected to continue to be strong as a result of dynamic business environments
that require continuous changes in working patterns. Organizations will be looking to migrate
from touch clocking systems to mobile frictionless experiences to support COVID-safe work
environments. Further, organizations are also likely to be attracted to solutions that support
COVID-safe return to work offerings as well as solutions that give greater visibility of hours
worked by employees who work from home.
Market Size & Growth
The Workforce Management market is estimated at to be worth ~$4,7bn in 2020, the largest
market being North America, which represents approximately 58% of the size of the market.
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Challenges & Success Factors
Despite recent investments in improving engagement functionality by some vendors, this is
consistent across the market and, overall, buyers have least satisfaction around the ability to
survey and engage employees within workforce management processes. More can be done to
address this need across the market. Client services satisfaction is also challenged for
supporting the ability to help fill resourcing gaps; this requires greater integration with
resourcing technologies and services.
Key success factors are:
• Deeper domain knowledge and industry-specific solutions to ensure developments are
suitably tailored to meet industry and customer needs
• Enabling compliance and keeping up to date with changes in legislation in countries
serviced
• Ensuring configuration can be easily updated by end users to support ongoing change and
can meet needs
• Strong analytics and benchmarking to drive continuous improvements
• Adaptability to meet to COVID-19 specific developments such as enabling touchless
services
• Demonstrating (e.g., referenceable clients) proven experience, leadership in execution
and innovation
• Supporting integrations with HCM, access management (security), and service delivery
(CRM) platforms for optimized experiences
• Supporting document management and surveys in the product to enable solutions that
support a holistic approach to workforce needs (employees as well as employers)
• Aligning to specific industries and engaging with industry experts to develop industry-
specific solutions and innovations to solve industry-specific needs
• Ongoing investments in roadmap.
Outlook
Market predictions for 2021 and beyond:
• Demand is expected to be continue to see an uptick in 2021, with ~14% growth, driven by
mid-market uptake as well as multi-country and global growth, particularly where
companies no longer need physical clocks and can use mobile with geofencing. The
greatest growth in 2021 is expected in retail and leisure
• Workforce management and payroll solutions are expected to become more closely
integrated through on-demand pay whereby hourly employees get paid at the end of a
shift
• Shift planning is expected to attract new buyers as AI-driven algorithms enable more
flexible working for deskless staff as well as the remote/office-based staff, so that
employees can more easily share preferences and availabilities in advance of shifts being
proposed and more easily trade/auction shifts themselves as part of a democratized
process
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• Chatbot availability and personalized communications will develop to include speech
recognition and post-shift employee sentiment analysis
• AI will increasingly be used to optimize staffing with AI-driven recommendations as well as
AI-driven automated approvals
• Use of facial recognition technology (FRT) and integration with temperature checks is
expected to increase to support employee health
• Analytics and industry-wide benchmarks will gradually mature following the various
platform consolidations that are underway across vendors
• Workforce continuity processes for workforce management will be a new focus area
across providers to support business responses to major disasters, and functionality
to better assist in times of disaster will see an increase in investment
• Workforce management integrations with staffing providers for supplementing
contingent labour will develop, particularly once microservices are fully enabled.
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NEAT Methodology for New World Workforce
Management
NelsonHall’s (vendor) Evaluation & Assessment Tool (NEAT) is a method by which strategic
sourcing managers can evaluate outsourcing vendors and is part of NelsonHall's Speed-to-
Source initiative. The NEAT tool sits at the front-end of the vendor screening process and
consists of a two-axis model: assessing vendors against their ‘ability to deliver immediate
benefit’ to buy-side organizations and their ‘ability to meet client future requirements’. The
latter axis is a pragmatic assessment of the vendor's ability to take clients on an innovation
journey over the lifetime of their next contract.
The ‘ability to deliver immediate benefit’ assessment is based on the criteria shown in Exhibit
1, typically reflecting the current maturity of the vendor’s offerings, delivery capability,
benefits achievement on behalf of clients, and customer presence.
The ‘ability to meet client future requirements’ assessment is based on the criteria shown in
Exhibit 2, and provides a measure of the extent to which the supplier is well-positioned to
support the customer journey over the life of a contract. This includes criteria such as the level
of partnership established with clients, the mechanisms in place to drive innovation, the level
of investment in the service, and the financial stability of the vendor.
The vendors covered in NelsonHall NEAT projects are typically the leaders in their fields.
However, within this context, the categorization of vendors within NelsonHall NEAT projects is
as follows:
• Leaders: vendors that exhibit both a high capability relative to their peers to deliver
immediate benefit and a high capability relative to their peers to meet future client
requirements
• High Achievers: vendors that exhibit a high capability relative to their peers to deliver
immediate benefit but have scope to enhance their ability to meet future client
requirements
• Innovators: vendors that exhibit a high capability relative to their peers to meet future
client requirements but have scope to enhance their ability to deliver immediate benefit
• Major Players: other significant vendors for this service type.
The scoring of the vendors is based on a combination of analyst assessment, principally around
measurements of the ability to deliver immediate benefit; and feedback from interviewing of
vendor clients, principally in support of measurements of levels of partnership and ability to
meet future client requirements.
Note that, to ensure maximum value to buy-side users (typically strategic sourcing managers),
vendor participation in NelsonHall NEAT evaluations is free of charge and all key vendors are
invited to participate at the outset of the project.
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Exhibit 1
‘Ability to deliver immediate benefit’: Assessment criteria
Assessment Category Assessment Criteria
Range of WFM offerings
IoT integration
Breadth of employee engagement
Offerings Capability to offer decision support tools
Ability to support benchmarking
User Experience and mobile offering
Depth of Industry-specific solutions
Breadth of implementation, integration & support services
Application of intelligent/cognitive technology features
Configuration flexibility
Partnerships in support of WFM solutions
Delivery Capability
Strength of proprietary IP & roadmap
Ability to scale delivery
North America presence
Global capability
North America presence
EMEA presence
ROW presence
Market Presence
Small Market (500 to 15k employees)
Large Market (>15k employees)
Increased workforce management effectiveness
Speed and agility to support business changes
Improved decision making from better insights & visibility
Benefits Achieved Improved compliance
Improved workplace health and safety
Cost savings the process improvements
Improved digitalization of WFM processes
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Exhibit 2
‘Ability to meet client future requirements’: Assessment criteria
Assessment Category Assessment Criteria
Suitability to meet WFM needs
Flexibility
Caliber of personnel
Innovation Culture Proactively brings best practice
Value
Innovation & creativity
Ability to deliver transformation
Level of investment in WFM solutions
Level of Investments
Level of investment in country expansion
Market Momentum Volume and size of deals won in past 12-18 months
For more information on other NelsonHall NEAT evaluations, please contact the NelsonHall
relationship manager listed below.
Sales Enquiries
NelsonHall will be pleased to discuss how we can bring benefit to your
organization. You can contact us via the following relationship manager:
research.nelson-hall.com Beth Lindquist at beth.lindquist@nelson-hall.com
Important Notice
Copyright © 2021 by NelsonHall. All rights reserved. NelsonHall exercises its best efforts in preparation of the information
provided in this report and believes the information contained herein to be accurate. However, NelsonHall shall have no
liability for any loss or expense that may result from incompleteness or inaccuracy of the information provided.
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