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SaaS HR, mobile analytics upends workforce management software market

Nucleus Research names Ceridian, ADP among top performers and finds threats to legacy leader Kronos.

Workforce management software is maturing beyond its legacy of time clocks and scheduling to incorporate mobile access and analytics for improved labor productivity and risk management, a new study from Nucleus Research shows. The technology shift is creating an emerging class of cloud and mobility-based vendors and threatening the dominance of longtime “back office” leaders, especially Kronos.

“The time clock is dead,” said Rebecca Wettemann, vice president of research at the Boston-based company and author of the research note. “It’s now about mobile devices and kiosks and allowing managers to do sophisticated scheduling,” such as analyzing retail traffic to put workers with the right skills in stores when they’re most needed.

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Mobile device access is no longer a nice-to-have,” Wettemann continued. “It’s a checklist requirement for workforce management.” All of the applications Nucleus evaluated now have messaging features that allow users to respond quickly to conditions, such as a demand spike that requires calling in workers on short notice, she said.

Mobile technology is also benefitting from innovations in integrating Global Positioning System (GPS) and biometric technology, Wettemann noted in the report. Payment cards -- debit cards that employers can use to pay employees who, for example, lack convenient or free check cashing -- is another innovative feature from leading WFM software vendors that appears to be taking off.

At the same time, cloud computing is affecting workforce management by allowing employers and employees to access the software from anywhere. That, in turn, is fueling growth in employee self-service portals. It is also making applications more dynamic and iterative. “Part of what we’re seeing with cloud deployment is it’s much easier for business users to configure the application without going back to IT,” she said.

Newer “push” analytics in WFM software is also allowing managers to receive proactive data alerts that warn, for example, of impending worker fatigue or labor pools that are on the verge of mandatory overtime.

“This is really about managers being able to act on data at a much more fast decision tempo than they have ever been able to before,” Wettemann said.

Fatigue management, another feature of advanced WFM software highlighted in the report, is also a risk management strategy because it can help minimize injuries, according to Wettemann. “If [employees already worked a couple of double shifts, I don’t put them on forklift detail.”

WFM software rated on usability, functionality 
To be included in Nucleus's Technology Value Matrix for Workforce Management, vendors had to offer software for workforce scheduling, time and attendance and leave management. Nucleus looked at software usability factors such as intuitiveness, availability of role-based interfaces and training, alongside functionality factors that include “breadth and repeatability” of core features, ease of integration and innovation.

Workforce management software vendors in the “leaders” quadrant invested the most in usability and functionality that is likely to deliver potential returns, according to the report. Ceridian led the group, followed in rough order by ADP, Kronos, Workforce Software, SumTotal and Infor Workbrain.

Ceridian is the poster child for the recent market changes, transforming itself from a traditional service bureau to a cloud human capital management (HCM) company, the report said. The company won points for making new executive appointments, launching the self-service portal, and acquiring Dayforce.

Analytics, SaaS HR improve WFM software
Kronos continues its focus on automating back office functions of employers, including “time and attendance, scheduling, absence management, human resources and payroll, hiring, and labor analytics.” The company’s Workforce Acquisition software helped customers fill positions more quickly, improve the quality of new hires and increase federal tax credits, the report said. Kronos also expanded its footprint by adding analytics and acquiring, a midmarket Software as a Service (SaaS) WFM vendor.

But the report also noted a rise in customers switching to other vendors and said the market could leave Kronos behind if it continues to focus on time-clock technology. “Kronos has had a position of dominance in the market for some time,” Wettemann said. “Now customers are looking at these other options, especially if their next step for workforce management is a potentially disruptive upgrade of Kronos.”

Workforce Software’s strong support for regulatory compliance, fatigue management, activity-based costing and configurable screens helps it compete with larger vendors, the report said. ADP retains its strength in business process outsourcing (BPO) but has recently added benefits administration and mobile access.

Which vendors showed the most movement in the past six months? Wettemann cited Ceridian, which gained from its executive changes and new features. Infor Workbrain and SumTotal moved into the leaders quadrant, the former because of usability enhancements; the latter because of its successful integration of technology from CyberShift and Accero, companies it acquired in 2011, she said.

Many WFM software vendors, including ADP and SumTotal, are expanding into HCM with substantial offerings, while traditional HCM players such as Oracle are bolstering their WFM capabilities.

Some of the category blurring is due to recent high-profile acquisitions by WFM and ERP vendors, according to Wettemann. One question mark, she said, is Oracle’s ability to fit Taleo into its Fusion HCM product strategy without disrupting its extensive partnerships with BPO companies that handle payroll and other workforce management services. SAP’s acquisition of SuccessFactors gave it a needed boost in customer base and cloud capabilities, “but SAP can be slow to integrate,” she said.

“What we see moving forward is more integration of talent management.”

These vendors made the other three quadrants:

  • “Experts,” whose software has deep, complex functions that require more training and expertise: SAP
  • “Facilitators” that emphasize ease of use for rapid adoption and limited training requirements: API Healthcare, Lawson, Red Prairie, Reflexis and Sage
  • “Core providers” that sell niche technologies or ones with low cost and limited functionality: Kaba Benzing, Oracle, Paychex and Ultimate Software


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