Gajus - Fotolia

ADP acquires performance coaching and employee engagement software

The Marcus Buckingham Company's cloud-based performance management and employee engagement software is set to be integrated into ADP's HCM platforms and benchmarking tool.

ADP has acquired The Marcus Buckingham Company cloud-based performance management and employee engagement soft...


ADP, which is noted for its payroll software and other HCM products, said TMBC and its founder, Marcus Buckingham, are pioneers in using analytics and science in employee engagement software and performance reviews.

The purchase is the latest in a string of acquisitions involving the HR industry, topped by Microsoft's $26 billion takeover of LinkedIn.

In a phone interview, Don Weinstein, chief strategy officer at ADP, said he was excited about the acquisition. "The TMBC approach is backed by decades of data and research, and is critical to our desire to transform the way the world works," he said.

Faster time to market

Paul Hamerman, vice president and principal analyst at Forrester Research, said that by buying TMBC ADP is acquiring innovative software and thought leadership for employee engagement and continuous performance management.

"It gives ADP an integrated software platform called StandOut that supports next-generation performance coaching and engagement measurement," Hamerman said. "It is a smart acquisition. It gives ADP a quicker time to market than building these capabilities."

Employee engagement software provides a way for companies to listen to employees and possibly improve retention of top talent.

Hamerman said Buckingham is an author and thought leader who will help ADP evangelize performance and engagement concepts. Also, he noted that ADP acquires a roster of clients that a press release said includes Hampton by Hilton, Facebook, Microsoft, Cisco, Accenture, Chick-fil-A, Coca-Cola and Kohl's.

Tools can boost engagement

TMBC StandOut was included in a Forrester report last year that analyzed employee engagement software.

"Employee engagement is a challenge for a lot of companies, but can be positively impacted with digital tools," Hamerman said.

Weinstein, of ADP, said StandOut would be integrated into ADP's core HCM platforms Vantage and Workforce Now.

Buckingham will be co-head of the ADP Research Institute and about 100 employees of TMBC, including 65 full-time employees and 35 consultants and contractors, will join ADP.

ADP will maintain TMBC's headquarters in Beverly Hills, Calif., Weinstein said.

Benchmarking users will benefit

Data from StandOut eventually will be included in ADP Benchmarking, which was introduced in early 2016 as part of the ADP DataCloud, and allows users to compare their data in near-real time with current industry averages in areas such as compensation, turnover and other metrics. Employee engagement data, for example, could be compared to turnover statistics at a company, Weinstein said.

StandOut measures the performance of employees by providing a short survey at least four times a year to team leaders, asking the leaders a few questions about how they feel about each of their team members, according to a blog by Buckingham.

The tool aggregates the data from the questions and gives a report on the performance of each team member. A company can use the data to pay, promote or train employees.

The software asks team leaders what they would do in response to a team member's performance and tracks the data over time, according to the company's website. Algorithms neutralize bias in each team leader's evaluation style and the more team leaders use it, the smarter StandOut gets, the website said.

Weekly check-ins for teams

The software also includes a feature for team members to check in with their team leader at least once a week for coaching on how to improve.  A leader basically asks, "What are you working on and how can I help? " Weinstein said.

In addition, the software allows team leaders to give anonymous pulse surveys to team members to measure real-time employee engagement with questions based on data and science.

The surveys measure the conditions of engagement created by the team leader and provide an overall score.

Gartner plans big purchase

ADP's acquisition of TMBC is among several others related to HR. Early this month, research firm Gartner, whose coverage includes HCM software, said it agreed to buy talent-management research and advisory company CEB Inc. in a $2.6 billion cash and stock transaction. .

In July, Workday improved its capabilities for using data in cloud-based HR and financial management when it acquired Platfora, a platform for supporting analytics. Platfora allows Workday to bring third-party data into its distribution platform.

In June, Workday also acquired Zaption, which offers cloud-based video content creation technology. The Zaption technology is being rebuilt as part of Workday Learning, according to a spokeswoman for Workday.

In August, Randstad Holding announced it would acquire online recruiter Monster Worldwide to enhance its HR services and add software to link people and jobs.

Ultimate Software announced in September that it purchased Kanjoya, which uses natural language processing and machine learning algorithms for performance reviews of employees and for employee engagement software. Using the technology acquired through Kanjoya, Ultimate is launching UltiPro Perception to help companies collect, understand and act on employee feedback, Ultimate said in a release.

Next Steps

Top vendors unveil cloud-based HR products

ADP releases predictive analytics software

CGB Enterprises taps ADP benchmarking

Big data spawns new HR analytics tools

Dig Deeper on Performance management software