This morning ADP informed the markets about its acquisition of WorkMarket, founded 2010 and a leading platform / marketplace for freelancers.
A first move by a key HCM player, so certainly worth one of our customary news analysis blog posts, with a Market Move format angle at the end. The press release can be found here.
ROSELAND, NJ -- (Marketwired) -- 01/22/18 -- ADP® today announced the acquisition of WorkMarket, a leading cloud-based workforce management solution provider that allows companies to build and manage an integrated workforce across W-2 employees, 1099 contractors, vendors and other types of workers. With this acquisition, ADP builds on its current portfolio of industry-leading payroll and human capital management solutions that help clients and workers modernize the way work gets done while unlocking productivity, engagement and growth.
MyPOV – Good summary of the acquisition and of the potential… could have used some of the often-seen stats on the growing gig economy to underline the relevance.
WorkMarket was founded in 2010 and is headquartered in New York City. Backed by leading venture firms such as Union Square Ventures, Spark Capital and Foundry Group, as well as Accenture Ventures, WorkMarket helps companies manage their integrated workforce in a simple, secure and compliant manner. WorkMarket' s innovative solutions include tools to source and vet independent workers, manage their engagements, and pay and evaluate these workers. In addition to offering robust freelancer management functionality, the company has extended its capabilities to help clients optimize how work gets done across any labor type. Their client base spans global brands, as well as small and mid-sized businesses.
MyPOV – Good and fair summary of what WorkMarket does. The capability to optimize across labor types is what is interesting for people leaders these days.
"At ADP, we innovate by anticipating how the world of work evolves and how dynamics -- like the rise of the gig economy -- impact the needs of our clients and the modern workforce. WorkMarket allows us to provide ready access to a growing contingent labor pool and the tools to manage and pay them in a secure, efficient and compliant manner. Through this acquisition, ADP continues its tradition of helping clients keep pace with change and manage increasing complexity," said Carlos Rodriguez, president and CEO of ADP. "WorkMarket is a proven expert in freelancer management. We are thrilled to welcome their team to ours and to leverage our global footprint and bring scale to their expertise and technology."
MyPOV – Good quote by Rodriguez. Describes the goal going forward – scale WorkMarket globally and to the ADP customer base – with an eye on the core of ADP, payroll.
The rise of the contingent workforce is shaping the global workforce. ADP data shows that approximately 80% of U.S. businesses already rely on independent contractors and the number of contingent workers as part of the overall workforce is growing. According to […], by 2020 nearly 60% of human resource leaders will use a unified talent strategy for employees and contractors. With this acquisition, ADP becomes the only human capital management provider with broad functionality for HR professionals to manage and have insights into this new mosaic of labor, which will be comprised of both full-time employees and contingent workers.
MyPOV – Ok – here are the market sizing statistics. More on ADP being the only one… below.
Jeff Wald, co-founder and president of WorkMarket, said, "The WorkMarket team is thrilled to be joining ADP. We share the same vision of enabling companies and workers alike to navigate the changing labor marketplace with greater ease, and we look forward to offering our solutions to ADP's vast client base."MyPOV – Always good to have a quote of the founder of the acquired party in the acquisition press release. Judging from the presence of Thomas Buckingham (ADP acquired TMBC almost exactly 1 year ago – see here) Jeff Wald maybe around for a few years. It's always good to see the founders carrying the torch on a great scale. We will see.
Overall MyPOVAfter overcoming the Pershing Square board challenge in fall of 2017, ADP keeps firing on all cylinders. It announced a new payroll and has more to come in 2018. Getting in early on the gig economy is a good move, as it has massive repercussions on how workers get paid. And while the new payroll supports all the gig economy requirements, there is more needed to feed that payroll: Contractor data, validation, market places – to mention a few. A key piece is also workforce scheduling, planning and simulation, something ADP will have to consider likewise – its either build, partner (existing partnerships with Kronos are in place) or acquire here, too. Future will tell.
On the concern side, one more acquisition of course. But ADP has shown it can acquire and keep momentum… WorkMarket though requires a different architecture and approach than traditional ERP / HCM software: Marketplaces, working on both sides of the firewall, marketing automation etc. are some of the prominent additional design points. It will be interesting to follow ADP through 2018 and see how soon the vendor will tackle the area. Oh, and on the claim, being the first HCM vendor, so maybe, as SAP with Fieldglass will have a word to say (but ok, ADP could say SAP is a ERP vendor). But all is good as it means choice and competition by vendors with deep pockets to help enterprises manage their heterogenous workforces of the future. Seamless employee / contractor management is the prize, with all the implications on the compliance, motivation and alignment side.
But for now, congrats to ADP for a key acquisition and to WorkMarket – that just got turbo charged. Stay tuned for more.