It has been quiet on the global payroll front in general – the biggest news of the year has been incremental addition of countries by practically all major global HCM vendors (see here for the Market Overview).
The faster path – basically not playing the country-by-country monopoly game – is an acquisition - and that is what Ceridian just has done, with the acquisition of ADAM HCM. Let’s dissect the press release in my custom style, it can be found here.
Toronto, ON and Minneapolis, MN, December 6, 2021
Ceridian (NYSE: CDAY; TSX: CDAY), a global leader in human capital management (HCM) technology, today announced it has acquired ADAM HCM, a leading payroll and HCM company serving customers in 33 countries across Central America, South America, and the Caribbean. This acquisition positions Ceridian as a leading HCM provider in Latin America and will create value for existing and prospective customers in key markets, including Mexico and Brazil.
MyPOV - ADAM HCM has been a specialist for Latin America, pretty much since its inception, pitching its capabilities to typically North American headquartered companies (e.g., Bayer, Cargill, GM, Intel etc.) that have been disappointed by their large HCM vendor support for both Latin American and Caribbean countries. More recently ADAM HCM has focused on larger Latin America champions, with a focus on Brazil and Mexico headquartered (e.g., Vale) companies.
Trusted by leading global brands, ADAM HCM has a strong and tenured leadership team and extensive regional knowledge and experience. Through this acquisition, ADAM HCM customers will be able to access Ceridian’s award-winning platform for global HCM, allowing them to scale and grow globally across new geographies.
MyPOV – This is a neutral statement on the intentions of Ceridian. Certainly, ADAM HCM customers will get access to Ceridian payroll supported countries but that is only a small portion of the overall potential for this acquisition. Understandably, Ceridian is trying to not open its cards here to much – but the medium and longer term is clear – leverage the ADAM HCM payroll expertise and build out Ceridian payroll... the interesting aspect to watch out for – will Ceridian first ‘just’ integrated the ADAM HCM payrolls or start with a rebuilt of them in the native Ceridian technology stack… future will tell.
“This acquisition will accelerate Ceridian’s global growth strategy by extending the Dayforce platform into Latin America, a highly appealing region for our multinational customers,” said David Ossip, Chair and CEO, Ceridian. “Together with ADAM HCM, we’ll enhance our capacity to meet rising customer demand in Latin American countries, while delivering on our brand promise to make work life better for people everywhere.”
MyPOV – Ossip’s statement shows the real intention unequivocally – bring Ceridian to Latin America. ADAM HCM supports 30 countries across Latin America and the Caribbean. Once Ceridian has support for these countries in Dayforce, which will of course not happen overnight, but would make Ceridian the #2 amongst HCM vendors when it comes to native, on platform payroll support.
Today’s announcement will accelerate Ceridian’s commitment to deliver Dayforce Payroll in Mexico. Dayforce Payroll, Ceridian’s always-on, global payroll platform, improves accuracy by auditing payroll data in real-time while managing global compliance complexities – all within a single solution.
MyPOV – Support for Mexico payroll was announced by Ceridian earlier, this acquisition will certainly help the effort, and more importantly rationalize the investment sooner, as a larger customer base can be potentially sold to.
“We are thrilled to become part of Ceridian’s global team and broaden the reach of Dayforce into Latin America and the Caribbean,” said Brian Beneke, CEO, ADAM HCM. “In today’s borderless and fluid world of work, our customers will benefit from a single Dayforce experience that delivers innovation and experiences to help organizations and employees reach their full potential.”
MyPOV – They usual acquired CEO positive statement, glad Beneke mentions the Caribbean – which is an underserved, under automated region when it comes to payroll support.
Ceridian continues its strategic acquisition spree of regional payroll players, that offer multiple country support already. Ceridian has shown that for the APAC region with the 2020 acquisition of Excelity and this February with Ascender. It even has a luxury and consolidation challenge there, as payroll offerings overlap. Now Ceridian is tackling Latin America and Caribbean. What’s next? Europe and Africa remain… as well as the Middle East. We won’t be surprised if Ceridian acquires there in 2022…
But it is one thing to acquire payroll providers, it is another one to get the know how into the go to platform (Dayforce) and another one to consolidate these payrolls and replace them with the Dayforce offering. Ceridian has shown in North America that it can do upgrades on a large scale at metronomic precision, as it upgraded the old Ceridian platform customers to Dayforce. And let’s not forget, Dayforce is a nice upsell for most of these customers who only HR Core and Payroll with their vendors, maybe some light Talent Management, but a full Talent Management suite, and the Ceridian ‘crown jewel’ on the Workforce Management side are massive upsell opportunities.
For not it is congrats to Ceridian, you first need to have the inhouse know how to build a payroll, and an acquisition is a good way to not only get the know-how, but also get real customer to convert to the new product to. Let’s see which countries will come out first wit the help of ADAM HCM.