Every team roster needs a great lineup and UKG is no different by bolstering its HCM and workforce management offerings with a deep bench capable of transforming any employer into a great place to work.
CEO Chris Todd (right) at UKG Aspire; startup cohorts from UKG Labs (bottom left); and a snapshot of a growing installed base running UKG Ready.
Before a crowd of over 5,000 customers and prospects at the recent Aspire event, UKG executives laid out their vision of a reconfigured product portfolio that would address a full spectrum of HCM requirements from global payroll to mobile user experience, not to mention the use of generative artificial intelligence (GenAI) to help them better support managers and employees.
UKG Pro remains one of its flagship products, which has more than 8,700 customers and millions of users who can now leverage a unified mobile interface to access Core HR and workforce management features, capping the final convergence of the two separate platforms on the heels of the merger between Ultimate Software and Kronos, Inc. three years earlier.
The second pillar of its HCM and WFM strategy is UKG Ready that has been growing rapidly over the past decade to reach more than half of the vendor’s latest installed base of 80,000 customers worldwide, as shown in the following exhibit.
Estimated Number of UKG Ready Customers
The two products are estimated to represent the majority of UKG’s revenues with UKG Pro accounting for the most as the average number of employees using UKG Pro is about four times that of UKG Ready. However, UKG Ready has been growing faster than UKG Pro because of a mix of telesales, field sales as well as partner-led push either as a white-label product or channel sell-through.
With an eye toward achieving $5 billion in total revenues at UKG over the next year or two, CEO Chris Todd considers UKG Ready a backup as much as a catalyst. He attributed the growth of UKG Ready to its decision to double the size of its SMB sales team over the past year and its overall appeal among small and midsized organizations that can turn to someone like UKG for a robust suite of Core HR, payroll as well as strategic workforce management solutions.
Todd said the current fiscal year’s priority is to move UKG Ready further up the market to as large as 500-person employers, some of whom may no longer be satisfied with the likes of Paycom and Paylocity that position themselves payroll software providers above anything else.
Furthermore, UKG Labs, its startup ecosystem with 12 portfolio companies and three quarters of a million users represented, is expected to turn up the heat for UKG Ready as they seek to leapfrog HCM software incumbents by offering add-ons that could prove to be valuable for those that are also entrepreneurial in nature and looking for alternative solutions like transportation assistance for frontline workers living in underserved communities or risk mitigation tools for last-mile delivery companies.
At the three-day Aspire event in Las Vegas, the vendor also announced UKG Bryte, an AI-powered assistant that uses Generative AI to help guide employees, managers, and HR executives with insights and recommendations on how best to improve working conditions.
The introduction of the AI assist tool follows the growing partnership between UKG and Google, which has already spawned half a dozen new AI products, thousands of AI models and even more UKG customers that are fast becoming active users of different AI tools.
A number of customers cited their reliance on UKG as a complete suite for HR, payroll, workforce management, complex scheduling, compensation management, employee engagement as well as earned wage access, while waiting for new AI capabilities that can make their jobs easier by improving retention and boosting employee wellbeing. One customer in manufacturing said the use of UKG Wallet alone for same-day payroll has helped boost retention by 1.1% since the beginning of the year, a better than expected outcome.
Although Todd harbors no illusions about the commercial value of such AI assist tools, they serve as the starting point that inevitably will lead to its other value propositions from global payroll for real-time analytics and compliance to its recently announced Benefits Hub and AI-powered recruiting through Eightfold for talent intelligence. At the event, UKG also announced a deal with Microsoft to place its low-code connectors on top of Microsoft Power Platform enabling customers to create and automate on the fly employee experiences specific to their business.
Great Place To Work As The Backup
The ultimate player on the roster may well be the 2021 acquisition of Great Place To Work, an employee feedback and survey platform, which guides companies to becoming great workplaces for all employees that will be incorporated into different UKG offerings to drive branding for employers especially those that are in dire need of boosting retention of frontline workers and managers in particular.
With UKG Bryte, UKG’s Great Place To Work – which is being sold both as a product and services – will become an intuitive recommendation engine as much as a benchmarking tool for companies to first identify bottlenecks that prevent employees from achieving their goals, while creating a new pathway for employers to continually improve their internal messaging. All of these efforts will help shore up trust and support for all parties involved as employees would rather stay put than quit and leaders adopt specific actions, behaviors, and best practices that are proven to be effective for fostering a collaborative work environment and enduring culture.
As UKG continues to pursue its expansion, it is bracing for a new set of challenges as well.
It’s one thing for CHROs to consider Great Place To Work an attractive idea to boost their reputation and attract talent, it’s something else altogether when they are being asked to take a cookie-cutter approach to improve working conditions especially when unemployment starts picking up or they may have to resort to drastic moves like layoffs during a recession, both of which could be counter-productive to investing in a corporate image makeover.
UKG executives point out that the process of becoming certified as a Great Place To Work requires meeting specific measures and goals. Recertification is also a must pending any changes to working conditions.
The volatility in the SMB market, as exemplified by the recent deceleration projected by rivals like Paycom, could force UKG to rewrite its playbook by focusing more on the enterprise, perhaps by adapting to the evolving needs of its legacy Workforce Central customers on when and how they should migrate to UKG Pro or UKG Ready.
Finally, the global payroll push by UKG through its recent purchase of Immedis may have limited impact on its top line immediately given that only 10% of its workforce management revenues is derived from multinationals. Another obstacle lies in the fact that payroll remains a local technology play that has been dominated by indigenous service providers with no shortage of compliance and jurisdictions to deal with.
The upshot is that after assembling a workforce of over 16,000 including more than 1,000 new hires in the most recent quarter, UKG has built a formidable organization with above-average starters and a versatile backup.
Todd is confident that UKG, which has been registering an annual run rate of more than $4 billion in its fiscal 2023, now has the scale and reach that its customers can count on, in addition to the manifestation of an enlarged ecosystem that covers an army of global system integrators, partners and startups whose involvement with UKG is predicated on the across-the-board victory that all of them would want to savor.
List of UKG Customers
Source: Apps Run The World, November 2023