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Instant Analysis: ADP Acquires WorkMarket…But What Does This Mean for the Future of Work?

Ardent’s latest research study, The State of Contingent Workforce Management: The Convergence of Talent, Technology, and the Future of Work, found that 40% of today’s total workforce is considered non-employee by employers. This is a figure that includes professional services, independent contractors, flexible workers, freelancers, temporary staff, and robotics. As such, it makes perfect sense that industry technology providers, including those that sell Vendor Management Systems and human capital suites, are actively looking to spark innovation and enable a deeper range of functionality to better manage a blended (FTEs and non-FTEs) workforce.

We had heard rumors that a deal was brewing and yesterday, ADP announced that it acquired online talent platform and labor automation outlet, WorkMarket. Below is Ardent’s “instant analysis” of the deal:

Ardent’s Instant Analysis

  • The deal is a clear signal that solution providers are vested in demystifying the concept of total workforce management (“TWM”). The concept of total workforce management is confounding to many; some business leaders believe that the entire structure is a vast myth, while others are convinced that, in due time, the complex layers of TWM will become a necessity given the rapid growth of the non-employee workforce. ADP’s acquisition allows the giant provider to cater to both ends of the total workforce management spectrum: handle payrolling and core human resources/human capital management (HR/HCM) competencies and processes while also offering a new, interconnected network of talent and non-employee skillsets to its client base.
  • The value of vast total talent data, from FTEs and W2 workers to freelancers and independent contractors is significant. Let’s look at this from an operational perspective: today’s hiring managers, procurement executives, and HCM “showrunners” rely on on-demand decision-making to make the business world run. In my recent Modern Guide to Total Workforce Management report, I highlighted one key element as part of Ardent’s landmark TWM Operating Model: total talent data. Users of the unified platform will eventually have access to a vast array of talent-based data, including deeper looks into total talent pools, information regarding on-site assets, performance of key contractors and freelancers, etc. This visibility capability is one giant step towards the total talent data management. However, just because the ADP-WorkMarket union will be able to provide data from WorkMarket’s talent network, that does not mean the combined company will offer data integration abilities with other online staffing outlets or even bigger contingent workforce technology providers, like Vendor Management Systems (note that it may only be a matter of time before this is enabled under the unified platform).
  • Enable agility for businesses that have not yet bought into the new world of work. What is the top challenge for businesses today, according to Ardent’s new State of Contingent Workforce Management research study? Answer: The desire to become a more agile business; this, after years of cost savings or compliance ranked as the primary driver of program enhancement. In regard to this acquisition, ADP may now be able to offer its customers (of all sizes) an ability to tap into real-time talent pools and manage that talent from compliance, payment, and project management perspectives in a more seamless and holistic manner by leveraging its own HCM functionality. This, of course, can be a prime driver of business agility for those businesses that have not yet begun to access real-time, on-demand talent. The key takeaway here is that if its longtime payroll and HR systems are connected to and integrated with a platform that provides real-time access to the new world of on-demand talent, a business will be much more likely to expand its talent pool via the connected (and thereby trusted), talent platform. By making the acquisition, ADP is betting that its customers will be more likely to tap into WorkMarket than other talent platforms because many typical employment risks, such as compliance and audits, would be minimized due to ADP’s long and storied history as a provider of deep HR and HCM compliance automation.
  • Legendary payroll and human capital management company + young online talent platform and labor automation system = the potential for more workforce and talent management innovation. WorkMarket has been an attractive company to the investment community, counting Accenture, Union Square Ventures, and Spark Capital as those who have backed the company with tens of millions of dollars in the last two years. WorkMarket’s “labor clouds” allow its clients to find and engage talent, curate deep talent pools, maintain compliance regulations, and provide a cloud-based platform in which to manage this talent and the projects in which they contribute (the company even acquired Freelancer Management System provider OnForce last year to enhance its own data management capabilities). ADP has been an HR/HCM giant for decades and offers a host of human capital management automation, from benefits administration and talent management to payroll and time and attendance. The WorkMarket acquisition boosts their standing in the HCM space and obviously helps ADP enable new and innovative ways to enhance talent acquisition and talent management…ultimately, helping their customers navigate the most complex era in business history, especially with concepts like the Gig Economy, Future of Work, and cognitive intelligence (i.e., artificial intelligence and machine learning) beginning to dominate the worldwide marketplace. The opportunity is vast, assuming that WorkMarket does not get lost or marginalized within the HR and payroll behemoth.

While the financial terms of this deal were not disclosed, Jeff Wald, co-founder and president of WorkMarket, stated, “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.”

DO NOT MISS TOMORROW’S EDITION OF THE CONTINGENT WORKFORCE WEEKLY PODCAST!Not only will we unveil our 2018 prediction for the new world of work, Future of Work, and contingent workforce management, but will also offer more in-depth analysis of ADP’s acquisition of WorkMarket.

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Contingent Workforce Weekly, Episode 214: Conversation with Jeff Wald, Co-Founder and President of WorkMarket

 

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