Stacia Garr and I attended the UKG Aspire conference in Las Vegas from November 6-8, 2023. It was the biggest conference the company has ever hosted, with over 4,000 customers and 1,500 partners and analysts in attendance.

CEO Chris Todd opened with impressive growth figures: $4.3 billion in total revenue, $881 million in bookings, and 1,000+ new employees in Q4 2023. The two-day event was filled with insightful updates from the executive team, offering a valuable glimpse into the company's vision for the upcoming year. Below is the TL;DR for this event. You can also check out our road reports from the company’s analyst sessions in Spring 2023 and Fall 2022.

1. A strong commitment to making companies great places to work. UKG acquired the Great Place To Work (GPTW) Institute in 2021 and has been working to integrate the capabilities into its technology and service offerings. This year, the company announced the availability of the GPTW Hub – a single unified place for UKG and GPTW data – in all of their products.
2. Doubling down on user experience and community. The company highlighted its continued investments in simplifying its products, improving the user experience, and driving user experience by providing a single unified mobile application for its users, launching a benefits hub for employees, and providing connectors for users to build custom codes.
3. Entering and expanding into new and adjacent markets. The company has moved up on the SMB front and is providing UKG Ready suite to companies with up to 500 employees. It also announced a new product, UKG One View for Global Pay, and a new partnership with Eightfold.ai.

A strong commitment to making companies great places to work

The keynote sessions and analyst sessions focused heavily on UKG’s purpose of helping organizations become great places to work for all through people-centric HR technology (Figure 1). There are 2 main ways UKG is trying to do that.

• GPTW Hub: The company announced the availability of the UKG Great Place to Work (GPTW) Hub to all UKG Pro customers. The Hub is GenAI-powered, and leverages UKG and GPTW data, including Trust Index benchmarks, best practices, and insights. It is able to offer insights into a company’s culture as well as identify areas that need to be improved and recommend specific actions and behaviors based on GPTW leadership model. The company plans to launch GPTW Hub for Ready in H1 2024.

Figure 1: A snapshot of UKG Great Place to Work Hub | Source: UKG 2023

• UKG Bryte: The company announced the launch of its AI assistant, called Bryte, as part of its UKG Pro suite. Bryte provides a unified solution for access to UKG Flex People Fabric, which is the underlying AI and machine learning that pull together insights and provides recommendations and nudges based on UKG and GPTW data, which itself is layered on top of Google’s Vertex large language model, which allows the technology to scale easily. The company envisions the technology being used for both task automation and operational improvement and overall talent and leadership development (Figure 2). Bryte will be available for UKG Ready customers in H1 2024.

Figure 2: A snapshot of UKG Bryte AI | Source: UKG 2023

Our take

The investment in GPTW hub area strongly aligns with UKG’s goal to develop better leaders and is the most comprehensive and clear messaging we have seen so far. While the company has been leveraging its GPTW product as a differentiator ever since its acquisition, the integration of the hub into UKG Pro and the brand is firmly established now.

It’s interesting to see how this has led to a slight shift in UKG’s messaging. While in 2022, the company identified its people-first suite as its leading differentiator, it now sees the one-of-a-kind data from its GPTW hub as the leading differentiator. Although their human-centric approach continues to be a value driver, the company is right in leading with something that truly sets them apart from other HCM providers. The integration of the GPTW hub into UKG Pro solidifies this position, emphasizing its unique data as a leading differentiator.

The description of how UKG plans to enable their customers to use AI technology represents some of the clearest thinking around usage that we have seen so far. The idea of using it not just for job descriptions and interview guides (which comprise most use cases currently) but also for leadership behavior nudges, career pathing, and frontline worker insights reflects that UKG is thinking more broadly about how to use AI to transform practices, not just make them more efficient. The challenge will be in not just getting companies to adopt the technology for these high business value and impact cases at scale but also in the right manner. A good way to do this would be for UKG to share their own learnings as they test and build these capabilities. Chris Todd shared that internally, the leadership is already encouraging UKG employees to use these capabilities to help them manage their workload, and as a result, avoid burnout.

Doubling down on user experience and community

The company has invested over $2 billion in customer experience over the last 3 years. There were several announcements that underscored the company’s commitment to unification, simplification, and an improved user experience:

• Unified mobile application: UKG announced a new mobile application for the Pro suite, which allows users to access all the information from the Workforce Management product and Pro HCM in one unified place. The application will provide a consistent experience to all users, regardless of whether they need to run payroll, manage schedules, or take any other HR action (Figure 3).

Figure 3: A snapshot of UKG's new mobile app | Source: UKG 2023

• Low-code/no-code premium connectors and templates. These are provided for mutual UKG Pro and Microsoft Power Platform customers. These connectors will make it easy and simple for users to create their own custom applications and configure workflows as per their needs.
• UKG Pro Benefits Hub. A new product that makes it easy for employees to access all the information regarding their benefits in one place (Figure 4). The product includes a comparison tool for employees and a feature that shows the impact of selected benefits on their income.

Figure 4: A snapshot of UKG Pro Benefits Hub | Source: UKG 2023

• Continued investment in the community portal. Launched in 2023, the community portal was an important addition for the company, especially since its biggest competitors (Workday and Ceridian) already had established community portals as part of their platforms. This year we saw that the community has grown into an active and valuable place used by over 2000 customers and partners to ask questions, share knowledge, and access classes and courses for free (Figure 5).

Figure 5: A snapshot of UKG's Community Portal | Source: UKG 2023

Our take

UKG has been on the simplification and unification journey for a while. It is the persistent focus that made the Ultimate and Kronos merger a success and turned UKG into its own brand. With the continued development of new products and acquisitions, the investments made in simplifying the experience for the user will be crucial in long-term adoption. The low-code/no-code connectors, in particular, can help expand usage among power users.

The unified mobile application will ensure accessibility and consistency for customers while low-code/no-code connectors will empower customization, and the Benefits Hub will simplify benefits management, collectively contributing to more efficient and user-friendly HR practices.

Entering and expanding into new and adjacent markets

A couple of announcements highlighted this.

• Expansion of UKG Ready into smaller markets. During the Spring event, UKG announced the official availability of UKG Ready product for clients of up to 500 employees (it used to target customers with only 250 employees). The product is now directly sold to companies with 75-500 employees. For companies with less than 75 employees, the product is available via resellers and partners (Figure 6). To push further into the small-sized market (SMB), the company has changed its marketing strategy for the product to go directly after the market and has hired over 100 sales representatives to drive its efforts.

Figure 6: An overview of UKG suites | Source: UKG 2023

• Multinational payroll via UKG One View. The company announced the launch of a new product, UKG One View for Global Pay. The product is the outcome of the Immedis acquisition earlier this year and provides a unified view of a company’s payroll across the globe. Through UKG One View, HR can run payroll anywhere in the world in any currency and continue working with their preferred payroll provider through the product, thus helping the company expand its customer base across the globe. The product is currently available to UKG Pro customers and will be made available to UKG Ready customers in mid-2024.

Figure 7: A snapshot of UKG One View | Source: UKG 2023

• Partnerships. The company announced the integration of UKG Pro suite with Eightfold.ai, a skills-based talent acquisition vendor (Figure 8). The partnership will allow data from UKG Pro to flow into Eightfold.ai and allow customers to hire high-performing talent from a wider talent pool based on their needs. UKG also announced a partnership with PayPal which will allow customers to create PayPal account from within UKG HCM and receive their anticipated salary two days in advance.

Figure 8: A snapshot of UKG's partnership with Eightfold | Source: UKG 2023

Our take 

The fall conference season firmly established the trend that we had long seen coming – multiple partnerships between HR tech vendors. UKG’s partnership with Eightfold.ai will be useful for customers interested in skills-based hiring.

The UKG One View product is also a smart move as it will help massively ease the multi-country payroll experience for HR leaders. We think it will be particularly beneficial for smaller companies with lean HR teams and global offices dealing with different payroll providers.

Overall, these developments collectively position UKG as a vendor focused on expanding its market reach by simplifying global payroll processes and forming strategic partnerships to enhance talent acquisition and financial services for its clients. They should lead to a more comprehensive and globally accessible suite of HR and workforce management solutions for a diverse range of businesses.

Final Thoughts

Overall, it was a very informative and well-designed conference. We greatly appreciated the opportunity to spend 2 days with UKG’s leadership and ask them questions about their challenges, vision, and product future. UKG has made significant investments in its HCM suites over the last few years. We are excited to see the company continue to innovate and look forward to particularly hearing more about how it will leverage GenAI for the benefit of its customers in the new year.

Last week thousands of people—including the 4 of us—descended upon the Mandalay Bay in Las Vegas for the annual HR Tech conference. It was a full event: schedules were packed, energy was high, and food was plentiful. We had an absolute blast!

Here are our high-level takeaways from the event:

• Fresh air. Seriously—this was one of our biggest takeaways: If you’re in Vegas, don’t let yourself spend the whole time indoors. We had lunch with RedThread members outside, and it was game-changing.
• Energy & community. Face-to-face meetings are still rare enough that people were super jazzed to meet old friends and make new acquaintances in person.
• Skills & AI absolutely dominated hallway conversations, session content, and provider messaging on the show floor, as expected.
• Manager effectiveness also showed up as a running theme as providers aim to better support managers with tech and AI.
• Vendor partnerships. Many providers said they were using the conference as an opportunity to explore or solidify partnerships with other vendors.
• Surprises. There were more providers from unlikely places offering skills tech and more earned wage access providers than we expected, but fewer frontline tech providers.
• Keynotes. Skills is an ongoing care-and-feeding process; companies need to help people fall in love with their work; and although HR tech spending will go down overall in 2024 it’s likely to rise for learning and people analytics tech.
• Next year. We think the vendor booths in the expo hall may be different next year as some vendors cut marketing spend and new AI vendors enter the market.

Now for the details…

Fresh air, energy & community

If you’ve ever been to a conference in Vegas, you’re probably familiar with this phenomenon: You land at the airport, get into a taxi, go to one of the hotels on the Strip, stay inside for 2-4 days straight, get back in a taxi, head back to the airport. Ugh.

We broke that streak with an outdoor lunch with RedThread community members and wow, did it make a difference! Join us next year because we’re sure to do it again.

Figure 1: RedThread community members at lunch at HR Tech | RedThread Research, 2023

We also got tons of energy and a feeling of community from the Tech Consortium members we talked to during the Moveable Feast of Insights interviews. We asked leaders about what they were seeing at the conference, what surprised them…and, yes, their views on skills and AI. You can check out the recordings here:

• Betterworks
• Claro Analytics
• Cornerstone
• Crunchr
• Degreed
• Eightfold
• Lightcast
• Microsoft
• Seekout
• Skillable
• Techwolf
• UKG
• Visier
• Workday

Skills are still hot

Everyone’s still talking about skills. It came up over and over (and over) again in our conversations with leaders and vendors—and not just because both of our team’s sessions were about skills. Vendor booths, session topics, and ad hoc conversations covered skills nearly as much as they did AI. For example, a few sessions in addition to ours were:

• Madeline Laurano of Aptitude Research and Xabier Ormazabal of Eightfold spoke about skills-based talent intelligence
• Caroline Ford, formerly of Novartis, Mike Howells from Pearson, and Mallory Martino from BIC shared how to strengthen a skill strategy
• Antony Shields from EY and Conor Volpe from Eightfold talked about AI and skills

But the most visible skills presence at the conference came from the vendors. There were loads of vendor-led sessions, demos, presentations, and case studies on skills from Cornerstone, Degreed, Eightfold, Lightcast, Neobrain, Phenom, Seekout, ServiceNow, Skyhive, Visier, and Workday. And we saw the word “skills” (along with AI, below) on many, many booths.

So it was interesting to note that, despite the chatter, many organizations are still in the early stages of developing their skills strategies. This was evident during Dani and Stacia’s skills session, where the audience was asked where they were in their skills journeys. Nearly half of folks raised their hands, saying they were thinking about it but didn't have a strategy yet. That aligned with the survey results that Dani and Stacia shared during the session: 58% of HR leaders surveyed said their organizations have no skills strategy (Figure 1).

Figure 2: Survey results on skills strategy | RedThread Research, 2023.

RedThread research hub members can access the above image and the full slide deck from Dani and Stacia’s skills presentation in the member portal here.

AI: Features, demoware, ethics

AI was the other hot topic at HR Tech. We saw a lot of AI-focused features being demoed at vendor booths, especially features using generative AI. We heard about how AI can enable skills-based approaches, improve hiring, increase productivity, transform the employee experience, and more. There were sessions on the potential of generative AI and pretty much every session in the conference touched on AI in one way or another.

Based on our understanding of the tech, much of what was being touted at the show was demoware. Demoware is designed to show the potential of AI / Gen AI, but it’s not actual code integrated into the products. (Or at least not code that could do much more than what was being shown in the demo environment.)

This is ok, because so much of the capability of AI is new, and most vendors are unlikely to invest heavily into integrating Gen AI until they are certain it is something their customers want, have clear use cases for, and know it will work. However, it is important for buyers to beware: Just because a vendor showed Gen AI capabilities at HR Tech does not necessarily mean it has those capabilities ready to roll out at an enterprise-grade level. If you are buying HR tech software right now, ask questions about the actual extent to which AI or Gen AI capabilities exist within the product—and ask for the opportunity to test those capabilities.

Ethical AI came up as a concern in many of our Moveable Feast conversations, including with Cornerstone, Degreed, Eightfold, Lightcast, Seekout, Techwolf, and Workday. Vendors and organizations seem to be experiencing both pressure to move fast on AI and the need to minimize any adverse effects of the AI they use—and there’s a tension between those two things. The people we talked to were thinking about how to ensure that:

• Organizations make good decisions about when and how to use AI
• Any AI is trained on clean and debiased data to the largest extent possible
• Decisions based on AI recommendations are explainable
• Personal data remains secure and private

A prediction: AI will increasingly be a commodity, the way that mobile capabilities are now a commodity. This commoditization is already occurring, as evidenced by the fact that nearly every vendor advertised that they have AI. A specific example of this is the proliferation of conversational chatbots, which were everywhere at HR Tech. Next year, we expect to see text summarization, suggested language prompts, and natural language inputs everywhere, all of which leverage generative AI.

Managers still need more help

One recurring theme was the ongoing challenge of manager burnout. Managers are often tasked with balancing the human and operational aspects of work, and they have more on their plates than ever.

In response, many HR technology providers are prioritizing support for managers. This support enables managers to be more efficient and agile in their roles, reducing their burden and enhancing their ability to lead effectively. The HR tech landscape is responding to the pressing need for tools that empower managers. A number of sessions at the conference focused on helping managers get the support they need, improving their effectiveness, and helping them drive employee engagement.

Some of the vendors we spoke with are focusing on managers by using AI to automate administrative tasks and redesign work, allowing managers to spend more time on meaningful activities and avoiding burnout. Others are using AI to help with performance management.

For example, one of the vendors we spoke with, beqom, is using AI to help employees with goal-setting and suggest questions that employees and managers should discuss in their check-ins so that they are able to better use their time together. Another vendor we spoke to, Beamible, is focusing on jobs and work design to help address manager burnout. A session by the people analytics technology vendor Visier highlighted the metrics that can help companies measure manager effectiveness and the insights that can help managers make better decisions. Another session by the workforce management vendor Legion showed how automation can reduce the administrative burden on managers and focus on what matters most (Figure 4).

Figure 3: Top 3 things managers say will make their lives easier | Source: Legion, 2023

Vendors are emphasizing partnerships

Notably, compared to previous years, more vendors at HR Tech emphasized their partnerships with other vendors. This reflects a trend we’re seeing more broadly: More and deeper vendor partnerships.

For years, anyone would say, “Of course we integrate!” when asked, but they weren’t necessarily promoting their integration capabilities and the quality of those integrations was often uncertain. Sometimes “integration” meant the ability to ingest a .csv file.

This year, we noticed the extent to which providers were actively advertising their integrations, promoting the depth and breadth of their partnerships with other providers as a benefit or differentiator of their solution. More and more people—from vendors and organizations alike—seem to have converted to the idea that no solution can provide all the needed tech. Even the biggest platforms can’t offer everything. This is why so many folks mentioned they have an “open and extensible ecosystem.” This is a good thing.

For example, Nag Chandrashekar from Degreed, Karthik Suri from Cornerstone, and Mikael Warnoo from Techwolf all emphasized during their Moveable Feast interviews that skills require an ecosystem approach (Figure 5). Many different platforms—human capital management systems, applicant tracking systems, learning systems, talent intelligence and management systems, and so on—generate and use skills data. Successful skills-based approaches will depend, at least to some degree, on providers’ ability to make different tech systems work well together.

A few surprises

We were surprised to see 3 things:

• Skills tech vendors from unlikely places. We’re used to hearing of skills tech vendors hailing from talent acquisition, learning, and people analytics categories. But from compensation, traditional assessment, or org design vendors? No, we didn’t expect that, necessarily. But that is what we saw. Across many of our briefings, vendors shared with us unexpected ways they play in the skills story, and that will show up in our skills tech update, which we will be publishing within the next quarter.
• More earned wage access vendors than expected. Earned wage access (EWA, also known as on-demand pay) is one way for organizations to support workers’ financial wellbeing without actually paying them more. As such, it’s been growing in popularity over the last few years. We expected to see some EWA vendors at HR Tech this year, but we were surprised at just how many there were. We noted at least 8 specialized EWA vendors—Clair, DailyPay, EarnIn, Immediate, Instant, Payactiv, and Tapcheck—not to mention the larger payroll/HCM vendors who also play in this space, like Ceridian and UKG. The vendors we talked to expect to see significant growth in 2024, so we should see even more of them at the conference next year.
• Fewer frontline offerings than expected. We’ve been researching frontline workers a lot this year. We know organizations continue to struggle with frontline talent shortages, and they’re looking to tech for solutions. We also know that frontline tech vendors are doing all right financially—for example, many expect to grow in the next 12 months and/or close funding rounds, as we’ll report in our upcoming frontline tech study. Given that there’s high demand and supply, we expected to see more frontline-focused vendors. That’s not to say there weren’t any frontline tech vendors—UKG and Workday’s Moveable Feast interviews highlighted their frontline offerings, the EWA vendors mentioned above primarily serve frontline workers, and there were a few frontline-focused vendors like Denim, Escalate USA, and Workbuzz. But there were a lot fewer than we thought there’d be. We hope there’s more next year.

It'll be interesting to see how these 3 surprises shape up next year.

Highlights from the keynotes

We missed Geena Davis’ keynote opening the conference, bummer! But we were glad to catch the other 3:

• Josh Bersin, HR analyst and author, opened the festivities on Wednesday with some framing thoughts on skills and AI. We appreciated his emphasis on skills as an ongoing, adaptive journey rather than a one-and-done exercise. He said skills are “an ongoing care-and-feeding process for your company” and gave the example of a large defense contractor that annually identifies upcoming critical skills, then hires and trains its workers accordingly. He also predicted the 4-day workweek is coming.
• Marcus Buckingham, author and motivational speaker, kicked off Thursday. He spoke about the declining trust among people in institutions that surround us, including government and media, and the rise in burnout among the younger generations joining the workforce. He called out the need among companies to help their people fall in love with what they do. The key to doing that, according to him, is to identify the outliers – those that are extremely engaged, performing to a very great extent, excited to go to work everyday – and figure out what their characteristics are and why they love working for the company. Understanding and further developing that can help companies establish trust and help others love what they do as well.
• Stacey Harris, industry analyst and Chief Research Officer at Sapient Insights Group, closed the conference on Friday morning. She presented some results from Sapient’s annual survey of over 2000 HR leaders, which framed some of the macro trends facing HR. Notably, she highlighted the fact that HR tech investments will likely go down overall in 2024, not just because of the economy but because many companies spent heavily on HR tech in recent years and buyers are looking to understand impact/ROI before they invest more. However, investments in people analytics and learning tech will likely go up—with more organizations planning to replace their learning tech systems than any other HR tech system.

We thought these keynotes framed the conference and each day nicely.

Vendors’ presence may be very different next year

Looking ahead to next year, we guess the expo hall floor may look different than it did this year—some of this year’s vendors might be missing; we might see some fresh new logos; and the booths may be somewhat less grandiose.

Here's what the floor looked like this year:

Figure 5: HR Tech show floor in 2023 | RedThread Research, 2023

Yes, there were live animals on the expo floor (kittens). We hope that'll change next year.

More broadly, we think vendors' presence and the view on the floor may look different next year for 3 reasons:

• Consolidation. Right now, many relatively small HR tech vendors who secured investment funding back in 2021-2022 are starting to run out of those funds, and it’s much harder to raise a new round right now. At HR Tech, we heard a lot of chatter that some vendors are looking to be bought, while others are looking for good deals on companies to buy. We expect to see some market consolidation in the next year—and those deals will be reflected in the logos on the show floor next year.
• Smaller marketing budgets. In her keynote, Stacey Harris reported that HR tech spending will likely decrease by 11% next year. And when we talked to vendors on the show floor, many of them said the booth traffic this year was light compared to 2022. Neither of those data points bodes well for vendors’ revenue in 2024. Although some vendors said they’re hoping for strong H1 2024 sales, we expect many will be more conservative in their marketing spending next year, and that’ll mean many may opt for less costly booths (read: smaller, less design, less construction).
• New AI vendors? This year, generative AI mostly showed up as features that had been added to existing offerings. We wonder if in the next year, we’ll start to see new vendors who started from scratch and developed completely new products and completely new ways of leveraging AI for work. We don’t know, but we can hope!

Wrapping up

We were thrilled at the thoughtful conversations, warm greetings, and helpful insights we found at this year’s HR Tech conference. We can’t wait until next year!

I recently spent a day with ADP’s senior leaders for their annual analyst day in their NYC Innovation Lab. As always, it was an exceptionally well-run event with wonderful access to ADP’s CEO, Maria Black, and her executive team. If you want some continuity in ADP’s story, RedThread members can check out last year’s ADP Road Report.

Here are my high-level key takeaways from the day:

• Consistent revenue growth: ADP grew 9% in revenue in FY2023 to $18 billion and experienced a 10% increase in employer services bookings growth. The company has more than 1 million clients and serves 80% of the Fortune 500.
• A marked change in leadership tone: ADP’s CEO, Maria Black, and its President of Global Product Innovation, Sreeni Kutam, who both started their roles within the last year (though they are ADP veterans), are setting a new tone. Given the day's conversations, I interpreted that tone to be more open, curious, and, dare I say it… human. This tone was underscored by Maria’s opening comments, where she stated that ADP is “Growing stronger, smarter, and with purpose.”
• A cleaner go-to-market approach: ADP had a much more precise set of strategic priorities than it shared last year, namely that it will “Lead with best-in-class HCM technology; Provide unmatched expertise and outsourcing; and Benefit our clients with our global scale.” Further, ADP is dramatically simplifying its product offerings, with its Next Gen HCM as a centerpiece of the new approach. In addition, it is placing a big bet on international growth.
• Large investments in Next Gen HCM: ADP invested in its payroll capabilities, implementation speed, and effectiveness, and it bought a company, Sora, which helps stitch together workflows. ADP also invested in its talent management capabilities and will continue to do so throughout next year. Though Next Gen’s growth isn’t as strong as I would have anticipated, it is still growing steadily, and we expect it to grow faster next year.
• AI is everywhere: ADP demonstrated a range of examples of where and how it integrates artificial intelligence capabilities of the generative and non-generative types. Their marquee offering is ADP Assist, which is a Gen AI-enabled chatbot. Leaders talked frequently about the importance of data security, ethics, and responsibility when it comes to AI.
• A few things were missing: It is impossible to cover everything in a single analyst day, but there were a few things that were discussed at length last year that were largely missing from this year’s session: diversity, equity, inclusion, and belonging (DEIB) and information on what’s happened with the Voice of the Employee survey. Further, we didn’t get much information on what learning and skills capabilities will look like.

With that said, let’s dive into the details.

Note: The full blog was publicly available for 48 hours, after which point it became available only to RedThread members. Sign up to become a member at https://members.redthreadresearch.com.

This morning, Perceptyx, an employee experience, engagement, and voice vendor, announced it acquired Humu, an employee engagement vendor best known for using science-based “nudges” (and for being founded by ex-Google CHRO Laszlo Bock).

For those of you counting, this is the fourth acquisition by Perceptyx in 3 years (the last 3 being Waggl, CultureIQ, and Cultivate). Given the surface-level similarity between Humu and Perceptyx – both vendors in the employee engagement / experience / voice space – you might be wondering what Perceptyx is thinking in making this acquisition. Let’s dive in and explore this deal together.

At a high level, here’s what you need to know about this acquisition:

• The greatest weakness of any employee engagement / experience / voice vendor is that they typically only measure those things – they generally struggle when it comes to showing they are driving change. Perceptyx is acquiring Humu to help it fill that gap in its capabilities.
• Humu’s value to Perceptyx is entirely tied up in its nudge system, including its behavioral content, science, sequencing, etc.
• The Humu acquisition helps round out Perceptyx’s product vision and continue its shift from a measurement and monitoring solution to one that also enables the mobilization of those insights at scale.
• This acquisition is indicative of a broader shift we anticipate will come in this space: moving from EE / EX / Voice measurement and monitoring to these solutions also mobilizing and motivating change.

In this blog, I cover:

• What employee engagement, experience, and voice vendors have done traditionally and where they have fallen short
• Who these specific vendors (Perceptyx and Humu) are and what they’ve done to date
• What we should expect from Perceptyx after the Humu acquisition

Note: This blog was publicly available for 48 hours, after which point it became available only to RedThread members. Sign up to become a member at https://members.redthreadresearch.com.

*Note, since I wrote this, UKG acquired Immedis, a global multi-country payroll provider. Since our ThreadHeads tends to focus on payroll not as much as other topics, I didn't cover global payroll much in this blog, though it is obviously an area of focus for UKG.*

A few weeks ago, I attended the spring 2023 UKG Analyst Event in Boston. For those of you who have not been following along on the latest from UKG, you should check out Priyanka Mehrotra's summary of UKG’s 2022 Aspire Analyst Event from last November.

Here’s the TL;DR for this UKG event:

• Continued commitment to its unified, values-aligned vision. UKG demonstrated an aligned approach in some very specific ways, including internal alignment (clear vision, mission, values), data alignment (by way of a single profile and data set for each customer, regardless of platform), the sunsetting of a lot of older products, and the integration of cross-UKG data into the Great Place to Work (GPTW) Hub and the Hub’s inclusion into UKG’s broader selling motion.
• Adjustments to better respond to customers. UKG has made a number of changes to better respond to customers, such as formally expanding UKG Ready to service up to 500 customers and making UKG Pro available to all organizations above that threshold. In addition, UKG is focusing heavily on frontline workers, who are a critical population for its customers. Further, UKG has implemented more than 2,000 customer requests into its software. Finally, they have developed new customer service pods to better meet customers’ needs.
• Investing in innovation. UKG had a lot of announcements on this front. They provided a lot more details on their recently announced strategic alliance with Google Cloud. Further, they shared more details on how FleX, which is a meshing technology underpinning UKG platforms, is enabling them to innovate and stand-up new products quickly. Finally, we heard a lot about UKG’s current use of AI and their plans for generative AI, which leverage both the Google Cloud partnership and FleX.

Note: This blog was publicly available for 48 hours, after which point it became available only to RedThread members. Sign up to become a member at https://members.redthreadresearch.com.

A few weeks ago, I attended the Oracle Applications and Industry Analyst Summit in Redwood Shores, CA (blissfully less than 30 minutes from home). This blog summarizes what I think you all would most like to know from the event, but the high-level summary is below:

TL;DR:

• Oracle attributes its growth to new customer acquisition versus a land-and-expand approach from other parts of their business
• Oracle has embarked on significant UX, speed, and responsivity investments that make the product look and feel more consumer-grade
• Oracle is taking a pragmatic and relatively conservative approach to generative AI

New customer acquisition driving growth

Previous Oracle metrics have indicated strong growth and the Oracle team indicated that much of this growth is coming from new customer acquisition (versus a land-and-expand approach from other parts of their business). The session was dotted with examples of customers that transitioned from both SAP and Workday (an interesting contrast from the Workday session in March, where customers’ previous HCM providers went unmentioned). The team also mentioned that a lot of their growth is coming from EMEA and Latin America.

Oracle’s broad messaging around why they are achieving that growth came down to three key points:

• Everything customers need
• Innovation that matters
• Committed to customers’ success

On the first point, Oracle shared a summary image of its portfolio of applications and infrastructure (see Figure 1). I’m sharing it here since I haven’t previously written about Oracle for our ThreadHeads, and some of you may be unfamiliar with the full breadth of Oracle’s offerings.

Figure 1: Oracle’s portfolio of applications and infrastructure | Source: Oracle, 2023.

When asked specifically why they are winning, the team stated they have “clear, non-arguable product and service differentiation.” Specifically, they called out:

• The pace of innovation and adoption
• Oracle ME elevating employee experience
• Mobile-responsive front-end
• “A complete, fully connected candidate journey”
• “Intelligent” automation
• Personalization without customization
• “Native, mature HR HelpDesk and case management”
• Natively developed payroll options, scale, and ability to handle complexity

Further, the team called out that they have invested in the following within Oracle HCM Cloud:

• Strategic integrator (SI) and independent software vendor (ISV) partner ecosystem expansion
• Global payroll
• App and platform extensibility
• Near-zero planned quarterly maintenance downtime
• Employee experience
• A modern platform, including improved security, performance, availability
• Redwood UX experience
• AI/ML and Generative AI

In addition, as many of you may know, Oracle has a very strong industry focus, and they featured many stories from the following industries:

• Healthcare
• Financial services
• Communications and professional services
• Consumer packaged goods and groceries
• Gaming, hospitality, and quick-serve
• Industrial manufacturing and logistics

Finally, the Oracle team talked a lot about customer success, indicating their “reference-ability and advocacy are at an all-time high.” They also specifically called out their customer community and the conversion of customer ideas to product, adding that roughly 80% of their roadmap is sourced through customer collaboration (see Figure 2).

Figure 2: Summary of Oracle’s Cloud Customer Connect Community | Source: Oracle, 2023.

My take

Oracle’s primary message is that they are gaining net-new customers and this is a result of greater customer satisfaction. This is interesting, in that Oracle’s strength over the years has not necessarily been customer satisfaction. Oracle is investing in accelerating time to value for customers and providing more resources for them through templates, learning resource centers, and a strong customer community. At the summit, we didn’t see any meaningful numbers such as NPS, though they did have a few happy customers there to speak to us. Given that this is the first Oracle I’ve attended in a long time, I will look forward to future opportunities to better understand and assess customer satisfaction.

UX, Speed, and Responsivity Investments

Oracle has significantly invested in its Redwood design and development system. This is designed to be a modern UX, which the team characterizes as a “collective reinvention of how Oracle customers interact with technology and consume information.” The components of this design system are listed in Figure 3. Oracle indicated that within 9-12 months they will have completed their comprehensive UX upgrade.

Figure 3: Summary of Oracle’s Redwood Design System | Source: Oracle, 2023.

Examples of the new UX are in Figure 4 and samples of the new Redwood pages and flows are in Figure 5.

Figure 4: Examples of the new Redwood UX in Oracle HCM | Source: Oracle, 2023.

Figure 5: Sample New Redwood Pages & Flows | Source: Oracle, 2023.

A consistent theme throughout the discussion on product improvements was product responsivity, availability, and speed. For example:

• Greater responsiveness: With the new UX, Oracle now is leveraging single page applications, meaning there is a micro-application built within a single web page. This makes it highly performant and stable, and results in a more seamless and responsive experience for users.
• Accelerated performance: The team mentioned their speed is 30% faster than previously. This also extends to search (see Figure 6).
• Improved availability: The team stated they now currently have a 99.9% SLA for uptime. The team specifically called out that their 90^th percentile downtime is just 2 hours per quarter. This contrasts with 5-6 years ago when that number was estimated at around 16-17 hours on average, and 24 hours for large customers. It also contrasts favorably to the planned downtime of other major vendors in this area who today require 4 or more hours each week. Expect Oracle to have the average downtime cut to 20 minutes per quarter next year.

Figure 6: Summary of Improvements in Oracle Search | Source: Oracle, 2023.

My take

Most of these improvements are designed to reduce friction in the Oracle user experience. This is a good thing, especially as it relates to consumer-grade UX, speed, and responsivity. Users expect this as table stakes from their Work Tech software and Oracle is making sure it will be present moving forward.

The most notable improvement comes from the improved downtime numbers, which are expected to further improve. Downtime is something most users don’t see unless it meaningfully impacts their day-to-day. Oracle is investing to make sure it doesn’t.

All that said, based on what I saw, it doesn't appear investments are pushing the needle on innovation. As far as I can tell, none of this is going to change how work is done or dramatically simplify it. In the future, I hope to see more from Oracle on this front.

A pragmatic and conservative approach to generative AI

Oracle is taking a highly pragmatic and conservative approach to generative AI. As shown in Figure 7, they see a relatively small overlap between the problems that AI is currently good at solving and those that businesses need to solve today.

Figure 7: Schematic of the overlap between generative AI capabilities and business problems | Source: Oracle, 2023.

The Oracle team’s plan for evolving the use of generative AI is shown in Figure 8. As you can see, their initial focus is on assisted authoring, summarization, and suggestions.

Figure 8: Schematic of how Oracle sees the evolution of generative AI use cases in applications | Source: Oracle, 2023.

The Oracle team sees a virtuous cycle from combining generative AI and existing AI, as shown in Figure 9.

Figure 9: How Oracle sees generative AI and existing AI working together | Source: Oracle, 2023.

The team plans to continue to invest in their product’s AI competencies by focusing on the below areas:

Figure 10: Summary of Oracle’s AI capabilities focus, now and next | Source: Oracle, 2023.

Finally, Oracle articulated its “radically practical approach to AI” as the following:

• Allow user and use cases to determine technology
• Start with a baseline, simple model; iterate
• Assess potential negative impact and implement guardrails
• Build features for specific use cases; leverage for general AI services
• Validate with real-world data and users in collaboration with customers

My take

Of all the recent analyst briefings I have attended, Oracle was one of the most conservative when it comes to generative and next-gen AI, as particularly illustrated by Figure 7.

While I am always for practicality, this seems like a time to dream, not to allow existing users (who do not understand the tech nearly as well as Oracle’s technologists, I would wager) to drive the discussion on what they should do. To be clear, I am not one to encourage anyone to chase bright and shiny objects – but I am one to encourage people to fundamentally rethink existing work and processes in an effort to simplify and improve. I’d like to see Oracle doing more of that.

One thing I did appreciate, though, was Oracle’s awareness of the need to earn customer trust when it comes to new LLM capabilities and training on traceable data. I’d like to see Oracle be more clear on what these two things mean for them and how we will see them show up to support ethical AI efforts.

Final takeaways

I was pleased to spend time with Oracle’s executives and look forward to additional deep dives on products that are of particular interest to our ThreadHeads, such as their learning and performance products. I am also looking forward to opportunities to get to know more of Oracle’s customers and to better understand the value they get from their Oracle implementations.

Today, Workday announced that VNDLY, a Workday company, will now be known as Workday VNDLY, an extended workforce and vendor management system (VMS) that’s part of Workday’s suite of products.

In this blog, I cover:

• Why contingent workers are especially important today
• What VNDLY is and how it addresses this need
• What the VNDLY acquisition tells us about Workday and its strategy

Why contingent workers are especially important today

With the rise in volatility and uncertainty, leaders are increasingly looking to structure their organizations to be responsive to change. For example, in our study on responsive organizations, we found that 95% of high-responsivity organizations were likely to meet their business goals, compared to just 21% of low-responsivity organizations.

One approach organizations can take to be more responsive is by using contingent workers (contractors, freelancers, temporary workers, project-based workers, 1099’ers, etc.), which allows organizations to more quickly adjust the size and skills of their workforce, given business needs. The use of contingent workers is prevalent, with some large companies estimating that as many as 30% of their workers today are contingent.

The idea of using contingent workers isn’t a new concept. For example, when I was at Deloitte in 2017, we wrote about the rise of “off-balance-sheet workers,” which is yet another term for these workers.

What is new, though, is the extent of the need for these types of workers. This is being driven by a few factors:

• Market volatility. We all know the last few years have been highly volatile and uncertain, and we can reasonably expect at least some degree of this to continue. That volatility is driving varied customer needs and, thus, organizations need different skills to respond. Contingent workers can help organizations adjust quickly.
• The skills gap. As technology accelerates change, organizations require different skills from workers. Current employees can only upskill, and organizations can only hire, so fast. Therefore, accessing contingent talent from outside the existing workforce can help organizations fill the gap in the short term.
• Demographics. Today, there are 9.9 million job openings in the U.S., but only 5.8 million unemployed workers. This mismatch between available talent and job openings is projected to continue, with the BLS expecting the economy to add 8.3 million jobs but only 7.7 million workers between 2021 and 2031. The result will be organizations scrambling for talent to fill gaps.

As a result, organizations will likely increasingly turn to contingent workers to augment their existing “core” employee workforce.

Yet, there are a host of challenges in using contingent workers, such as:

• Legal and regulatory challenges: Organizations can be accused of misclassifying workers or co-employment, which can result in legal action, fines, and other challenges.
• Competitive risk. Due to the more temporary nature of their work, contingent workers may have different confidentiality requirements, potentially exposing organizations to the risk of loss of trade secrets, intellectual property, and organizational knowledge.
• Ownership and accountability. Historically, contingent labor has been managed by procurement rather than HR. As a result, it can be unclear to managers how to get access to contingent workers and how to manage them.
• Clarity around talent available. Given the different status of contingent workers, and the fact that they are usually managed in a different technology system, leaders may not understand the contingent labor force and how to access it effectively in times of need.

As a result of these challenges, many organizations use a VMS (vendor management system), potentially in combination with an MSP (managed service provider) to help them manage their contingent workforce. According to Workday, approximately 70% of organizations leveraging a VMS also use a MSP.

These systems typically are separate from human capital management (HCM) systems and are run by procurement. That said, they have many similarities to HCM systems, such as the ability to source, engage, manage, and pay contingent workers. However, the nuances around what is required to do each of those things is different. For example, with sourcing, there isn’t a direct outreach from the hiring organization, but rather a hiring manager can look at the talent available and then have the MSP reach out directly to that person. Examples of the range of capabilities offered by a VMS are shown in Figure 1 and Figure 2.

 

Figure 1: Workday VNDLY as an example of a vendor management system (1/2) | Source: Workday, 2023.

 

Figure 2: Workday VNDLY as an example of a vendor management system (2/2) | Source: Workday, 2023.

While a VMS and/or MSP can help with the first two bullets outlined in the list of challenges above, it typically does not help with the second two, around ownership and accountability and clarity around the talent available. This is why it makes sense to combine the insights of a VMS and an HCM system.

Note: This blog was publicly available for 48 hours, after which point it became available only to RedThread members. Sign up to become a member at https://members.redthreadresearch.com.

This morning, at its Viva Summit, Microsoft announced the integration of Copilot into Microsoft Viva and also the formal addition of Glint to the Viva family in July 2023. Microsoft also announced a new “Performance Equation,” via its Work Trend Index Special Report (from the People Science team at Glint), which shows some compelling correlations between engagement and financial performance. (If you need the backstory on all of this, see our previous RedThread articles on Microsoft and Glint here, here, here, and here.)

As I’ve mentioned on social media, I had a chance to participate in today’s keynote panel, so got to peek under the hood before today’s announcement.

Here’s the TL;DR of it all:

• Copilot in Microsoft Viva = LLMs + Microsoft Graph + Viva Apps. Put another way, Copilot in Microsoft Viva applies the power of large language models (LLMs) to data in the Microsoft Graph and Viva apps. Practically speaking, this means that users can now query, in natural language, any Microsoft Viva app, and get a result generated by the LLM from across all the apps.
• “Viva Glint” = Copilot + Glint data + Microsoft behavioral and collaboration data. We’ve known for a while that Glint was moving to Viva, and that by doing so, it would be in the same “family” as Microsoft’s behavioral and collaboration data (provided via Viva Insights). However, it’s one thing to be in the same family – it’s another thing to share data effectively. The addition of Copilot changes the game, as it allows all those data to be accessed easily in an interface that is already well-known by Glint customers.
• Productivity x Engagement = Performance. Microsoft also released a new study (conducted by the People Science team at Glint) that shows why business leaders should care about engagement: because there is a strong relationship between engagement levels in organizations and financial returns. Based on this, they have thus come up with what they are calling the new performance equation: Productivity x Engagement = Performance.

Let’s dive into the details more.

Note: This blog was publicly available for 48 hours, after which point it became available only to RedThread members. Sign up to become a member at https://members.redthreadresearch.com.

People analytics has served as a crucial tool for many leaders to navigate the uncertainty of the past few years. Given its essential role, it is not surprising that this research, our fourth annual study on the people analytics technology market, finds that vendors in this space are thriving.

Yet, the market has changed and matured over the last few years.

Our study into the people analytics technology (PAT) market, based on survey data and vendor briefings and demos conducted in early 2023, resulted in 6 key findings that can help the buyers and makers of the technology understand the market better. We found that:

• The PAT market has continued to grow. The overall PAT market grew to an estimated $5.6 billion in 2022 from $3.1 billion in 2021. It experienced a growth rate of 41% for 2021-22 and a 50% CAGR (compound annual growth rate) for the last 3 years.
• Acquisitions and investments are slowing down. About half of the vendors that said they received funding in 2021 said the same in 2022. In addition, there was almost a 10% decline in those that reported undergoing a merger, acquisition, or some ownership change in 2022, compared to 2021.
• Growth expectations for 2023 are lower than for 2022. Fewer vendors expect over 31% growth for 2023 compared to those that said the same for 2022.
• Vendors are shifting their target customer segments. More vendors served small companies (under 1,000 employees) and mid-sized (1,000 – 10,00 employees) in 2022 compared to 2021.
• Vendors are helping customers address urgent needs. Retention and efficiency were the top 2 outcomes vendors' solutions focused on in 2022.
• Customers are receiving more support, but services cost more. Vendors checked in with their customers more frequently, but they also increasingly charged them for consulting services.

Overall, 2022 was a good year for PAT vendors. We were excited to see the market grow and the vendors become clearer on their value propositions, marketing, and go-to-market approach. Vendors are also optimistic about their ability to deliver on customer needs while being realistic about the future and how the changing economic environment might impact their growth.

Our member-only report dives into each of these findings and provides insights on what they mean for people analytics practitioners and the PAT market. RedThread members also have exclusive access to RedThread’s 2023 People Analytics Technology tool, which will be updated in May, which helps members quickly search and compare information on specific vendors. If you would like to learn more about our membership, please click here.

In addition to the member-only full report, there is also a link to a free executive summary available on our external website, which provides an overview of our findings from the report.

The publication of this report will be followed on May 30, with the release of the second part of the study — the People Analytics Technology Vendor Report. That report will contain a more in-depth look at individual vendors and where they fit in the marketplace.

We will also share our findings at an upcoming webinar on June 29.

This report is made possible by the support of our RedThread Tech Consortium members. We would like to thank our Tech Consortium members for pledging to support high-quality, unbiased HR technology research. If you would like to learn more about our Tech Consortium, please click here.

Last week, I attended the first day of Perceptyx’s Insights conference in Carlsbad, California (just north of San Diego). If you want the play-by-play, the Twitter hashtag was #Insights2023. You can see last year’s blog on their event here.

My key takeaways include:

• The world has changed – so, too, must your people strategies
• Perceptyx has a clear and modern vision of how its core product and acquisitions fit together
• The new People Insights Platform gives customers a way to access all of those capabilities in one place

Note: This blog was publicly available for 48 hours, after which point it became available only to RedThread members. Sign up to become a member at https://members.redthreadresearch.com.

#TC #Perceptyx #EmployeeEngagement #EmployeeExperience #HRTech #WorkTech #LearningTech #RoadReport