ADP Bets on Managing Gig Workers

By: | February 27, 2018 • 8 min read
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Monte Carlo turned out to be a fitting location for ADP’s ReThink conference to learn about its latest wager acquiring WorkMarket—with its platform for managing the contingent workforce.

ADP has always seemed a little down-market to me. Its division for its largest clients, National Accounts, starts at customers with only 1,000 employees or more. That’s barely out of the “S” in SMB for its big HCM rivals.

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But then ADP invited me to its ReThink conference in Monte Carlo, which I first thought was a bribe! Are there serious business meetings in Monte Carlo?!? A reason to be there other than discussing gaming, tourism or Formula 1 racing? Apparently so.

ReThink had five other HCM analysts, but more importantly the client bright lights ADP too often hides under a bushel. The event was for ADP’s MNC (multi-national clients), which turned out to be among the biggest brands and companies in the world. Executives from Hewlett-Packard, BP, Michael Kors and Cerner were all featured speakers at ReThink. Some talking about more than payroll, of course.

But with the payroll emphasis, you might imagine my attention wandered to ADP’s latest acquisition, WorkMarket, which I knew managed contingents but surprised me by offering what HR will soon call (if not already) “the contingent experience” or “the gig experience.”

Wazzat?

We all know about the candidate experience, especially when it means being treated like a mushroom: online applications and assessments, video and live interviews, reference and background checks, offers and onboarding et al. Perhaps you’re even familiar with the CandE Awards from the Talent Board, which is given to companies that do all those functions well, thoughtfully and humanely.

Well, how about all those exploding number of gig economy workers we’ve been hearing about? To avoid sectarian argument, I’m going to call them all “contingents” here, ignoring the fine-grained distinctions among freelancers, contractors and others.

What has their experience with larger employers been like? What does it need to become? Historically, HR has not done well by contingents—at all.

First, to be fair, until about 15 years ago the HRMS could not even put a contingent into the database. Full- and part-time employees, former employees (including retirees), spouses, dependents, beneficiaries, emergency contacts—yes, the HRMS could accommodate each and every one of these roles—but not a worker who wasn’t on the payroll.

It didn’t really much matter since HR relied on the company’s own procurement department to engage and pay for “temps” (always more than receptionists and secretaries, despite common perceptions) from staffing giants such as Kelly and Manpower. But they were purchased like paperclips.

Of course, this was long before HR realized how much it needed to know about its own employees (pre-talent management). Well, at the time, it needed to know even less about temps—just whether the job was getting done. Each agency had its own software to help manage client relationships with procurement or sometimes HR.

Later several aggregators came along—most notably Fieldglass (now owned by SAP) and IQNavigator. They were able to handle multiple vendors and collectively became known as VMS (Vendor Management Systems). Naturally, the money was paramount, particularly the software’s ability to note when the temp’s contractual rate went down!

Clearly, some companies wanted to change this because around that same time, 15 years ago, two major vendors (Oracle and a still independent PeopleSoft) became the first to add a “person” object to their HRMS. For the first time, HR could wrap its software around everyone with a relationship to the company and truly get a holistic view of the workforce.

This breakthrough was not swept up into customer’s arms.

Aided by handheld answering devices, this simple question was posed to the attendees at the 2004 HR Technology® Conference: “As an HR person, do you want to handle the contingent workforce?” The response: 50.55 percent answered “Yes”; and 49.45 percent said “No.”

Pretty old numbers, I admit, but it gives you a sense of what WorkMarket has been up against and the opportunity it has with thousands of ADP feet on the street.

Personally, I’m not a big believer in the huge growth in the gig economy, much as companies might welcome it to save labor costs. For every report I read saying the gig workforce is going to grow exponentially, I read another saying gig workers remain hungry for day-to-day job security, not to mention the benefits of health insurance, sick days and paid vacation that full-time employment traditionally provides.

But whatever the numbers, HR will soon have to start doing for contingents some of what it has traditionally done for employees. And that’s what WorkMarket does.

In its press announcement, ADP was rather aspirational, saying WorkMarket would allow management of an integrated workforce of every type of worker. Maybe later, but right now it is designed specifically for the special needs of contingents.

Like so much new recruiting software, it originally focused on IT workers. Now it has 300,000 contingents in its group labor pool, 20,000 represented by those traditional staffing firms.

But the point, says CEO Jeff Wald, is not to be a marketplace for talent, but a platform for managing it. Like many organizations, the New York Times keeps its 28,000 freelancers in a private talent pool. Others with IT contingents might want them in the public pool to avoid any court possibly ruling they are employees.

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WorkMarket has tools to source and vet contingent workers, manage their projects, and pay and evaluate them. The functionality includes contingent profiles with lists of engagements completed and ratings for them. Lists of certifications and insurance. Naturally, it offers self-service capability, enabling contingents to add more information, (which the company might have to verify).

WorkMarket verifies various insurance policies and can easily generate engagement documents. It has a time-and-attendance system—for contingents—that may match any on the market for full-time employees, but not for retail scheduling.

WorkMarket is enterprise software, which means it can handle the complexities of large numbers and the exceptions generated by them. Accenture, Pitney Bowes and Walgreens are already clients.

This acquisition comes conveniently at the same moment ADP is rewriting its payroll engine to handle the variety of pay cycles required by the Gig Economy. Not to mention rewriting its major HRMSes and talent-management suites, which may have something to learn from how WorkMarket does it today!

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