What Workday’s new $700M deal means for HR technology
The COVID-19 pandemic has motivated employers to ratchet up their attention to employee engagement even more intensely, as work-from-home scenarios expand the chasm between employers and their distributed workforces. That challenge has increased demand for tech that enables organizations to better listen to the needs of employees, says global industry analyst Josh Bersin.
Bersin, one of the keynote speakers at the upcoming virtual Spring HR Tech show, slated for March 16-19, says such solutions are primed to be key components of business strategies to build agility, responsiveness and growth.
A key example is the recent announcement that Workday Inc., the enterprise cloud application provider for finance and human resources, has signed a definitive agreement to acquire Peakon ApS, an “employee success” platform that converts feedback into actionable insights, for an estimated $700 million.
“Workday’s acquisition of Peakon will enable Workday customers to deploy a highly targeted and integrated employee listening strategy, addressing a top priority in employee experience today,” Bersin says.
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By acquiring Peakon, Workday says it will provide clients with a continuous listening platform, including real-time visibility into employee experience, sentiment and productivity, that will help drive employee engagement and improve organizational performance.
“Peakon is on the cutting edge of helping organizations turn employee insights into more connected teams and stronger organizations,” said Aneel Bhusri, co-founder and co-CEO of Workday, in a company statement. “Bringing Peakon into the Workday family will be very compelling to our customers—especially following an extraordinary past year that has magnified the importance of having a constant pulse on employee sentiment in order to keep people engaged and productive.”
According to Bhusri, the events of this past year have changed the world of work, as business leaders need to support employees like never before while grappling with uncertainty. Those circumstances have forced organizations to rethink HR strategies and continually adapt approaches to engage, support and retain talent. This includes, he says, consistently cultivating a two-way dialogue to hear, understand and respond to employees.
To meet that challenge, Bhusri says, Workday and Peakon’s listening collaboration will help customers capture real-time employee sentiment, facilitate ongoing feedback and access personalized, prescriptive recommendations for actions.
“By joining forces with Workday, we’re able to accelerate our mission to help every employee drive the change they want to see,” said Phil Chambers, co-founder and CEO of Peakon. “We share Workday’s passion for putting people at the center of technology, and together, we’ll be able to provide customers with the employee insights they need to support rapid change and growth.”
In a Workday blog interview, Chambers says the combined technologies of the businesses could yield insights that could have a truly transformative effect on how people manage organizations.
“That’s got to be the ambition,” he said, noting that Workday excels at helping enable customers to leverage their data. “Together, we’ll be able to help drive greater productivity, talent development and employee retention for our customers—and unify how employees interact with their organizations. I can’t wait to get started on this, and I know the Peakon team feels the same.”
In a recent blog article, Bersin explains several positives about the deal. For one, he says, Workday customers will now have “an integrated survey, analytics and development planning solution” built into its platform for 3,000-plus enterprise clients.
“This means these companies can stop buying other tools and standardize on one,” he says.
Also, Bersin notes, Workday and Peakon can advance the market, explaining that the “direction of this market is toward closing the loop from feedback to resolution.”
A solution like that from Workday-Peakon addresses a number of problems, Bersin says. For instance, a new employee can get an onboarding survey that sends a message to the manager or L&D department if there are problems, or an employee who moves locations can get a triggered survey to give feedback on new payroll or tax issues.
“The scenarios are endless,” Bersin says.