ADP has announced the acquisition of WorkMarket. No terms were disclosed.
WorkMarket provides a cloud based platform that provides an online marketplace for contractors and freelancers. Companies are able to build a portfolio of workers that provide flexible resources to them such as W-2 employees and 1099 contractors.
This is an intriguing acquisition that delivers several benefits to ADP. The software already has integrations to ServiceNow, Oracle, Microsoft, MuleSoft, Atrium, Salesforce and Workday. It is the last two that could add the most value for ADP. ADP already has a strategic relationship with Workday for payroll, though it competes in the HCM market. This will strengthen that tie as its will provide even more payroll services.
The integration with Salesforce allows Salesforce users to trigger labor and resources requests direct to WorkMarket. ADP is already working with Salesforce. Last year it agreed to migrate the FinancialForce US customer base to Workforce Now and integrate with the FinancialForce PSA and finance solution. This is giving it deeper knowledge and integration into the wider Salesforce platform. If WorkMarket has Salesforce developers on staff they will become a valued addition to the ADP team.
WorkMarket won’t have been cheap
WorkMarket will not have come cheap. According to Crunchbase the company has raised $66 million since its founding in 2010. Founded by Jeffery Leventhal and Jeffrey Wald it was supported by investors such as Accenture, Union Square Ventures, Spark Capital and Foundry Group. While Leventhal stepped away in 2016, Wald is now president. He commented: “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.”
The gig economy is growing. By 2027 it is estimated than more than half the workforce will be freelance. Even today, ADP surveys estimated that 80% of US businesses rely on contractors. That figure will grow as companies find that new generations desire a more flexible job market. If companies cannot offer a job for life, individuals are looking for a better work life balance. WorkMarket was well placed to take advantage of that growth.
Its functionality includes:
- A job market that already has thousands of assignments for workers
- The ability to create and manage labour clouds, delivering a workbench of potential employees for an organisation
- Organisations can manage both the assignments and workers in a single dashboard
- The ability to pay worker, through both on and off platform methodologies
- Reporting, using real time data to analyse both assignment and the workforce available as well as the costs associated with contigent labor.
What does it mean
ADP will no doubt integrate its Payroll and other applications to WorkMarket. However, how it will integrate its HCM solutions is where the most benefit will come. In acquiring WorkMarket is has stolen a significant step on rivals. They will need to develop functionality in this space either through integrating with WorkMarket or through development or acquisition.
Carlos Rodriguez, president and CEO of ADP commented: “At ADP, we innovate by anticipating how the world of work evolves and how dynamics — like the rise of the gig economy — impact the needs of our clients and the modern workforce. WorkMarket allows us to provide ready access to a growing contingent labor pool and the tools to manage and pay them in a secure, efficient and compliant manner.
“WorkMarket is a proven expert in freelancer management. We are thrilled to welcome their team to ours and to leverage our global footprint and bring scale to their expertise and technology.”
For ADP the hard work starts now, it need to demonstrate how this acquisition can compliment its product lines. While still maintaining the substantial growth trajectory that WorkMarket has enjoyed over the last few years.