Table of contents:

• Preamble
• Definition of Cloud HR Services
• Definition of Multi-Process HR Services
• 1. Changing Shape of Multi-Process HR Services
• The current cloud HR services market is characterized by a stair-step purchasing approach, with either advisory or implementation services as the gateway offering…
• … by 2022, the cloud HR services market will shift to a bundled purchasing approach
• The current overall multi-process HR services market size is declining y/y due to lower TCVs for deals leveraging cloud HCM technology…
• … however, the cloud-based multi-process HR services market will grow at a compounded average annual rate of 4.5% through 2022
• 2. Customer Requirements
• Industry issues affecting the cloud HR services market include HCM system choices, migration challenges, and ongoing system management
• Industry Issues Affecting the Cloud HR Services Market
• Support for cloud HR services typically follows a stair-step approach, commencing with either advisory services or implementation, followed by AMS support and then HR BPaaS
• Drivers of cloud HR services include complex legacy environments, with outsourcing providing access to knowledgeable certified system consultants
• Case Study: A communications company needed to establish a global HR infrastructure and HR programs to support growth and turned to Accenture… resulting in management consulting and project management for the deployment of Workday
• Case Study: A financial services company was seeking process redesign support prior to its implementation of SAP SuccessFactors and turned to Deloitte… resulting in one integrated system for full visibility
• Case Study: An energy company was seeking a full-scale HR transformation by implementing Workday and turned to Alight Solutions… resulting in the elimination of 30 HR and IT systems
• Case Study: A financial management company was seeking to replace expensive heavily customized legacy HR systems and turned to DXC Technology… resulting in the deployment of Workday
• Case Study: A non-profit was lacking the skills to manage Workday tickets and turned to Capgemini… resulting in the resolution of all incoming tickets within the SLAs
• Case Study: A technology company was seeking post-deployment support of their Workday environment and turned to NGA HR… resulting in maximized functionality
• Industry issues shaping the multi-process HR services market include cloud HCM systems, compliance, and globalization
• Industry Issues Affecting the Multi-Process HR Services Market
• Cloud-based platforms have fueled the evolution of the multi-process HR services market, which now focuses on modernizing processes by incorporating digitalization, RPA, and machine learning
• The top driver for multi-process HR services is to gain access to vendor expertise, followed by cost reduction
• Case Study: A financial services company was seeking a BPaaS partner with experience operating on Workday and turned to OSV… resulting in growth without added headcount
• Case Study: A consumer products company was seeking to restructure HR as it was splitting into two organizations and turned to Conduent… resulting in strategically focused HR
• Case Study: A security services company was merging with another company and turned to ADP for BPaaS support… resulting in the reduction of the HR organization
• Cloud HR services tend to be priced separately by offering, even when services are bundled together
• Per employee pricing dominates multi-process HR services contracts, with demand for consumption-based pricing increasing
• Contract lengths for multi-process HR services continues to shorten, with the overall average at 4.8 years
• 3. Market Size and Growth
• The global cloud HR services market will reach $3.4bn by 2022, with a 5.7% CAAGR
• For the next five years, majority of the cloud HR services market will focus on pre-deployment and deployment activities
• Workday services lead the global cloud HR services market, accounting for ~27%
• Combined, cloud HR services for Workday, SAP SuccessFactors, and Oracle HCM Cloud represent nearly 70% of the market
• The global multi-process HR services market size is declining 5.8% y/y as revenues from legacy on-premise deals erode
• The global multi-process HR services market is led by the U.S. which is also the largest region for next generation cloud-based multi-process HR services deals
• Approximately 40% of the 2017 multi-process HR services market is leveraging cloud HCM platforms, with the inflection point at 2019
• The manufacturing sector accounts for nearly one quarter of the market due to legacy contracts leveraging on-premise technology, with strong growth expected from financial services, technology, and pharmaceuticals
• 4. Vendor Market Shares
• ADP holds ~9% of the global cloud HR services market, providing support for its Workforce Now, Vantage HCM, and GlobalView platforms
• Market leaders of the cloud HR advisory and implementation services market include the Big 4 consultancy firms
• The cloud HR AMS services market is led by vendors with proprietary platforms
• Several Workday services vendors such as Alight Solutions, OSV, and DXC Technology have also deployed Workday HCM internally
• Leaders of the global SAP SuccessFactors services market tend to have longstanding relationships with SAP
• ADP dominates the global cloud proprietary services market with ~46% market share
• The multi-process HR services market is led by Alight Solutions, ADP and IBM, all who have made heavy investments in the cloud HR services market…
• … followed by Capita, SD Worx, and NGA HR, who collectively hold ~15% market share
• North America multi-process HR services market is led by Alight Solutions, whose clients leverage both on-premise and cloud HCM technologies…
• …challenged by ADP, whose offering is exclusively provided on its proprietary cloud HCM platforms
• European multi-process HR services market is led by Capita with ~17% market share, followed by SD Worx, IBM, and Alight Solutions
• … with Indian-headquartered vendors including Neeyamo, and Infosys collectively generating $9m in multi-process HR services revenues in EMEA
• U.K. multi-process HR services market is dominated by U.K.-based provider Capita, with nearly 25% market share…
• … with Alight Solutions, Conduent, NGA HR, and DXC Technology also present
• The APAC multi-process HR services market is led by IBM, followed by Alight Solutions, Excelity, and DXC Technology
• The LATAM multi-process HR services market is led by U.S.-based vendors that serve multi-country contracts that include employee populations in LATAM
• 5. Vendor Offerings
• Cloud HR services focus on technology-oriented activities, while multi-process HR services focus on managed process support
• Advisory services are typically leveraged by large market organizations and are often bundled with implementation services
• Rapid deployment solutions are becoming a key part of the cloud HR services offering
• While many vendors offer cloud HR services across different HCM platforms, there are vendors focused exclusively on one platform
• Vendor strength for cloud HR services by platform tends to be high for one or two of the leading third-party cloud HCM platforms…
• … with many vendors also providing cloud HR services for other third party platforms such as DXC Technology for Cornerstone OnDemand
• Core multi-process HR services offerings focus on HR admin, payroll, benefits, recruiting and learning, with additional services extending to broader relocation and exit management offerings
• There are three technology scenarios underlying multi-process HR services, with majority of vendors taking an agnostic platform approach
• On the journey to the cloud, organizations typically transition through each platform evolution
• Approximately 40% of the multi-process HR services market is operating in a cloud environment…
• … with majority of vendor HR BPaaS capabilities strongest on Workday and SAP SuccessFactors
• Some vendors offer proprietary portals as an alternative to cloud HCM system interfaces
• End-to-end cloud and multi-process HR services deals are extremely rare; the core multi-process HR services bundle includes HR/workforce administration and payroll
• The average number of services in scope within multi-process HR services contracts in 2017 was 2.7 processes
• Vendor consolidation within the cloud HR services market has been increasingly active, with the emphasis on expanding Workday Services practices to new geographic markets
• 6. Vendor Targeting
• Targeting for cloud and multi-process HR services varies by each particular service, but overall tends to focus on mid & large companies
• Vendors with agnostic platform approaches to the cloud HR services market tend to target multiple geographic regions…
• … while platform specialists such as Zalaris and Kainos largely targeting one region
• Cloud-based multi-process HR services contracts are primarily focused on a single country, mostly from the U.S., followed by continental Europe
• Multi-process HR services continue to make strides with midmarket organizations due to affordability
• All vendors’ client portfolios contain a combination of both mid and large market clients, with mid-market activity continuing to increase…
• … the proportion of single country multi-process HR services contracts remained relatively unchanged over the last two years
• While multi-process HR services vendors do not target by vertical, majority of vendor revenues tend to come from one to three verticals…
• …with manufacturing and financial services as a top sectors across most vendors
• 7. Delivery Capabilities
• Successful delivery of cloud HR services is dependent on platform certified consultants
• Emphasis on multi-shoring for multi-process HR services remains high to leverage lower-cost resources for non-complex transactions
• Nearly all multi-process HR services vendors leverage offshoring…
• … India remains the preferred offshore location…
• … followed by the Philippines, and then China
• Immediate delivery priorities for vendors are focused on omnichannel strategy development and expanding delivery networks
• The application of RPA in cloud and multi-process HR services is increasing
• Partnerships with end-to-end HCM platform vendors are essential for cloud HR services delivery
• For multi-process HR services, partnerships exist for both service delivery and technology
• 8. Vendor Challenges and Success Factors
• The main inhibitor for cloud HR services is the desire to maintain the status quo and ride out previous technology investments
• Inhibitors to Cloud HR Services
• The assumption that operating on cloud HCM platforms is straightforward is the top inhibitor for the adoption of multiprocess HR services
• Inhibitors to Multi-Process HR Services
• The primary vendor challenge for cloud HR services is addressing customer apprehension about change resulting from the cloud transformation project
• Challenges to Cloud HR Services
• The negative connotation with legacy deals from the early 2000’s is a big hurdle for multi-process HR services vendors
• Challenges to Multi-Process HR Services
• The top vendor selection criteria for cloud HR services is expertise and proficiency with the desired cloud technology
• Vendor Selection Criteria for Cloud HR Services
• Ability to make the business case, demonstrate significant cost reduction, and create a collaborative environment are important vendor criteria for multi-process HR services
• Vendor Selection Criteria for Multi-Process HR Services
• Long-term success for cloud HR services vendors depends on geographic expansion
• Critical Success Factors for Cloud HR Services
• Establishing a value-add differentiator is critical for vendors operating in the multi-process HR services market
• Critical Success Factors for Multi-Process HR Services
• Appendix I: Vendors Researched for Analysis
• Vendors Researched for Analysis – I
• Vendors Researched for Analysis – II
• Vendors Researched for Analysis – III