In the past year Kronos announced a major release of its Workforce Central suite and more recently, made an announcement regarding a major investment that should help keep the company well capitalized. Kronos is one of the largest vendors of workforce management systems, providing time and attendance, labor scheduling, absence management, HR management, payroll and recruiting applications. In 2013 the company grew to almost US$1 billion in revenue, selling to companies around the globe and having users in more than 100 countries. Kronos offers two product lines based on the sizes of companies. Workforce Ready serves small and some midsize companies, and Workforce Central serves companies from the upper midsize through the very large. A while ago my colleague Mark Smith discussed several major enhancements to Kronos’ products, and there have been notable events since then.
In February Kronos announced that it has entered into a definitive agreement for $750 million of investment by venture capitalists Blackstone Group and GIC of Singapore. This support should help Kronos invest further in its growth and workforce management products. In addition, since being taken private in 2007, Kronos’ revenue has grown 45 percent, which shows not only its effective execution as a business, but the strength of the market for workforce management products.
Kronos already showed strong performance in its products in the past year. Workforce Central took the top spot in our 2014 Next-Generation Workforce Management Value Index. In 2013 its Mobile Solution won one of our Technology Innovation Awards. Recently the company announced Release 7 of Workforce Central. Here is my analysis of the most significant enhancements to the suite.
There is a new addition to the Workforce Central suite – Kronos Workforce Collaboration, a module that enables managers and employees to share relevant workforce information using popular social tools including user profiles, wall posting and polling. Kronos Workforce Collaboration is sold as an add-on to Workforce Timekeeper, one of the applications in Workforce Central, and is powered by Tibbr, Tibco’s enterprise social networking platform. For example, this set of capabilities will help managers address scheduling issues by understanding how employees feel about their schedules; accommodating them better can help improve retention and engagement. Our next-generation workforce management benchmark research shows that collaboration is the most wanted improvement in workforce management technologies, as more than two out of three (70%) participants said it is important, so this addition may be well received.
Release 7 of Workforce Central also enhances Workforce Scheduling with the ability to schedule workers according to their skills. This capability can be useful in industries that require special competencies, such as clinical healthcare or manufacturing. Kronos also enhanced notification capabilities of the suite, providing alerts that are easy for users to see on the main page of the application and that also can be sent to mobile devices. This could help staffing and HR managers, for whom multitasking is a daily reality, reduce the time spent trying to manage information.
Despite such investments into the product line, we see other areas in need of improvement. For instance, the Workforce HR and Payroll products could use expanded mobility that provides self-service for both employees and managers. And since Kronos has a global emphasis in its customer base, it should extend Workforce Payroll and HR to meet international requirements such as multiple display languages, currency formats and conversion capabilities and support for local regulatory requirements. Also improvement in Workforce Activities more integration with recognition and rewards functionality would be recommended, and retail clients using Workforce Scheduling could benefit from a more robust demand engine to speed the ability of customers that have large, complex workforces to generate schedules.
Considering the workforce management market on the whole, the investments vendors are making in their products, as well as the capital investments by private equity firms, show that these products are becoming more essential to businesses. Specifically, they are moving beyond just improving efficiencies to provide new ways for managers to make decisions that improve key activities like employee engagement and the quality of products and services delivered. As well as Kronos, other vendors of workforce management suites such as ADP, Ceridian and Infor have introduced both collaboration and mobile capabilities.
Another new technology, analytics, has been a focus in workforce management providers for several years. These capabilities help companies more effectively meet both labor cost objectives and product and service improvements. Employers in the United States now need more accurate ways to track and predict time and labor information so they can comply with the Affordable Care Act and manage their healthcare benefits strategically. However, our recent benchmark research on payroll management shows that organizations need to focus on integrating time and attendance information with payroll data (only 20 percent have integrated these systems) to minimize errors in the data, which will be used to determine eligibility under the Affordable Care Act.
According to our research more than half (54%) of organizations do not have a dedicated workforce management system; for those organizations and others that have only a partial workforce management system, complete suites like Kronos Workforce Central can automate and connect the separate workforce management processes in one system. Beyond improving process efficiency, they can help align workforce efforts to the company’s business objectives, which is the most important priority companies in our research have for workforce management. The improvements Kronos has made in Release 7 can help them attain these larger business benefits. If your organization is evaluating workforce management suites and has not looked at Kronos’ products lately, we recommend including them in your evaluation.