Please find Part I of this article here.

Not everyone is delighted by the acquisition of Excelity and Ascender by U.S.-based HCM and payroll solution provider Ceridian. The move is a clear signal that Ceridian is doubling down on its presence in Asia Pacific, where it now boasts a combined 2.5 million employees across 1,500 clients and 30 countries. If you have not followed the evolution of the global payroll market, it is easy to miss the impact that Ceridian’s APAC consolidation has had on its staunch competitors. The highlights below are a reminder that “all is fair” in love, war, and global payroll.

HR-payroll Globalization

HR-payroll globalization has been the result of a decade-long series of partner relationships and acquisitions, reading much like a tabloid for those who follow the power couples and broken hearts.  The newly formed Ceridian union will spur the breakup of some noteworthy partnerships formerly used by organizations seeking global payroll coverage. 

The first and most successful of these arrangements was between regional partners HR and payroll services and software provider SDWorx in Europe and HCM and payroll solution provider Ascender in APAC. In December 2016, SDWorx welcomed Ascender into the Payroll Services Alliance (PSA), a consortium of providers with the collective geographic reach to bid on most any combination of countries around the world. At that time, Ceridian was already part of the PSA bringing managed payroll to the U.S. and Canada. While the PSA has since dissolved, SDWorx and Ascender have maintained strong ties through both client referrals and subcontracts as the regional lines of demarcation ensure neither is a competitive threat to the other. Ceridian’s acquisition will surely create distance and an ultimate break-up as joint client contracts with SDWorx come up for renewal.

Impacts to the HCM-payroll Provider Market

You must reach back to old dating history to recognize Ceridian as an unlikely bedfellow for SDWorx.  Earlier in 2016, in the heyday of the collective PSA, SDWorx and Ceridian were so close that the former acquired Ceridian’s payroll business in the U.K. and Ireland and launched a joint effort to combine and expand on Ceridian’s local payroll technology plus SDWorx local service capabilities. Joint ambition and funding fell by the wayside, and just two years later in July 2018, Ceridian brought a fully localized HCM suite (including payroll) to the U.K./Ireland market. Today, they are direct competitors in the U.K. and Ireland with Ceridian flashing the latest in cloud technology. Given the jilted past, expect distance from future joint clients or referrals by SDWorx as Ascender joins Ceridian’s household.

Turning from Alight to the Americas, HRO provider Alight is equally affected by Ascender’s move from “single” partner status to being wed to Ceridian. The history between Alight and both of Ceridian’s APAC acquisitions is equally complicated. Known as Aon Hewitt at the time, Alight originally built a leading India payroll business that later expanded to other APAC countries before being spun off to become Excelity -- Ceridian’s first APAC acquisition. Years later, Alight would re-enter the global payroll business with its 2019 acquisition of Europe-based NGA HR. Just prior to that, NGA opted to sell Preceda, its popular mid-market payroll solution for Australia and New Zealand, to Ascender with the expectation that it would continue to use it for ANZ payroll clients. Ceridian’s acquisition of Ascender leaves Alight/NGA without its long-time dance partner in ANZ, which is a market many global clients will expect to serve.

Consolidation of Payroll Around the World

Besides the clear inconveniences to SDWorx and Alight/NGA, there are many other ripples in the HCM-payroll provider pond:

• Once dismissed as largely a U.S.-centric cloud HCM, Ceridian is now clearly showing its interest in vying for global HCM clients. Adding to English-speaking countries (including Canada, U.K., Ireland and ANZ), Ceridian is now showing land-and-expand ambitions for Dayforce that will make it a challenger to the likes of Workday, UKG and ADP.
• Integrated, robust timekeeping is a particular strength of Ceridian’s Dayforce HCM suite – and a challenger to ADP eTime, UKG (merger of Ultimate Software with Kronos), and SAP (Workforce), which are among the leading go-to solutions for global time and attendance.
• As talent markets heat up post-pandemic, on-demand pay is a feature Ceridian has embedded in its cloud payroll engine by virtue of real-time daily pay calculations. We expect to see marketing emphasis on this from Ceridian and a whole host of providers and apps in the fintech-payroll space in response to growing employee and client interest.
• Ceridian has Dayforce for Germany on its roadmap for release in 2022, which is further evidence of its ambitions in Europe. Workday also announced the addition of Germany (and Australia) to its roadmap of native payroll modules, so it appears these countries will become key battlegrounds for a pan-European payroll.

Watch for more ripple effects as other HR-payroll providers adjust their own alliances, partnerships and market positions in Asia Pacific and EMEA. In the meantime, it’s clear all remains fair in the consolidation and simplification of payroll around the world. For strategic insights specific to your countries, providers, and technologies, contact us.

About the author

With more than 25 years of industry and consulting experience, Julie is an invaluable advisor for enterprises needing to evaluate and assess alternatives for multi-process HR service delivery, including workforce administration, payroll, benefits, compensation, recruiting, technology, learning, and talent management. Julie leads complex global HR assessments and transactions around the world. Prior to joining ISG, Julie worked for nearly a decade as an independent consultant, providing market research, vendor assessments, systems testing and implementation consulting to a broad community of benefits administration vendors and human resources departments. Julie started her career in human resources outsourcing, establishing shared service centers for a national benefits consulting and administration firm. She is a well-published thought leader in her field. 

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