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HR Brew

Earnings

Adam DeRose

hr-brew.com

 in Q2, CEO David Ossip told investors on its earnings call Wednesday.

“In the second quarter, we delivered strong results. Revenue growth was healthy as Dayforce continues to exhibit strong appeal with customers to power best-in-class HCM experiences for their employees,” Ossip said on the call.

Dayforce reported 16% YoY revenue growth in Q2.

Total revenue hit $423.3 million in the quarter.

Dayforce also reported that 6,657 customers were live on the platform as of June 30, the close of the second quarter, an increase of 82 customers since the end of Q1.

“We are encouraged by our achievements to date in 2024. The core value proposition of the Dayforce platform of creating simplicity at scale, reducing complexity, driving financial ROI, and improving employee engagement resonates very well with customers,” Ossip said.

Dayforce execs pointed to an expanded partnership with the government of Canada, with which it’s been working on a payroll modernization project since 2021.

CFO Jeremy Johnson boasted of “a contract for $85 million Canadian [dollars], or approximately $62 million USD, to amend the contract with Dayforce to include additional talent capabilities, provide incremental licenses, and to continue to expand testing and design Dayforce to its specific needs.”

Beyond the Great North, Dayforce also sees continued growth in the international market.

“We saw strong demand for Dayforce globally, and sustained strength in both enterprise and major markets on a year over year basis,” Ossip said.

Company officials also spoke about Dayforce’s investment in AI. The platform, formerly known as Ceridian, launched a new suite of features powered by AI 

The developments in AI technology and the Dayforce 

 offer HR pros efficiency gains and “really drastically improv[e] the overall experience for the frontline workers, the frontline managers, and for the executives,” as well as employees, Ossip told investors.

“When we compare it to the competitors…I do believe that we have a strong advantage from an AI perspective that already is reflected in the US,” he said.

Dayforce reports better-than-expected Q2 performance

The HCM company pointed to expanded deal with Canada. 

HCM software giant ADP closed its fiscal 2024 with better than expected earnings, as the company celebrates its 75th anniversary, CEO Maria Black told investors this week.

Black pointed to success in ADP’s three priorities in fiscal year 2024: “best-in-class HCM technology” (including the launch of ADP Assist, its new cross-platform AI-powered tool), continuing to provide expert guidance to clients—Black also pointed to developments in AI here—as well as an expansion of the company’s global reach.

ADP reported 6% YoY revenue growth in Q4, to $4.8 billion.

The company closed out the full fiscal year 2024 with a 7% growth.

It reported a growth in revenue to $19.2 billion for the year.

Black lauded ADP’s deployment of AI tools, suggesting that each way the company has developed AI both in its products and internally for sales and service associates “feed[s]” its revenue model.

“As we look at all the use cases and both the short-term stuff that we’re working on, as well as the long-term vision of what ultimately generative AI can look like in the coming years, we do see monetization opportunities,” she said. “Each one of our business faces that you can imagine has a clear goals of what it is that we’re trying to accomplish, inclusive of revenue growth.”

Black told investors the company plans to roll out more AI features in fiscal 2025.

 On the international stage, ADP boasted of acquiring the payroll offerings of its partner, 

, as well as the expansion of its Celergo offering to Iceland “and further growing our on-the-ground presence in the APAC region.”

“Companies continue to want to think about their system of record from a global perspective, as they continue to have distributed workforces across the globe, as they continue to move supply chains in this world of globalization, as they have remote employees and smaller countries around the world,” Black said. “We have this incredible network and ability to support clients today in 141 countries, and we continue to add more.”

HCM giant ADP boasts strong Q4

The company ended its fiscal year with slightly stronger-than-expected performance.

Things you can find in Canada: Justin Trudeau, poutine, Tim Hortons, and the toonie—and now you can also find Paycom. The payroll provider and HCM is heading to the Great White North.

Paycom announced on its Q2 earnings call that the company is expanding its flagship offering, Beti, to clients in Canada, aiming to better serve businesses with a global footprint.

“Now, more North American businesses will be able to improve their payroll processing by giving their employees a more transparent and user-friendly experience in Canada with Beti,” Paycom President and CEO Chad Richison told investors.

 its Q2 revenues at $401 million, up 27% YOY.

Richison said the move would open the company’s target market to organizations with more than 10,000 employees.

It follows an April announcement that Paycom made its Global HCM offering available to more than 180 countries and in 15 languages.

“We’re not picking the easiest countries. We’re picking the countries that have the greatest amount of US-based company employees,” Richison said

Canada is the first stop, but offering Beti in about 20 additional countries would allow Paycom to meet the needs of its US-based clients, he said.

 Paycom is doubling down on its efforts to push customers toward Beti, its automated employee-driven payroll system launched in 2021. Beti lets employees see and adjust their payroll to address issues before checks are cut.

About 60% of existing clients have moved to Paycom’s new employee self-service approach, according to Richison, although it’s been a “harder slog” to keep moving existing Paycom clients.

“We’ve been changing out the jet engines on our plane in mid-flight here,” Richison said. “Beti dramatically changes the way our clients do their payroll, produces a dramatic ROI. So, we have to remain disciplined. We’re not going to make a client go on it. We have to sell them on it and it takes a while.”

To help make the case for the other 40% of clients, Paycom commissioned a total economic impact study to identify the ROI for HR teams who switch to Beti. That study found that Beti reduced time spent processing payroll by 90%, 

Image of a map of Canada with a Canadian flag fastened to a toothpick stuck in the middle of it

PwC_NativeAd2_Sep23

Paycom expands its global footprint

The payroll servicer and HCM announced it will be servicing clients in Canada.

An illustration of reporter Courtney Vinopal's headshot.

Courtney Vinopal

The Covid-19 pandemic gave employers the opportunity to hire from outside the borders of their company headquarters, thanks to the wider availability of talent afforded to them by remote work.

 (54%) of readers surveyed by HR Brew said their organizations operate in two or more countries, with 22% reporting they’re present in 10 or more.

In addition to the prevalence of remote work, recent global hiring trends have been shaped in part by companies’ efforts to respond to labor shortages, as well as implement cost-saving measures, Dave McGonegal, VP of talent solutions consulting for North America at ManpowerGroup, 

Though there are benefits to hiring globally, the process also introduces complexities for HR departments, including navigating new tax, payroll, and business entity regulations for the first time. HR management firms are now cashing in on the trend by expanding their offerings for global customers.

 (EOR) services, which manage payroll, benefits, and taxes for companies outside the country they’re based, have seen recent success from distributed workforce trends.

Deel, which provides EOR services, saw its 

 to $12 billion from October 2021 to May 2022, when it closed a $50 million fundraising round with investors including Laurene Powell Jobs’ Emerson Collective. Papaya Global, a competitor, 

 that its revenue had grown 300% year over year for the last three years.

Gusto, an HR software management firm for businesses based in the US, is now offering global employment services through a partnership with Remote, another EOR provider. The product, called 

, was spurred by an uptick in requests from customers seeking to hire outside the US, Josh Reeves, Gusto CEO, told HR Brew.

“Small businesses used to be out of luck, because there’s a lot of cost to create a subsidiary, set up local business in that country,” he said. The global platform is starting with services for employers hiring in Canada, with plans to expand to over 80 countries.

Because Gusto caters to small businesses, Reeves said the firm is in a unique position to help companies that might not be as well-served by EORs that are geared toward larger companies.

Ceridian and ADP focus on international expansion. 

On recent earnings calls, both Ceridian and ADP highlighted the success of investments to support a global workforce.

ADP president and CEO Maria Black said one of the company’s strategic priorities is to “leverage our global scale for the benefit of our clients” during a July 26 call with analysts and investors. She noted GlobalView, ADP’s payroll tool for multinational employers, now serves workforces in more than 40 countries, and expanded into five additional markets in 2023.

The company also announced it will make Roll, its payroll product for small and medium-size businesses, available internationally.

Ceridian Dayforce, which provides payroll, is now available across most of Africa and the Middle East, with customers in countries like Kenya, Mauritius, and South Africa, Chairperson and Co-CEO David Ossip said on an Aug. 2 earnings call.

Asked about competitors seeking to enter the global payroll space, Ossip spoke of the complexities US companies encounter when they expand abroad, from time and attendance tracking, to taxes and pension calculations, to managing benefits. “I would not want to be a new entrant into the global market starting today and competing against the likes of us,” he said.

A person in a suit points to an illustration of the globe with people scattered throughout.

HireVue

HireVue_OwntheTopic_HR_2023

Gusto, ADP, Ceridian cashing in on global hiring trends

HR management firms are now cashing in on international hiring trends by expanding their offerings for global customers. 

HR management companies are going global

 have all tightened their return-to-office policies. But Yelp has zigged where other firms have zagged.

Carmen Whitney Orr, Yelp’s chief people officer, announced in a 

 that the tech platform would close offices in Phoenix, Arizona, and Hamburg, Germany, due to low utilization. This follows last year’s closure of offices in New York, Chicago, and Washington, DC, after co-founder and CEO Jeremy Stoppelman said 

“Overwhelmingly here, employees just voted with their feet,” Orr told HR Brew. In her June blog post, she noted Yelp’s Phoenix and Hamburg offices had seen a combined utilization rate of less than 6% over the last month.

“And if you only have a handful of folks utilizing your office, there’s a much better way to make use of those investments in real estate,” Orr said.

Yelp is keeping offices in San Francisco, London, and Toronto open for the time being, Orr said, as their utilization rates are higher. But the company remains confident that its employees are just as—if not more—productive working from home.

Orr cited Yelp’s most recent earnings as evidence that a remote-first approach is working for the company. The company 

 record net revenue of $312 million for the sixth quarter in a row this March, beating analysts’ estimates by 2.19%, though it also recorded a loss of almost $1.2 million in the first quarter.

Orr also said product velocity—referring to how quickly a company releases new products or features—is higher than it’s been in recent years. In April, 

 a series of new features, including a search experience incorporating artificial intelligence and large language models, as well as immersive video for reviews.

Beyond business results, Orr said, employee sentiment data shows Yelp employees continue to overwhelmingly favor remote work, and the flexibility has helped boost recruitment.

Between 2019 and 2022, “the applicant pool for sales roles increased by 25%, and for [general and administrative] roles by 200%. And over that same time period, we saw a reduction in the time to fill our jobs by six days,” Orr said.

“We also know that underrepresented minorities even more strongly prefer remote work,” she said, referring 

 that suggests queer employees or employees of color are more comfortable working remotely. “So, that’s important to us, as well, in terms of being able to recruit diverse talent.”

Data on remote work and productivity isn’t all rosy. 

While a remote-first approach is working for some companies, researchers are still trying to understand what effect it has on productivity.

 by two doctoral students at Harvard initially found call center workers for an online retailer were more productive when working remotely, with the number of calls handled per hour by employees increasing by almost 8% in a remote environment. But a revised version of the paper published in May actually documented a 4% decline in productivity, 

, after the researchers received more detailed data on the employees’ schedules. Several other recent studies have also documented a decline in productivity for remote workers, the magazine noted, including one among employees of an online travel agency in China.

Even as many companies keep hybrid work schedules, “the balance of the workweek is likely to tilt back to the office and away from home,” the Economist predicted, “because better productivity lies in that direction.”

Close-up of sign on facade at headquarters of travel and restaurant rating company Yelp in San Francisco, California.

Why Yelp is sticking with remote work 

 The business review platform recently closed offices in Phoenix and Hamburg due to underutilization. 

Yelp’s chief people officer explains why the company is sticking with remote work

The US labor market, like that first-year-of-college fling, continues to send very mixed signals about where it stands. The government keeps publishing data that looks promising for both job-seekers and employers, yet 

 it plans to lay off 270 employees, representing about 20% of its workforce, in response to “current market conditions.” In a May earnings call the company’s CEO, Ian Siegel, said ZipRecruiter had observed a slowdown “across industries.”

“We see employers paring back their hiring in response to the uncertain economic backdrop we now face,” he said. 

, both ZipRecruiter competitors, have also laid off workers in recent months, citing a slowdown in job openings.

The same day ZipRecruiter said it would lay off workers, the Bureau of Labor Statistics (BLS) 

 showing an increase in US job openings to 10.1 million in April, surpassing analysts’ expectations. Hires increased, while layoffs decreased to 1.5 million, representing just 1% of the workforce. The US 

 jobs in May, according to the most recent BLS figures; analysts had estimated just 195,000.

What explains recent rounds of layoffs in the recruiting industry, even as government data points to a still-robust labor market?

If you look beyond this latest report, job openings 

slowed from an all-time peak, Nick Bunker, research director at Indeed’s Hiring Lab, told HR Brew.

“Yes, they ticked up in April, but if you take a longer view, they peaked back in March of last year,” Bunker said. He noted a little less than half of the job openings came from retail alone, which can be volatile, suggesting the higher level of available positions may not endure.

Job postings on Indeed have been declining steadily since the beginning of last year. The site’s most recent 

, which is about a month ahead of the BLS data, showed openings declining 1.9% from the previous month as of May 25, Bunker added.

The pandemic-era labor market was exceptional, spurring record levels of hiring that meant big business for recruiters.

 in March 2022, employers in industries like manufacturing, retail, and education and professional services were struggling to hire enough workers to meet business demands. Meanwhile, workers were quitting their jobs in droves, emboldened by a robust labor market.

That “fever pitch” of hiring and competition for workers has now subsided, Bunker said. The rate at which US workers quit their jobs was 2.4% in April, just shy of pre-pandemic levels. And the April hiring rate, at 3.9%, matches what it was in 2019.

There’s still “a healthy amount of hiring,” in the US, Bunker said. But “it's less than what we were seeing a year, or two years, ago.”

As major job sites downsize their workforces, many recruiters and talent acquisition team members are out of work. Recruiting and HR were hit harder by tech layoffs than other departments, an 

 by technical interviewing platform Interviewing.io found, with about half the staff in each of these departments laid off.

Joel Knippel, global head of talent acquisition and talent partnership at Unilever, 

 that the recent BLS data suggests it’s still a “jobseeker’s market.” With labor-force participation rates still below pre-pandemic levels, he predicted job openings will outpace hires “for most of the better part of the year, potentially into 2024.”

“All of this means recruiters remain in high demand and that the strategic contribution of Talent Acquisition and Partnership…remains crucial to business success,” he wrote.

Job openings rose in April. What does this mean for recruiters?

Sites like ZipRecruiter and Indeed are laying off workers, even though businesses are still hiring at a decent pace. 

 Why recruiting sites are downsizing, even as job openings remain historically high

Investments in AI and self-service technology are making HR functions including payroll easier than ever. And if payroll companies’ recent earnings are any indication, that’s not hurting their bottom lines.

As these solutions have gained traction, payroll services companies wrapped up 2022 with strong earnings:

total revenue increase of 7% YoY to $1.2 billion

Paycom’s president and CEO, Chad Richison, highlighted sales of Beti—an 

automated payroll solution launched in July 2021

—on his company’s earnings call, touting the platform’s ability to allow employees to change their own payroll information, which, he said, protects companies from risk while avoiding “the negative consequences associated with your pay not matching what you expected to be paid.”

“We’re not short on opportunities right now,” Richison said on the call. “We’re out there making businesses more efficient by making the employees do the payroll themselves. I don’t see why that would slow down for us.”

Paycom, he said, plans to continue shifting marketing and sales efforts to the product, which he said is used by about 50% of its current clients.

Top brass at Paychex, meanwhile, boasted efforts of the last several years “to look much more like a technology company” than a “perfectly well-functioning tech services business.”

, an AI feature for its full-service payroll and HR platform, Paychex Flex. Additional solutions and features for Flex were 

, including for recruiting, onboarding, and time and attendance management.

“The digital adoption that’s happening in the marketplace is a benefit [to Paychex],” President and CEO John Gibson said on the company’s earnings call. “Employees and employers don’t want to talk to us anymore…they want to be able to do it themselves whenever they want to do it…We’re investing in that looking for ways to drive efficiencies there.”

Efficiency is the name of the game at Paycor, too. In October, 

, an AI-driven recruiting platform that aims to provide its clients faster, cheaper talent sourcing. Though CFO Adam Ante noted plans to integrate the two platforms, he said it isn’t expected to affect financials this fiscal year.

Looking forward, Ante said on the call that products like Talenya don’t require the same level of customer servicing as its payroll services, so they can help pad Paycor’s margins.

Don’t forget marketing and advertising. 

Raul Villar Jr., Paycor’s CEO, said the Cincinnati-based company's 

 and PAC12 sports sponsorships have driven brand awareness and new business development.

Villar said Paycor counted more digital impressions in the last quarter than the entire previous fiscal year, and suggested a relationship between the deal and visibility in tier-one markets outside the Midwest.

Over at Paycom, officials said marketing has also impacted sales.

“I think our marketing has changed dramatically, even since the beginning of the pandemic when we start spending,” Richison said. “We’re able to do things with, I’m not gonna call them indirect leads, but softer employee-driven leads that come from rank-and-file employees that are just tired of dealing with the consequences of having their check wrong.”

Do you work in HR or have information about your HR department we should know? Email 

. For completely confidential conversations, ask Adam for his number on Signal.

woman boss talking to man at desk saying "people gots ta get paid"