Kronos has been a fixture in the HR tech space for decades. The company was founded in 1977 and has clearly grown well beyond its original time clock technology. Today, the firm has HCM software and technology solutions for mid-sized and large enterprise firms. Kronos’ workforce management technology may be the current star in its growing collection of solutions.
Kronos has only had two CEOs in its 42-year-old history. Mark Ain was the first and his brother Aron Ain succeeded him in that role in 2005.
The company went public in 1992 and, according to Wikipedia.org:
In March 2007, Kronos was bought out for US$1.74 billion by the lead investor Hellman & Friedman and the secondary investor JMI Equity. In 2014, private equity firms Blackstone and GIC invested in Kronos alongside Hellman & Friedman and JMI Equity. In the transaction, Kronos was valued at $4.5 billion.
The current owners of the company (Hellman & Friedman, et.al.) are also the same owners of HCM software vendor Ultimate Software. Regardless of this common ownership, both firms are still actively competing with each other and are expected to run independently in the near and long term.
Kronos’ newest product line is Workforce Dimensions. It’s an all-cloud suite that contains modules for: timekeeping, scheduling, HR, Payroll, talent acquisition, and much, much more.
Kronos maintains that they can port approximately 75% of their Workforce Central (their legacy HCM product) customers data and configurations to Workforce Dimensions. To expedite these conversions, Kronos has created a number of vertical “startup tenants”. When these and industry best-practice configurations are used with the customer’s existing data, a new instance of Workforce Dimensions can be created in a timely and cost-effective manner.
Workforce Dimensions runs on four global data centers, powered by Google Cloud Platform.
Workforce management software is very hot right now and is a key capability within the Workforce Dimensions product line. Technology that does a better job of scheduling workers and ensuring workers have the requisite training/skills/certifications is more important than ever. More of the economy is shifting to a services-based economy and people management is key to maximizing services revenues. Manufacturers need this as more firms are shifting from selling a product to selling product as a service (e.g., turbine engine generating power as a service). Certification and skills tracking are also critical to delivering outstanding customer service, for the safe operation of equipment (e.g., nuclear power operators), to meeting compliance standards, etc. Healthcare firms need the same functionality.
Kronos’ approach to workforce management also includes the use of AI/ML. A ‘smarter’ workforce management solution can do a better job of matching an employee to work shifts that the worker desires (not what a manager chooses). That alone can create a more positive work environment and increase retention. A smarter tool can also help firms utilize freelancers, alumni, temps, and other potential workers more effectively.
Longer term, Kronos intends to enhance its Workforce Dimensions suite by:
- Expanding self-service functionality via the deployment of AI-based technology (e.g., worker self-scheduling)
- Use bots to offload routine Q&A from HR and to automate common tasks (e.g., schedule time off)
- Use AI to improve labor forecasting/workforce planning
- Expand vertical functionality
- Extend manager self-service via AI support for automated decision making/recommendations
Kronos is actively recruiting more partners for this product line. With more partners and with Kronos’ new platform, D5, Kronos hopes to dramatically expand its market footprint. With more partners and customers using the D5 platform, there’s also hope that more, deeper industry vertical extensions will be created. Those extensions would make the products more relevant for more prospective Kronos customers. In fact, a major partner collaboration has already occurred in the home healthcare space. This mega-solution uses Kronos Workforce Dimensions, Rodio (workforce communication platform), Passport (route management and execution software), and Form.com (digital form management). Marketed under the FieldCentric name, this is solution is HIPAA compliant) and provides a field caregiver an engagement platform specifically for field-based healthcare professionals.
The firm will be using its new AI tool, AIMEE, to also supplement its personnel forecasting module. Initial customers are already seeing an average 25% improvement in forecast accuracy. The AI functionality also helps employees (via a smart self service function) receive recommendations for shift swaps, time off and other requests.
AI is also being marked for use in compliance monitoring. With the right algorithms, Kronos could identify an adverse compliance trend building across multiple pay periods.
Another new big feature in Workforce Dimensions is same day pay. Workers can get paid for the hours they worked that day if the employer supports this option.
Productivity was also a focus point for Workforce Dimensions. I saw an interesting online report that displayed several workforce productivity measures for a health care vertical. This tool can monitor a worker’s productivity over the last six pay periods.
I liked the productivity focus as many payroll and HR systems only capture time near the end of a pay period. You can’t know, in real-time, how productive people are if you only see their time at the end of a month. Having time data together with payroll cost rates allows payroll to also be a real-time offering. It also could help firms in cost accounting activities. In fact, I’d love to have a further discussion with Kronos on how they could better support real-time cost accounting. It would be one of those rare times when Accounting/Finance would be tightly and beneficially coupled together.
Kronos is also making a big push re: customer engagement with Workforce Dimensions. They are continuing to invest in additional programs, community support tools, new intellectual property, etc. to help ensure customers have a great initial and long-term customer experience.
Kronos provides full service payroll and tax-filing in the US. Native payrolls are also being added for Canada and Australia.
Workforce Ready is aimed at the mid-market market. It’s a full suite of products offered at a competitive price point targeting the 500 to 5,000 employee segments. Interestingly, Kronos has dozens of companies with more than 10,000 employees using the application.
Workforce Central is one of Kronos’ oldest software solutions and is the most mature from an industry vertical perspective. It is available as an on-premises solution or in the cloud running on Kronos’ cloud servers. Workforce Central has traditionally been targeted for mid-to-large enterprises. As of this year, Workforce Dimensions possesses about 95% of the same functionality as Workforce Central.
This product line will continue to get additional R&D funds and functional expansion.
Creating a global payroll/HR juggernaut is quite expensive and time consuming. To date, no payroll software provider has been able to provide more than a handful of native payrolls and must rely on third party/in-country providers to deliver global coverage.
Kronos is no exception in this regard but its growing size is definitely pushing it into more global markets and functionality. My counsel to any HR software buyer is to evaluate the global capabilities of short-listed vendors carefully. Fees, integration requirements and timeliness of pay & time data can vary a lot globally.
For those customers using Kronos HR and Kronos timekeeping devices, they may experience a more seamless multinational experience.
Reflecting on the recent analyst day, I believe that:
- Kronos is a lot bigger than many might think. It probably belongs in more selections than it is seeing these days. Kronos seems to purposely not toot its own horn too much vis-à-vis competitors. I suspect some of that is due to firms like SAP and ADP reselling the Kronos Workforce Management tools. Also, most every HR/HCM/Payroll provider has integrations with Kronos’ timekeeping devices. That said, I believe it’s time for Kronos to get more aggressive in its marketing and positioning in the core HR space.
- Workforce Management is indeed a bigger deal than ever before. Every retailer, hospital, manufacturer, etc. out there needs a better way to schedule its people. No one seems to be winning the war for talent these days and employers that can do a better of job of matching people to their desired work shifts will likely have greater retention (and engagement).
- Kronos is getting through the private equity experience in a positive fashion. Not all PE deals end with asset stripping, debt loading, huge management fees, etc. Kronos’ owners appear to be growth-oriented equity investors. That’s a good thing for employees, customers and shareholders.
- Kronos’ attention to customer experience (as well as employee self-service and manager self-service functionality) is great to see. It’s a shame that so many vendors are finally getting focused on these needs as they should have been table stakes all along. In Kronos’ case, we had opportunities to hear from many customers of all three product lines. We also heard the current status and planned efforts from the Kronos executives who will lead the next wave of customer experience initiatives. All of this is great to see.
- Kronos is winning deals because of its:
- workforce management functionality
- focus on verticals
- new cloud product line
- customer service orientation
My final thought is this: the market needs more HR/HCM solution providers that treat their customers well (note: Kronos is still supporting iSeries clients they acquired in the 1980s). I get almost daily reminders of how unabashedly some vendors can wallet frack their own customers. How these firms can sell and/or talk of customer experience and then pillage their own customers baffles me. Kronos’ customers seemed content with the company. If they truly are that content, then this must become a critical part of Kronos’ future marketing messages, too.