We are a cloud-based provider of payroll and human capital management, or HCM,
software solutions for medium-sized organizations, which we define as those
having between 20 and 1,000 employees. Our comprehensive and easy-to-use solutions
enable our clients to manage their workforces more effectively. Our solutions
help drive strategic human capital decision-making and improve employee engagement
by enhancing the human resource, payroll and finance capabilities of our clients.
Our multi-tenant software platform is highly configurable and includes a unified
suite of payroll and HCM applications, such as time and labor tracking, benefits
and talent management. Our solutions have been organically developed from our
core payroll solution, which we believe is the most critical system of record
for medium-sized organizations and an essential gateway to other HCM functionality.
Our payroll and HCM applications use a unified database and provide robust on-demand
reporting and analytics. Our platform provides intuitive self-service functionality
for employees and managers combined with seamless integration across all our
solutions. We supplement our comprehensive software platform with an integrated
implementation and client service organization, all of which are designed to
meet the needs of medium-sized organizations.
Effective management of human capital is a core function in all organizations
and requires a significant commitment of resources. Organizations are faced
with complex and ever-changing requirements, including diverse federal, state
and local regulations across multiple jurisdictions. In addition, the workplace
operating environment is rapidly changing as employees increasingly become mobile,
work remotely and expect an end user experience similar to that of consumer-oriented
Internet applications. Medium-sized organizations operating without the infrastructure,
expertise or personnel of larger enterprises are uniquely pressured in this
complex and dynamic environment. Existing solutions offered by third-party payroll
service providers can have limited capabilities and configurability while enterprise-focused
software vendors can be expensive and time-consuming to implement and manage.
We believe that medium-sized organizations are better served by solutions designed
to meet their unique needs.
Our solutions provide the following key benefits to our clients:
Comprehensive cloud-based platform optimized to meet the payroll and HCM needs
of medium-sized organizations;
Modern, intuitive user experience and self-service capabilities that significantly
increase employee engagement;
Flexible and configurable platform that aligns with business processes and
centralizes payroll and HCM data;
Software as a service, or SaaS, delivery model that reduces total cost of ownership
for our clients; and
Seamless data integration with our extensive partner ecosystem that saves time
and expense and reduces the risk of errors.
We market and sell our products primarily through our direct sales force. We
generate sales leads through a variety of focused marketing initiatives and
from our extensive referral network of 401(k) advisors, benefits administrators,
insurance brokers, third-party administrators and HR consultants. We derive
revenue from a client based on the solutions purchased by the client, the number
of client employees and the amount, type and timing of services provided with
respect to those client employees.
The tax and regulatory environment in the United States is complex and dynamic.
Organizations are subject to a myriad of tax, benefit, workers compensation,
healthcare and other rules, regulations and reporting obligations. In addition
to U.S. federal taxing and regulatory authorities, there are more than 10,000
state and local tax codes in the United States. Further, federal, state and
local government agencies continually enact and amend the rules, regulations
and reporting requirements with which organizations must comply.
Growing Demand for Mobility and Enhanced User Experience
Connectivity and mobility are enabling employees to spend less time in traditional
office environments and more time working remotely. This trend increases the
demand for advanced and intuitive solutions that improve collaboration and foster
employee engagement, such as remote self-service access to payroll and timesheet
reporting, HR and benefits portals and other talent management applications.
Given the prominence of consumer-oriented Internet applications, employees expect
the user experience and accessibility of internal systems to be similar to those
of the latest Internet applications, such as LinkedIn, Amazon and Facebook.
Medium-Sized Organizations Face Unique Challenges
Medium-sized organizations functioning without the infrastructure, expertise
or personnel of larger enterprises are uniquely pressured in the current complex
and dynamic environment. Employees in these medium-sized organizations often
perform multiple job functions, and many medium-sized organizations have limited
financial, technical and other resources needed to effectively manage their
critical business requirements and to build and maintain the systems required
to do so.
Large Market Opportunity for Payroll and HCM Solutions
According to market analyses published by International Data Corporation, or
IDC, titled Worldwide and U.S. Human Capital Management Applications 2015-2019
Forecast (June 2015) and U.S. Payroll Outsourcing Services Forecast, 2015-2019
(November 2015), the U.S. market for HCM applications and payroll outsourcing
services is estimated to be $26 billion in 2017. The market opportunity is driven
by the importance of payroll and HCM solutions to the successful management
of organizations.
To estimate our addressable market, we focus our analysis on the number of
U.S. medium-sized organizations and the number of their employees. According
to the U.S. Census Bureau, there were over 610,000 firms with 20 to 999 employees
in the U.S. in 2014, employing over 43 million persons. We estimate that if
clients were to buy our entire suite of existing solutions at list prices, they
would spend approximately $285 per employee annually. Based on this analysis,
we believe our current target addressable market is approximately $12 billion.
Our existing clients do not typically buy our entire suite of solutions, and
as we continue to expand our product offerings, we believe that we have an opportunity
to increase the amount clients spend on payroll and HCM solutions per employee
and to expand our addressable market.
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