The secret to talent management? Put employees, not employers first

March 6, 2015, 2:03 PM UTC
JM Family Enterprises, Inc. logo and business sign
WESTON, FL - FEBRUARY 25: Exterior General view of Ultimate Software logo and business sign on February 25, 2015 in Weston, Florida. (Photo by Johnny Louis /Getty Images)
Photograph by Johnny Louis — Getty Images

It stands to reason that technology companies selling human resources software should know a thing or two about nurturing corporate culture.

Two prominent ones, Ultimate Software and Workday, both earned credible spots this week on the newly published 2015 Fortune “Best Places To Work For” ranking”. They were No. 21 and No. 22, respectively. This was Workday’s first time on the list; it is Ultimate’s fourth consecutive year.

For Ultimate founder and CEO Scott Scherr, culture is the ultimate differentiator. There are no non-competes, no employment contracts at his 25-year-old company. Every new employee receives equity, everyone can recite its business goals, and the company covers 100% of healthcare and dental premiums. “The true measure of a company is how they treat their lowest paid employee,” reads a prominent slogan posted in the Weston, Florida company’s lobby.

Likewise, it is Ultimate’s mission to help customers like Elizabeth Arden, Nikon and Herman Miller “do everything they can to keep their people first,” Scherr said.

The company’s initial offering centered on payroll management (still its flagship service), but now Ultimate sells cloud software subscriptions to manage everything from recruiting to onboarding to benefits and time-tracking. During 2014, total revenue rose 23% to $506 million—net income reached $45 million. Looking ahead, Ultimate expects $600 million in revenue this year and $1 billion by 2018. With a customer retention rate of 96%, that doesn’t seem unrealistic.

Scherr believes talent management systems should put employees, not employers, first. Fresh research on workforce dynamics (sponsored by his company) drives this point home: one-third of new hires can predict whether they’ll stay with a company long-term within two weeks of being on the job. Millennials are particularly impatient: 42% would love some sort of weekly feedback.

“Employees across all generations now have the expectation that HR and payroll systems are extremely fast and efficient,” said Ultimate’s chief technology officer, Adam Rogers, commenting on the data. “They don’t expect to be asked to enter the same piece of information more than once, and they expect the system to be as easy to navigate as a consumer application.”

Of course, managers are employees, too. That’s why Ultimate’s software includes analytics reports that help identify high performers or that predict which offices or facilities might be at risk of higher turnover. It does this by correlating data about overtime, gender, age, and geography that is drawn from across its different applications.

In today’s culture of job hopping, Scherr is a bit of an anomaly. This is only his third company: his previous employers were ADP (hence his expertise in payroll) and his father’s company in Bronx, New York, where he developed the philosophy that shapes Ultimate today: “The only thing I knew was that business was there to take care of the people, and the people were there to take care of customers.”

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