Gantry Customer Satisfaction Wp Final 02 26 09
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Gantry Customer Satisfaction Wp Final 02 26 09 Document Transcript

  • 1. Gantry Group Customer Satisfaction with HRMS & Payroll Solutions: Comparative StudyFebruary 2009 Top Study Findings • Study respondents represented a broad mixThe Gantry Group, LLC of HR/payroll solution vendors. The majority of respondents used ADP,150 Baker Avenue Ceridian, or Ultimate Software, so studySuite 301 findings are focused on these solutionConcord, MA 01742 providers.www.gantrygroup.com • Study found that companies that switched from a service bureau solution to an on- premise or software-as-a-service (SaaS) solution are more satisfied than those who have stayed with a service bureau. • Study findings showed that Ultimate Software customers were the most highly satisfied and most willing to recommend their current vendor.
  • 2. ContentsExecutive Summary ...............................................................................1Comparing Leading HR Management Solutions......................................3 Customer Satisfaction & Retention ................................................................................ 3 Vendor Strengths ....................................................................................................... 4 Solution Implementation ............................................................................................. 5 Switching Vendors...................................................................................................... 5Comparing Leading Payroll Solutions ....................................................5 Customer Satisfaction & Retention ................................................................................ 5 Vendor Strengths ....................................................................................................... 7 Solution Implementation ............................................................................................. 7 Switching Vendors...................................................................................................... 8Conclusions ...........................................................................................8About the Study.....................................................................................9About The Gantry Group, LLC...............................................................11
  • 3. Customer Satisfaction with HRMS & Payroll Solutions: Comparative Market StudyCustomer Satiisfactiion wiith HRMS & PayrollllCustomer Sat sfact on w th HRMS & PayroSollutiions: Comparative Market StudySo ut ons:Executive SummaryIn late 2008, Gantry Group conducted a comparative market survey designed to explorecustomer satisfaction with the leading human resource management system (HRMS) andpayroll vendors at companies with more than 200 employees. Over 15,000 emails were sent tosolicit the sample of 513 completed responses for HRMS and 493 completed responses forpayroll. The study received responses for over 10 HR and payroll solutions. However, therewere only enough responses for three vendors that yielded a sample sufficiently large forstatistical representation. These three vendors included ADP, Ceridian, and UltimateSoftware, who together make up over 70% of the sample. For this reason, analysis waslimited to comparisons between these three vendors. More details about the studysample can be found in the section entitled “About the Study.”The objective of the study was to compare customer experiences with the leading HRMS andpayroll solution vendors. In addition to gaining insight into how satisfied customers are withtheir current vendor and why, the study was intended to explore why customers switched fromone vendor’s solution to another.Overall Vendor Satisfaction Overall Customer Satisfaction Ceridian 73% ADP 84% Study Average 89% Ultimate 99% 0% 20% 40% 60% 80% 100% Source: Gantry Group 2009 Figure 1 – Overall Customer SatisfactionAccording to the survey results for both HR and payroll users, Ultimate Software customersreported the highest overall satisfaction of 99%. The average response for satisfaction from theoverall total sample was 89% satisfaction. ADP and Ceridian’s customer satisfaction were belowthe sample average at 84% and 73%, respectively. Vendor satisfaction shown in Figure 1 ismeasured as the aggregate of all levels of satisfaction. 1The Gantry Group LLC Copyright 2009, All Rights Reserved
  • 4. Customer Satisfaction with HRMS & Payroll Solutions: Comparative Market Study Overall Likelihood to Recommend Vendor Ceridian 46% ADP 59% Ultimate 86% 0% 20% 40% 60% 80% 100% Ultimate ADP Ceridian Source: Gantry Group 2009 Figure 2 – Likelihood to Recommend VendorThe differences in satisfaction seen in Figure 1 were even more pronounced when respondentswere asked about the likelihood of recommending their current vendor to a business colleague.This question is typically equated with a more “pure” estimation of customer satisfactionbecause it eliminates other factors such as existing investment or entrenchment with aparticular vendor, or the respondent’s knowledge of alternative solutions. Responses to thisparticular question are frequently equated with customer loyalty.Figure 2 shows that 86% of Ultimate customers would recommend Ultimate’s solution. Thiscompares with 59% of ADP customers and 46% of Ceridian customers (overall for both HR andpayroll).Improved Satisfaction When Switching Away from Payroll ServiceBureau ModelOne of the most provocative findings in the study concerned the difference in current vendorsatisfaction between customers who switched vendors but stayed with the service bureaumodel, compared to those who changed from a payroll service bureau to a software-as-a-service solution or on-premise software model. Customers who switched from the servicebureau to a SaaS or on-premise solution were more satisfied with their currentvendor than those who switched vendors but stayed with a payroll service bureau.Figure 3 shows that 90% of respondents who switched from Ceridian to Ultimate wouldrecommend Ultimate to a business colleague for HRMS or payroll, compared with 63% (HRMS)and 70% (payroll) of those that switched from Ceridian to ADP, who would recommend ADP.Customers who switched from ADP to Ultimate were twice as likely to recommend their currentvendor than companies who switched from ADP to Ceridian.% Respondents Likely to Recommend Current Vendor Switching Vendors HRMS Payroll Ceridian to ADP 63% 70% Ceridian to Ultimate 90% 90% ADP to Ceridian 40% 44% ADP to Ultimate 87% 86%Source: Gantry Group 2009 Figure 3 – Switching Vendors vs Likelihood to Recommend 2The Gantry Group LLC Copyright 2009, All Rights Reserved
  • 5. Customer Satisfaction with HRMS & Payroll Solutions: Comparative Market StudyThe survey included two separate sections for HRMS and payroll, respectively. Detailed resultsfrom the study are presented in this white paper with HRMS and Payroll analyzed in twoseparate sections.Comparing Leading HR Management SolutionsHRMS Customer Satisfaction & RetentionRespondents were asked to indicate their level of satisfaction with their current HRMS vendoras well as whether or not they were likely to recommend their current HRMS solution to a peeror colleague. Figure 4a shows satisfaction results for ADP, Ceridian, and Ultimate HRMScustomers. HRMS Customer Satisfaction Ceridian 73% ADP 81% Study Average 87% Ultimate 98% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Source: Gantry Group 2009 Figure 4a – HRMS Customer SatisfactionOf customers using Ultimate HRMS, 98% reported satisfaction, compared with 81% of ADPcustomers, 73% of Ceridian customers, and 87% of all respondents in total.Figure 4b shows a similar trend regarding customer loyalty as measured by the likelihood torecommend the current HRMS vendor to a peer or business colleague. 86% of customers usingUltimate would recommend their solution compared with 55% and 43% of customers using ADPand Ceridian, respectively. 3The Gantry Group LLC Copyright 2009, All Rights Reserved
  • 6. Customer Satisfaction with HRMS & Payroll Solutions: Comparative Market Study Likelihood to Recommend HRMS Vendor Ceridian 43% ADP 55% Ultimate 86% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Source: Gantry Group 2009 Figure 4b – HRMS Likelihood to RecommendHRMS Vendor StrengthsAveraged across the total sample, when asked what the current HRMS system does well, thetop three functions selected by respondents were reporting, integration between HRMS/payroll,and employee/manager self-service. Figure 5 shows the results. Rate Strength of Current Vendor’s HRMS Functionality 15 Employee and manager 19 self-service 64 Integration between HR 26 Ceridian and payroll and other 49 ADP systems Ultimate 80 24 Reporting 50 85 0 10 20 30 40 50 60 70 80 90 Source: Gantry Group 2009 Figure 5 – Vendor Strength (numbers represent counts) 4The Gantry Group LLC Copyright 2009, All Rights Reserved
  • 7. Customer Satisfaction with HRMS & Payroll Solutions: Comparative Market StudyHRMS Solution ImplementationFor Ultimate (58%) and ADP (55%), over half of respondents reported solution implementationof less than 6 months, while 43% of Ceridian customers were implemented in less than 6months. On average, Ultimate and ADP customers were implemented in approximately 7months and Ceridian customers in 9 months.With regard to the implementation costs and expected timeframe, on average the Ultimateimplementation experience was reported as being on-time and on-budget. ADP and Ceridianimplementations on average were reported as being slightly longer or over-budget thanplanned.Satisfaction When Switching HRMS VendorsThe number of respondents switching from Ultimate to ADP or Ceridian was too low forstatistical relevancy. Figure 6 shows likelihood to recommend for customers whose previousHRMS vendor was ADP or Ceridian, respectively.When asked the likelihood of recommending their current vendor’s HRMS solution, Ultimatecustomers who migrated from a payroll service bureau (ADP or Ceridian) were much morelikely to recommend Ultimate to a business colleague than those who migrated between payrollservice bureaus (ADP and Ceridian). FIGURE 6 - % of Respondents Likely to Recommend HRMS Vendor Ceridian to Ceridian to ADP to ADP to ADP Ultimate Ceridian Ultimate HRMS 63% 90% 40% 87%The study results are clear that the majority of companies that switched from one servicebureau to another for HRMS either did not realize an increase in satisfaction (Ceridian) orexperienced a minimal increase in satisfaction (ADP). In the case of customers who switchedfrom ADP to Ceridian only, 40% reported that they would recommend the Ceridian solution.Because this question is frequently a proxy for customer loyalty which, in turn, is driven by thedegree to which a solution met the respondent’s expectations, it is reasonable to assume thatcustomers remaining with the service bureau model did not gain the benefits they may haveexpected by changing vendors.Top Reasons Cited for Switching HRMS VendorsThe primary reasons given for switching away from ADP as a previous HRMS vendor were lackof scalability (33%) and unsatisfactory customer support (26%). The primary reasons given forswitching from Ceridian as a previous HRMS vendor were unsatisfactory customer support(33%) and poor reporting (26%).Comparing Leading Payroll SolutionsPayroll Customer Satisfaction & RetentionRespondents were asked to indicate their level of satisfaction with their current payroll vendoras well as whether or not they were likely to recommend their current payroll solution to a peeror colleague. Figure 7a shows the comparative results of ADP, Ceridian, and Ultimate againstthe average for the entire sample. 5The Gantry Group LLC Copyright 2009, All Rights Reserved
  • 8. Customer Satisfaction with HRMS & Payroll Solutions: Comparative Market Study Payroll Customer Satisfaction Ceridian 74% ADP 88% Study Average 89% Ultimate 99% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Source: Gantry Group 2009 Figure 7a – Payroll Customer SatisfactionOf customers using Ultimate payroll, 99% reported that they are satisfied compared with the89% average from the total respondents, 88% of ADP payroll customers, and 74% of Ceridianpayroll customers.Figure 7b shows a similar trend regarding customer loyalty as measured by the likelihood torecommend the current payroll vendor to a peer or business colleague. 87% of customers usingUltimate would recommend their payroll solution compared with 63% and 49% of customersusing ADP and Ceridian, respectively. Likelihood to Recommend Current Payroll Vendor Ceridian 49% ADP 63% Ultimate 87% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Source: Gantry Group 2009 Figure 7b – Payroll Likelihood to Recommend 6The Gantry Group LLC Copyright 2009, All Rights Reserved
  • 9. Customer Satisfaction with HRMS & Payroll Solutions: Comparative Market StudyPayroll Vendor StrengthsAveraged across the total sample, when asked what the current payroll system does well, thetop three functions selected by respondents were payroll processing without manualintervention, reporting, and easy payroll corrections. Figure 8 shows the results.When asked what the current payroll system does well, the results show 94% of Ultimate usersselected payroll processing without manual processing, 83% identified reporting, and 78% likedthe control over when to run payroll. There was a stark contrast across vendors regardingcontrol over when to run payroll, with 78% of Ultimate customers identifying this as a strengthcompared with only 49% of ADP and 33% of Ceridian customers, respectively. Rate Strength of Current Vendor’s Payroll Functionality 21 Easy payroll corrections (manual/off cycle 50 checks) 80 13 Control over when to run 42 payroll 82 Ceridian ADP Ultimate 18 Reporting 58 87 36 Payroll processing (gross-to-net) with no 74 manual intervention 99 0 20 40 60 80 100 120Source: Gantry Group 2009 Figure 8 – Vendor Strength (numbers represent counts)Payroll Solution ImplementationFor all three vendors, respondents experienced similar timeframes for average payrollimplementation time. Implementation of each payroll solution took 3-6 months for ADP,Ceridian, and Ultimate.The differences in implementation emerged when respondents were asked to describe theirimplementation experience. On average the Ultimate implementation experience was reported 7The Gantry Group LLC Copyright 2009, All Rights Reserved
  • 10. Customer Satisfaction with HRMS & Payroll Solutions: Comparative Market Studyas being on-time and on-budget. ADP and Ceridian implementations on average reported asbeing slightly longer or over-budget than planned.Satisfaction When Switching Payroll VendorsThe number of respondents switching from Ultimate to ADP or Ceridian was too low forstatistical relevancy. Table 9 shows likelihood to recommend for customers whose previousHRMS vendor was ADP and Ceridian, respectively.When asked the likelihood of recommending their current vendor’s payroll solution, Ultimatecustomers who migrated away from a payroll service bureau (ADP or Ceridian) were muchmore likely to recommend Ultimate to a business colleague than those who migrated betweenpayroll service bureaus (ADP and Ceridian). Table - 9 % of Respondents Likely to Recommend Payroll Vendor Ceridian to Ceridian to ADP to ADP to ADP Ultimate Ceridian Ultimate Payroll 70% 90% 44% 86% Source: Gantry Group 2009The study results are clear that the majority of companies that switched from one servicebureau to another for payroll either did not realize an increase in satisfaction (Ceridian) orexperienced a minimal increase in satisfaction (ADP). In the case of customers who switchedfrom ADP to Ceridian, only 44% reported that they would recommend the Ceridian solution.Because this question is frequently a proxy for customer loyalty which, in turn, is driven by thedegree to which a solution met the respondent’s expectations, it is reasonable to assume thatcustomers remaining with the service bureau model did not gain the benefits they may haveexpected by changing vendors.Top Reasons Cited for Switching Payroll VendorsThe primary reasons given for switching from ADP as a previous payroll vendor were that thesystem did not meet needs (29%) and lack of scalability (26%). The primary reasons given forswitching from Ceridian as the previous payroll vendor were that the system did not meetneeds (36%) and unsatisfactory customer support (32%).ConclusionsGantry Group’s analysis of the data from its market study reveals some important insights intodifferences between the experiences of customers using HRMS and payroll solutions from ADP,Ultimate, and Ceridian. Although the data for HRMS vendors was analyzed separately frompayroll vendors, the results for these two important functions are closely matched.Based on the experiences as measured from this study, we observed companies experiencingmuch higher levels of overall satisfaction from their HRMS and payroll solutions when providedby a SaaS or on-premise software provider rather than a payroll service bureau model. Thisresult is particularly interesting in light of respondents’ reasons for leaving a prior servicebureau vendor, which included poor customer support, limited reporting, lack of scalability, andlack of functionality to meet business needs. 8The Gantry Group LLC Copyright 2009, All Rights Reserved
  • 11. Customer Satisfaction with HRMS & Payroll Solutions: Comparative Market StudyIn particular, the study revealed: • More customers report satisfaction with their HRMS and payroll solutions from Ultimate than those using ADP and Ceridian. 99% of Ultimate customers reported satisfaction compared with a total sample average of 89%. • More customers would recommend Ultimate HRMS and payroll solutions than those using ADP and Ceridian. • Customers who have changed from one service bureau to another are less satisfied and loyal (measured by likelihood to recommend to a business colleague) to their current vendor than those who went from a service bureau to Ultimate. • Customers’ reasons for leaving their previous vendors centered on unsatisfactory customer support, limited functionality, and lack of reporting.About the StudyIn November 2008, Gantry Group constructed a quantitative online survey designed to reachHR and payroll executives within U.S. enterprises (200 or more employees) that had deployedHR solutions from one of 12 vendors including ADP, Ceridian, and Ultimate. One of the primaryobjectives was to measure and compare customer satisfaction and retention with HRMS andpayroll solutions from these vendors. Over 15,000 emails were sent to solicit the sample of 513completed responses for HRMS and 493 completed responses for payroll.Respondent data was analyzed by the functional category of HR solution currently deployed andby the specific HR solution vendor.Ten of the leading HRMS and payroll vendors were included in the study; however, ADP,Ceridian, and Ultimate represented about 70% of the total sample. For this reason, analysiswas limited to comparisons between these three vendors. Figure 10 shows the distribution ofvendors in the sample. 35% 32% 30% 28% 26% 24% 23% 25% 20% 14% 15% 11% 10% 7% 7% 5% 3% 3% 2% 3% 2% 2% 2% 2% 1% 1% 0% 0% ADP Ceridian Kronos Law son Oracle Paychex PeopleSoft SAP Ultimate Other Softw are HRMS PayrollSource: Gantry Group 2009 Figure 10 – Vendor Distribution 9The Gantry Group LLC Copyright 2009, All Rights Reserved
  • 12. Customer Satisfaction with HRMS & Payroll Solutions: Comparative Market StudyCompanies of respondents to the study ranged from 200 employees to over 10,000 employees.Figure 11 depicts the size distribution for the sample as a whole. 50% 45% 45% 40% 35% 30% 25% 20% 20% 15% 9% 9% 10% 7% 5% 0% 200-1,000 1,001-2,500 2,501-5,000 5,001-10,000 Over 10,000Source: Gantry Group 2009 Figure 11 – Company Size DistributionThe functional areas of respondents were restricted to heads of the HR and payroll functions atrespondent companies. 10The Gantry Group LLC Copyright 2009, All Rights Reserved
  • 13. Customer Satisfaction with HRMS & Payroll Solutions: Comparative Market Study About The Gantry Group, LLC Gantry Group LLC is a privately held market research and strategy consulting company serving the world’s leading technology-based solution providers. For the past decade Gantry Group’s customized market research and consulting services have armed its clients with targeted market intelligence to support their strategic business decisions. Backed by over 25 years of experience, Gantry Group delivers to business executives the firsthand market insights and predictive measurement capabilities that allow them to make informed decisions as they plan ahead and anticipate changing market trends and needs. As a result of Gantry Group’s services, leading solution providers have designed solution strategies aligned to what the market truly values, segmented target customers to support precision marketing, and communicated product benefits that motivate customer purchases. Gantry Group clients include IBM, Xerox Global Services, EDS, Accenture, Mercer, McKesson, Palm and many other solution providers. Additional information about Gantry Group can be found at www.gantrygroup.com. 11The Gantry Group LLC Copyright 2009, All Rights Reserved