HR Tech: Case Studies
Justworks built a base of satisfied customers by offering 24/7 support and user-requested updates to their product. ADP focused on establishing their brand and staying relevant through focused PR efforts.
Case Study #1: Justworks
- Justworks offers a one-stop platform with tools like automatic payroll, onboarding services, team communication, and 24/7 human support. They support small to mid-size businesses and service over 85,000 employees in all 50 states
- In the past three years, Justworks grew its revenue 271x. They are the fastest growing HR tech company in the nation and North America's 2nd fastest growing company. In January 2020, Justworks acquired 50 million in funding, bringing their overall total to 143 million.
- Justworks' strategies for success include (1) harnessing customer feedback to build an innovative product and (2) focusing on customer satisfaction.
Building an Innovative Product
- Justworks offered the first technology-enabled PEO (Professional Employer Organization). Fred Wilson, a partner at a venture capital firm invested in Justworks, called the platform a "category-defining offering." He cited its"elegant, intuitive and easy-to-use" technology as a reason for the company's rapid growth.
- Justworks uses customer feedback to continuously improve its product offerings. For example, after measuring the needs of customers they began to offer 24/7 support to every employee on the platform. Since then, human-to-human customer service has become an integral part of their brand.
Excelling in Customer Satisfaction
- The CEO, Isaac Oates, attributes his company's success to the pursuit of client satisfaction. In general, HR tech companies lag behind other industries in customer satisfaction rates. The average net promoter score (metric for measuring overall customer loyalty) for HR companies is just 8, so Justworks's score of 60+ sets them apart.
- According to Oates, the company focuses on establishing positive relationships with customers during the onboarding phase. They believe that early relationship-building has a huge impact on customer retention.
Case Study #2: ADP
- Since its founding in 1949, ADP (Automatic Data Processing Inc.) has become the leading payroll service company. At least 66% of ADP's revenue still comes from payroll processing services. However, they also provide a variety of HR tech services to small, mid-sized, and large companies.
- ADP's net income grew 41% in the 2019 fiscal year. They have an average growth rate of 6.7% each year and are expected to reach the $15 billion in total revenue by 2020. They have been a Fortune 500 company for 25 years.
- ADP grew by establishing itself as the most well-known payroll service in America. They have maintained their brand's integrity through focused PR efforts.
Establishing a Trusted Brand
- The main strategy ADP uses to drive consistent success is maintaining the integrity of their brand.
- Within the US, 1 in every 6 employees receives their paycheck through ADP, with the ADP logo in the corner of all their communications. They believe that their logo "suggests dependability" and they enforce strict guidelines for when and how it can be used.
- In discussing the factors of their success, CEO Jan Siegmund mentioned their legacy of providing "peace-of-mind" to their customers. They take pride in their "very consistent performance" over the past 70 years.
Incorporating New Technology and Updating Their Brand
- Unlike Justworks, ADP does not aspire to be the first to adopt new technology, as it might hurt their reputation as a trusted brand. However, they do actively incorporate proven technologies by buying successful companies or developing new products.
- In 2019, ADP and Havas Media Group created the "Breaking Barriers" campaign. They set up booths where guests used sledgehammers to destroy objects representing "work-place barriers" (like glass mirrors and fax machines). ADP's marketing team used memorable media from that campaign to announce that ADP would become a more tech-driven company.
After reviewing HR tech industry analysis available from the Society for Human Resource Management (SHRM), a report on 2020 HR Tech predictions, and other reports from leading HR tech groups (like HR Technologist and Human Resources Today), we were unable to find case studies to fully answer the research question. Thus, we built case studies by compiling research from a range of sources, including the industry analysis sources mentioned above. We began by identifying the fastest growing HR tech companies. From this list, we zeroed in on Justworks and ADP, two companies that offer insight into a diverse set of strategies. To complete the case studies, we compiled data from PR reports, business news outlets, and interviews with company leaders.