ADP Acquires WorkMarket, Steps into Contingent Workforce and Total Talent Management Space

Payroll and human capital management provider ADP announced Monday it is acquiring WorkMarket, a cloud-based workforce management solution, for an undisclosed amount, the company said in a press release.

The acquisition reflects a number of important human capital trends, including the increasing use of skilled non-employee labor to perform tasks or projects and, more recently, the growing recognition that businesses need to more deeply integrate their internal employee and external contract workforce, an approach also known as total talent management.

Spend Matters has followed WorkMarket’s growth over the past several years, tracing its evolution from a so-called freelancer management system (FMS) focused strictly on sourcing and managing independent contract workers to a much broader enterprise workforce management solution. In its current form, WorkMarket “allows companies to build and manage an integrated workforce across W-2 employees, 1099 contractors, vendors and other types of workers,” allowing businesses to “optimize how work gets done across any labor type,” according to the press release.

Is ADP just moving pieces around on the board or starting a whole new game in the contingent workforce technology space? Read our PRO research brief covering the transaction to find out. 

WorkMarket Background

Since its founding in during the early days of the so-called “gig economy,” WorkMarket has raised $66 million in venture funding, including $25 million in a Series D funding round by Foundry Group and Accenture in 2017. Today, companies like Walgreens, The New York Times and Yahoo are counted among WorkMarket’s enterprise clients.

For an introduction to WorkMarket’s capabilities, please see our Vendor Snapshot series covering the provider:

• WorkMarket: Vendor Analysis (Part 1) — Background & Solution Overview
• WorkMarket: Vendor Analysis (Part 2) — Product Strengths and Weaknesses
• WorkMarket: Vendor Analysis (Part 3) — Competitive & Summary Analysis

A New “Gig” for ADP?

For ADP, the acquisition represents what is perhaps the company’s first major step into the contingent workforce segment (and, one could say, the gig economy). ADP has now become “the first human capital management provider with robust freelancer management functionality and reporting insights across all workers, from W-2 employees to 1099 contractors,” the company said in the press release.

Carlos Rodriguez, president and CEO of ADP, described WorkMarket as a “proven expert in freelancer management. WorkMarket allows us to provide ready access to a growing contingent labor pool and the tools to manage and pay them in a secure, efficient and compliant manner.”

Will ADP Become the Amazon Business of Labor and Services?

Spend Matters views this acquisition as a milestone event in the accelerating evolution of enterprise workforce sourcing, engagement and management, where the traditional W-2 employee workforce and external contingent workforce tended to fall into the domains of HR and contingent workforce procurement, respectively.

Accordingly, Spend Matters will shortly be publishing a more extensive and detailed PRO analysis of the acquisition and its implications in our industry.

Whether ADP becomes the Amazon Business of labor and services markets, however, remains to be seen. Regardless, this acquisition seems much more “on target” for the labor giant than ADP’s past forays into the electronic invoicing technology market.