Gartner, has revealed the results of its latest 2022 Magic Quadrant focused on Cloud HCM Suites for enterprises with more than 1000 employees.
According to the company, the market for Human Capital Management (HCM) solutions is diverse, with an array of HR specialists, ERP, and payroll-focused vendors all entering the landscape.
Gartner believes by 2025, around 60 percent of global mid-sized and larger enterprises will already have invested in a cloud-deployed solution for HCM to assist with administrative HR and talent management.
However, the analyst also suggests many brands will need to leverage other accompanying solutions for 20-30 percent of their HR requirements.
Gartner’s Magic Quadrant aims to assist companies with more than 1,000 employees in finding an innovative HCM solution suited to their specific needs.
This year’s report features 11 vendors, with a total of four market leaders.
Defining Cloud HCM Suites for Mid to Large Enterprises
HCM Suites support companies in attracting, developing, retaining, and engaging employees.
According to Gartner, the core capabilities of a cloud HCM solution for enterprises with more than 1,000 employees must include tools for:
- Managing employee data.
- Lifecycle monitoring.
- Organizational structure.
- Payroll and benefits administration.
- Role-based self-service.
Cloud HCM solutions for mid to large enterprises should also feature talent management tools with recruiting, onboarding, performance management, compensation planning, and career planning capabilities.
Gartner also notes these suites must include integrated HR service management with personalized access to procedure, policy, and program guidance for managers and employees.
Such solutions may also include integrated case management, knowledge bases, workflow management, virtual assistants, and digital document management.
Optional capabilities of cloud HCM Suites for enterprises may include:
- Workforce management (WFM) tools: Absence management, time and attendance, workforce scheduling, task/activity tracking, forecasting and budgeting, and other tools.
- Employee experience (EX) solutions: Functions designed to support the experience of team members, such as employee campaigns, recognitions, rewards, and voice of the employee (VoE) technologies.
- Cross-functional enabling features: Emerging capabilities that use data from other tools within the HCM suite to assist initiatives such as talent analysis, internal talent marketplaces, workforce planning, and skills management solutions.
Gartner also notes that Cloud HCM vendors are adding functionality to support the management of casual workers.
While Gartner typically divides its notable vendors into four categories, this year’s edition only focuses on Leaders, Challengers, and Niche Players. Indeed, no Visionaries are included in this year’s report. Let’s take a closer look at each entry.
Leaders
Leaders in the Cloud HCM environment offer a clear vision of how they can help HR leaders reach crucial objectives. In doing so, they work towards their vision with an array of products and services, demonstrating excellent business results. Most leaders use cutting-edge technologies and showcase a consistent ability to win deals. The Leaders for the 2022 Cloud HCM Magic Quadrant include:
- Workday
- Oracle
- Ceridian
- SAP
Workday
Workday combines its HCM suite with various other products for ERP functions, such as planning, finance, procurement, and professional service automation. According to Gartner, Workday benefits from the robust integration options across these offerings – many of which are best-of-breed. Indeed, Gartner pinpoints Workday as the highest-performing vendor for employee experience, with differentiating features like its Value Inclusion Belonging and Equity index, alongside built-in sentiment analysis.
Oracle
Oracle has enhanced the core HR function of its ecosystem with the use of “Journeys” to enable personalized user experiences and workflows across the suite. Additionally, advanced HCM controls can track suspicious user activity. Oracle HCM also delivers exceptional employee experience, augmented by the launch of the Oracle ME platform. Plus, of all the vendors assessed by Gartner, Oracle is the highest performing for recruitment purposes.
Ceridian
The Ceridian Dayforce ecosystem benefits from an innovative and expanding range of payroll capabilities, providing teams with cashback rewards. It also boasts robust WFM capabilities, built-in as a native function of its core product. This year, Ceridian also earned the highest vendor grades for “Market Understanding”.
SAP
The SAP SuccessFactors HXM Suite, combined with various elements within SAP’s broad portfolio, has interoperability at its heart. Indeed, it boasts more than 400 partner alliances that work to bring enhanced value to the product proposition. SAP also has a fantastic sales strategy, focusing on upselling existing customers and using indirect sales channels. Plus, it has excellent geographic coverage, with localized solutions in 102 countries.
Challengers
Challengers in the Cloud HCM Magic Quadrant demonstrate an impressive customer base and a significant growing presence in various sub-markets. While these companies may be unable to execute consistently in all geographies, they have a strong understanding of the changing needs of HR organizations. This year’s Cloud HCM Magic Quadrant challengers are:
- UKG (Pro)
- ADP
UKG (Pro)
Hosted in a public cloud environment, UKG Pro exhibits excellent WFM innovation, with pre-built integrations for demand-driven scheduling and employee management. Gartner also found UKG Pro to be the highest-performing product for IHRSM functionality. Plus, the analyst notes the vendor is one of the top products for services in the report. However, UKG Pro struggles with limited geographic coverage, primarily working with organizations in the US and Canada.
ADP
ADP Workforce Now benefits from a native local payroll solution and prepaid, reloadable debit cards. While lauding the vendor’s partner and alliance strategy, Gartner also found ADP’s reporting capabilities robust and insightful. Unfortunately, ADP only offers limited integrated HR service management solutions, and case management is only available through outsourced services to clients.
Niche Players
Niche Players in the Gartner Magic Quadrant for Cloud HCM offer many core functionalities, offering complete portfolios for specific industries and business sizes. However, they often serve some sectors better than others. Meanwhile, these vendors tend to suffer from a smaller geographical footprint. This year’s 2022 Cloud HCM Magic Quadrant Niche Players are:
- UKG (Ready)
- Darwinbox
- Cornerstone
- Infor
- Cegid
UKG (Ready)
Previously known as Kronos Workforce Ready, UKG Ready provides companies with robust WFM capabilities, including geofencing for mobile employees and personalized scheduling. Following a recent merger, the platform benefits from integrating with PeopleDoc to provide strong HR service management. Nevertheless, Gartner notes that UKG has suffered from limited investment in innovation in recent years, which has caused it to fall behind the competition.
Darwinbox
Darwinbox is a growing cloud HCM solution with excellent capabilities in employee experience. The platform looks at traits for employee workflows, native employee surveying, and more. It is also becoming a high-performing mid-sized vendor following a recent round of funding. Plus, the company has an excellent reputation for market responsiveness. However, Gartner highlights its lack of a robust learning solution as a significant drawback.
Cornerstone
Cornerstone serves up an excellent user experience, incorporating personalization features for user preferences and roles. Additionally, Gartner found Cornerstone’s HCM delivers fantastic performance management functionality and robust career planning tools. However, Cornerstone’s HCM doesn’t include native payroll, workforce management, or benefits administration functions.
Infor
Infor’s Cloud HCM benefits from an integrated and robust WFM solution. The technology includes contextualized features and configuration for healthcare and retail companies, with shift swapping and scheduling solutions. Infor was also the highest-performing vendor in this year’s report for vertical strategy, with a comprehensive range of retail, manufacturing, and healthcare tools. Unfortunately, Gartner notes that Infor only provides limited functionality for employee experience.
Cegid
The Cegid Cloud HCM excels in learning management, with integrated support for Microsoft Teams for virtual classrooms and succession and career planning tools. Cegid also benefits from flexible performance management capabilities, with features supporting continuous performance appraisals. However, Gartner stated that Cegid HCM struggles with a fragmented marketing strategy and has trouble building a differentiated product portfolio.
Looking Ahead to the Future of Cloud HCM
Cloud HCM solutions are increasingly crucial for business leaders looking to expand their talent acquisition, staff engagement, and employee experience strategies.
In a world of evolving workplaces, these tools give businesses more freedom to experiment with everything from career planning and learning to succession management.
The Gartner Cloud HCM Magic Quadrant offers a fantastic starting point for businesses unsure where to begin their HCM deployment adventures in 2023 and beyond.
To uncover more insights from Gartner into other enterprise technologies, read our rundowns of the:
- Gartner Magic Quadrant for Cloud ERP for Product-Centric Enterprises 2022
- Gartner Magic Quadrant for Enterprise Conversational AI Platforms 2022
- Gartner Magic Quadrant for Contact Center as a Service (CCaaS) 2022
