By Cliff Stevenson, Principal Analyst, Talent Management and Workforce Management

Ultimate Software and Kronos announced they will be merging. This shouldn’t come as too much of a surprise. The companies are owned by the same private-equity firm (Hellman & Friedman LLC is the controlling partner for each). They have said that they would remain separate entities but after looking at their combined market positioning, it just made too much sense to not combine their efforts.

I was on the analyst call and though I can’t go into too many specifics, I can say that both companies were fully represented on the call and remain committed to providing their customers complete service with no interruptions during or after the merger.

The challenges they face will be keeping their cultures intact. They are both in the Top 50 of all major benchmarks for culture: Best Places to Work, Fortune, Brandon Hall Group, etc. However they’ll be no moving one service to another company or vice-versa and both will continue to operate as they are now including keeping both of their current headquarters in Lowell, Massachusetts for Kronos and Weston, Florida for Ultimate. This business-as-usual philosophy also includes their overseas endeavors, recent acquisitions and the like. They plan a renaming themselves but do not have a new name yet. There were some rather humorous names bandied about in the chat among the analysts, but it is unlikely any of those will be used by the new company.

What this means for existing or prospective customers is that there will be an expanded series of offerings from those organizations along with the top-level service that both have provided in the past. They will not be removing or changing any of their current service models and will more or less — at least in the near future —operate as distinct entities, although merged at the top level.

From a Brandon Hall Group perspective, we have worked closely with both organizations for quite some time and will continue to do so. The major questions for customers should be whether this merger will be a success and will it affect their employees. I have always held their R&D departments in high regard and both have shown a great openness about their use of artificial intelligence and machine learning in their platforms. As long as they continue their transparency and future-focused thinking, they will thrive as one entity as they did separately. Employees of their customers can expect to not notice the merger at all, which in the short-term is a good indicator of a great merger.

Cliff Stevenson, (Twitter: @CliffordDarrell email: cliff.stevenson@brandonhall.com) Principal Analyst, Talent Management and Workforce Management, Brandon Hall Group

 For more information on Brandon Hall Group’s research, please visit www.brandonhall.com

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