UKG: The Kronos and Ultimate Software Merger One Year Later

April 1, 2020, Ultimate Software and Kronos merged to create one of the larger players in the HCM market. Six months later, the company rebranded the merged entity to UKG (Ultimate Kronos Group). Now that just over a year has passed since the merger and with direct experience working with our Clients and the combined companies, we thought now would be a good time to assess where the company is in the landscape of HCM solutions, and where you should be encouraged (while exercising caution) in executing agreements going forward.

You may also remember them as a 'one to watch' on our Top 10 HCM HRMS suppliers for 2021.

Common Threads

Unlike many (many) mergers and acquisitions we see in the market, UKG seemed motivated from the start to make this relationship work and work well. Suppliers often buy companies or merge simply to plug a product gap and continue to do business without really taking care to fold the capabilities smoothly into existing processes and or solutions. On top of that, these mergers can be announced literally with no warning, meaning the companies have barely or ever worked together prior to the corporate action. This makes for some interesting transitions for the customer base and, more often than not, a bad experience.

Kronos and Ultimate, however, did have a pre-existing relationship. They worked extensively together with complementary products and services such that when they merged, the customer experience suffered far less than many other corporate actions. We have seen this directly with our Client interactions, and has made for smoother transitions, so if you had concerns in this area with the combined UKG, we can say that it has been far better than expected.

Motivated Change Management

We work with suppliers post-M&A all the time and can say with first-hand knowledge that low employee morale is the rule not the exception. Generally, this has not been so with UKG, as they obviously took steps to ensure their field teams were happy and secure (which most likely means compensated well to keep performing). In turn, we have been pleasantly surprised in our negotiations and interactions which have been positive and productive with little of the “between you and me” conversations that we frequently get into with recently merged or acquired salespeople.

While the CEO and CFO both came from the Kronos side of the house, it’s clear that leadership has made it a priority to execute on business plans to realize the merger benefits as soon as possible.


While we have pointed out some of the positives, there are also things to be aware and mindful of when engaging in a formal relationship with UKG. Premerger, we viewed Ultimate Software Group as a potential disruptor in the marketplace, exerting pricing pressure and providing a competitive alternative to the likes of Workday.

However, recently we have seen a trend in their pricing models which move them away from the disruptor category to behave more like one of the established market dominant players. Said another way, their combination gives them more market share and they are now raising prices.

This translates into their value proposition being less reliant on price, and more a direct solution comparison to the other providers. How this plays out is to be determined, but know that they are no longer positioning as the lower cost alternative with a comparable solution.

In addition to understanding the impacts on pricing models, like all mergers, you have to understand exactly what products, services, and features you are getting and for what price particularly if you are a former customer of either party in the merger and, at renewal time, are asked to “convert” your product set or agreements to the newly merged and, possibly, only somewhat integrated. While products are being organized and merged with platforms, they can often leave things off agreements that might be needed later and, more importantly, may then come with a pricing model that is detrimental to your business in the long-term.

In summary, the UKG merger has gone better than most, and has had a more positive impact on Clients than most others we have seen. But that said, with newly realized market share and scope of solutions, they are now looking to capitalize and realize some revenue gains, mostly at your expense. As always, with any interaction, negotiations or engagements with UKG or any other HCM supplier, we stand ready to help and or just have a conversation.

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