Event Recap
isolved recently held its annual isolved Connect client event in sunny Palm Desert, California. A city with an always sunny reputation, a very fitting backdrop for the HR technology event for a brand recognized by its bright pink branding and outlook on the future of human capital management.
Over 800 client and partner attendees converged on the desert paradise to network, learn, and engage around the future of work and HR, hoping to move their organizations from good to great with the help of their flagship HCM investment in the isolved People Cloud.
Business Update
isolved once again had a stellar growth story to share with analysts; now hovering around $500M in total revenues in FY’23 with a 26% CAGR performance since 2012 and steaming towards its goal of $1B in revenue. A goal that seems more likely to occur sooner than later if isolved executes its range of strategic growth plans.
The isolved People Cloud Platform now supports more than 168K unique small and midsized organizations, with more than 6M users across the United States, with adoption rapidly growing through direct and indirect sales channels. isolved’s business model has historically been prolific at fueling its aggressive growth through white-labeling its technology to regional HR and payroll service providers (“partners”) as a service-enabling technology in their businesses.
isolved is also seeing a sizable uptick in HR services adoption in concert with its technology, citing services as a top growth area for its business. HR, payroll, and benefits in the modern workplace are complicated and are only getting more complex as compliance requirements intensify. isolved’s platform-based solution of services and technology under one brand is meeting this demand and helping the organization ease the burden of compliance while driving a differentiated employee experience.
AI and Analytics Everywhere
Building on its AI announcements earlier this summer, isolved announced a cache of innovations to drive productivity, insights, and improved business outcomes, including:
Analytics Everywhere: AI-enabled, predictive, and prescriptive analytics delivered in the flow of work to support guiding and empowering HR practitioners, front-line managers, and their businesses. Further, the solution “layers” analytic insights and builds on its recently launched benchmarking insights and NLP-enabled conversational analytics to include KPI dashboards, in-context insights, and an ROI Dashboard for modeling and showing the hard dollar impacts of HR-related actions and investments – a key strategic tool for helping HR leaders “make a case” for impactful change in their organizations.
AI-driven candidate and job matching: aimed at simplifying and improving hiring effectiveness by automating resume parsing and matching candidates to open roles based on best-fit skills. The capability also includes auto-generation of job descriptions to further augment recruiting teams.
GenAI-based learning experience: to support skills development and adaptive learning, including course recommendations through “personalized pathways,” matching employees to relevant learning and development content, plus automated feedback and assessments for learners.
isolved also shared a sneak peek at Workspaces, its next-gen UX that incorporates its “always on HR” concept and will incorporate deep personalization, surfaced insights and nudges, learning recommendations, global search capability, and integration to broader work applications like Microsoft 365 for a strengthening “in the flow of work” experience.
With SMBs and emerging middle market firms increasingly recognizing the need to advance beyond their organizations from tactical HR toward a strategic HCM approach, isolved is advancing its People Cloud Platform to provide more tools to that end. Talent management is a key focus area where isolved is doubling down to help its adopters attract, retain, and develop top talent in line with its up-market peers.
To that end, new solutions in FY’24 will include deeper candidate relationship management, applicant tracking system (ATS) capabilities and insights, personalized learning experiences (LXP), and career and succession planning. Not to mention recent releases in 2023 for compensation management and analytics, and talent intelligence, each an extension of its benchmarking solution.
The Outlook for isolved and People Cloud
Looking ahead, isolved’s strategic plans point to multiple key initiatives to continue its growth trajectory and path to $1B.
First, isolved has a sizable TAM opportunity simply by selling into its existing base with a broader set of HCM products. With its talent and analytic capabilities gaining in maturity and converging with SMB HCM maturation trends, it should see a strong uptake for its strategic HCM capabilities and additional SKUs. It also supports targeting larger, more complex middle market buyers above 500 employees for platform adoption.
Although isolved is doubling down on strategic focus areas like talent and insights, it isn’t sleeping on the more tactical, foundational aspects of HR and payroll. Its recent Perfect Payroll product announcement aims to augment payroll practitioners by identifying errors and anomalies proactively for improved accuracy, compliance, and reduced processing effort and time.
On the pay front, isolved is also expanding its financial wellness offering, adding real-time payments and payroll verifications to its existing on-demand pay and model my pay solutions to drive improved wellness outcomes and enhance the employee experience.
However, isolved still lacks the capability to support emerging multinational employer needs. With SMBs increasingly finding their footprints creeping beyond North America’s borders in pursuit of talent and strategic growth plans, localized HCM and multi-country payroll remain a gap in the offering and limits targeting or supporting emerging MNC employer needs.
With global payroll and EOR a notable hidden gem on the roadmap, look for isolved to take steps to address the gap later in FY’24, likely through a strategic partnership or expanded marketplace of provider options.
A key focus area for isolved is the continued development of its indirect channel, which has fueled its platform adoption and revenue growth through white labeling People Cloud to more than 215 ASO and PEO provider firms and growing. While both will remain key, PEO firms are an essential growth channel that isolved aims to dominate as the go-to service enabling HCM platform to power the PEO industry. Further, the ASO/PEO partner channel will remain key to powering its partner M&A strategy, which has historically driven platform adoption and ARR growth.
isolved’s biggest obstacle moving forward will be sustaining its peer-leading customer experience and reputation as it scales. A historically key differentiator for isolved is its CX; their clients absolutely love them, which shows in their retention, growth, and consistent positive sentiment from across its base. Aside from innovation aimed at enabling improved HR and business outcomes, isolved will need to remain keenly focused on driving ROI and sustaining its robust CX as it scales to $1B.
To that end, expect to see isolved double down on client and user engagement in the coming year and beyond, including continuing and building on its highly successful 50+ roadshow events around the United States. Further curating and nurturing its highly adopted People Heroes World - the integration between its practitioner and user community (People Heroes Community) and learning experience platform (People Heroes University) that, combined, boasts >10K users and advocates and produced 1.5M courses taken to date. Isolved is also deepening its client support and engagement approach with an emphasis on driving ROI and time to value for its adopters.
Overall, isolved is well-positioned to support its continued trajectory and achieve its ambitious growth objectives. However, it will need to maintain a relentless focus on innovating and solving for the core fundamentals of HR – the hard stuff, as it levels up and adds to its platform on the strategic side. It will also need to continue to mature capabilities and differentiate itself as it pushes further into the middle market while protecting its culture and CX to ensure the honeymoon doesn’t end with its loyal base of SMBs that brought the firm this far.
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