Published on the 10/03/2021 | Written by Heather Wright
New acquisition reflects changing nature of work…
Xero is expanding its employee scheduling abilities and embracing the hot workforce management arena with a €183.5 million acquisition of the Danish Planday platform,
The deal comes against a backdrop of increasing reliance on casual and gig economy workers, remote workers and increased compliancy and legislation requirements.
The cloud-based Planday platform integrates with accounting solutions, including Xero, and third-party workforce related apps, to deliver a real-time view of staffing needs and payroll costs, alongside key business performance metrics. Xero says when combined with an accounting solution, Planday can provide insights to help businesses better manage labour, adjusting staffing levels to match trading conditions and control labour costs.
“Planday addresses the growing need for flexibility and rising compliance demands.”
Workforce management has become an increasingly hot market, particularly in the wake of Covid-19, with some analysts forecasting a compound annual growth rate upwards of 10 percent out to 2026 as companies look to enhance productivity and efficiency of employees with optimised workforce planning and deployment.
Xero isn’t the only payroll platform integrating workforce management for the mid-market. MYOB took a majority share in Brisbane startup Roubler last October, with the technology being integrated into MYOB’s enterprise resource planning and payroll software offering. Last month MYOB opened up for expressions of interest, for the new platform, which it says will help simplify and streamline workforce management for shift-based businesses and enable mid-market companies to combine ERP, payroll and WFM software in a single cloud platform.
For ASX-listed Xero the deal – the largest every for the Kiwi company – aligns with its strategy of growing its small business-oriented system, helping customers deal with increasing compliance requirements and supporting more flexible forms of work.
“Planday’s workforce management platform helps small businesses to respond to the rapidly changing nature of work,” Steve Vamos, Xero CEO, says. “Planday also addresses the growing need for flexibility and rising compliance demands within the workplace.”
Anna Curzon, Xero chief product officer, says the deal will ‘really enhance’ Xero’s payroll product and simplify things for companies and advisors. She notes that Planday operates in some of the most complex compliance regimes globally.
The system identifies employees by pay category, logs accrued leave, calculates overtime and generates supplemental payments, while ensuring wages are updated to reflect regulatory compliance.
“Planday relieves business owners of one of their most time-consuming tasks: Adjusting rosters and tracking employees’ time. Workers enter their availability, swap shifts and record hours through a mobile app,” Xero says.
Employers and employees can stay in touch through Planday’s chat function and messages can be broadcast to an entire team.
Planday, which has been a Xero ecosystem partner since 2019, has 350,000 employee users across Europe and the UK. Xero says it will extend the offering into other markets once the deal concludes – expected by the end of this month.
Planday will become a Xero subsidiary.
The deal follows Xero’s August 2020 acquisition of Australian invoice lending platform Waddle for AU$80 million.
Xero will pay €155.7 million up front for Planday, with 45 percent paid in shares and the rest in cash. There’s also a subsequent earnout payment of up to €27.8 million based on product development and revenue milestones.