HR Tech News
8 min read

The End of 'Peak Workday'?

Updated on
July 4, 2023
Brett Ungashick
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Ever since I've been in the HRIS world, Workday has been a dominant force with no true peers.

  • HR professionals will push hard for Workday to be their new platform - sometimes against all logic - just so they can say they've worked in Workday.
  • Startups brand themselves as the "Workday for X" and hope that Workday will acquire them someday.
  • And, as begrudgingly as they are to admit it, none of the other HRIS vendors like hearing the words "We're also considering Workday" during a sales process.

But, are we seeing the end of 'Peak Workday'? Are Workday's days as the undisputed champ of the HRIS industry numbered?

There are three trends that make me think Workday's best days might be behind them:

And let me be clear: This doesn't mean that Workday will fold or go bankrupt; they won't.

They will likely follow a similar path to their predecessor, PeopleSoft, which was implemented so far and wide that they were able to stay relevant decades after their peak, even as more innovative companies (like Workday) started eating their lunch.

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The End of The Low Interest World

Workday was founded in 2005 and went public in 2012. The period from 2008 to 2022 has seen the lowest average interest rates in US history. Why is this relevant?

Low interest rates mean that cash is incredibly easy to borrow. And easy cash led to massive investments in high-growth technology companies that often made very little profit, rather than investments on profitable, steady-growth businesses.

These high-growth tech companies got very rich and often very complacent in this low interest rate environment. They stopped innovating as quickly and just focused on easy acquisitions. Their internal culture became more centered on perks & time-off than innovation & efficiency.

And - for a while - it seemed like that might not matter.

However, now that the interest rates are rising, investors want to put their money into steady, highly profitable businesses, not rapidly scaling, but money-losing endeavors.

Do you know what company Wall Street compares Workday to the most? It's not ADP or UKG. It's Salesforce.

And do you know who has been absolutely crushed the last 6 months by Wall Street? Yes, Salesforce.

Salesforce has had two CEOs leave the company in the last month. CEOs don't leave $130B companies if they think that the waters are smooth up ahead.

Not only are investors more wary of Workday in a high interest rate environment, but customers will be skeptical too.

When money was cheap, Workday could get away with charging 2-3x their competitors. But with budgets tightening globally and companies more focused on unit economics and profitability, Workday's premium pricing strategy could now become a burden.

Workday was already struggling to expand into the mid-market when CFOs weren't as profit-and-loss focused. How tough will that expansion be in a high interest rate world?

Salesforce could be the canary in the coal mine for what is to come with Workday over the next 12 months.

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The Shrinking Advantage of Silicon Valley

Another advantage that Workday has held over their competitors is that they are the one public HRIS company that came out of Silicon Valley.

ADP is based in New Jersey. UKG is based in Boston and Florida. Paycom is out of Oklahoma. Paylocity is out of Chicago.

Workday could very confidently say they had the best HRIS technology in the market, because they had access to the very best software engineering talent in the world.

However, there have been two radical shifts in the last few years that are weakening that advantage. One is a cultural shift and the other is a technological shift.

1.) Remote work expanded talent pools.

The shift to hybrid and remote work during the pandemic created an opportunity for software companies to seek engineering talent outside of their local talent pools.

When competing for engineering talent on a global scale, Workday no longer has the advantage of geography and needs to attract top talent based on the job itself rather than the brand, location and perks.

Workday is a company that has become slower moving and more bureaucratic over time, and their job description, compared to a job description for a company like Rippling, will have much less room for growth, fewer innovative technologies being used and less overall impact on the product's direction.

Star engineering talent is going to choose the option with higher upside, and that is increasingly not Workday.

2.) The rise of AI and no-code technology.

With the rise of OpenAI and other tools, it is now entirely possible to tell an AI what program you want to build and have that AI write the exact code for you, without you needing to know a single coding language.

This is going to dramatically change what successful technology companies look like going forward. It's going to be easier for new, smaller firms to enter the market and compete with established SaaS providers, because they can now build and launch new products and services more quickly and efficiently than before.

Additionally, AI and no-code technology can also be used internally to automate various processes, which can reduce their operating costs and make startup products and services more competitively priced. This can also give them an edge over larger, more established firms that may be slower to adopt these technologies.

Ultimately, the use of AI and no-code technology can enable smaller, more agile firms to move more quickly and nimbly than their larger, established peers, which can make it more challenging for the latter to maintain their market position.

Want more info on Workday? Talk to an OutSail advisor

The Rise of True Competition

This third point is actually an extension of the second point, but we are now seeing companies that are coming to market maturity who have utilized the principles in the last section - remote work, AI, no-code technology - to quickly start eating away at Workday's market leadership.

The two names that are most likely to be Workday disruptors today are Rippling and Darwinbox.

Rippling has been discussed at length in this newsletter, but they have a great path towards taking over Workday's dominance with mid-market, white collar workforces.

A 850-employee tech company hasn't always been a perfect fit for Workday due to how robust and expensive Workday is, but Workday has won a fair share of those deals, because the competition - ADP, UKG, Ceridian - leaves the customer wanting more from a UI & integration perspective.

Rippling provides the user-friendly, tech-forward UI that white collar workforces are seeking with their business applications. Rippling has one of the best integration architectures in the market and is increasingly developing tools to support finance teams, IT teams and global workforces - all areas that Workday could claim as trump cards against competition.

While Rippling is starting down-market and making their way up towards the enterprise segment, Darwinbox is giving Workday it's first new enterprise competitor in over a decade.

Darwinbox was founded in India in 2014 and has quickly become the HRIS market leader in Asia. They have built a cutting edge, enterprise-grade HRIS platform that is built for a more dynamic workforce and a more global workforce. The system was built from the ground up with integrations, custom workflows and AI in mind, while their peers are scrambling to add these features after-the-fact.

Darwinbox is launching their North American expansion in earnest in 2023 and will increasingly be a thorn in Workday's side.

Blog: 10 Alternatives to Workday for Mid-Sized Companies


For the last five years, I've likened Workday to the pretty girl in high school who never had to develop a personality.

Workday could completely ignore customer's demo requests, refuse to take part in certain steps of an evaluation process, send over a proposal 3x as expensive as the competition and still come away with the deal.

Workday took their core audience (HR) for granted and shifted their development and marketing focus towards finance instead.

Workday underinvested in partners and created a walled garden when the rest of the industry was opening up.

And yet, none of it seemed to matter in a low interest rate world.

But now, our high interest rate world, is going to be a shock to the system.

The pretty girl from high school is heading off to college, where there is much more competition from others who have been developing uniquely charming personality traits.

Workday will continue to be pretty, but they won't be the only game in town.