‘I’m in the trenches’: The payroll processor on her own front line
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The Signal Insight Jennifer Morgan, who became the first female leader of a DAX-listed company when Germany’s SAP named her co-CEO in 2019, now leads a US business processing $1 trillion of payroll data each year. UKG, formed in 2020 from the merger of Ultimate Software and Kronos, provides HR services and workforce management technology to organizations employing 65 million hourly and frontline workers in industries including retail, healthcare, and manufacturing. Since arriving in 2024 from Blackstone, one of UKG’s private equity owners, Morgan says she has not seen those jobs become much more vulnerable to AI disruption. But she has struck partnerships with the likes of Anthropic and OpenAI, seeing opportunities to “give the worker agency” with AI-powered tools that let them plan schedules around their childcare, or volunteer for overtime when they need to earn extra money. Morgan’s pitch to employers is that pairing these tools with data-driven insights into wages, absenteeism, and inefficiencies in schedules can cut billions of dollars from corporate America’s $1 trillion-a-year attrition bill. Replacing just one hourly worker costs the average employer about $5,000, she notes. Morgan’s strategy is to reposition UKG from a provider of administrative support tools to a “workforce intelligence hub” that uses shift data to inform operational decisions in real time. She has overhauled the company’s leadership, replacing about 80% of her direct reports and 40% of the tier below them, to bring in more people with experience of operating at the scale and speed this moment demands. But she has also tried to stay on her own front line, spending a quarter of her time with customers, which include Marriott, the Mayo Clinic, PepsiCo, and the Transportation Security Administration. And she says that sharing their positive and critical feedback with her staff has been equally important. Here’s how she sees AI bridging the gap between companies and the workers who are often furthest from their headquarters, yet closest to their customers. This interview has been edited for clarity and brevity. Andrew Edgecliffe-Johnson: What will AI mean for frontline workers? Jennifer Morgan: Think about a world where that frontline worker on their app can say, “I need to make $500 extra between now and the end of the month. What are the shifts that are available for me to do this? Oh, and by the way, here’s my school schedule; schedule around this.” Or workers who need access to their pay before [their] paycheck arrives; one of our customers [who offered early “earned wage access” saw] the retention for people who took advantage of that was 14% higher. AI gives the worker agency because AI can be a better advocate for what they need. That’s what’s been missing. If you think about the person who’s trying to put the schedule together, they don’t have all that texture, and they definitely don’t have it in real time. So that’s where the expectation gap gets bigger and bigger, because what the worker needs and what the operation needs are different. Do you think you have better insight into what’s happening in companies’ workforces than they do? Yes. Whether we’re talking to Pepsi or T-Mobile, we can show them what we see happening. We can talk to them about their overtime, their wages, absenteeism, and the attrition that’s happening because people don’t get the hours that they want. If they get too many [hours], or they don’t get enough, they leave. That information is ready in real time, [but] companies look at that after the fact. What does private capital bring to this very expensive and uncertain AI transition? I remember when I read my first investment memo at Blackstone for a company we were looking at, my first reaction was, “I wish somebody had given this to me when I was the co-CEO of SAP.” Having somebody who can unemotionally look at your business and tell you all the opportunities, all the great things, and all the things that you can address to make it even better, as a leader, that’s what you’re looking for: Just take out the filter and give it to me. I love having a board with both investors and operators, because operators understand all the nuance and all of the intended and unintended consequences of what could happen if I do X or if I do Y. Investors tend to look at things very unemotionally, factually. And it helps bring a level of focus. Do you ever see tension between that left-brain and right-brain way of looking at the business? Absolutely. I remember, again, my first investment committee meeting at Blackstone. We were talking about [investing in] this one company and all of a sudden there was this strong intellectual debate. I’m thinking to myself, “Oh my goodness, they don’t like this company.” But it was really about just getting to the right answer. There were no corporate politics. It was just that intellectual honesty about what this was, what we could do, what you needed to believe in order to get to where everybody wanted to go. So that is really positive when you’re able to have those discussions, and make change at a pace that I don’t have to constantly worry about the [next quarterly earnings]. Because the amount of change that we’re making to the organization is a lot, and the longer you wait to react, the more you have to catch up, and the change is twice as much and twice as hard. UKG was put together from two different companies. To what extent has your job been about defining a single culture? [I was asked] as a new CEO, “Jen, are we going to be a product-led culture? Are we going to be a sales-led culture? How are we going to define it?” I said we’ve got to be customer-led. To be a winning culture, you’ve got to understand what’s going on outside the four walls. And so I spend a lot of my time sharing what I’m hearing. I’m used to being in bigger companies, and when you’re talking to tens of thousands of employees, you don’t tend to just go out there unscripted, off-the-cuff. But because things are changing so fast, people don’t want [a script], they want perfect imperfection. Like, “Give it to me straight. I don’t want to feel like you’re giving me the glossy. Tell me the challenges. Tell me what’s happening.” The more that I bring the outside in, the more that becomes a common language [across] product, engineering, marketing, and sales. And one of our challenges as you continue to grow, is you have to connect all those dots. Leaders today have to be on their own front line. As a CEO, I’m trying to find the most unfiltered, real-time feedback and people who are going to give it to me straight. CEOs get concise, need-to-know briefings. But the nuance really matters. How do you spend your time, between customers, employees, and your top team? I try to spend at least a quarter of my time with customers, because that contextualizes everything. So if I look at something that’s not going well in a company, you can usually find the answers by going out and hearing from your customers. My biggest fear is to have one of my employees say to me, “Jen, you don’t really understand what we’re actually dealing with here.” And so that gives me a lot of credibility as a leader to be able to say, like, “No, I’m in the trenches.” So while my team sometimes gets frustrated that I put my personal mobile phone at the footer of every email, it’s a gift. Because all those little nuggets that I get [from customers] are super helpful to me, and it’s helpful for the leadership team to just constantly have a pulse. Notable - AI is transforming other aspects of human resources. The technology has allowed Adecco to cut the time it takes to submit candidates’ job applications to clients by 40%, Denis Machuel, the staffing company’s CEO, told The CEO Signal recently. And its AI-augmented recruitment processes have helped customers of the Zurich-based global group fill 10% more of the jobs they advertise, he says.
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