On January 26, 2022, global managed payroll and employer of record (EoR) services provider Safeguard Global agreed to acquire global EoR peer Global Upside. The acquisition is the third since 2019 for Safeguard Global (“Safeguard”) and the next step to fuel an aggressive five-year growth plan and vision of supporting the future of work by curating a comprehensive global workforce and employment platform offering.
The combined firm will serve more than 1,300 multinational client organizations and expand its global delivery footprint and capability to serve over 70 countries directly through its owned legal entities, in-country offices, more than 1,600 employees, and platform technology.
Global Upside brings a robust set of complimenting capabilities to the Safeguard portfolio. First, it brings legal entity establishment support and advisory – previously a gap in the Safeguard offering. Global Upside also adds recruiting, accounting and legal services, further solidifying Safeguard’s global expansion support offering by widening its portfolio of services.
Safeguard’s Global Unity platform will remain the primary technology for the combined firm. However, Safeguard will look to accelerate its technology offering by leveraging the microservices architecture design of Global Unity to integrate key modules and capabilities of Global Upside’s platform, such as time and attendance and performance management.
The acquisition also accelerates Safeguard’s country expansion plans. The move deepens its legal entities and in-country presence in growth geographies including expanded footprints in East Europe, the Middle East and Africa, Latin America, and Asia Pacific.
Possibly the most impactful outcome of the acquisition is the potential growth it promises. Though the two companies were operating within the same global EoR and payroll marketplace and with similar capabilities and offerings, the firms were each growing at high double digits. In addition, they each have a nearly incremental pipeline overlap - illustrating just how rich and untapped the market for compliant global workforce solutions is.
The Path Forward for Safeguard Global
Safeguard is undertaking the most complex integration effort in its history – bringing together two globally diverse organizations. It will look to its successes and learnings with past regional European acquisitions of WorkFor (2019) and GEDA (2020) as a blueprint for merging two sizable global delivery networks and capabilities.
Safeguard is keenly focused on customer experience and looking to immediately engage its newly expanded base to demonstrate the value of the combined organization’s global capability. Its ability to provide clients with short-term engagements, such as entity set-up, global EoR, or longer-term managed global payroll services, should support increased retention (which currently stands at mid 90%) and annual recurring revenues.
The firm is keeping its “foot on the gas,” aiming to expand its capabilities and solutions through technology and innovation. Its roadmap is supported by over 50 new engineers added in 2021. Key themes for its roadmap include expanding marketplace solutions and integrations, deeper employee lifecycle insights, more compliance tools and broadening its global workforce ecosystem to enable “work in any way experiences.”
Global EoR Marketplace Impact
Safeguard can now claim the most complete offering and deepest localized entity and delivery network among its global EoR peers by leveraging the full scope of its combined global capabilities. Safeguard now controls a significant portion of its “payroll supply chain” within each of its primary businesses (global EoR and global payroll). This gives the company direct control over the client and employee experience through a highly localized delivery capability – an increasingly important buyer requirement when selecting global payroll solutions and providers.
Safeguard is now in a unique position as the only global EoR provider able to offer firms a complete ecosystem of global workforce solutions through a single provider – with more planned on the roadmap. With many of the global EoR providers offering portions of Safeguard’s portfolio and often lacking the depth of global payroll presence, experience, and credibility, I expect Safeguard will bubble up in competitive bids in an incredibly crowded and mildly differentiated marketplace. With an expanded offering, clear differentiation and sizable market opportunity, Safeguard is primed to continue its growth trajectory.
Stay tuned for new ISG research in 2022 dedicated to the global EoR and global managed payroll services marketplace. The complete ISG Provider Lens annual research plan can be found here, which features an expanded HR research set, including further studies dedicated to HR outsourcing, transformation services and HCM platform technology.