HUMAN CAPITAL MANAGEMENT SPECIAL FOCUS ON HR TECHNOLOGY

Your Single Source For “All Things Human Capital®”

Mergers & Acquisitions

Public and Private Financings

Strategic Advisory & Growth Capital

August 2017 HR Technology Edition

www.delanceystreetpartners.com Five Tower Bridge | Suite 420 | 300 Barr Harbor Drive | West Conshohocken | PA| 19428 HR Technology Sector Review

As part of our Human Capital Management sub-sector research, Delancey Street Partners is pleased to present this HR Technology Edition.

This HR Technology Sector Review provides an overview of the current HR Technology market as well as a look into recent and historic related M&A transactions and Private Equity Financings.

We also provided an overview of key differentiators, a taxonomy, and an overview of valuation drivers. Delancey Street Partners

Delancey Street Partners is an independent, industry-focused investment bank. We serve CEOs, Entrepreneurs, Shareholders and Boards of Directors of high growth and middle market private and public companies. Our services include strategic advisory, capital raising and independent board advice. We advise on sell-side and buy-side M&A, growth capital financings and recapitalizations. Bill Filip leads Delancey’s Business Services & Technology practice, which includes a strong focus on the Human Capital Management marketplace. Additional Delancey sectors include Healthcare, Industrial & Industrial Technology, and Infrastructure. We form long-term partnerships with our clients and commit to managing each engagement with senior professionals who bring years of experience and insight.

William J. Filip Patrick E. Dolan B. Andrew Schmucker David K. Allebach Jacques H. Fu Managing Director Managing Director Managing Partner Director Vice President (484) 533-6312 (484) 533-6311 (484) 533-6313 (484) 533-6315 (484) 533-6316 [email protected] [email protected] [email protected] [email protected] [email protected]

HCM: HR TECHNOLOGY SECTOR REVIEW 1 Contents

DSP’s Human Capital Management: “All Things Human Capital®” Special HR Technology Edition Volume: August 2017

Departments 45 Big Ideas: HR Technology Q&A with Josh Bersin

3 HR Technology News Human Capital expert 18 DSP HR Technology Observations and Founder of Bersin by Deloitte sits down with 31 Market Performance and Valuation DSP to give us his thoughts on important 45 Big Ideas Q&A with Josh Bersin topics and interesting 52 Select HR Technology M&A Transactions trends in the world of Human Capital 65 Notes & Disclosures Management and HR 67 About Delancey Street Partners & Technology. Delancey Street Capital Partners How to Subscribe This was prepared by Delancey Street Partners and is for informational purposes only (see important disclosures). If you would like a free subscription (or reprints of prior The Delancey team will be attending the HR Technology editions) please e-mail your name and contact info to Matt Conference from October 10th – 13th. Please reach out to us to Dougherty at [email protected]. schedule a time to meet and catch up. See you in Las Vegas!

HCM: HR TECHNOLOGY SECTOR REVIEW 2 HR Technology News

Category Page

Pre-Hire 4-6

Hire/Onboarding 7-8

Compensation 8-9

Talent Management/ Succession 9-11

Broader HR Technology 11-15

AI & Predictive Analytics 15-17

3 Industry News

Pre-Hire

■ Indeed Acquires Interviewed – August 4, 2017 – Austin, TX-based ■ Yello, Inc. Raises $31 Million Series C Financing – June 12, 2017 – Indeed announced its acquisition of San-Francisco-based Interviewed. Chicago-based Yello (fka: Rescolu), a talent acquisition software Interviewed develops automated screening tools and simulations to developer, announced that it raised $31 million in Series C financing led give a candidate the experience of what the job will entail. All of by new investor, JMI Equity, and existing investor First Analysis Interviewed’s employees will become Indeed employees as part of the Corporation. The company has raised more than $46 million in funding acquisition. “Interviewed’s technology is a natural extension, over four rounds. Peter Arrowsmith of JMI Equity joins Yello’s board of allowing job seekers to demonstrate their skills, and enabling directors. “This investment is a big win for Yello clients, our incredible employers to quickly and easily identify the best candidates for their employees, and the city of Chicago. We will create many new jobs roles," Indeed president Chris Hyams said in a statement. throughout the organization to further support and champion the success of our clients as they work to hire the best talent for their ■ MoBerries GmbH Raises $2 Million Series A Financing – June 25, organizations,” said Dan Bartfield, Yello’s co-founder and president. 2015 – Berlin, Germany-based MoBerries announced it has raised $2 million in Series A financing from High-Tech Gründerfonds ■ SilkRoad Data Shows Indeed Top Source for Hires – May 31, 2017 – Management GmbH, Littlerock GmbH, 42 Capital I Holding GmbH For the sixth consecutive year, research from SilkRoad suggests that and several renowned angel investors, Michael Brehm, Thomas Indeed is the top job search engine for external hires and interviews. Baum, Dr. Magnus Tessner, Tim Stracke, Paul Schwarzenholz, among SilkRoad’s 2017 Sources of Hire report indicates Indeed led to two times others. MoBerries operates an online platform to match recruiters and as many hires as all other branded online sources combined. According candidates on demand. The proceeds will be used to further develop to SilkRoad, Indeed delivered 72% of interviews and 65% of hires in proprietary technology and expand internationally. 2016, compared to 10% and 8% respectively for LinkedIn.

■ Apollo Purchases Majority Stake in CareerBuilder for $475 Million ■ Job Digital Networks Receives $22 Million Series C Financing – May – June 19, 2017 – Chicago-based, CareerBuilder, a SaaS platform that 23, 2017 – Job Digital Networks, developer of CornerJob, a mobile connects job seekers and employers globally, has been purchased by application for recruiters and candidates, received $22 million in Apollo Global Management (NYSE:APO) and the Ontario Teachers’ financing from 5M Ventures, Antai Venture Builder, Augesco Pension Plan. Apollo and the pension plan acquired a 75.7% stake in Ventures, Innogest SGR S.p.A, Northzone Ventures, Sabadell CareerBuilder from Tribune National Marketing Company, TEGNA Capital, Samaipata Ventures, Mediaset España Comunicación, S.A. Inc. (NYSE:TGNA) and Knight Ridder Digital, Inc. (BME:TL5), Randstad Innovation Fund, TF1 Group (ENXTPA:TFI), and others. Job Digital Networks has now raised in excess of $60 million ■ Entelo Raises $20 Million Series C Funding – June 16, 2017 – San over five rounds of financing. Francisco-based Entelo, a provider of cloud-based recruiting software, announced that it has received $20 million in Series C ■ JobTeaser SARL Raises $16.6 Million Series B Financing – May 16, funding led by U.S. Venture Partners with participation from existing 2017 – Paris-based JobTeaser SARL announced that it has received investors Battery Ventures, Shasta Ventures, and Correlation $16.6 million in its Series B funding from Alven Capital Partners, Ventures. Entelo has now raised in excess of $40 million in financing. IDInvest Partners SA, and Korelya Capital. JobTeaser SARL owns and operates a recruiting platform for students and graduates.

HCM: HR TECHNOLOGY SECTOR REVIEW 4 Industry News (continued)

Pre-Hire

■ DHI Announces It Will Divest Certain Businesses – May 3, 2017 – DHI ■ CareerStack Innovations Raised $4.6 Million Series A Financing will divest several online professional communities including BioSpace, – April 11, 2017 – Bangalore, India-based CareerStack Innovations HCareers, Health eCareers, and Rigzone to maintain its tech-focused announced it received $4.6 million in financing led by new strategy. Management believes this will allow DHI to focus on becoming a investor DHI Group (NYSE: DHX). CareerStack operates a SaaS leading global provider of recruitment and talent solutions focused recruitment solution for technical hiring needs. Its platform primarily on tech professionals. enables companies to hire developers and programmers by delivering online programming tests across various programming ■ Work Today, Inc. Raises $1.1 million in Seed Financing – April 28, 2017 – languages and platforms. Work Today announced a $1.1 million seed round of funding led by EMERGE s.a.-n.v., GAN Ventures, Hone Capital, MuckerLab, and Social ■ Patrick Amaral Joins gr8 People as Chief Customer Officer – Capital. Work Today will use the proceeds to further its mission of April 11, 2017 – Philadelphia-based gr8 People, a provider of connecting workers with jobs through SMS. Work Today has now raised enterprise recruiting software announced that HR Tech veteran approximately $1.4 million over two rounds of financing. Patrick Amaral has joined the company as Chief Customer Officer.

■ AMN Transforms Recruiting with gr8 People – April 25, 2017 - gr8 People ■ Beamery Raises $5 Million – April 11, 2017 - London-based welcomed AMN Healthcare as its newest enterprise customer. Through the Beamery has closed a $5 million Series A for its candidate collaboration, AMN Healthcare will enhance its industry leading RPO relationship software. The round is led by Index Ventures, with practice and services, with gr8 People’s powerful Talent CRM and participation from Edenred Capital Partners, GP Ventures, and Recruitment Marketing Platform which combines CRM, job distribution, LocalGlobe. Beamery will use the funding to double its headcount optimized talent portals, landing pages, social recruiting, recruitment and open a new sales and marketing-focused office in San marketing campaigns, and analytics all within one-experience. Francisco.

■ iCIMS Introduces Streaming API Technology – April 20, 2017 – iCIMS ■ SEEK and Zhaopin Enter Merger Agreement – April 6, 2017 – announced the introduction of streaming API integration technology into its Zhaopin, a leading career platform in China focused on connecting Platform-as-a-Service framework, UNIFi. iCIMS is the first to deliver users with relevant job opportunities, announced that it has Streaming API integrations in Talent Acquisition software and has entered into a definitive agreement and plan of merger with SEEK prioritized development of this technology to support the large volumes of International Investments, the current controlling shareholder. data in today’s hiring landscape. ■ Global HR Research Acquired for $30 Million – April 4, 2017 – ■ DHI Concludes Strategic Alternatives Process – April 12, 2017 – For the Renovo Capital acquired Fort Myers, FL-based Global HR past 5 months, DHI has been working to explore alternative ownership Research for $30 million, plus the assumption of certain liabilities, options and long-term strategy. The company has determined that from Patriot National (NYSE:PN). Global HR Research provides shareholder interest is best served by remaining independent and investing pre-hire intelligence solutions, hiring solutions, and screening. in their tech-focused business.

HCM: HR TECHNOLOGY SECTOR REVIEW 5 Industry News (continued)

Pre-Hire

■ Storyhunter, Inc. Raises $1.3 Million – March 29, 2017 – Brooklyn- ■ SmartRecruiters Acquires Jobspotting UG – January 31, 2017 – based, Storyhunter, announced it raised $1.3 million in seed funding SmartRecruiters announced its acquisition of Berlin-based from 500 Startups, Frontier Ventures, Draper Associates, NFX Guild, Jobspotting UG. Jobspotting UG operates a discovery engine for and Altair Capital Management. Storyhunter develops cloud based job hunting that offers personalized job recommendations based talent marketplace and network for video professionals. The company on users’ skills and professional experiences. Jobspotting will has now raised $4.2 million in funding. continue to operate out of Berlin and its products will be incorporated into SmartRecruiters’ suite of recruiting tools. ■ Teamable Inc. Raises $5.3 Million Series A Financing – March 22, 2017 - Redwood City, CA-based Teamable announced it has raised $5.3 ■ ZipRecruiter Partners with Bandwidth – January 23, 2017 - million in Series A financing led by True Ventures with participation Bandwidth announced ZipRecruiter has expanded messaging from SaaStr. Teamable is an online portal for employee referrals that using Bandwidth’s CPaaS messaging services. Bandwidth’s APIs matches talent and open positions in employee’s networks. They will are used to integrate messaging easily and cost efficiently into the use the proceeds to further develop its data engine, improve matching recently expanded SMS job alerts feature from ZipRecruiter, which algorithms, and expand its sales and marketing teams. is intended to make the job seeking process more accessible.

■ FreakOut Holdings Acquires Talentio – March 16, 2017 – FreakOut ■ Jobaline.com Raises $7.2 Growth Financing – January 20, 2017 – Holdings (TSE: 6094) announced it has acquired Tokyo-based Talentio, Kirkland, WA-based Jobaline.com Inc. announced that it raised which develops a SaaS recruitment management system. $7.2 million in funding led by Founder’s Co-op, Madrona Venture Group, and Trilogy Equity Partners with over twenty others ■ TextRecruit Raises $3 Million – March 7, 2017 – San Jose, CA-based participating. Jobaline.com operates a bilingual web based job TextRecruit announced it raised $3 million in its Series A round of portal. The company has now raised over $20 million. financing from Signalfire. TextRecruit builds text messaging and chat tools that help employers attract talent, recruit candidates, and engage employees worldwide.

■ Gr8 People Closes Multiple New Clients – March 6, 2017 – Philadelphia-based gr8 People has announced several new enterprise clients, including Polaris, Ratner and Talbots. gr8 People is an enterprise class talent platform for corporate entities an RPOs. The company’s comprehensive solution integrates CRM, recruitment marketing, hiring, and on-boarding into a single experience platform. The company is led by CEO Diane Smith and COO/CTO Jayne Kettles.

HCM: HR TECHNOLOGY SECTOR REVIEW 6 Industry News (continued)

Hire/Onboarding

■ OnboardIQ Receives $9.1 Million Series A Funding – July 6, 2017 – San ■ SkillSurvey Experiences Growth in Higher Education – April 4, Francisco-based OnboardIQ, a provider of hiring automation software for 2017 – SkillSurvey, a provider of talent acquisition and assessment managing large workforces, announced that it has received $9.1 million in products, announced 46% growth in bookings in 2016 compared Series A funding led by new investor Origin Ventures. The financing to 2015 in the higher education sector. Elite universities have included participation from existing investors, CrossLink Capital, SoftTech turned to SkillSurvey’s reference-checking solutions to efficiently VC, and Y Combinator Management. Brent Hill of Origin Ventures has evaluate job applicants. Six of the eight Ivy League Institutions are joined the company’s board of directors. OnboardIQ has now raised now using SkillSurvey. “Colleges and universities are turning to approximately $11 million over three rounds of financing. SkillSurvey to add efficiencies to their hiring process, learn more about the candidates they’re hiring, and source new and more ■ Stuart Olsten Acquires HarQen – July 5, 2017 – Stuart Olsten, founder and diverse candidates for their talent pipelines,” said Ray Bixler, chairman of Olsten Staffing Services, acquired Milwaukee-based HarQen. SkillSurvey CEO. Olsten has served on HarQen’s board since 2010. HarQen provides tools to align and accelerate recruitment processes including on-demand video ■ Checkr Raises $40 Million – March 23, 2016 - Checkr has raised interviews, live video interviews, SMS candidate engagement, on-demand Series B funding of $40 million with a valuation between $250 mock interviews, candidate profile builders, and other tools. million and $300 million. This round is being led by the Y Combinator Continuity Fund. Checkr is a software based ■ HireRight Appoints Kathleen Delaney as Vice President of Marketing background screening company based in San Francisco, CA. and Product – June 26, 2017 – HireRight, a provider of global employment background checks, drug and health screening, and electronic Form I-9 and ■ PSI Services Acquires Performance Assessment Network, Inc. – E-Verify solutions, announced it has named Kathleen Delaney as vice January 24, 2017 – PSI Services announced it has acquired president of marketing and product. Performance Assessment Network (“PAN”) from Spire Capital Partners, LLC and others. PAN provides talent assessment and ■ Shortlist Project Raises $1.5 Million Seed Financing – June 6, 2017 – San measurement solutions online. Steve Tapp, President and CEO of Francisco-based Shortlist Project announced that it raised $1.5 million in PSI spoke on the deal saying, “By combining PSI’s extensive seed funding from FundersClub, Impulse VC, and Alchemist Accelerator. psychometric consulting arm, industry leading assessment Shortlist develops an application that helps in onboarding, managing, and products, and operational expertise with PAN’s expanded leading paying freelancers. Shortlist will use the proceeds to continue to develop its edge technology and test catalog, including IPAT published product and expand its sales and marketing team. The company has now products, PSI is well-positioned to deliver world-class solutions raised $2.3 million. and provide more choice to the Human Capital marketplace.”

■ EASYRECRUE SAS Raises $6.6 Million Series B Financing – May 15, 2017 – Paris-based EASYRECRUE SAS announced it has raised $6.6 million in Series B financing from Bpifrance Investissement, Elaia Partners, Entrepreneur Venture Gestion SA, and Fonds Ambition Numerique. EASYRECRUE provides recruiters a platform to conduct video interviews. The company has raised $9.95 million in financing.

HCM: HR TECHNOLOGY SECTOR REVIEW 7 Industry News (continued)

Hire/Onboarding Compensation

■ RIVS Acquires InterviewStream, Inc. – January 5, 2017 – Chicago- ■ HRsoft Doubles Compensation Software Revenue – August 10, 2017 based RIVS announced it has acquired Waco, TX-based InterviewStream – Maitland, FL-based HRsoft announced its compensation software, from The Brazos Higher Education Service Corporation. RIVS provides COMPview, saw revenue double in fiscal year ending May 31, 2017. SaaS digital interviewing software solutions including live video The COMPview software platform allows employers to calculate interviews, asynchronous interviews, and an automated scheduling individual employee bonus plans, salary levels, and merit increases; all feature. InterviewStream also offers pre-recorded and live video with consideration for budget guidelines and business rules. The interviewing solutions. The terms of the transaction were not disclosed. COMPview software helps make employee compensation clear to managers, as pay equity increases in priority for HR. ■ BirdDogHR Debuts New Products and Services– October 16, 2016 – BirdDogHR released a brand-new, user friendly interface for the ■ EaseCentral Raises $6.5 Million Series A Financing – June 20, 2017 – BirdDogHR Talent Management System and five new managed services San Francisco-based EaseCentral announced it has raised $6.5 million for customers. These services include Talent Assist, Competency Series A funding led by Propel Venture Partners with participation Connect, Talent Scout, Brand Builder, and Drug and Background from Transmedia Capital, Compound, Upside Partnership, and Screening. Freestyle Capital. EaseCentral develops an online platform to manage employee benefits, onboarding, and compliance. It plans to use the proceeds to scale the business nationally. The company has now raised $11.5 million.

■ Iconixx Software Corp. Raises $4.2 Million Financing – April 25, 2017 – Austin, TX-based Iconixx Software Corp. announced it has raised an additional $4.2 million in financing from existing investors Ballast Point Ventures, Harbert Venture Partners, and S3 Ventures. Iconixx Software has raised over $23 million in financing over four rounds since 2012. Iconixx offers incentive compensation management solutions.

■ Decisely Insurance Services Raises $60 Million – March 30, 2017 – Alpharetta, GA-based Decisely Insurance announced it raised $60 million in its first round of financing. The venture round was led by Edgewood Partners Insurance Center, Two Sigma Investments, and The Carlyle Group. Decisely Insurance Services offers HR resources, benefits, and technology to support small businesses through its online platform.

HCM: HR TECHNOLOGY SECTOR REVIEW 8 Industry News (continued)

Compensation Talent Management/Succession

■ Castlight Health, Inc. Acquires Jiff, Inc. – January 4, 2017 – San ■ Bond International Software Acquires Erecruit – June 14, 2017 – Bond Francisco-based Castlight Health announced it has acquired Palo International Software announced that it has acquired Boston-based Alto, CA-based Jiff for approximately $150 million. Jiff provides a Erecruit Holdings, a provider of enterprise staffing software, vendor HIPAA-compliant social network and digital health platform. management systems (VMS), and onboarding software for large staffing “Benefit leaders are eager for a health benefits platform that drives firms and employers. With the acquisition, Bond International Software employee engagement and reduces the administrative burden of expands its solution portfolio of software, hardware, and related support managing multiple health benefit solutions. The combination of services for the recruitment industry worldwide. Castlight and Jiff enables us to address these needs in one solution,” said John Doyle, CEO of Castlight Health. Derek Newell, CEO of ■ Culture Amp Raises $20 Million Series C Financing – June 14, 2017 – Jiff, will become president of the new combined company. Melbourne, Australia-based Culture Amp announced it has raised $20 million in Series C financing led by new investor Sapphire Ventures, with participation from existing investors Blackbird Ventures, Felicis Ventures, and Index Ventures. Culture Amp develops a survey platform that captures and delivers performance insights of people through culture, lifecycle, performance, pulse, and specialized employee surveys, and provides feedback at the manager, team, and individual level. The proceeds will be used to grow the Culture Amp team across their four major offices Melbourne, San Francisco, New York, and London.

■ Callidus Software Acquires Learning Heroes – June 5, 2017 – Callidus Software Inc. (Nasdaq: CALD) announced its acquisition of Warrington, UK-based Learning Heroes Ltd. Learning Heroes offers online education services and e-learning modules. The acquisition enhances the CallidusCloud Litmos Mobile Learning Platform. Rory Cameron, EVP Litmos and corporate development at CallidusCloud commented, “This acquisition is strategic as it allows Litmos to significantly increase its footprint in EMEA, where the e-learning market is valued at over $6.5 billion per year."

■ Viridis Learning Raises Growth Financing – June 2, 2017 – New York, NY-based, Viridis Learning, an education technology company, announced it raised additional funding from Salesforce Ventures and Thayer Ventures. Viridis Learning operates a platform enabling middle skill employees to be trained, certified, and matched to employers who suit them. Viridis has now raised $7.5 million.

HCM: HR TECHNOLOGY SECTOR REVIEW 9 Industry News (continued)

Talent Management/Succession ■ hibob Inc. Raises $17.5 Million Series A Financing – April 25, 2017 – ■ Saba Software Acquires Halogen Software – February 23, 2017 – Saba Tel Aviv, Israel based hibob announced that it has received $17.5 Software announced its acquisition of Halogen Software (TSX: HGN) for million in Series A financing led by Battery Ventures with participation $212.3 million. Halogen develops, markets, and sells SaaS based talent from Arbor Ventures, Bessemer Venture Partners, and Eight Roads management software solutions worldwide. “No matter what size the Ventures Europe. hibob provides SaaS human resource management company, all organizations are ultimately trying to solve the same services. They will use the capital to further develop the platform challenge, which is how to better their business performance by behind its technology, build additional benefit partners, and increase engaging, developing, and investing in their employees,” said Pervez sales efforts. The company has raised $25 million in funding. Qureshi, CEO of Saba. “The combination of Saba and Halogen brings them something very powerful – the expertise of the best and brightest ■ PrismHR Raises Growth Financing – April 24, 2017 – Southborough, minds in talent management.” MA-based PrismHR announced that it has received an equity round funding from new investor, Summit Partners. The transaction included ■ Collage Technologies Raises $3.8 Million Seed Financing – February participation from Accel-KKR. The investor acquired a majority stake 22, 2017 – Toronto-based Collage Technologies Inc. announced that it has in the company. As a part of the transaction, Scott Collins and Zachary received $3.8 million in its seed round of funding led by Diagram. Gut of Summit Partners have joined the company’s board of directors. Collage Technologies provides human resource management software solutions for businesses in Canada. ■ Careerminds Introduces Evergreen Retirement Lifestyle Planning – March 27, 2017 – Careerminds launches Evergreen retirement lifestyle ■ Amazon Uses Workday to Manage its Workforce – February 12, 2017 – planning and coaching to help clients manage retirement succession Amazon has selected and is beginning to deploy Workday Human planning early. The program was born from existing clients’ request for Capital Management (HCM), including Workday Payroll. Workday a retirement transition program instead of outplacement. HCM enables customers to uncover workforce insights for quick, more informed decisions while optimizing HR and talent management ■ PeopleNet Corporation Acquired Fyre LLC – March 15, 2017 – operations. Atlanta- GA-based PeopleNet Corporation announced the acquisition of Fyre, a software tool for the staffing industry. PeopleNet ■ Hireology Unveils Platform for all HR Needs – January 24, 2017 - Corporation provides time and workforce management solutions. Hireology announces new product and feature releases for 2017 that will help multi-location, owner-operated, and independently owned ■ WorkJam, Inc. Raises $12 Million Growth Financing – February 28, businesses build teams, lift customer service, and drive profitability. 2017 – Montreal-based WorkJam announced it has received $12 million in growth financing from Blumberg Capital, Founder Collective, Lerer ■ Deputechnologies Raises $25 Million Series A Financing – January 18, Hippeau Ventures, and Novel TMT Investments. WorkJam develops a 2017 – Sydney, Australia-based Deputechnologies announced that it has web and mobile app workforce management system. It offers shift and received $25 million in its Series A round of funding led by OpenView task management, scheduling, messaging, training and assessment, Venture Partners. The company’s mission is to reinvent the employee rewards and recognition, and surveys and polls. WorkJam targets scheduling and workforce management space for organizations. hourly workers without company emails and allows communication from head office down to the hourly worker.

HCM: HR TECHNOLOGY SECTOR REVIEW 10 Industry News (continued)

Talent Management/Succession Broader HR Technology ■ ADP Acquires The Marcus Buckingham Company – January ■ SAP Plans to Pilot Software to Promote Workplace Diversity – August 10, 17, 2017 –The Marcus Buckingham Company provides 2017 – SAP plans to launch two new anti-bias features to its HR software leadership development solutions to organizations including suite currently utilized at 6,200 organizations with solutions including tools, research, coaching, and training programs. Carlos payroll, recruitment, and performance reviews. One feature will alert hiring Rodriguez, president and CEO of ADP commented, “At its core, managers when job descriptions more likely appeal to men, creating the strength and differentiation of any company lies in its talent. potential bias. The other feature will notify managers of high-performers That is why we are continuing to invest in data-driven talent overlooked for promotion or inconsistencies in performance reviews across management solutions with the acquisition of TMBC.” managers, to ensure merit drives career trajectory.

■ Staffjoy, Inc. – January 10, 2017 – Staffjoy announced it has ■ BirdDogHR Announces Partnership with MRA – August 1, 2017 – received $1.2 million in seed round funding led by returning BirdDogHR announced their new partnership with MRA – The investors Caffeinated Capital and Brainchild Holdings. Haystack Management Association. MRA has 4,000 employer members serving fund also participated. Staffjoy develops an automated 800,000 employees. The partnership was born out of MRA utilizing workforce scheduling tool that builds schedules automatically BirdDogHR for its recruiting and hiring needs. “BirdDogHR offers exactly based on worker and manager preferences. what our members are looking for,” said Beth Mathison, Director of Employment Services at MRA. “The software is easy to use and mobile friendly. MRA is a huge believer in BirdDogHR and the software and services they have to offer. We’re so pleased with our own customer experience and look forward to sharing BirdDogHR as a member benefit.”

■ Google Launches Hire, Google’s Applicant Tracking Platform – July 18, 2017 – Google Hire offers businesses an applicant tracking service that’s integrated with G Suite to make it easier for businesses to recruit talent. “Hire and G Suite are made to work well together so recruiting team members can focus on their top priorities instead of wasting time copy- pasting across tools,” Google product manager Berit Johnson writes in today’s announcement.

■ Benefitfocus Announces New Additions to Executive Leadership Team – July 17, 2017 Benefitfocus, Inc. (Nasdaq: BNFT) announced that Robert Dahdah has been appointed to Executive Vice President of Global Sales and Jonathon E. Dussault will join the company as Chief Financial Officer. Dahdah joins Benefitfocus with over 20 years of experience in SaaS, human capital management, and payroll sectors, most recently from Verizon Telematics where he served as Senior Vice President, Global Sales. Dussault joins Benefitfocus from Evolution1, Inc. (now WEX Health, Inc.) where he served as Chief Financial Officer. HCM: HR TECHNOLOGY SECTOR REVIEW 11 Industry News (continued)

Broader HR Technology

■ Paycom Opens Long Island Sales Office – July 11, 2017 – Paycom (NYSE: ■ iSolved HCM Acquires ExcelPay Business Solutions – June 14, PAYC), a provider of cloud-based HCM software, opened a sales office in 2017 – Charlotte, NC-based iSolved HCM announced its Long Island, NY. The Long Island office is Paycom’s 45 sales team acquisition of Atlanta-based ExcelPay Business Solutions. nationwide. ExcelPay develops payroll and human capital management software. ExcelPay’s staff will continue to operate the business. ■ PayFit SAS Receives $16.0 Million Series B Funding – July 6, 2017 – “We are excited to officially welcome ExcelPay’s customers and Paris-based PayFit SAS, a payroll software developer, announced that it staff,” said Dave Dawson, CEO of iSolved HCM. “The iSolved has received $16.0 million Series B funding led by new investor Accel Network is designed to help partners grow and ExcelPay nearly Partners. The transaction included participation from existing investor doubled their business as an iSolved Certified Partner.” Tynes Otium Ventures and Xavier Niel. PayFit SAS will use the funds to further Hildebrand, ExcelPay president, said, "We chose to merge with develop its services with new features and to expand its presence in iSolved as they are the brains behind the payroll and HR Europe; targeting Spain, Italy, Germany, and the UK. technology we have already been using. This combination of forces provides ExcelPay clients with direct access to even more ■ Catalant Raises $41 Million – June 27, 2017 – Boston-based, Catalant powerful tools, features and options, while maintaining the special Technologies (fka: HourlyNerd) announced it raised $41 million in Series relationships and service standards inherent in the culture of both D financing. Catalant provides a technology platform that connects companies.“ businesses with experts. Its platform enables professionals to pursue work with new clients worldwide and allows businesses access to expertise in ■ LinkedIn Acquires Heighten - Jun 4, 2017 - Microsoft subsidiary real-time. The round was led by GE Ventures with participation from LinkedIn has agreed to acquire sales productivity software existing investors General Catalyst partners, Greylock Partners, and startup, Heighten. Heighten provides software that enables sales Highland Capital Partners. Previous investors include Accanto Partners professionals to track leads, import, and manipulate related data and Kraft Group. With this round, Catalant has raised in excess of $75 and report the results in an efficient manner. The deal is part of an million. ongoing initiative by LinkedIn to slice off value from the sales enablement process and take full advantage of its business social ■ Google Launches Jobs Search Engine – June 20, 2017 – Google’s search network. engine launched a new jobs search feature on its search results page. The job board pulls from the major online job boards. The location setting on ■ Talla, Inc. Raises $8.3 Million Series A Financing – June 2, 2017 – your device will pull applicable jobs in your area, based on your search. Brookline, MA-based Talla announced it has raised $8.3 million in Upon selecting a thumbnail, Google will direct you to the application. Series A financing led by Glasswing Ventures with participation Google’s product manager, Nick Zakrasek, claims it has no plans to from PJC, Pillar, Launch Fund, Avalon Ventures, and others. Talla directly compete with job boards by allowing employers to post listings develops recruiting, marketing, and office management software. directly to the search engine. Zakrasek commented, “We want to do what The company plans to use the proceeds to expand the sales and we do best: search. We want the players in the ecosystem to be more marketing efforts and invest in the data science team to improve successful.” the software’s natural language processing. The company has now raised $12.3 million.

HCM: HR TECHNOLOGY SECTOR REVIEW 12 Industry News (continued)

Broader HR Technology

■ Asure Software Acquires iSystems for $59.3 Million – May 25, 2017 – ■ Primus Capital Invests in MBO Partners – May 24, 2017 – Herndon, Asure Software (NasdaqCM: ASUR) announced its acquisition of VA-based MBO Partners announced it raised growth financing from iSystems from Silver Oak Services Partners and other shareholders. Primus Capital of an undisclosed amount. MBO Partners provides iSystems develops payroll, tax, and HR software serving HR services contractor engagement solutions for self-employed professionals and companies, banks, CPA firms, and insurance companies. iSystems their clients. It offers back office tools, a client-engagement platform, reported revenues of $12.8 million, operating loss of $2.42 million and and a project aggregation system that helps users to access net loss of $4.28 million in 2016. “We are continuing to compete in a assignments and expand their network. “We are excited to expand much larger market. With the acquisition of iSystems, our strategy of our reach in the human capital realm to the growing independent partnering with the customer base of service bureau organizations and workforce and gig economy,” said Jon Dick, Managing Director at helping them grow continues,” said Asure Software CEO Pat Goepel. Primus. “It is clear that MBO Partners is the definitive leader in this space. MBO understands the unique needs of both independent ■ Asure Software Acquires Compass HRM – May 25, 2017 – Asure workers and the enterprises that engage them, and we are excited to Software (NasdaqCM: ASUR) acquired Compass HRM for $6 million support MBO in the next stages of their growth and expansion.” from founders, John, Jonathan, and Joshua Gibbons. Tampa-based Compass HRM provides IT-based human resource management ■ Sage Acquires FairSail – May 5, 2017 – Newcastle, United Kingdom- solutions. Asure’s CEO, Pat Goepel said, “We are thrilled to have based The Sage Group (LSE: SGE) announced its acquisition of Compass HRM join with Asure. The addition of Compass HRM will be Reading, United-Kingdom-based Fairsail Limited. Fairsail, a global a great complement to our strategy of integrating service bureau cloud HCM and people management system for mid-sized businesses, organizations, allowing Asure to cross-sell its workforce and workplace adds to Sage’s payroll, accounting, and payments solutions. software while supplementing our existing organic growth.” ■ BambooHR Launches Public Apps Marketplace – April 26, 2017 - ■ Electronic Commerce Acquires cfactor Works – May 25, 2017 – BambooHR announced the launch of the BambooHR Marketplace, a Electronic Commerce, Inc. announced it has acquired cfactor Works. public integrations marketplace that offers a growing catalog of HR The combined organization will be known as Vibe HCM Inc. Vibe HCM apps integrated with BambooHR's HRIS software. Since the is an HR technology company with solutions and reporting in benefits, company's inception, BambooHR has offered an open API, which payroll, engagement, recruitment, training, performance, compensation, hundreds of third parties have used to build integrations. Independent assessment, succession, and learning and development. Vibe also offers software vendors (ISVs) and third-party developers can leverage this a social intranet to connect employees internally. “Combining ECI and open API to build powerful apps, and can now market their solutions cfactor Works is exciting news for the HCM marketplace because Vibe through BambooHR. HCM will be able to offer one unified platform that delivers on employers’ HR transactional needs as well as their strategic employee ■ Work Market Raises $25 Million Growth Financing – April 25, 2017 engagement initiatives,” said Todd Tyler, CEO of Vibe HCM. – New York, NY-based Work Market announced it raised $25 million in growth financing from Accenture (NYSE: ACN) and Foundry Group. Work Market is a labor automation platform that offers tech services, vendor network, retail, and marketing solutions. Work Market has now raised $66 million in five rounds of financing.

HCM: HR TECHNOLOGY SECTOR REVIEW 13 Industry News (continued)

Broader HR Technology

■ Swingvy Raises $1.1 Million Seed Financing – April 20, 2017 – ■ Infor and Marketo Enter Into Partnership – March 13, 2017 – Infor and Malaysia-based Swingvy announced it received $1.1 million in seed Marketo have agreed to integrate their core products and sell them fund co-led by Big Basin Capital and Walden International. Swingvy jointly to businesses in search of sales and marketing software. The develops HR software for small and mid-size businesses. alliance formed with the aim of competing with software giants like Oracle and Salesforce that have spent billions to build their sales and ■ Paycom Opens Milwaukee Office – April 20, 2017 - Paycom marketing platforms. announced the opening of a sales office in Milwaukee, WI, growing Paycom’s total number of sales teams to 43 nationwide. ■ BambooHR Unveils New Payroll Platform – February 22, 2017 – BambooHR announced the release of Bamboo Payroll™, a full-service ■ Campus Management Partners with Burning Glass Technologies – online payroll experience powered by Execupay. Bamboo Payroll™ April 17, 2017 - Campus Management and Burning Glass integrates with BambooHR and the Bamboo mobile app, which Technologies announced their strategic partnership to deliver job streamlines HR functions for managers and employees by combining market analytics that help educators and students to make data- payroll and a human resource information system. driven career decisions. ■ Facebook Unveils Job Posting Capability – February 15, 2017 – ■ PRO Unlimited, Inc. Recapitalizes – April 7, 2017 – Boca Raton, FL- Facebook revealed their job posting platform to aid small businesses based PRO Unlimited will recapitalize with additional investment find the right talent. According to Facebook’s press release, half of the from Investcorp Bank B.S.C. (BAX: INVCORP) and Bahrain US workforce is employed by small businesses, but still 40% of them Mumtalakat Holding Company B.S.C. PRO Unlimited offers a report filling openings is more challenging than expected. Facebook has vendor-neutral Managed Services Program and a Vendor added a bookmark on the application making available positions easy Management System. PRO helps clients manage procurement, to find and post. selection, engagement, and tracking of contingent workers, including independent contractors, 1099 workers, consultants, temps, and ■ Zenefits Names Jay Fulcher CEO – February 6, 2017 – Zenefits named freelancers. former Ooyala CEO Jay Fulcher to succeed David Sacks. Sacks will remain on the board of directors. Fulcher has served as an executive of ■ Summit Partners Recapitalizes Ascentis – March 21, 2017 – San SAP, Red Pepper Software, PeopleSoft, and as CEO of Agile Software Mateo, CA-based Ascentis Corporation announced it has received a and Ooyala. “The ultimate validation for all of our hard work over the majority equity recapitalization round of funding from Summit past year is the company attracting an amazingly accomplished CEO to Partners. Peter Rottier and J.P. Sanday of Summit Partners will join lead it to the next stage of growth and profitability. I feel very fortunate Ascentis’s board of directors. Brian Provost, an Executive-in- to be passing the reins to a seasoned leader and operator with deep Residence with Summit Partners and a software industry leader with experience in both HR and SaaS,” Sacks said in a statement. more than 20 years of executive experience, will join Ascentis as CEO.

HCM: HR TECHNOLOGY SECTOR REVIEW 14 Industry News (continued)

Broader HR Technology A/I & Predictive Analytics

■ Namely Raises $50 Million Series D Funding - January 5, 2017 - ■ Elon Musk and Mark Zuckerberg Debate AI – July 27, 2017 – Elon Namely announced that it has raised $50 million, closing out a Series Musk has long stood concerned about the potential impacts of artificial D totaling $80 million. The round was led by Altimeter Capital and intelligence and has encouraged proactive regulation on the subject. At Scale Venture Partners, with previous investors including Sequoia the National Governors Association Musk spoke dimly on the matter. “I Capital, Matrix Partners, and True Ventures also participating. keep sounding the alarm bell, but until people see robots going down Funding will be used to grow Namely’s existing business, and the street killing people, they don’t know how to react.” Zuckerberg expand into new products. called Musk a “naysayer” and claims his outcries against AI are “irresponsible”. On July 25, Musk took to Twitter to defend himself ■ Asure Software Acquires Payroll Specialties – January 3, 2017 – tweeting: “I’ve talked to Mark about this. His understanding of the Austin, TX-based Asure Software (Nasdaq: ASUR) announced its subject is limited.” asset purchase agreement of Eugene, OR-based Payroll Specialties NW for $3.61 million. Payroll provides a range of human resources ■ RealMatch Enters Strategic Partnership with Gannett to Expand solutions and payroll processing services. Recruitment Advertising Services – July 25, 2017 – Gannett (NYSE: GCI) announced today a new partnership with RealMatch. RealMatch ■ Ebix Acquires WDEV – December 23, 2016 - Ebix announced that it hosts TheJobNetwork™, a national network comprising thousands of has acquired Rio De Janeiro based WDEV, with the goal of becoming local and industry specific job sites. RealMatch has created a proprietary the largest one-stop insurance software services provider in Brazil. platform that uses predictive data and artificial intelligence to help WDEV provides technology and operational consulting, straight employers target and recruit the best talent quickly and efficiently. through processing services, and SaaS products to the insurance Gannett’s advertisers in the USA TODAY NETWORK will now have industry. access to RealMatch’s recruitment tools.

■ Harver B.V. Raises $8.1 Million Series A Funding – June 29, 2017 – Amsterdam-based Harver B.S. announced it has received $8.1 million in Series A funding led by new investor Insight Venture Partners. Harver develops a recruitment platform that uses statistical and machine learning predictive analytics for employee selection. The company has now raised $11.4 million in funding.

■ Textio Raises $20 Million Series B Financing – June 9, 2017 – Seattle- based Textio announced that it will receive $20 million in funding led by new investor Scale Venture Partners. The round included participation from existing investors Bloomberg Beta, Cowboy Ventures, Emergence Capital Partners, and Upside Partnership. Textio develops a writing platform for job listings that includes predictive analytic and job-listing improvement recommendation capabilities. Textio has raised $29.5 million over three rounds of financing.

HCM: HR TECHNOLOGY SECTOR REVIEW 15 Industry News (continued)

A/I & Predictive Analytics

■ Burning Glass and Symplicity Form Partnership – June 7, 2017 - To ■ Affectiva Looks to Raise $20 Million in Funding – June 2, 2017 – help higher education institutions prepare their students for the Boston-based Affectiva Inc. looks to raise a $20 million round of workforce demands of today’s job market, Symplicity, the leading investment later this year to adapt its emotion-recognition technology employability platform for higher education, and Burning Glass to new uses. The AI software is trained to automatically measure and Technologies, the industry leader in labor market insights, announced a catalog emotional reactions. The business currently sells its software to strategic partnership to benefit students and alumni seeking jobs. market research firms studying consumer reactions to advertisements. "About a year ago we decided as a company that we wanted to ■ Workey Employees Recruitments Raises $8 Million Series A diversify into new markets and really kind of go back to our vision, Financing – June 6, 2017 – Tel Aviv, Israel-based Workey Employees which is humanize technology by infusing the world with artificial Recruitments announced it received $8 million in Series A funding led emotional intelligence," co-founder and CEO Rana el Kaliouby said in by PICO Partners and Magma Venture Partners. Workey develops an an interview. online recruitment platform that enables job seekers to find jobs and referrals from friends through social networks. Workey will use the ■ Aon plc Acquires cut-e GmbH – May 4, 2017 – Aon plc (NYSE: AON) proceeds to replace headhunters with artificial intelligence, to expand to announced it acquired Hamburg, Germany-based cut-e GmbH. The the United States, open an office in New York City, and expand the company designs and implements online tests, questionnaires, and research and development and data science teams. The company has gamified assessments for recruitment, selection, and development. now raised $9.6 million in funding. cut-e GmbH tests include aptitude, personality and values, creativity and integrity, situational judgement, strength-based, job preview, ■ Cornerstone OnDemand Expands People Analytics Offerings – June amongst others. The founders will assume leadership roles in Aon’s 6, 2017 – Cornerstone OnDemand (Nasdaq: CSOD), announced the Talent, Rewards & Performance solution group. “At a time when the addition of two new people analytics applications, Cornerstone Engage global workforce is shrinking, workforce engagement is on the decline and Cornerstone Benchmark. The products aim to enable HR and and turnover among younger workers is accelerating, big data is business leaders to make strategic talent decisions will new information. changing the way organizations identify, select, deploy, engage and Cornerstone Engage utilizes pulse and traditional annual surveys to measure the effectiveness of their talent,” said Michael Burke, CEO measure employee engagement factors. Cornerstone Benchmark Talent, Rewards & Performance at Aon. automates the benchmarking process to allow organizations to identify and compare key HR and talent metrics against internal teams, industry ■ Microsoft Tools Integrate LinkedIn and Dynamics 365 – April 24, peers, or companies in the same location. 2017 – Microsoft has announced it has linked Dynamics 365, the company’s CRM and ERP suite, with the LinkedIn Sales Navigator tool. This givers users access to LinkedIn’s 500 million users. Microsoft is also announcing an HR tool, Dynamics 365 for Talent, giving Dynamics-users the ability to recruit directly from LinkedIn’s recruiter. CEO Satya Nadella stated in the July 20 earnings call, “In a world where customers are increasingly digitizing every business process, we continue to invest and expand our portfolio of modern, modular business applications that are infused with AI.”

HCM: HR TECHNOLOGY SECTOR REVIEW 16 Industry News (continued)

A/I & Predictive Analytics

■ HiringSolved Partners with SmashFly – April 12, 2017 - HiringSolved ■ Visier Closes $45 Million in Series D Funding – March 15, 2017 – announced a new software integration partnership with SmashFly Visier, a provider of applied business analytics, raised $45 million Technologies, the leading Recruitment Marketing platform provider. to meet the growing demand for its people strategy platform, as HiringSolved's TalentFeed+ Recruiting Automation Platform has been well as to grow its international and partner ecosystems. integrated with SmashFly's Total Recruitment Marketing Platform to help enterprise recruiters increase efficiency by using AI to automatically bring ■ Symphony Talent Unveils Technology Platform – March 9, 2017 qualified contacts into targeted talent pipelines who can then be nurtured - Symphony Talent today announced the launch of Experience for current and future job opportunities. Cloud (X-Cloud), an omni-channel experience platform for candidates, employers and employees, and Media Cloud, an ■ ENGAGE Talent Expands Board of Directors – April 4, 2017 – ENGAGE artificial intelligence-based media buying platform for employers. Talent adds Tim Yates, Mark Hamdan, and Joe Otto to its board of directors. These two solutions deliver a relevant and compelling end-to-end The board now consists of five members: Bob Habig, former Pepsi executive experience for candidates, employers, and employees. and early stage / start-up CFO; Tim Yates, former Monster Worldwide CEO; Mark Hamdan, HRsmart founder; Joe Otto, former Alpine Data CEO; ■ ScheduleOnce Acquires Reschedge from HireVue – January 11, and Joseph Hanna, ENGAGE Founder and CEO. "We are very excited to 2017 – Reschedge was built for recruiting teams to coordinate welcome Tim, Mark, and Joe to our board," Hanna said. "They are multiple calendars together. According to ScheduleOnce’s press innovators in their respective fields, and their combined knowledge and release, Reschedge’s algorithmic calendar can reduce time spent leadership will help fuel ENGAGE's continued rapid growth.” scheduling interviews by up to 95%. Rami Goraly, CEO of ScheduleOnce, had been targeting the acquisition for awhile. ■ WayUp, Inc. Raises $18.5 Million Series B Financing – March 23, 2017 – "We’ve had our eye on Reschedge since it first hit the market back New York, NY-based WayUp announced it raised $18.5 million in financing in 2013," he says. "We had just started working with recruiting led by new investor Trinity Ventures with participation from existing departments and found Reschedge to be the perfect fit to extend investors Index Ventures, General Catalyst Partners, Axel Springer Venture our offering." GmbH, and SV Angel, among others. WayUp owns and operates as an online portal that helps students to find jobs and internships. ■ Callidus Acquires Datahug Limited for $13 Million – November 8, 2016 – Datahug, headquartered in Dublin, Ireland, will form the ■ Joberate Updates Global Talent Search Engine – March 21, 2017 – Joberate, CallidusCloud Predictive Analytics, AI and Machine Learning a global platform of proprietary people metadata that helps companies innovation center. “We are super excited to welcome a talented convert people analytics and insights into opportunities, announces updates team of engineers and entrepreneurs to join us in our mission to to the company’s Morph.eus search tool, which enables recruiters to zero in become a top 5 cloud company,” said Callidus CEO Leslie Stretch. on relevant and diverse talent with one search of more than 330 million profiles. Joberate’s platform calculates metadata attributes like patent- pending “J-Score”, which measures people’s online job seeking behavior. Morph.eus offers nearly thirty Career Oriented Attributes that can be searched in the same manner as other search engines.

HCM: HR TECHNOLOGY SECTOR REVIEW 17 Delancey HR Technology Observations

18 DSP Perspectives on HR Technology

Introduction

In this Special Edition of the Delancey Street Partner’s HCM “All Things Human Capital®” we provide a focused look at trends within the HR Technology industry. Please contact your DSP representative for more HR Technology information, comments and questions.

DSP HR Technology Trends & Observations 1) Big upgrades are looming Not since the 2011-12 trifecta of SAP acquiring Successfactors, Oracle acquiring Taleo, and IBM acquiring Kenexa, have we seen the landscape so poised for industry consolidation. The looming wave of M&A activity is unlikely to be as large in terms of acquired values, but it will be driven by aging technology platforms at the large incumbents, the need for data intensive insights, and the demand for new upsell products.

2) Game changers entering the competition? The widely followed entrance and increased focus of game changing entities such as Google (Google Hire and job board), Microsoft/Dynamics/LinkedIn, Facebook’s job board may be best described as the HR Tech equivalent of political redistricting. While these entities’ precise focus and future impact is unknown, if they want to have a major tectonic impact on the HR Tech landscape, they will.

3) Vertical, vertical, vertical Younger new to the scene HR Tech vendors can have significant advantages playing the vertical industry (focus) game. It goes like this (young HR Tech vendor to Prospective Customer): “Hi Mr. Prospective Customer, if you have unique company and industry needs then we’re the right partner for you. We are focused on your space. But if you have generic requirements then we are not your horse, go to the big generic incumbent provider” (Source: HR Tech Business 101 Pitch). Here, “vertical,” is essentially a code word for domain knowledge and solutions that neatly meet customer workflow needs; often a big advantage.

HCM: HR TECHNOLOGY SECTOR REVIEW 19 DSP Perspectives on HR Technology (Cont’d)

DSP HR Technology Trends & Observations - Continued 4) Technology-driven service models are also game changers The long held belief that the “service models” don’t know technology is being challenged. While they may not be the genesis of many new technology (software) driven applications, they understand that their clients now require them to have a sophisticated and informed technology point of view. Staffing and advisory firms have clearly become power users of technology and are increasingly directly participating in the HR technology game. Several large staffing firms are making direct investments in tech startups, acquiring pure technology providers and increasingly integrating them into their delivery capabilities. Look for the nimble RPO providers (and RPO divisions) to lead the charge into this new technology smorgasbord. Competing on price is a tough game, so don’t. Teching-up a service model brings unique and real value. These technology moves increase productivity and reduce costs; long a winning formula in HR land.

5) Gigify or else The Gig economy is “big and it’s getting bigger”- See “Big Idea’s Q&A Guest Josh Bersin’s comments on the mega Gig trend on page 49 of this report. The Gig equation is not just the realm of the techie crowd either, it really has gone mainstream as Josh so convincingly points out, from the Millennials to the Boomers and beyond.

6) The admin and compliance sides of HR are exciting too! We are all fascinated by recruitment; it’s fun, athletic, and has an attractive budget. DSP likes recruitment too. But we’d caution our HR enthusiast friends out there not to forget about the administrative and compliance sides of the HR house. Maybe a little less exciting than recruitment, but opportunities that delight the CFO (cost savings, avoidance of penalties, and preventative investment) need to be HR priorities too. Ask your CFO friends about their HR expense hotspots and you will likely be surprised by the size of the cost saving opportunities sitting on income statements. For example, wellness and workers comp, are ripe for new and improved tech-focused HR solutions.

HCM: HR TECHNOLOGY SECTOR REVIEW 20 DSP Perspectives on HR Technology (Cont’d)

DSP HR Technology Trends & Observations - Continued 7) Big data shifts to redefine the recognition and rewards industry HR Tech platforms that bring clarity to the linkage between performance and compensation & benefits will also enable HR managers to proactively influence workplace culture and engagement at the company level and individual contributor level. Mix this capability in with predictive analytics and you have ways to encourage positive workplace change like never before.

8) Connecting the dots – Artificial Intelligence brings it all together Our trends commentary would not be complete without the mention of Artificial Intelligence (AI). While we’ll let Elon and Mark (see page 15) address the really deep and potentially adverse perspectives of AI, we will suffice to say that providing unique, real-time “insights” to all aspects of HR functions will have very strong positive ROIs (productivity and cost saving). Embrace AI (big data, machine learning, predictive analytics) in ways that will make your HR world better! Please see Josh Bersin’s very eloquent comments on AI on page 48 of this report.

HCM: HR TECHNOLOGY SECTOR REVIEW 21 The DSP HR Technology Taxonomy

• Businesses must choose their HR Technology “philosophy” starting with whether to insource or outsource (or hybrid) their HR Technology platform • In general, the larger the enterprise, the more likely a business can insource their HR Technology requirements efficiently • Businesses of all sizes (SMB to enterprise) have increasingly sophisticated options for creating (best of breed build) or buying (single source) HR platforms. Many providers offer “vendor communities” to offer further complementary solutions • Trends toward vertical industry workflow and optimal data & analytics insights increasingly influence platform decision making

Employment Life Cycle Functionality

Pre-Hire Hire/Onboarding Compensation Talent Management Post

Sourcing/Tracking Qualify Interview Post-Hire Benefits Learning Performance Succession

• Branding • Assess • Interview • Onboarding • Benefits Admin. • Learning Mgmt. • Talent Mgmt. • Succession Templates • Cultural Fit Scheduling • Drug Testing • Health Insurance System • Customizable Planning • Applicant Testing • Automated E- • Automated Data • Retirement • Content Forms • Skill Gap Tracking • Background mails Capture Services Integration • Goal Setting and Reporting • Job Board Credential • Video • Information • COBRA • Compliance & Tracking • Talent Pools and Integration • Offer Letter • Real-Time Integration • Compensation Certification • Performance Planning • Candidate Automation Evaluation Tools • Task Tracking Mgmt. Mgmt. Improvement • Offboarding Compliance • Skill Testing/ • Offer Letter • E-Signatures • Test and Survey • Employee • Talent Bench Validation Automation • Payroll Recognition • Social • Time & Recruitment Attendance • Employee Scheduling

Outsource (Managed Services) or Insource

Platform Best of Breed vs. Single Platform (and Extended Community) Decision Spectrum Industry Workflow Integration

Workforce Data/Analytics & Forecasting

HCM: HR TECHNOLOGY SECTOR REVIEW 22 HR Technology Business Models: Key Points of Differentiation Employee Size HR Technology providers construct their business models and solutions (core platforms, UI/functionality, and complementary HR solutions) to the specific characteristics and requirements of their targeted clients. Historically, the primary platform focus has been targeted at employee size (measured by EEs or “lives”) as a proxy for requirement complexity. DSP Size Definitions(1) Enterprise Size (“EE Lives”) Business Model Implication

Micro Market Deep functionality and comprehensiveness is sacrificed in favor speed and easy of use, a highly intuitive User Interface (UI) and light or self-service implementation. Limited HR 0 - 10 capabilities at target small user clients put solution flexibility at a premium; mobile native functionality (to facilitate after hour processing) has been well received. The emergence of freemium (or near freemium) pricing models in the small EE spectrum SMB Market Small Market 10 - 50 and channel distribution relationships have disruptive traditional industry competitors. Focus Nearly all small market models require an efficient client acquisition referral/channel partner strategy to be successful (e.g., the SMB payroll technology space). 50 - 500 Sub Enterprise class, middle sized clients (500 to 5,000) solutions have taken enormous strides in providing both light UI feel and ease of use/implementation and very robust 500 – 1,500 solutions, with vertical and workflow strategies that are near-equivalent to enterprise Mid Market solutions. New technology platforms better suited for data consumption and big data applications (analytics, “AI”) make many newer mid level solutions highly competitive for lower enterprise clients. Watch for a migration of these vendors upstream. 1,500 – 5,000 The land of the giants is highly competitive with the large successful incumbents focused Enterprise Market on client retention and feeding their installed base new product functionality (upsell). Pressure from younger technology solutions and mid market providers looking to move upstream, combined with these providers requiring significant technology platform 5,000+ upgrades will drive a new wave of functionality-driven M&A consolidation. Vertical Focus Increasingly, providers target specific end markets and construct their software with relevant industry workflow solutions.

Business Services Healthcare Manufacturing Retail Restaurant

(1) DSP definition of the HR Technology market by employee size and target focus. HCM: HR TECHNOLOGY SECTOR REVIEW 23 What Drives HR Tech Valuations?

Ask any business owner, entrepreneur, or investor “what drives HR Technology valuations?” and you are sure to get a mixture of “art and science” that includes a myriad of GAAP and “adjusted” financial metrics, product attributes and competitive advantages, discounted cash flows, comparable analyses, (addressable) market sizes, multifaceted growth strategies, risk factors, synergies, and add backs to name a few… All true, all important and all a bit confusing. So let’s shed some Delancey light on the question and give you a simple but valuable framework that drives value, with a little back up and (and guidance) to boot. We believe value is a function of: Core Value Drivers: Growth, Profitability, and Scarcity Value G + + “Scarcity Value”

Where G represents Growth (in revenue, earnings, customers, etc.) Where 흅 represents Profitability (gross and EBITDA margin, or “path to”) Where Scarcity Value represents the value of a combination of industry and company-specific attributes that are unique (relative to competitors)

While all value drivers are important, a near universal truism is that nothing is more important than growth. SaaS technology businesses can be highly scalable and there is a direct correlation between value and growth. Revenue growth is the most fundamental growth metric but related proxies such as growth in G annual recurring revenue, contract value, per-employee-per month subscription rates and pipeline/backlog values are another way to compare companies vis-a-vis “growth.” Sound too simple? Not convinced? Check out DSP’s Historical and Future Growth Rate to Revenue Multiples charts (on pages 28-29) and our Growth Median Revenue Growth Quartiles to Revenue Multiple statistics (bottom of page 42). How’s that for a direct correlation!

HCM: HR TECHNOLOGY SECTOR REVIEW 24 What Drives HR Tech Valuations? (continued)

Core Value Drivers: Growth, Profitability, and Scarcity Value G + + “Scarcity Value” Where G represents Growth (in revenue, earnings, customers, etc.) Where 흅 represents Profitability (gross and EBITDA margin, or “path to”) Where Scarcity Value represents the value of a combination of industry and company-specific attributes that are unique (relative to competitors)

Profitability is ultimately where the rubber meets the road in HR technology valuation land. The interesting question is why do businesses in the same industry vary so much in profitability? Profitability fundamentally tells the “story” on key management business decisions, strategy, and execution – decisions on product and service, sales and marketing, and the team’s operating execution are key. Gross margins tell the story of per unit pricing power versus production cost within the chosen business model. Gross margins are comparative in aggregate, but great companies also bring gross margins right down the product and customer unit level. EBITDA (earnings before interest, taxes, depreciation and amortization) margins are a non-GAAP proxy for a company’s core operating profitability and cash flow. 흅 By stripping out financing strategy (interest), normalizing out (regionally varying) tax differences, discretionary asset accounting policies (depreciation) and merger-related strategies (amortization) the operating profitability of one business can be better compared to another. But EBITDA is not a perfect Profitability measure and in can be misleading in particular for high growth businesses investing heavily in expansion. For example, EBITDA ignores changes in working capital which can be meaningful in growing businesses. Many of the HR Tech sector’s fastest and most highly valued companies (Workday for example), and the new promising start-up companies have negative to modest levels of EBITDA. For these cases its management’s credibility in communicating its “growth versus profitability” strategy and its milestones and “path” to profitability is what is assessed.

HCM: HR TECHNOLOGY SECTOR REVIEW 25 What Drives HR Tech Valuations? (continued)

Core Value Drivers: Growth, Profitability, and Scarcity Value G + + “Scarcity Value” Where G represents Growth (in revenue, earnings, customers, etc.) Where 흅 represents Profitability (gross and EBITDA margin, or “path to”) Where Scarcity Value represents the value of a combination of industry and company-specific attributes that are unique (relative to competitors)

The broadest category of value driver is “scarcity value”. Literally this refers the economic term for translating limited supply to value (please recall your Econ 101 “inelastic” supply curves). Many of the HR Tech “consolidations” by large incumbents of small, specialty HR Tool companies certainly fall into this “scarcity” of supply category. But let’s face it, there aren’t that many completely “unique to the world HR tech” companies. Quite the contrary, in many HR Tech sub-categories, there are a lot of “me- too” businesses with low “scarcity value” or nuanced differentiation. Further, many of the new to the world emerging spaces attract a crowd over time, so scarcity value can be hard to sustain.

For the true “category killers” out there – we solute you! Congratulations, but watch your back as the Scarcity next “new” is right around the corner, and they are smart, fast, and quite possibly well funded. So in the context of a “sustainability” we offer a modified view and practical guide to assessing value driven by Value scarcity value on two dimensions: 1) business model/industry differentiation and 2) company-specific scarcity value, and we’ve packaged it in our own assessment tool, the DSP Valuation Scorecard.

Again, we start with the positive disposition that management matters, and that good executives making smart decisions matter. Matter in terms of driving long term, sustainable enterprise value. With this as the fundamental context, we created the DSP Scorecard methodology over many years of first hand analysis and assessment of how business model decisions (differences) and company-specific factors (unique characteristics of the company, unrelated to the industry) are valued by the marketplace.

HCM: HR TECHNOLOGY SECTOR REVIEW 26 What Drives HR Tech Valuations? (Scarcity Value continued) The DSP Valuation Scorecard: Measuring Scarcity Value Low Value Business Model Value Correlation High Value

Revenue Valuation (X) 2x 3x 4x 5x 8x 25x EBITDA Valuation (X) 6x 10x 12x 15x Growth Multiples (if relevant) Industry and Business Model Comparison Translating Attributes Model, Customer Attributes, Comparable Financial Metrics – typically 15-20 measures to Business Valuation Company Specific Attributes Team, Product Solution Delivery, Internal Financial Performance, Expansion Strategy – typically 20-25 measures DSP Valuation Scorecard Components The first dimension of the DSP Valuation scorecard is business model and industry differentiation. This quite literally compares your company to your peers within your industry on business model characteristics that can be assessed, graded, and importantly, improved on with proactive management. Identifying and comparing your company performance to value driving industry benchmarks is a fundamental competency of high performing leadership teams, and exceptional performance is scarce and highly valued. Example attributes include: • Model Characteristics (measures of solution/service and technology differentiation, distribution strategy, and pricing model, vertical strategy) • Customer Attributes (measures including customer usage patterns, urgency/criticality, financial impact (ROI), attrition, and customer quality/complexity) • Critical Financial Metrics (key financial measures including organic revenue growth, in-organic revenue strategy, gross/EBITDA margins, new product, and services) The second dimension of the DSP Valuation Scorecard assesses internal capabilities that are “company-specific” and fundamentally gauge your teams strength and weaknesses, strategy, and execution capability). These measures are dynamic, reflecting stage of company development and financial resources, but a critical assessment of these attributes by members of the company’s leadership team, board, and investor groups can be highly insightful highlighting areas of misperceptions, capability gaps, and alignment among stakeholders. Similarly to the above, great management teams strive to improve and understanding where they stack up, and prioritize the critical items to improve to actively drive higher values. Example attributes include: • Team Leadership & Depth (typically include functional and leadership depth, scalability and processes capability, sales execution (people and plan)). • Product and Solution Related (often include domain/functional expertise, suite approach/verticals, product specification, pricing model, contract structure and ability to expand wallet share). • Company Specific Financial Metrics (often include revenue scale, recurring revenue characteristics, pipeline quality, business mix, customer concentration, growth dimensions, and financial controls). • Other Positioning Decisions (often include decisions on addressable market, reaction to competitive dynamics, and regulatory/business climate strategy). Please see your DSP representative to discuss providing you with examples of our valuation scorecards most relevant to your company and industry.

HCM: HR TECHNOLOGY SECTOR REVIEW 27 Growth and Valuation Correlations (Historical Growth)

HR Technology Historical Revenue Growth vs LTM Revenue Valuation (1)

16.0x Reflects DSP Adjusted Revenue Scale (Relative) 14.0x HQY Linear (Trendline)

12.0x Expon. (Trendline) WDAY PAYC 10.0x XING

8.0x INTU ULTI PCTY SEEK PAYX JOBS 6.0x EBIX CALD ORCL CSOD SAGE SAP BNFT 4.0x ADP ASUR ZPIN HSTM 2.0x EHTH DHX

Enterprise Value / LTM Revenue LTM / ValueEnterprise 0.0x

-2.0x -10% -5% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% Historical Three Year Revenue CAGR

HR Technology CAGR Analysis

CAGR Rev(x) Ticker Company Name CAGR Rev(x) Ticker Company Name CAGR Rev(x) Ticker Company Name

42% 11.4x PAYC Paycom 21% 6.1x CALD Callidus Software 7% 6.5x PAYX Paychex 38% 11.2x WDAY Workday 20% 9.5x XING XING 6% 4.2x ADP ADP 37% 8.0x PCTY Paylocity 17% 6.8x EBIX Ebix 2% 4.7x SAGE Sage Group 37% 14.0x HQY HealthEquity 13% 2.6x HSTM HealthStream 0% 5.4x ORCL Oracle 25% 3.1x ASUR Asure Software 12% 5.9x JOBS 51job -2% 1.4x EHTH eHealth 25% 4.7x BNFT Benefitfocus 11% 7.6x SEEK SEEK -7% 0.7x DHX DHI Group 24% 8.3x ULTI Ultimate Software 10% 4.9x SAP SAP N.A. 2.8x ZPIN Zhaopin 22% 5.1x CSOD Cornerstone 8% 6.7x INTU Intuit

Source: Capital IQ as of 07/31/17. (1) 3-Year Revs CAGR represents 2018P metric vs 2015A results.

HCM: HR TECHNOLOGY SECTOR REVIEW 28 Growth and Valuation Correlations (Projected Growth)

HR Technology Projected Revenue Growth vs 2017P Revenue Valuations (1)

16.0x Reflects DSP Adjusted Revenue Scale (Relative) 14.0x Linear (Trendline)

12.0x Expon. (Trendline) HQY

10.0x WDAYPAYC 8.0x ULTI XING PCTY PAYX INTU 6.0x EBIX SEEK CALD ORCL JOBS SAGE SAP CSOD 4.0x ADP BNFT

HSTM 2.0x ASUR EHTH DHX

Enterprise Value / 2017P Revenue2017P / ValueEnterprise 0.0x

-2.0x -10% -5% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% Projected Two Year Revenue CAGR HR Technology CAGR Analysis

CAGR Rev(x) Ticker Company Name CAGR Rev(x) Ticker Company Name CAGR Rev(x) Ticker Company Name

38% 2.3x ASUR Asure Software 19% 5.4x CALD Callidus Software 8% 4.4x SAGE Sage Group 28% 9.3x WDAY Workday 18% 6.1x SEEK SEEK 5% 4.1x ADP ADP 27% 9.6x PAYC Paycom 16% 4.3x BNFT Benefitfocus 5% 6.4x PAYX Paychex 26% 7.6x XING XING 15% 4.6x CSOD Cornerstone 4% 5.3x ORCL Oracle 24% 6.9x PCTY Paylocity 14% 6.1x EBIX Ebix 1% 1.5x EHTH eHealth 24% 11.8x HQY HealthEquity 13% 4.6x SAP SAP -3% 0.8x DHX DHI Group 23% 7.1x ULTI Ultimate Software 9% 2.5x HSTM HealthStream N.A. N.M. ZPIN Zhaopin 19% 5.0x JOBS 51job 9% 6.4x INTU Intuit

Source: Capital IQ as of 07/31/17. (1) 2-Year Revs CAGR represents 2018P metric vs 2016A results.

HCM: HR TECHNOLOGY SECTOR REVIEW 29 SaaS Key Financial & Operating Metrics

How does your SaaS company stack up against industry benchmarks? Contact DSP to schedule time to review your metrics vs. industry standards. Here are a few key metrics we look at: Key Metrics Financial (Non-GAAP measures are used to highlight core operating performance) Metric Definition/Comment

Adjusted Gross Profit Gross profit before amortization of capitalized internal-use software costs, stock-based compensation expense, employer payroll taxes related to stock releases, option exercises, and one-time executive bonus pay-outs, if any

Adjusted Recurring Gross Profit Total recurring revenues after cost of recurring revenues and before amortization of capitalized internal-use software costs, stock-based compensation expense, employer payroll taxes related to stock releases, option exercises, and one-time executive bonus pay-outs, if any

Adjusted EBITDA Net income (loss) before interest expense (income), income tax expense (benefit), depreciation and amortization, stock- based compensation expenses, employer payroll taxes related to stock releases, option exercises, and one-time executive bonus pay-outs, if any

Annual Recurring Revenue / Total The amount of annual recurring revenue (subscription-based, excluding implementation revenue)/total annual revenue Revenue (%) Annual Contract Value Value of a customer contract over a 12 month period or the annual recurring revenue quota

Total Contract Value The total value of contract per one customer. TCV is calculated as the full value of the contract, and not calculated on an annualized basis

PEPM Per Employee Per Month – average cost (price) of service per individual EE per month

Operating Metric Benchmarks vary depending upon business model

BDR New Ramp Time Months for a new business development representative to achieve full quota

BDR OTE Business development representative on target earnings target

New Business Bookings Achievement (%) Total quota achievement/targeted new business bookings New Business Bookings – New Sales (%) New sales from “new logos” as a percentage of total revenue

New Business Bookings – Upsell New sales “upsells” to existing clients

Retention Mean and median annual gross retention of revenue

Retention – Uncontrollable Measure of uncontrollable churn (e.g., clients acquired or going out of business)

HCM: HR TECHNOLOGY SECTOR REVIEW 30 Market Performance and Valuation

31 Key Labor Market Benchmarks: Employment

Change in Employment (in thousands) Trailing Six Months

1,000 800 600 216 232 207 222 152 400 50 200 - (200) (400)

(600)

01-17 03-17 04-17 05-17 06-17 (800) 02-17

(1,000)

2008 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2009 2010 2011 2012 2013 2014 2015 2016 2017

Source: Bureau of Labor Statistics.

Change in Payrolls by Company Size (in thousands) Trailing Six Months

126 111 400 103 101 94 Small (1-49) Medium (50-499) Large (500-999) Enterprise (1,000+) 91 93 91 300 82 65 58 200 36 37 36 32 29 28 27 22 100 18 21 17 7 -

(100) -18

(200) Small (1-49) Medium (50-499)

(300) Large (500-999) Enterprise (1,000+)

(400) 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 01-17 02-17 03-17 04-17 05-17 06-17

Source: ADP; American Staffing Association.

HCM: HR TECHNOLOGY SECTOR REVIEW 32 Key Labor Market Benchmarks: Unemployment

U.S Unemployment Rate (U-3) Trailing Six Months

10.0% 10.00% 9.0% 9.00% 8.0% 8.00% 7.0% 7.00% 6.0% 6.00% 4.80% 4.80% 5.0% 5.00% 4.60% 4.70% 4.70% 4.50% 4.0% 4.00% 3.0% 3.00% 2.0% 2.00% 1.0% 1.00%

0.0% 0.00%

2005 2009 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2006 2007 2008 2010 2011 2012 2013 2014 2015 2016 2017

10-16 11-16 12-16 01-17 02-17 03-17

Source: Bureau of Labor Statistics. U-3 rate defined as total unemployed persons as a percent of civilian labor force. Data is seasonally adjusted.

Labor Underutilization (U-3, U-5 & U-6) Trailing Six Months

18.0% U-3 U-5 U-6 U-3 U-5 U-6 16.0%

14.0%

12.0%

10.0% 9.5% 9.3% 9.2% 9.4% 9.2% 8.9% 8.0%

6.0% 5.9% 5.8% 5.7% 5.8% 5.7% 5.4% 4.8% 4.6% 4.7% 4.8% 4.7% 4.5% 4.0%

2.0%

0.0%

1996 2009 1995 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2010 2011 2012 2013 2014 2015 2016 2017

10-16 11-16 12-16 01-17 02-17 03-17

Source: Bureau of Labor Statistics. U-5 rate defined as total unemployed persons, plus discouraged workers, plus all other persons marginally attached to the labor force, as a percent of the civilian labor force plus all persons marginally attached to the labor force. U-6 rate defined as total unemployed persons, plus all persons marginally attached to the labor force, plus total persons employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force. Data is seasonally adjusted.

HCM: HR TECHNOLOGY SECTOR REVIEW 33 Delancey Street Human Capital Technology Taxonomy

Enterprise/Core HRIS Payroll/Benefits Technology Recruitment Technology

Oracle Corporation (ORCL) Automatic Data Processing (ADP) SEEK (ASX:SEK) SAP SE (DB:SAP) Benefit Focus (BNFT) 51job (JOBS) Workday, Inc. (WDAY) Intuit (INTU) XING AG (XTRA:01BC) Sage Group plc (LSE:SGE) Ultimate Software (ULTI) Zhaopin (ZPIN) Paylocity (PCTY) Dice Holdings (DHX) Paychex (PAYX) Paycom (PAYC) Ebix (EBIX) eHealth (EHTH) Health Equity (HQY)

Administrative Technology Learning/Performance/Assess

Callidus Software (CALD) Cornerstone OnDemand (CSOD) Asure Software (ASUR) Healthstream (HSTM)

HCM: HR TECHNOLOGY SECTOR REVIEW 34 Equity Market Performance: One-Year Stock Performance (Equal Weighting)

THE DSP HUMAN CAPITAL INDEX vs. MARKET INDICES (as of July 31, 2017)

Sector Performance DSP Index Dow Jones NASDAQ S&P 500 Price (Indexed to 100) FOR GRAPH LEGEND (ONE YEAR STOCK PERFORMANCE) NASDAQ Composite 123 130

DSP Human Capital Index 122 125 Dow Jones Industrial 119 120 S&P 500 114 115 FOR GRAPH LEGEND (THREE YEAR STOCK PERFORMANCE) Rank 110 3 2 105 1 4 100

95

90

85

80 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17

Note: The DSP Human Capital Index includes all companies in DSP's Staffing, Executive Search, HR & Outsourcing Services and HR Technology industry categories.

HCM: HR TECHNOLOGY SECTOR REVIEW 35 Equity Market Performance: Three-Year Stock Performance (Equal Weighting)

THE DSP HUMAN CAPITAL INDEX vs. MARKET INDICES (as of July 31, 2017)

Sector Performance DSP Index Dow Jones NASDAQ S&P 500 Price (Indexed to 100) 150 NASDAQ Composite 147

Dow Jones Industrial 131 140 DSP Human Capital Index 129

S&P 500 128 130

120

110

100

90

80 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17

Note: The DSP Human Capital Index includes all companies in DSP's Staffing, Executive Search, HR & Outsourcing Services and HR Technology industry categories.

HCM: HR TECHNOLOGY SECTOR REVIEW 36 HR Tech Sub-Sector Performance: One-Year Stock Performance (Equal Weighting)

Sector Performance Enterprise / HRIS Payroll / Benefits Admin. Price (Indexed to 100) 150 Recruitment 135 Learning / Performance Recruitment S&P 500 Index (^SPX) - Index Value Enterprise / HRIS 121 140 Payroll / Benefits 121 Admin. 120 130 S&P 500 114 120 Learning / Performance 92

110

100

90

80

70 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17

Enterprise / HRIS includes: ORCL, SAP, WDAY, SGE Payroll / Benefits includes: ADP, BNFT, INTU, ULTI, PCTY, PAYC, PAYX, EBIX, EHTH, HQY Admin. includes: CALD, ASUR Learning / Performance includes: CSOD, HSTM Recruitment includes: SEEK, JOBS, ZPIN, DHX, XING

HCM: HR TECHNOLOGY SECTOR REVIEW 37 HR Tech Sub-Sector Performance: Three-Year Stock Performance (Equal Weighting)

Sector Performance Enterprise / HRIS Payroll / Benefits Admin. Price (Indexed to 100) 280 Admin. 231 Learning / Performance Recruitment S&P 500 Index (^SPX) - Index Value Payroll / Benefits 157 260 Recruitment 137 240

Enterprise / HRIS 128 220 S&P 500 128 200 Learning / Performance 96 180

160

140

120

100

80

60 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17

Enterprise / HRIS includes: ORCL, SAP, WDAY, SGE Payroll / Benefits includes: ADP, BNFT, INTU, ULTI, PCTY, PAYC, PAYX, EBIX, EHTH, HQY Admin. includes: CALD, ASUR Learning / Performance includes: CSOD, HSTM Recruitment includes: SEEK, JOBS, ZPIN, DHX, XING

HCM: HR TECHNOLOGY SECTOR REVIEW 38 Equity Market Performance: One-Year Stock Performance (Equal Weighting)

DSP HUMAN CAPITAL INDICES vs. S&P 500 (as of July 31, 2017) COMPANIES INCLUDED IN INDEX

Sector Performance Price (Indexed to 100) 150 Executive Search 137 Staffing 135 140 HR Technology 121 S&P 500 114 130 HR & Outsourcing Services 108

120

110

100

90

80 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17

Staffing Executive Search HR & Outsourcing Services HR Technology

Mean Median Mean Median Mean Median Mean Median LTM Revenue $6,322.9 $2,264.6 $1,080.5 $1,080.5 $3,557.0 $3,078.3 $4,071.9 $352.4 Market Value 4,251.9 1,062.7 1,122.4 1,122.4 5,571.5 2,437.9 22,317.4 2,832.9 LTM Gross Margin 26.1% 25.0% 29.2% 29.2% 37.1% 33.5% 71.4% 69.9% LTM EBITDA Margin 6.3% 5.3% 10.5% 10.5% 10.5% 9.0% 24.6% 26.2% 3-Year Rev. CAGR 5.1% 5.0% 11.9% 11.9% 14.6% 15.1% 16.7% 15.0% EV / LTM Revenue 0.6x 0.5x 0.8x 0.8x 1.9x 1.1x 6.2x 5.9x EV / LTM EBITDA 10.7x 10.0x 7.3x 7.3x 16.0x 14.7x 20.9x 19.9x

Staffing includes: ADEN, ASGN, CCRN, CDI, BRNL, RAND, CEN, SDG, HSON, KELY.A, KFRC, HAS, STHR, MAN, PAGE, RECN, RHI, TBI, TSE: 6098 Executive Search includes: HSII, KFY HR & Outsourcing Services includes: BBSI, CPI, NSP, TNET, WLTW, WAGE HR Technology includes: ADP, ASUR, SEK, BNFT, CALD, CSOD, SAP, DHX, EBIX, EHTH, HQY, HSTM, INTU, JOBS, SGE, ORCL, PAYC, PAYX, PCTY, ULTI, WDAY, O1BC, ZPIN

HCM: HR TECHNOLOGY SECTOR REVIEW 39 Equity Market Performance: Three-Year Stock Performance (Equal Weighting)

DSP HUMAN CAPITAL INDICES vs. S&P 500 (as of July 31, 2017)

Sector Performance Price (Indexed to 100) 140 HR Technology 133 S&P 500 128 Staffing 119 Executive Search 111 120 HR & Outsourcing Services 91

100

80

60 Aug-14 Nov-14 Feb-15 May-15 Aug-15 Nov-15 Feb-16 May-16 Aug-16 Nov-16 Feb-17 May-17

Staffing Executive Search HR & Outsourcing Services HR Technology

Mean Median Mean Median Mean Median Mean Median LTM Revenue $6,322.9 $2,264.6 $1,080.5 $1,080.5 $3,557.0 $3,078.3 $4,071.9 $352.4 Market Value 4,251.9 1,062.7 1,122.4 1,122.4 5,571.5 2,437.9 22,317.4 2,832.9 LTM Gross Margin 26.1% 25.0% 29.2% 29.2% 37.1% 33.5% 71.4% 69.9% LTM EBITDA Margin 6.3% 5.3% 10.5% 10.5% 10.5% 9.0% 24.6% 26.2% 3-Year Rev. CAGR 5.1% 5.0% 11.9% 11.9% 14.6% 15.1% 16.7% 15.0% EV / LTM Revenue 0.6x 0.5x 0.8x 0.8x 1.9x 1.1x 6.2x 5.9x EV / LTM EBITDA 10.7x 10.0x 7.3x 7.3x 16.0x 14.7x 20.9x 19.9x

Staffing includes: ADEN, ASGN, CCRN, CDI, BRNL, RAND, CEN, SDG, HSON, KELY.A, KFRC, HAS, STHR, MAN, PAGE, RECN, RHI, TBI, TSE: 6098 Executive Search includes: HSII, KFY HR & Outsourcing Services includes: BBSI, CPI, NSP, TNET, WLTW, WAGE HR Technology includes: ADP, ASUR, SEK, BNFT, CALD, CSOD, SAP, DHX, EBIX, EHTH, HQY, HSTM, INTU, JOBS, SGE, ORCL, PAYC, PAYX, PCTY, ULTI, WDAY, O1BC, ZPIN

HCM: HR TECHNOLOGY SECTOR REVIEW 40 Select Top Performers Comparison by Sector (Three-Year)

TOP PERFORMERS IN EACH SECTOR BY 3-YEAR REVENUE CAGR (1) Select Top Performers (3-Year Revenue CAGR)

Sector Performance Price (Indexed to 100) 180 HR Technology 150

Staffing 135 160

S&P 500 127 140 Executive Search 117

HR & Outsourcing Services 89 120

100 EV / LTM Revenue Multiple

80

60 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17

Top Performers: HR Technology Top Performers: HR & Outsourcing Services 10.0x 9.6x Overall Group EV/Revenue Median

Paycom Software, Inc. Willis Towers Watson Public Limited Company 9.0x Workday, Inc. WageWorks, Inc. Paylocity Holding Corporation TriNet Group, Inc. 8.0x

HealthEquity, Inc. Insperity, Inc. 7.0x Asure Software, Inc. Capita plc 6.0x

5.0x Top Performers: Executive Search Top Performers: Staffing 4.0x Korn/Ferry International Recruit Holdings Co.,Ltd. Heidrick & Struggles International, Inc. On Assignment, Inc. 3.0x 2.2x Cross Country Healthcare, Inc. 2.0x Groupe CRIT SA 0.9x 0.8x Randstad Holding NV 1.0x

0.0x HR Technology HR & Outsourcing Services Staffing Executive Search Source: Capital IQ as of 07/31/17. (1) 3-Year Revs CAGR represents 2018P metric vs 2015A results.

HCM: HR TECHNOLOGY SECTOR REVIEW 41 Trading Statistics : Sorted by Growth Rate (Three-Year Revenue CAGR)

COMPANY STOCK PERFORMANCE AND COMPANY DATA LTM MARGINS GROWTH (1) VALUATION DATA

Market Enterprise Revenue Gross 5-Year 3-Year EV / EV / Price / 52-Week Value Value LTM Profit EBITDA EPS Revs Revenue EBITDA Earnings Name 7/31/17 Low High ($mm) ($mm) ($mm) % Margin % Margin CAGR CAGR LTM 2017 LTM 2017 2017 2018

Paycom Software, Inc. $70.46 $39.15 $73.61 $4,157.8 $4,096.4 $358.5 85.3% 22.1% 147.9% 41.6% 11.4x 9.6x N.M. 34.5x N.M. N.M. Workday, Inc. 103.25 65.79 106.75 20,705.4 19,131.1 1,701.6 69.9% N.M. N.M. 37.6% 11.2x 9.3x N.M. N.M. N.M. N.M. Paylocity Holding Corporation 46.32 29.69 49.65 2,377.6 2,276.2 283.8 58.6% 5.8% N.M. 37.2% 8.0x 6.9x N.M. 39.9x N.M. N.M. HealthEquity, Inc. 47.26 28.12 54.95 2,854.2 2,658.7 189.8 59.2% 30.4% 7.4% 36.8% 14.0x 11.8x 46.1x 32.8x N.M. N.M. Asure Software, Inc. 13.00 4.65 17.27 92.5 121.4 39.5 77.7% 15.1% N.M. 25.3% 3.1x 2.3x 20.3x 9.9x 23.4x 17.1x Benefitfocus, Inc. 36.55 24.55 44.98 1,094.7 1,145.6 242.7 49.3% N.M. N.M. 24.6% 4.7x 4.3x N.M. N.M. N.M. N.M. The Ultimate Software Group, Inc. 227.21 180.29 233.42 6,932.5 6,857.2 822.6 61.4% 7.6% 39.6% 24.1% 8.3x 7.1x N.M. 29.1x N.M. 46.1x Cornerstone OnDemand, Inc. 40.73 30.31 47.75 2,282.9 2,233.2 435.4 68.3% N.M. N.M. 22.3% 5.1x 4.6x N.M. 40.0x N.M. N.M. Callidus Software Inc. 24.65 15.15 25.65 1,498.0 1,314.8 216.5 61.7% N.M. N.M. 21.4% 6.1x 5.4x N.M. 43.5x N.M. N.M. XING AG 292.23 195.96 301.58 1,642.3 1,566.9 164.7 62.9% 27.4% 25.0% 19.7% 9.5x 7.6x 34.7x 23.3x 48.8x 37.8x Ebix, Inc. 57.95 50.17 65.10 1,885.0 2,083.4 306.3 70.4% 36.3% 25.4% 17.0% 6.8x 6.1x 18.7x 17.4x 19.7x 18.0x HealthStream, Inc. 22.73 20.60 31.53 730.6 614.9 238.5 56.5% 9.9% (3.2%) 13.1% 2.6x 2.5x 26.0x 16.9x N.M. N.M. 51job, Inc. 48.16 31.05 48.74 2,832.9 2,064.4 352.4 71.9% 29.4% 17.7% 12.1% 5.9x 5.0x 19.9x 14.0x 23.7x 20.7x SEEK Limited 13.66 10.92 14.77 4,766.4 5,317.1 703.1 95.4% 34.4% 12.5% 10.8% 7.6x 6.1x 22.0x 16.2x 29.0x 24.2x SAP SE 105.94 88.16 113.23 127,024.7 128,930.0 26,427.8 69.5% 24.9% 10.9% 9.5% 4.9x 4.6x 19.6x 13.6x 21.7x 19.8x Intuit Inc. 135.64 103.22 143.81 35,334.2 34,241.2 5,089.0 84.6% 31.0% 17.2% 8.2% 6.7x 6.4x 21.7x 16.7x 29.8x 26.9x Paychex, Inc. 57.76 52.78 63.03 20,943.8 20,620.4 3,151.3 70.8% 43.4% 8.7% 6.9% 6.5x 6.4x 15.1x 14.6x 25.3x 23.5x Automatic Data Processing, Inc. 117.38 85.48 120.00 52,856.2 52,078.2 12,379.8 43.1% 20.6% 9.8% 6.2% 4.2x 4.1x 20.4x 19.7x 31.6x 29.1x The Sage Group plc 8.90 7.81 10.60 9,653.0 10,076.3 2,160.3 93.3% 28.7% 7.9% 1.8% 4.7x 4.4x 16.3x 15.8x 22.5x 19.6x Oracle Corporation 50.30 37.62 51.85 212,115.1 204,332.1 37,728.0 58.5% 38.9% 11.0% (0.1%) 5.4x 5.3x 13.9x 11.6x 17.5x 16.3x eHealth, Inc. 17.55 6.38 19.53 322.6 256.5 182.7 98.7% N.M. N.M. (1.6%) 1.4x 1.5x N.M. N.M. N.M. N.M. DHI Group, Inc. 2.40 2.40 8.43 114.5 160.9 215.6 85.8% 18.3% (8.5%) (7.2%) 0.7x 0.8x 4.1x 3.7x 10.4x 8.0x Zhaopin Limited 18.87 13.70 18.98 1,084.3 737.4 264.0 88.5% 19.1% N.M. N.M. 2.8x N.M. 14.6x N.M. N.M. N.M.

Overall HR Technology Group Mean $22,317.4 $21,865.8 $4,071.9 71.4% 24.6% 21.9% 16.7% 6.2x 5.5x 20.9x 21.7x 25.3x 23.6x Median 2,832.9 2,276.2 352.4 69.9% 26.2% 11.0% 15.0% 5.9x 5.3x 19.9x 16.9x 23.5x 20.7x High 212,115.1 204,332.1 37,728.0 98.7% 43.4% 147.9% 41.6% 14.0x 11.8x 46.1x 43.5x 48.8x 46.1x Low 92.5 121.4 39.5 43.1% 5.8% (8.5%) (7.2%) 0.7x 0.8x 4.1x 3.7x 10.4x 8.0x

Overall Group (Excluding Public Companies > 10.0x EV/Revenue Valuations) Mean $24,279.2 $23,851.4 $4,570.2 71.4% 24.4% 13.4% 13.2% 5.3x 4.8x 19.1x 20.3x 25.3x 23.6x Median 2,330.2 2,158.3 329.4 70.0% 26.2% 11.0% 12.1% 5.3x 5.0x 19.7x 16.7x 23.5x 20.7x High 212,115.1 204,332.1 37,728.0 98.7% 43.4% 39.6% 37.2% 9.5x 7.6x 34.7x 43.5x 48.8x 46.1x Low 92.5 121.4 39.5 43.1% 5.8% (8.5%) (7.2%) 0.7x 0.8x 4.1x 3.7x 10.4x 8.0x

Median Statistic by 3-Year Revenue CAGR Quartile Quartile 1 (75th Percentile to Max) $2,615.9 $2,467.4 $263.3 64.6% 18.6% 77.7% 37.0% 9.6x 8.1x 33.2x 33.6x 23.4x 17.1x Quartile 2 (50th Percentile to 75th Percentile) 1,763.7 1,825.1 272.4 62.3% 18.7% 25.2% 20.6% 6.4x 5.7x 26.0x 26.2x 34.2x 37.8x Quartile 3 (25th Percentile to 50th Percentile) 28,139.0 27,430.8 4,120.2 71.3% 30.2% 11.7% 8.9% 6.2x 5.5x 20.2x 15.4x 27.1x 23.9x Quartile 4 (Min to 25th Percentile) 1,084.3 737.4 264.0 88.5% 23.9% 7.9% (0.8%) 2.8x 3.0x 14.3x 11.6x 17.5x 16.3x

Source: Capital IQ as of 07/31/17. (1) 5-Year EPS Growth represents 2018P metric vs 2013A results except in certain circumstances where out year projections are not available; 3-Year Revs CAGR represents 2018P metric vs 2015A results.

HCM: HR TECHNOLOGY SECTOR REVIEW 42 Trading Statistics : Sorted by Gross Margin

COMPANY STOCK PERFORMANCE AND COMPANY DATA LTM MARGINS GROWTH (1) VALUATION DATA

Market Enterprise Revenue Gross 5-Year 3-Year EV / EV / Price / 52-Week Value Value LTM Profit EBITDA EPS Revs Revenue EBITDA Earnings Name 7/31/17 Low High ($mm) ($mm) ($mm) % Margin % Margin CAGR CAGR LTM 2017 LTM 2017 2017 2018 eHealth, Inc. $17.55 $6.38 $19.53 $322.6 $256.5 $182.7 98.7% N.M. N.M. (1.6%) 1.4x 1.5x N.M. N.M. N.M. N.M. SEEK Limited 13.66 10.92 14.77 4,766.4 5,317.1 703.1 95.4% 34.4% 12.5% 10.8% 7.6x 6.1x 22.0x 16.2x 29.0x 24.2x The Sage Group plc 8.90 7.81 10.60 9,653.0 10,076.3 2,160.3 93.3% 28.7% 7.9% 1.8% 4.7x 4.4x 16.3x 15.8x 22.5x 19.6x Zhaopin Limited 18.87 13.70 18.98 1,084.3 737.4 264.0 88.5% 19.1% N.M. N.M. 2.8x N.M. 14.6x N.M. N.M. N.M. DHI Group, Inc. 2.40 2.40 8.43 114.5 160.9 215.6 85.8% 18.3% (8.5%) (7.2%) 0.7x 0.8x 4.1x 3.7x 10.4x 8.0x Paycom Software, Inc. 70.46 39.15 73.61 4,157.8 4,096.4 358.5 85.3% 22.1% 147.9% 41.6% 11.4x 9.6x N.M. 34.5x N.M. N.M. Intuit Inc. 135.64 103.22 143.81 35,334.2 34,241.2 5,089.0 84.6% 31.0% 17.2% 8.2% 6.7x 6.4x 21.7x 16.7x 29.8x 26.9x Asure Software, Inc. 13.00 4.65 17.27 92.5 121.4 39.5 77.7% 15.1% N.M. 25.3% 3.1x 2.3x 20.3x 9.9x 23.4x 17.1x 51job, Inc. 48.16 31.05 48.74 2,832.9 2,064.4 352.4 71.9% 29.4% 17.7% 12.1% 5.9x 5.0x 19.9x 14.0x 23.7x 20.7x Paychex, Inc. 57.76 52.78 63.03 20,943.8 20,620.4 3,151.3 70.8% 43.4% 8.7% 6.9% 6.5x 6.4x 15.1x 14.6x 25.3x 23.5x Ebix, Inc. 57.95 50.17 65.10 1,885.0 2,083.4 306.3 70.4% 36.3% 25.4% 17.0% 6.8x 6.1x 18.7x 17.4x 19.7x 18.0x Workday, Inc. 103.25 65.79 106.75 20,705.4 19,131.1 1,701.6 69.9% N.M. N.M. 37.6% 11.2x 9.3x N.M. N.M. N.M. N.M. SAP SE 105.94 88.16 113.23 127,024.7 128,930.0 26,427.8 69.5% 24.9% 10.9% 9.5% 4.9x 4.6x 19.6x 13.6x 21.7x 19.8x Cornerstone OnDemand, Inc. 40.73 30.31 47.75 2,282.9 2,233.2 435.4 68.3% N.M. N.M. 22.3% 5.1x 4.6x N.M. 40.0x N.M. N.M. XING AG 292.23 195.96 301.58 1,642.3 1,566.9 164.7 62.9% 27.4% 25.0% 19.7% 9.5x 7.6x 34.7x 23.3x 48.8x 37.8x Callidus Software Inc. 24.65 15.15 25.65 1,498.0 1,314.8 216.5 61.7% N.M. N.M. 21.4% 6.1x 5.4x N.M. 43.5x N.M. N.M. The Ultimate Software Group, Inc. 227.21 180.29 233.42 6,932.5 6,857.2 822.6 61.4% 7.6% 39.6% 24.1% 8.3x 7.1x N.M. 29.1x N.M. 46.1x HealthEquity, Inc. 47.26 28.12 54.95 2,854.2 2,658.7 189.8 59.2% 30.4% 7.4% 36.8% 14.0x 11.8x 46.1x 32.8x N.M. N.M. Paylocity Holding Corporation 46.32 29.69 49.65 2,377.6 2,276.2 283.8 58.6% 5.8% N.M. 37.2% 8.0x 6.9x N.M. 39.9x N.M. N.M. Oracle Corporation 50.30 37.62 51.85 212,115.1 204,332.1 37,728.0 58.5% 38.9% 11.0% (0.1%) 5.4x 5.3x 13.9x 11.6x 17.5x 16.3x HealthStream, Inc. 22.73 20.60 31.53 730.6 614.9 238.5 56.5% 9.9% (3.2%) 13.1% 2.6x 2.5x 26.0x 16.9x N.M. N.M. Benefitfocus, Inc. 36.55 24.55 44.98 1,094.7 1,145.6 242.7 49.3% N.M. N.M. 24.6% 4.7x 4.3x N.M. N.M. N.M. N.M. Automatic Data Processing, Inc. 117.38 85.48 120.00 52,856.2 52,078.2 12,379.8 43.1% 20.6% 9.8% 6.2% 4.2x 4.1x 20.4x 19.7x 31.6x 29.1x

Overall HR Technology Group Mean $22,317.4 $21,865.8 $4,071.9 71.4% 24.6% 21.9% 16.7% 6.2x 5.5x 20.9x 21.7x 25.3x 23.6x Median 2,832.9 2,276.2 352.4 69.9% 26.2% 11.0% 15.0% 5.9x 5.3x 19.9x 16.9x 23.5x 20.7x High 212,115.1 204,332.1 37,728.0 98.7% 43.4% 147.9% 41.6% 14.0x 11.8x 46.1x 43.5x 48.8x 46.1x Low 92.5 121.4 39.5 43.1% 5.8% (8.5%) (7.2%) 0.7x 0.8x 4.1x 3.7x 10.4x 8.0x

Overall Group (Excluding Public Companies > 10.0x EV/Revenue Valuations) Mean $24,279.2 $23,851.4 $4,570.2 71.4% 24.4% 13.4% 13.2% 5.3x 4.8x 19.1x 20.3x 25.3x 23.6x Median 2,330.2 2,158.3 329.4 70.0% 26.2% 11.0% 12.1% 5.3x 5.0x 19.7x 16.7x 23.5x 20.7x High 212,115.1 204,332.1 37,728.0 98.7% 43.4% 39.6% 37.2% 9.5x 7.6x 34.7x 43.5x 48.8x 46.1x Low 92.5 121.4 39.5 43.1% 5.8% (8.5%) (7.2%) 0.7x 0.8x 4.1x 3.7x 10.4x 8.0x

Median Statistic by Gross Margin Quartile Quartile 1 (75th Percentile to Max) $1,084.3 $737.4 $264.0 93.3% 23.9% 7.9% 0.1% 2.8x 3.0x 15.4x 15.8x 22.5x 19.6x Quartile 2 (50th Percentile to 75th Percentile) 2,832.9 2,083.4 352.4 71.9% 31.0% 17.4% 12.1% 6.5x 6.1x 19.9x 14.6x 23.7x 20.7x Quartile 3 (25th Percentile to 50th Percentile) 2,568.5 2,445.9 325.9 62.3% 26.2% 17.9% 21.9% 7.2x 6.2x 34.7x 31.0x 35.2x 37.8x Quartile 4 (Min to 25th Percentile) 2,377.6 2,276.2 283.8 56.5% 15.3% 9.8% 13.1% 4.7x 4.3x 20.4x 18.3x 24.6x 22.7x

Source: Capital IQ as of 07/31/17. (1) 5-Year EPS Growth represents 2018P metric vs 2013A results except in certain circumstances where out year projections are not available; 3-Year Revs CAGR represents 2018P metric vs 2015A results.

HCM: HR TECHNOLOGY SECTOR REVIEW 43 Trading Statistics: Sorted by Market Value

COMPANY STOCK PERFORMANCE AND COMPANY DATA LTM MARGINS GROWTH (1) VALUATION DATA

Market Enterprise Revenue Gross 5-Year 3-Year EV / EV / Price / 52-Week Value Value LTM Profit EBITDA EPS Revs Revenue EBITDA Earnings Name 7/31/17 Low High ($mm) ($mm) ($mm) % Margin % Margin CAGR CAGR LTM 2017 LTM 2017 2017 2018

Oracle Corporation $50.30 $37.62 $51.85 $212,115.1 $204,332.1 $37,728.0 58.5% 38.9% 11.0% (0.1%) 5.4x 5.3x 13.9x 11.6x 17.5x 16.3x SAP SE 105.94 88.16 113.23 127,024.7 128,930.0 26,427.8 69.5% 24.9% 10.9% 9.5% 4.9x 4.6x 19.6x 13.6x 21.7x 19.8x Automatic Data Processing, Inc. 117.38 85.48 120.00 52,856.2 52,078.2 12,379.8 43.1% 20.6% 9.8% 6.2% 4.2x 4.1x 20.4x 19.7x 31.6x 29.1x Intuit Inc. 135.64 103.22 143.81 35,334.2 34,241.2 5,089.0 84.6% 31.0% 17.2% 8.2% 6.7x 6.4x 21.7x 16.7x 29.8x 26.9x Paychex, Inc. 57.76 52.78 63.03 20,943.8 20,620.4 3,151.3 70.8% 43.4% 8.7% 6.9% 6.5x 6.4x 15.1x 14.6x 25.3x 23.5x Workday, Inc. 103.25 65.79 106.75 20,705.4 19,131.1 1,701.6 69.9% N.M. N.M. 37.6% 11.2x 9.3x N.M. N.M. N.M. N.M. The Sage Group plc 8.90 7.81 10.60 9,653.0 10,076.3 2,160.3 93.3% 28.7% 7.9% 1.8% 4.7x 4.4x 16.3x 15.8x 22.5x 19.6x The Ultimate Software Group, Inc. 227.21 180.29 233.42 6,932.5 6,857.2 822.6 61.4% 7.6% 39.6% 24.1% 8.3x 7.1x N.M. 29.1x N.M. 46.1x SEEK Limited 13.66 10.92 14.77 4,766.4 5,317.1 703.1 95.4% 34.4% 12.5% 10.8% 7.6x 6.1x 22.0x 16.2x 29.0x 24.2x Paycom Software, Inc. 70.46 39.15 73.61 4,157.8 4,096.4 358.5 85.3% 22.1% 147.9% 41.6% 11.4x 9.6x N.M. 34.5x N.M. N.M. HealthEquity, Inc. 47.26 28.12 54.95 2,854.2 2,658.7 189.8 59.2% 30.4% 7.4% 36.8% 14.0x 11.8x 46.1x 32.8x N.M. N.M. 51job, Inc. 48.16 31.05 48.74 2,832.9 2,064.4 352.4 71.9% 29.4% 17.7% 12.1% 5.9x 5.0x 19.9x 14.0x 23.7x 20.7x Paylocity Holding Corporation 46.32 29.69 49.65 2,377.6 2,276.2 283.8 58.6% 5.8% N.M. 37.2% 8.0x 6.9x N.M. 39.9x N.M. N.M. Cornerstone OnDemand, Inc. 40.73 30.31 47.75 2,282.9 2,233.2 435.4 68.3% N.M. N.M. 22.3% 5.1x 4.6x N.M. 40.0x N.M. N.M. Ebix, Inc. 57.95 50.17 65.10 1,885.0 2,083.4 306.3 70.4% 36.3% 25.4% 17.0% 6.8x 6.1x 18.7x 17.4x 19.7x 18.0x XING AG 292.23 195.96 301.58 1,642.3 1,566.9 164.7 62.9% 27.4% 25.0% 19.7% 9.5x 7.6x 34.7x 23.3x 48.8x 37.8x Callidus Software Inc. 24.65 15.15 25.65 1,498.0 1,314.8 216.5 61.7% N.M. N.M. 21.4% 6.1x 5.4x N.M. 43.5x N.M. N.M. Benefitfocus, Inc. 36.55 24.55 44.98 1,094.7 1,145.6 242.7 49.3% N.M. N.M. 24.6% 4.7x 4.3x N.M. N.M. N.M. N.M. Zhaopin Limited 18.87 13.70 18.98 1,084.3 737.4 264.0 88.5% 19.1% N.M. N.M. 2.8x N.M. 14.6x N.M. N.M. N.M. HealthStream, Inc. 22.73 20.60 31.53 730.6 614.9 238.5 56.5% 9.9% (3.2%) 13.1% 2.6x 2.5x 26.0x 16.9x N.M. N.M. eHealth, Inc. 17.55 6.38 19.53 322.6 256.5 182.7 98.7% N.M. N.M. (1.6%) 1.4x 1.5x N.M. N.M. N.M. N.M. DHI Group, Inc. 2.40 2.40 8.43 114.5 160.9 215.6 85.8% 18.3% (8.5%) (7.2%) 0.7x 0.8x 4.1x 3.7x 10.4x 8.0x Asure Software, Inc. 13.00 4.65 17.27 92.5 121.4 39.5 77.7% 15.1% N.M. 25.3% 3.1x 2.3x 20.3x 9.9x 23.4x 17.1x

Overall HR Technology Group Mean $22,317.4 $21,865.8 $4,071.9 71.4% 24.6% 21.9% 16.7% 6.2x 5.5x 20.9x 21.7x 25.3x 23.6x Median 2,832.9 2,276.2 352.4 69.9% 26.2% 11.0% 15.0% 5.9x 5.3x 19.9x 16.9x 23.5x 20.7x High 212,115.1 204,332.1 37,728.0 98.7% 43.4% 147.9% 41.6% 14.0x 11.8x 46.1x 43.5x 48.8x 46.1x Low 92.5 121.4 39.5 43.1% 5.8% (8.5%) (7.2%) 0.7x 0.8x 4.1x 3.7x 10.4x 8.0x

Overall Group (Excluding Public Companies > 10.0x EV/Revenue Valuations) Mean $24,279.2 $23,851.4 $4,570.2 71.4% 24.4% 13.4% 13.2% 5.3x 4.8x 19.1x 20.3x 25.3x 23.6x Median 2,330.2 2,158.3 329.4 70.0% 26.2% 11.0% 12.1% 5.3x 5.0x 19.7x 16.7x 23.5x 20.7x High 212,115.1 204,332.1 37,728.0 98.7% 43.4% 39.6% 37.2% 9.5x 7.6x 34.7x 43.5x 48.8x 46.1x Low 92.5 121.4 39.5 43.1% 5.8% (8.5%) (7.2%) 0.7x 0.8x 4.1x 3.7x 10.4x 8.0x

Median Statistic by Market Value Quartile Quartile 1 (75th Percentile to Max) $44,095.2 $43,159.7 $8,734.4 69.7% 31.0% 10.9% 7.6% 6.0x 5.8x 19.6x 14.6x 25.3x 23.5x Quartile 2 (50th Percentile to 75th Percentile) 4,462.1 4,706.7 530.8 78.6% 29.0% 15.1% 18.1% 7.9x 6.6x 21.0x 22.7x 23.7x 22.4x Quartile 3 (25th Percentile to 50th Percentile) 1,763.7 1,825.1 263.3 62.3% 27.4% 25.2% 21.9% 6.4x 5.7x 26.7x 39.9x 34.2x 27.9x Quartile 4 (Min to 25th Percentile) 322.6 256.5 215.6 85.8% 16.7% (5.9%) 5.8% 2.6x 1.9x 17.4x 9.9x 16.9x 12.6x

Source: Capital IQ as of 07/31/17. (1) 5-Year EPS Growth represents 2018P metric vs 2013A results except in certain circumstances where out year projections are not available; 3-Year Revs CAGR represents 2018P metric vs 2015A results.

HCM: HR TECHNOLOGY SECTOR REVIEW 44 Big Ideas: Q&A with Josh Bersin

45 Big Ideas: Q&A with Josh Bersin, Principal, Bersin by Deloitte Consulting, LLC

DSP: Hello Josh. Thanks for being with us today! I think most of our readers are familiar with your great career, reputation in the HR/Corporate Learning space and your work at Bersin by Deloitte, but give us a little color on how your originally got into the HR field?

JB: Well it was actually an accident. I spent 20+ years in sales, marketing, business development, and product management and then decided to take a job as VP of Marketing with a startup that was building an online learning platform (back in 1998). The CEO of that company suddenly had a heart attack and left the business, leaving me with the responsibility to lead the company to its next phase. We ended up selling the company to DigitalThink, which was a very hot publically traded company in Josh Bersin founded Bersin & Associates in 2001 to provide the online learning market (before we called it the cloud). I led research and advisory services focused on corporate learning. product management and marketing there for 18 months and He is responsible for Bersin by Deloitte, Deloitte Consulting then was laid off when the 2000 recession hit. So I went out on LLP’s long-term strategy and market eminence practice. Josh my own and started doing paid research. is a frequent speaker at industry events and has been quoted on talent management topics in key media, including Harvard Our research started with training, and over time as developed a Business Review, The Wall Street Journal, Bloomberg, on BBC name for myself and we built up a business, we realized that all the training issues and vendors we studied were also playing in a Radio, CBS Radio and National Public Radio. He is a popular larger market, so we expanded. First we studied leadership blogger for Forbes.com and has been a columnist since 2007 for development, then talent management, and all aspects of HR Chief Learning Officer magazine. Josh spent 25 years in (and HR technology). I think my deep background in technology product development, product management, marketing and and engineering oriented mind has helped me understand all the sales of e-learning and other enterprise technologies at changes in the HR and training marketplace over the years; and companies including DigitalThink (now Convergys), Arista my business background helped me understand how these Knowledge Systems, Sybase, and IBM. Josh's education vendor companies succeed and fail. includes a B.S. in Engineering from Cornell University, an M.S. in Engineering from Stanford University, and an MBA from the Haas School of Business at the University of California, Berkeley.

HCM: HR TECHNOLOGY SECTOR REVIEW 46 Big Ideas: Q&A with Josh Bersin

Okay, let’s hear your elevator pitch. Give us the skinny on “Bersin by In your professional career, what are you most proud of? Deloitte” – what’s the business model, your mission, and what is BBD really good at? It’s pretty easy for me: I’m incredibly proud of the impact we’ve had on the HR profession, the vendor market, and the HR professionals Bersin by Deloitte is the undisputed digital destination for HR around the world. I get up every day excited about helping HR people professionals. We focus on doing comprehensive, practical research to and HR vendors improve their personal impact, their companies, and fuel organization performance through the one asset that will always their products. And ultimately I think in some small way I’m helping matter: the people. We are also an analyst firm, studying all the vendors, their businesses, employees, and the rest of the world do better as a tools, and platforms in the market. This combination of research and result. analyst work gives us amazing insights into leading practices and trends, so we can really help HR professionals and leaders make good decisions. In our language we call it “impact.” Are we helping a company really impact their people, business, or product strategy? We don’t do “HR I would also say that a key to our business model is something I learned for HR sake” – we question every “best practice” and people really almost 30 years ago: staying close to our clients. We are good listeners, appreciate that. and we focus on “solving problems” for people. And we have hired people who are wired that way. These are important lessons for any I also just love the HR profession and the people in it. They are business in any market, and they’re principles I try to reinforce every day. passionate, smart, committed, and wonderful to work with. I feel blessed to have landed in this profession. Every few days I get an email or phone call from someone saying “thank you” and that is the best reward I could ever receive.

How would you describe your personal leadership style and give us some In this issue, we are focusing on HR Technology. Given your long and personal “HR lessons learned.” distinguished career, we’d be interested to hear what you think has been the biggest HR Technology change over the last decade? Well I’ve learned a lot, both as an employee, entrepreneur, analyst, and Principle at Deloitte. I’d say it’s three things: First, leaders must clearly I think the single biggest change is the huge shift from “technology to understand the market and where you want to play, so you can help the automate HR” to “technology to improve productivity and work life.” organization focus; second it’s important to hire the smartest people you While many HR tools are for HR, we are almost all now focused on can and look for a team that loves the work, loves to get things done, and “what makes employees and the organization better” – so all the feels like someone you can work with every day; third keep a relentless systems, tools, and technology has changed. More consumer-like, focus on the customer, and let the customer drive what you do next. That, analytics driven, and easier to use. It’s amazing how it has changed. plus making sure the organization has a strong sense of mission, purpose, and teamwork – and things tend go well. If you look at the tools from the early 2000s and compare them today, you almost want to laugh – they were so geeky, hard to use, and focused entirely on the needs of HR people, without any concept of what a real working person would want.

HCM: HR TECHNOLOGY SECTOR REVIEW 47 Big Ideas: Q&A with Josh Bersin

Without giving away any trade secrets, please give us your thoughts on Are there any specific customer end markets where you are seeing exciting how the HR Technology space is changing? For the CHROs out there, technology being used in particularly compelling ways (verticals, enterprise what should be on their “HR Technology reading list”? or SMB, hourly vs salaried, recruitment, vs performance, training etc.)?

I think the three biggest things are A) technology to facilitate the new Every industry and every size company can benefit from HR technology, way we work, which means empowering teams, facilitating individual but maybe the biggest “new benefit” is how easy it now is for smaller performance, and focusing on gig, contract, and alternative work companies to buy amazing HR systems which are cloud based, and they arrangements; B) smart use of analytics and AI to make HR software have all the features and ease of use capabilities of the gigantic systems big “smarter” and more predictive and useful, and C) Ease of use – HR and companies buy. management tools should be instantly accessible to everyone, requiring minimal training. This means a relentless focus on “design”. I think one of the biggest emerging markets is software to manage all aspects of the gig, contingent, and project work economy. I am writing a Oh I have to add one more: get to know the vendor, talk with their book on this topic and there is a huge shift taking place. We need tools that other clients, and make sure they are focused on making their let us manage people in very new ways, and this will be a multi-billion customers successful. dollar new market over the next decade.

The last couple years, the HR Tech buzz words have been things like For those of our readers new to the sector, what are some of the biggest “machine learning” “big data” “predictive analytics/assessments” mistakes you’ve seen young HR Technology vendors make? “robotics”… now it seems everything is broadly wrapped in the HR vernacular as “AI” (Artificial Intelligence). So Josh, set us straight on Well there are lots of ways to mess up, so let me try to give you a few to AI and its near term/longer term relevance to HR. think about: First you should have to have a product that immediately adds value. HR buyers are typically pragmatic, they don’t like to play with AI is very exciting, but honestly I think the term will probably go away “experimental systems.” If you cant find a way your product immediately in a year or two. It’s really just very fast, machine-learning, predictive makes your customers’ companies grow faster, hire better, reduce costs, etc.. analytics that occurs in real time – so it’s not something “new” but you’re probably going to have a struggle. Second, you should learn how to rather a leap forward in what we have been trying to do. The idea that market and sell to HR people. Lots of entrepreneurs really come up with the software will “learn” from the data is new, and the decisions it amazing ideas, and then they struggle to build a business that engages with makes will be “smarter” is exciting. But ultimately these are tools that this market. This is a big but very special market, and you have to learn how fall into three categories: assist work (make us better at what we do to communicate and listen to them. Third, before you build something, talk now), augmented work (help us do things we couldn’t do before), and with people and see if someone’s already tried this before. Lots of automated work (take the human out of the work). All three are entrepreneurs have wonderful new ideas, but I see people trying things that happening. have been tried before. I’m not saying there isn't always an opportunity to do something better, but if you haven't studied what’s already in the market Incidentally I think conversational systems will be huge in HR – we are and why some vendors failed or succeeded, you may find yourself making more comfortable talking than typing, so the natural language/chatbot similar mistakes. Remember there are quite a few smart buyers out there, so parts of AI will be very important in HR. you have to immediately ask the question “why is this better than xyx?”

HCM: HR TECHNOLOGY SECTOR REVIEW 48 Big Ideas: Q&A with Josh Bersin

Your quote “The war for talent is over and the talent won” phrase is We’ve all seen the impact of Uber in the taxi/driving space. Is there iconic in HR circles. Now as we approach the age of the Millennial an Uber for HR Technology out there just waiting to be unleashed worker does the talent know they won (or even care?) Moreover, in (i.e., using installed workforce in new ways)? an ever increasing Millennial-centric workforce, what does “talent winning” mean and how does this change things for employers? Yes many. I just met with a company that is going to modernize the Does technology play a bigger role in the war for Millennial talent? hourly workforce, for example. I wont get into specifics but this particular company has the opportunity to be a $billion company or more if they pull off what they’re trying to do. Millennials are in their 30s now, so they’re now almost half the workforce. So if you can’t appeal to Millennials you can’t sell your We also need systems that can streamline work inside of companies. product effectively. They tend to be technically savvy, pragmatic, Companies are rapidly trying to become more agile, team-centric, and smart buyers – so they have upped the game and want new and project-oriented internally. There are not enough tools to help ideas, proven solutions, and products that leverage the latest companies create an internal “job market” for projects, assess people technology and user experience. And yes they expect technology to against these projects, and measure “followership” and other work and integrate into their lives in a positive, meaningful way. dimensions to work – which is where organizations are going.

Where will the next wave of HR Technology innovation come from? The move towards a Gig economy (prevalence of a series of short term work and freelancing versus permanent work) seems very I think the next wave is coming from a group of smart young people compelling in certain industries (technical, creative, advisory). (all over the world) who have incredible smarts in software, AI, user What’s your take on the Gig trend and when if ever will it go more experiences, and analytics. There must be 300+ startups out there, mainstream? and more than 3 billion was invested in this market over the last three years (according to CB Insights data ), so there is a lot going on. It has gone mainstream and its just getting bigger. More than 40% of Companies in India, Europe, and all over North America are all US workers are in “alternative” work arrangements and research springing up. from the National Economics Research Council shows that 95% of all net-new jobs created from the 2008 recession are “alternative work” The big “new wave” is tools and systems that “make work life arrangements. This is a big deal already and its getting bigger. better” and “improve productivity at work.” I wont get into too much detail here, but there is a lot of opportunity ahead. Consider one more thing. The fastest growing segment of the US workforce is people “over the age of 80.” We are living longer. How do we manage people in their “encore career” that don’t want to retire but may want to work part time? They are essentially “gig workers” and we baby boomers are still the biggest cohort in the workforce.

HCM: HR TECHNOLOGY SECTOR REVIEW 49 Big Ideas: Q&A with Josh Bersin

“Rapid Fire” session, your quick impression and why?

. Bigger deal, unique sourcing of talent or talent cost savings? Slow down your hiring process and make sure you have a well understood model for success, before you “fill the slots” with people who don’t fit.

. Bigger opportunity, salaried or hourly market? Find a way to better manage your gig workers, you have many more of them than you realize.

. Job boards, thing of the past or career sites v 2.0? Job boards are never going away, but they have to be smarter and give us much more information than they do today.

. Freemium models, good or bad and why? I personally love them but in the corporate world they are often a red flag that the company doesn’t have a working product yet.

. The hiring “Fico-score” plausible or pipedream? Something we will always want to find, but I doubt its possible given the complex and ever changing nature of jobs, companies, cultures and skills needed.

. Robots replacing recruiters – true or false? Robots will help source, screen and assess people better than ever. But human recruiters will remain, and they’ll be the “closers” not the “screeners.”

HCM: HR TECHNOLOGY SECTOR REVIEW 50 Big Ideas: Q&A with Josh Bersin Josh, as a “closer look” give the DSP readers a few Personal Fun Facts about yourself…

Birthplace: Brookline, Mass

First Job: Paper boy at the age of 10

Favorite Music/Artist: I guess it’s the Beatles.

Hobby: Reading, biking, and hanging with my fam. Favorite Vacation Spot: Lake Tahoe in the summer.

Favorite Hometown Restaurant: The wonderful Vietnamese restaurant near my office. Not allowed to give you the name! Charitable/Non Profit You Support: Oakland food bank.

Car You Drive: Mercedes, its nearly “autonomous” and so much fun.

Biggest Regret: That I didn’t study more software programming in college (I learned PL/I on mainframes)

Little Known Fact: I started college as an English major, hence my love of reading and writing.

My Golden Rule: If you always help others, good things happen in your life.

Backdrop photo is the Oakland Bay Bridge in California Thanks Josh!

HCM: HR TECHNOLOGY SECTOR REVIEW 51 Select HR Technology M&A Transactions

52 Select Recent HR Technology M&A Transactions

Date Buyer / Target / Business Investor Issuer Description

8/5/17 Stuart Olston HarQen, Inc. HarQen, Inc. provides Software as a Service based tools to align and accelerate recruitment processes.

8/4/17 Indeed, Inc. Prehire, Inc. Prehire, Inc. provides job simulation solutions. Its solution features tests that allow hiring managers to evaluate the skills and resume of the candidates, as well as provides candidates with quantification on performance dimensions and suggests steps for getting hired.

7/6/17 CrossLink Capital, Inc., Origin Ventures, OnboardIQ Inc. OnboardIQ Inc. provides hiring automation software for hiring and managing a large SoftTech VC, Y Combinator workforce.

7/6/17 Accel Partners; Otium Ventures Plc PayFit SAS PayFit SAS develops software that manages payroll automatically.

6/29/17 Technology Crossover Ventures Pracuj.pl Pracuj.pl is a job, career and education web site in Poland.

6/29/17 Insight Venture Partners LLC Harver B.V. Harver B.V., a human resources technology company, develops a recruitment platform for recruitment.

6/27/17 Highland Capital Partners, General Catalyst Catalant Technologies, Inc. Catalant Technologies, Inc. provides a technology platform that connects businesses and Partners, GE Ventures, Greylock Partners experts.

6/20/17 Transmedia Capital LLC; Freestyle Capital; EaseCentral EaseCentral develops an online platform to manage employee benefits, onboarding, and Compound; Upside Partnership; Propel Venture compliance. Partners

6/19/17 Apollo Global Management, Ontario Teachers' CareerBuilder, LLC CareerBuilder, LLC provides HR Software as a Service solutions that connect job seekers and Pension Plan Board employers internationally.

6/16/17 Battery Ventures, U.S. Venture Partners, Shasta Entelo, Inc. Entelo, Inc. provides cloud-based recruiting software. Ventures, Correlation Ventures

6/14/17 iSolved HCM, LLC ExcelPay Business Solutions, LLC ExcelPay Business Solutions, LLC designs and develops software for payroll and human capital management.

6/14/17 Bond International Software plc Erecruit Holdings, LLC Erecruit Holdings, LLC develops and provides enterprise staffing software, vendor management systems (VMS), and onboarding software.

HCM: HR TECHNOLOGY SECTOR REVIEW 53 Select Recent HR Technology M&A Transactions (cont’d)

Date Buyer / Target / Business Investor Issuer Description

6/9/17 Scale Venture Partners, Emergence Capital Textio, Inc. Textio, Inc. develops a writing platform for creating job listings. Partners, Cowboy Ventures, Upside Partnership

6/6/17 FundersClub Inc., Alchemist Accelerator, LLC, Shortlist Project Inc Shortlist Project Inc develops an application that helps in onboarding, managing and paying Impulse VC freelancers.

6/6/17 Magma Venture Partners, PICO Partners Workey Employees Recruitments Ltd. Workey Employees Recruitments Ltd. develops an online recruitment platform.

6/5/17 Callidus Software Inc. Learning Heroes Ltd. Learning Heroes Ltd. offers online education services and e-learning modules for customers.

6/2/17 Thayer Ventures; Salesforce Ventures Viridis Learning, Inc. Viridis Learning, Inc. is an education technology company that combines workforce education and human capital solutions for the middle-skill workforce.

6/2/17 Avalon Ventures, Glasswing Ventures Talla, Inc. Talla, Inc. develops recruiting, marketing, and office management software.

5/31/17 Sapphire Ventures, Index Ventures, Felicis Culture Amp Pty Ltd. Culture Amp Pty Ltd. develops a survey platform for people and culture. Ventures, Blackbird Ventures

5/26/17 Asure Software, Inc. iSystems, LLC iSystems, LLC develops payroll, tax, and HR software for the payroll service bureau market and other financial services providers in the United States.

5/26/17 Asure Software, Inc. Compass HRM, Inc. Compass HRM, Inc. provides IT based human resource management solutions.

5/25/17 Vibe HCM Inc. cfactor Works Inc. cfactor Works Inc. delivers a personalized on-demand social human resource management system (HRMS), talent management, and employee collaboration software suite for employees.

5/24/17 Primus Capital MBO Partners, Inc. MBO Partners, Inc. provides contractor engagement solutions for self-employed professionals and their clients, and enterprises.

HCM: HR TECHNOLOGY SECTOR REVIEW 54 Select Recent HR Technology M&A Transactions (cont’d)

Date Buyer / Target / Business Investor Issuer Description

5/24/17 Callidus Software Inc. RevSym Inc. RevSym Inc. develops a software platform that automates revenue recognition for companies.

5/23/17 e.ventures, TF1 Group, Northzone Ventures, Job Digital Networks S.L. Job Digital Networks S.L. develops CornerJob, a mobile application for recruiters and Mediaset, Caixa Capital, Randstad Innovation candidates. Fund, others

5/17/17 High-Tech Gründerfonds Management GmbH, MoBerries GmbH MoBerries GmbH operates an online platform for recruiters and candidates. Littlerock GmbH, 42 Capital I Holding GmbH

5/16/17 IDInvest Partners, Alven Capital Partners, JobTeaser SARL JobTeaser SARL owns and operates a recruiting platform for students and graduates. Korelya Capital

5/15/17 Bpifrance Investissement, Entrepreneur Venture EASYRECRUE SAS EASYRECRUE SAS provides recruiters a platform to conduct differed video interviews. Gestion, Elaia Partners

5/4/17 Aon plc cut-e GmbH cut-e GmbH provides psychometric instruments for HR diagnostics on the Web.

4/28/17 EMERGE s.a.-n.v., Social Capital, MuckerLab, Work Today, Inc. Work Today, Inc. connects workers with jobs through Short Message Service (SMS). Hone Capital, GAN Ventures

4/25/17 Ballast Point Ventures, S3 Ventures, Harbert Iconixx Software Corporation Iconixx Software Corporation provides cloud-based incentive compensation management Venture Partners, LLC solutions.

4/25/17 Accenture, Foundry Group Work Market Inc. Work Market is a work automation platform for freelancers.

4/25/17 Battery Ventures, Bessemer Venture Partners, hibob Inc. hibob Inc. provides cloud based human resources (HR) management software. Eight Roads Ventures Europe, Arbor Ventures

4/24/17 Summit Partners, Accel-KKR PrismHR PrismHR develops enterprise software solutions to help human resource outsourcing (HRO) organizations, including professional employer organizations (PEOs) and administrative service organizations (ASOs).

HCM: HR TECHNOLOGY SECTOR REVIEW 55 Select Recent HR Technology M&A Transactions (cont’d)

Date Buyer / Target / Business Investor Issuer Description

4/20/17 Walden International, Big Basin Capital Swingvy Sdn Bhd Swingvy Sdn Bhd develops HR software for small and mid-size businesses.

4/11/17 DHI Group, Digital Garage, BizReach, Prime CareerStack Innovations Pvt. Ltd. CareerStack Innovations Pvt. Ltd. operates HackerEarth Recruit, a cloud-based online Venture Partners, Beenos Partners, Beenext Pte. recruitment solution for technical hiring needs. Ltd.

4/11/17 Index Ventures, Edenred Capital Partners, Beamery Ltd Beamery Ltd. provides a recruitment CRM software to source, attract, and engage candidates. Localglobe, GP Ventures

4/7/17 Harvest Partners, Investcorp Bank, Bahrain PRO Unlimited, Inc. PRO Unlimited, Inc. develops contingent workforce management solutions for Global and Mumtalakat Holding Company Fortune 500 companies worldwide.

4/4/17 Renovo Capital, LLC Global HR Research, LLC Global HR Research, LLC provides pre-hire intelligence solutions in the United States.

3/30/17 Two Sigma Investments, LP; Edgewood Decisely Insurance Services, Inc. Decisely Insurance Services, Inc. offers HR resources, benefits, and technology to support small Partners Insurance Center, Inc. businesses through its online platform.

3/29/17 500 Startups, Draper Associates, Frontier Storyhunter, Inc Storyhunter, Inc. develops cloud based talent marketplace and network for video professionals Ventures, Altair Capital Management, NFX worldwide. Guild

3/23/17 Trinity Ventures, Index Ventures, General WayUp, Inc. WayUp, Inc. owns and operates as an online portal that helps students to find jobs and Catalyst Partners, Axel Springer Venture internships. GmbH, SV Angel, Lerer Hippeau Ventures, others 3/22/17 True Ventures, SaaStr Investment Arm Teamable Inc. Teamable Inc. operates an online portal for employee referral.

3/21/17 Summit Partners LLP Ascentis Corporation Ascentis Corporation develops SaaS based human resource (HR) solutions, online payroll services, and human capital management solutions in the United States and Canada.

3/16/17 FreakOut Holdings, inc. Talentio, Inc. Talentio, Inc. develops cloud based recruitment management system.

HCM: HR TECHNOLOGY SECTOR REVIEW 56 Select Recent HR Technology M&A Transactions (cont’d)

Date Buyer / Target / Business Investor Issuer Description

3/15/17 PeopleNet Corporation Fyre LLC Fyre LLC develops software tools for the staffing industry.

3/7/17 Signalfire, LLC TextRecruit, LLC TextRecruit, LLC builds text messaging and chat tools that help employers attract talent, recruit candidates, and engage employees worldwide.

2/28/17 Blumberg Capital, Novel TMT Investments, WorkJam, Inc. WorkJam, Inc. develops a web and mobile app that runs stand-alone or integrated with Founder Collective, Lerer Hippeau Ventures existing workforce management system.

2/23/17 Saba Software, Inc. Halogen Software, Inc. Saba Software, Inc. provides cloud-based intelligent talent management solution for organizations to hire, develop, engage, and inspire people worldwide.

2/22/17 Diagram Collage Technologies Inc. Collage Technologies Inc. provides human resource management software solutions for businesses in Canada.

1/31/17 SmartRecruiters Inc. Jobspotting UG (haftungsbeschränkt) Jobspotting UG (haftungsbeschränkt) operates a discovery engine for job hunting.

1/24/17 PSI Services LLC Performance Assessment Network, Inc. Performance Assessment Network, Inc. provides talent assessment and measurement solutions that allow companies to select, develop, and retain employees through a Web-based technology.

1/20/17 Madrona Venture Group, Trilogy Equity Jobaline.com Inc. Jobaline.com Inc. operates a bilingual Web based job portal. Partners, Founder's Co-op

1/18/17 OpenView Venture Partners Deputechnologies Pty Ltd. Deputechnologies Pty Ltd. provides employee scheduling and workforce management software for organizations.

1/17/17 Automatic Data Processing, Inc. The Marcus Buckingham Company, Inc. The Marcus Buckingham Company, Inc. provides leadership development solutions to (NasdaqGS:ADP) organizations.

1/10/17 Brainchild Holdings, Caffeinated Capital Staffjoy, Inc. Staffjoy, Inc. develops Staffjoy Boss, an automated workforce scheduling tool that builds schedules automatically according to workers and managers preferences.

HCM: HR TECHNOLOGY SECTOR REVIEW 57 Select Recent HR Technology M&A Transactions (cont’d)

Date Buyer / Target / Business Investor Issuer Description

1/9/17 GGV Capital, DRW Ventures, FJ Labs, KDWC Shiftgig, Inc. Shiftgig, Inc. operates a platform that connects people who want temporary work with Ventures businesses who need them on their mobile devices.

1/5/17 Kronos Incorporated Financial Management Solutions, Inc. Financial Management Solutions, Inc. provides performance management information reporting software solutions for banks and credit unions in North America.

1/5/17 RIVS, Inc. InterviewStream, Inc. InterviewStream, Inc. provides pre-recorded and live video interviewing solutions.

1/4/17 Castlight Health, Inc. (NYSE:CSLT) Jiff, Inc. Castlight Health, Inc. operates a health benefits platform in the United States.

1/3/17 Asure Software, Inc. Payroll Specialties NW, Inc. Payroll Specialties NW, Inc. provides a range of human resources solutions and payroll processing services for commercial and non-commercial entities.

12/22/16 Matrix Partners, Sequoia Capital, Scale Venture Namely Inc. Namely Inc. owns and operates an online human resource software platform for small- and Partners, True Ventures, Altimeter Capital mid-sized organizations. Management, The Four Rivers Group

12/15/16 Mercer Thomsons Online Benefits Thomsons Online Benefits is a SaaS provider of global employee benefits and employee engagement software.

12/13/16 IQNavigator, Inc. Beeline.com, Inc. Beeline.com, Inc. provides software solutions for sourcing and managing the extended workforce.

12/10/16 Adecco Group AG Talentoday Inc. Talentoday Inc. provides online career guidance solutions to companies, schools, and organizations worldwide.

12/1/16 Oliver Wyman LShift Limited LShift Limited provides software development and information technology consulting services.

11/25/16 AirTree Ventures Remesys Pty Ltd Remesys Pty Ltd., a remuneration and talent management software provider, specializes in remuneration review and performance management software.

HCM: HR TECHNOLOGY SECTOR REVIEW 58 Select Recent HR Technology M&A Transactions (cont’d)

Date Buyer / Target / Business Investor Issuer Description

11/21/16 AirTree Ventures Jobbatical OÜ Jobbatical OÜ offers online services to post and search short-term employment opportunities.

10/27/16 Deluxe Corporation Payce, Inc. Payce, Inc. provides payroll and tax filing services to hospitality, contractor and builder, retail, healthcare, and financial services sectors primarily in the Mid-Atlantic region.

10/25/16 Kronos Incorporated Datamatics Management Services, Inc. Datamatics Management Services, Inc. develops automated time and attendance, human resource, and payroll solutions.

10/20/16 Serent Capital Apex Payroll Apex Payroll Software is a cloud-based payroll and HR technology provider. Apex offers a comprehensive suite of products and services including payroll, payroll tax, human resources, time and attendance, and more.

10/10/16 Compunnel Software Group, Inc. Jobhuk, Inc. Jobhuk, Inc. owns and operates a marketplace that provides recruitment services for recruiters and employers worldwide.

10/4/16 GGV Capital; Toba Capital Restless Bandit, Inc. Restless Bandit, Inc. is a talent discovery platform for resume databases.

9/30/16 StoneCalibre, LLC Trivantis Corporation Inc. Trivantis Corporation Inc. provides electronic learning solutions.

9/30/16 The Ultimate Software Group, Inc. Kanjoya, Inc. Kanjoya, Inc. operates a workforce intelligence and management platform for enterprise companies.

9/19/16 Permira Advisers P&I Personal & Informatik Aktiengesellschaft P&I Personal & Informatik Aktieng-esellschaft provides integrated software solutions for payroll, time management, and human resources management in Europe.

9/12/16 SJF Ventures, University Ventures, Strada Portfolium, Inc. Portfolium, Inc. operates a cloud-based platform that enables students with opportunities to Education Network, Endownment Arm capture, curate, and convert skills into job offers, while giving learning institutions and employers the tools they need to assess competencies and recruit talent.

9/7/16 Peak Equity Partners Valiant Solutions, Inc. Valiant Solutions, Inc. provides cloud-based payroll and human capital management (HCM) solutions, including applicant tracking, human resources, payroll, time and labor management, communication center, employee self-service and more.

HCM: HR TECHNOLOGY SECTOR REVIEW 59 Select Recent HR Technology M&A Transactions (cont’d)

Date Buyer / Target / Business Investor Issuer Description

9/6/16 Careerbuilder Workterra WORKTERRA provides a cloud-based technology to handle HCM challenges.

8/31/16 Elevate Capital Blendoor, Inc. Blendoor, Inc. develops a mobile job matching application that enables technology companies to qualified women, veteran, and underrepresented minority candidates.

8/29/16 Engage:BDR Inc. Tiveo, LLC Tiveo, LLC, doing business as mydiveo, operates a talent discovery platform.

8/9/16 Randstad North America, LP Monster Worldwide, Inc. Monster Worldwide, Inc., together with its subsidiaries, provides online and mobile employment and recruitment solutions worldwide.

8/1/16 Specialist Computer Services Limited Pyramid Human Resources Limited Pyramid Human Resources Limited provides payroll, human resources, time and attendance, expenses, and vehicle management applications.

8/1/16 Dominion Payroll Services Tennessee, LLC Avintus Employer Services Avintus Employer Services provides human resource (HR) and payroll solutions in the United States.

7/31/16 Alchemist Accelerator, LLC Shortlist Project Inc Shortlist Project Inc develops an application that helps in onboarding, managing and paying freelancers.

7/28/16 Oracle Corporation NetSuite Inc. NetSuite Inc. provides cloud-based financials/enterprise resource planning (ERP) and omnichannel commerce software suites in the United States and internationally.

7/25/16 HealthStream, Inc. Nursing Registry Consultants Corporation Nursing Registry Consultants Corp., doing business as NursingCorp, provides online competency tests and staffing software for resourceful healthcare employers.

7/22/16 Access Capital Partners, Tenzing Private Equity Bond HR and Payroll Software Limited and Bond HR & Payroll Software Limited develops and offers human resource (HR) and payroll Bond Payroll Services Ltd and Eurowage Ltd software solutions.

7/19/16 Slack Technologies, Inc., Investment Arm Wade & Wendy, Inc. Wade & Wendy, Inc. develops machine intelligence personalities to assist hiring.

HCM: HR TECHNOLOGY SECTOR REVIEW 60 Select Recent HR Technology M&A Transactions (cont’d)

Date Buyer / Target / Business Investor Issuer Description

7/11/16 e.ventures, TF1 Group, Northzone Ventures, Job Digital Networks S.L. Job Digital Networks S.L. develops CornerJob, a mobile application for recruiters and Mediaset, Caixa Capital, others candidates.

7/3/16 SEEK Limited Sidekicker Pty Ltd. Sidekicker Pty Ltd. operates an on-demand staffing platform that allows businesses to hire temporary staff in Australia.

7/1/16 Indeed, Inc. Simply Hired, Inc. Simply Hired, Inc. builds and operates an online job search engine.

6/30/16 HealthStream, Inc. Performance Management Services, Inc. Performance Management Services, Inc. provides clinical competence assessment of nurses.

6/30/16 Workday, Inc. Zaption, Inc. Zaption, Inc. operates an online video interaction platform that offers interactive video tools and ready-to-use video lessons for education applications.

6/24/16 Callidus Software Inc. Badgeville, Inc. As of June 24, 2016, Badgeville, Inc. was acquired by Callidus Software, Inc. Badgeville, Inc. owns and operates a behavior management platform.

6/24/16 AppPoint Ventures (OPC) Private Limited HireCanvas, Inc. HireCanvas, Inc. recruits candidates by leveraging employees and university networks.

6/23/16 Insight Venture Partners, Mayfield Fund SmartRecruiters Inc. SmartRecruiters Inc. provides an applicant tracking and recruiting software for businesses.

6/16/16 Pracuj.pl, Edenred Capital Partners Beamery Ltd Beamery Ltd. provides a recruitment CRM software to source, attract, and engage candidates.

6/14/16 Atomico Investment Holdings, Cygnus Asset Jobs and talent S.L. Jobs and talent S.L. designs and develops social network platform for job search. Management, Amerigo Innvierte Spain Technologies, FJ Labs

6/13/16 Microsoft Corporation LinkedIn Corporation LinkedIn Corporation, together with its subsidiaries, operates an online professional network worldwide.

HCM: HR TECHNOLOGY SECTOR REVIEW 61 Select Recent HR Technology M&A Transactions (cont’d)

Date Buyer / Target / Business Investor Issuer Description

6/8/16 Monster Worldwide, Inc. Jobr, Inc. Jobr, Inc. develops and delivers a mobile application that connects talented individuals with jobs.

6/7/16 Connecture, Inc (NasdaqGM:CNXR) ConnectedHealth, LLC

6/7/16 Baird Venture Partners, Bain Capital Ventures, Hireology, Inc. Hireology, Inc. provides a Web-based hiring management software platform to source, engage, Lightbank LLC and hire performers for businesses, distributed enterprises, and companies.

6/7/16 Icon Ventures, DBL Partners, QED Investors, The Muse The Muse provides job listings and career advice for young people online. Aspect Ventures

6/3/16 Trapeze ITS Luxembourg SARL Bond International Software plc Bond International Software plc provides Recruitment Software, HR and Payroll Software, and Outsourcing segments.

5/31/16 HR Knowledge, Inc. Resource Navigation Inc. Resource Navigation Inc. provides payroll and HR solutions and services to small to mid-sized companies.

5/24/16 Battery Ventures, Shasta Ventures Entelo, Inc. Entelo, Inc. provides cloud-based recruiting software.

5/20/16 The Ultimate Software Group, Inc. Vestrics, Inc. The Ultimate Software Group, Inc. provides cloud-based human capital management solutions (NasdaqGS:ULTI) primarily to enterprise companies in the United States and Canada.

5/11/16 TMF Group Holding B.V. UCMS Group EMEA Ltd. UCMS Group EMEA Ltd. provides payroll, human resource (HR) administration, and accounting services for multinational and global corporations, as well as midsized and large local companies.

5/10/16 Mathers Associates, Bluff Point Associates, Tsai untapt inc. untapt inc. operates a digital hiring platform for technologists and employers. Capital Corporation, SenaHill Partners, Sand Hill East Ventures, WorldQuant Ventures

5/9/16 Intuit Inc. Sierra Ventures Townsquared, Inc. Townsquared, Inc. operates an online community to help small businesses succeed through local connections and resources.

HCM: HR TECHNOLOGY SECTOR REVIEW 62 Select Recent HR Technology M&A Transactions (cont’d)

Date Buyer / Target / Business Investor Issuer Description

5/9/16 Sabadell Capital Job Digital Networks S.L. Job Digital Networks S.L. develops CornerJob, a mobile application for recruiters and candidates.

5/6/16 Florida Angel Nexus, FAN Fund Candidate.Guru, Inc. Candidate.Guru uses big data to predict cultural fit of candidates.

5/2/16 Careerbuilder Aurico Aurico is an NAPBS accredited and ISO 9001:2008 certified background screening and drug testing company.

4/16/16 SEEK Limited Nimble Software Systems Inc. Nimble Software Systems Inc. provides cloud-based employee scheduling and time clocking software that enables users to streamline and automate workforce management operations.

4/14/16 XING AG BuddyBroker AG BuddyBroker AG develops and provides online recruiting solutions.

4/13/16 TF1 Group Job Digital Networks S.L. Job Digital Networks S.L. develops CornerJob, a mobile application for recruiters and candidates.

4/8/16 Callidus Software Inc. ViewCentral, LLC ViewCentral, LLC provides external, SaaS, cloud-based learning management solutions (LMS) for technology, financial services, biosciences, human resources, consulting, and other industries.

4/8/16 Converge Venture Partners, ff Venture Capital Wade & Wendy, Inc. Wade & Wendy, Inc. develops machine intelligence personalities to assist hiring.

4/7/16 TriNet Group, Inc. Teleborder Teleborder provides HR management system solutions for immigration.

3/22/16 First Analysis Corporation, Primus Capital Netchex Netchex offers a SaaS-based solution including robust tools for recruiting top talent, paperless onboarding, labor cost tracking and seamless management of benefits, in addition to base payroll and tax.

3/21/16 Asure Software, Inc. Mangrove Software, Inc. Mangrove Software, Inc. provides Software as a Service based human capital management applications and benefits administration services for mid-market and enterprise organizations in the United States.

HCM: HR TECHNOLOGY SECTOR REVIEW 63 Select Recent HR Technology M&A Transactions (cont’d)

Date Buyer / Target / Business Investor Issuer Description

3/10/16 Redpoint Ventures, Bain Capital Ventures, Justworks, Inc. Justworks, Inc. provides services related to benefits, payroll and payments, and compliance for Thrive Capital, Index Ventures startup businesses.

3/9/16 SEEK Limited Workana LLC Workana LLC operates an online platform that enables companies, businesses, and individuals to hire and manage freelancers to complete their projects in Latin America.

3/2/16 Union Square Ventures, AS SmartCap, Jobbatical OÜ Jobbatical OÜ offers online services to post and search short-term employment opportunities. Localglobe LLP

3/1/16 Teakwood Capital, L.P. iiPay Ltd. iiPay Ltd. provides cloud-based payroll services for customers in the United States and internationally.

2/9/16 Matrix Partners, Sequoia Capital, Greenspring Namely Inc. New York, NY-based, Namely Inc. owns and operates an online human resource payroll and Associates, True Ventures, The Four Rivers benefits software platform. Group

2/4/16 LinkedIn Corporation Connectifier, Inc. Connectifier, Inc. operates an online platform for discovering and connecting with candidates.

2/4/16 Plug and Play Tech Center DoubleNet Pay, Inc. DoubleNet Pay, Inc. provides an application software that integrates with employer payroll providers to pay employees’ bills and fund savings plans.

1/25/16 JMI Equity CoreHR Limited CoreHR Limited develops and distributes cloud-based human resource (HR) and payroll software.

1/24/16 Seedcamp Beeline.com, Inc. Beeline.com, Inc. provides software solutions for sourcing and managing the extended workforce.

1/19/16 Matrix Partners, Index Ventures, Scale Venture Lever, Inc. Lever, Inc. develops and delivers a Web application for hiring. Partners, Correlation Ventures

1/15/16 Randstad Innovation Fund Focus Orange Technology B.V. Focus Orange Technology BV provides solutions for people data analytics.

HCM: HR TECHNOLOGY SECTOR REVIEW 64 Notes & Disclosures

65 Notes & Disclosures

Financial Terminology

- EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortization - EPS: Earnings Per Share - LTM: Last Twelve Months - NA: Not Applicable - NM: Not Meaningful - PE: Price to Earnings Multiple - Enterprise Value: Market value of equity plus total debt (including capitalized leases) plus preferred stock at book value minus cash and short-term investments.

Disclosures

The financial data and other information in DSP’s Human Capital Management Special HR Technology Review is derived from Capital IQ, company SEC filings and news releases and other news sources. We believe the information obtained from these sources is reliable, but we do not guarantee that the information herein is accurate or complete. This material was prepared by Delancey Street Partners, LLC and is for informational purposes only. This material is not a research report and should not be interpreted as such, or used in any way as the basis for making investment decisions of any kind. This report shall not constitute an offer to sell or the solicitation of any offer to buy any of the securities mentioned herein; past performance does not guarantee future results. Any performance mentioned does not include transaction fees and costs which would reduce an investor’s return.

Securities offered through SSG Capital Advisors, LLC Member SIPC | Member FINRA

 2017 Delancey Street Partners, LLC

HCM: HR TECHNOLOGY SECTOR REVIEW 66 - Page Intentionally Left Blank -

67 About Delancey Street Partners & Delancey Street Capital Partners

68 About Delancey Street Partners & Delancey Street Capital Partners

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HCM: HR TECHNOLOGY SECTOR REVIEW 69