If you are considering purchasing a Workday subscription, you are going to have to determine your number of Full-Service Equivalent (FSE) workers as this metric is how Workday prices their solutions. This FSE count is calculated on an enterprise level for core HCM and Finance solutions; however, some of the add-on solutions like Cloud Connect for Benefits may have lower FSE counts based on the number of actual users utilizing that particular service.
Workday’s Standard FSE Categories
Generally speaking, Workday uses the following worker categories:
- Salaried Workers
- Hourly Workers
- Part-Time Workers
- Contingent Workers
Why They Are Important
Each category has its own definition and applicable percentage that is applied to determine the FSE worker count. Salaried workers are counted at 100%, while part-time workers are counted at 25%. As an example, if you have 200 salaried workers and 100 part-time workers, your total FSE count would be as follows:
- Salaried Workers 200 * 100% = 200 FSE Workers
- Part-Time Workers 100 * 25% = 25 FSE Workers
- Total FSE Workers 200 + 25 = 225 Total FSE Workers
The worker categories are designed to account for the value an organization receives from the cloud services subscription based on their overall employee or worker count. Since each worker category provides different value to the organization, each category is assigned different percentages to account for any value differential. The sum of these categories represents the FSE worker count of the organization and this metric is used to determine pricing for core HCM and FI solutions.
Is There Flexibility?
While Workday might not always actively promote other worker categories, they will offer them to customers on a case-by-case basis. The key here is to review your specific workforce and group your workers by role or classification. For example, you might have labor or field workers, or seasonal workers for the holidays. The applicable percentage associated with these other types of workers can vary in range from 15% to 65%.
Workday will also use worker categories and percentages as a means for reducing costs during negotiations. Too many organizations focus on the discount percentage off list price or get hung up on having to include all of their employees on an enterprise level. But depending on the size of your workforce, substantial savings can also be achieved simply by categorizing your workers properly.
Keep in mind that your worker categories can also provide for future cost savings as you grow and add employees, since you will already have these defined in your agreement and available for your FSE annual growth reporting, future subscriptions, and renewals. Be sure to include clear definitions for all worker categories to avoid any ambiguity in future years when memories of the negotiations fade.
When negotiating with Workday, keep in mind the importance and potential value of determining your FSE workers as this does have a significant impact on pricing, both short-term and long-term. The key variables to review are the:
- Worker categories
- Applicable percentage assigned to each category, and
- The definitions for the worker categories.
Also, if you have workers that do not easily fit into one of the worker categories, you can request Workday modify the definition of a Workday category or even create a new category with a custom definition that addresses your unique workers. Just be prepared to clearly articulate why these workers are different and do not fit within the defined worker categories and the applicable percentage that should be assigned to them based on the level of value they provide to your organization.
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