History of HR software

1888 to today · 12 chapters · 30 dated events · 25 sources

The short answer

HR software started with the time clock, which Willard Bundy built in 1888, and with payroll, one of the first jobs given to business computers. LEO ran the J. Lyons payroll by late 1953, and General Electric programmed payroll for its UNIVAC from 1954. ADP and Paychex ran payroll for smaller firms. PeopleSoft, founded in 1987, put HR records on client-server systems, and Workday, founded in 2005, moved HR to the browser by subscription.

Human resources information system (HRIS): Software that keeps a record for each employee, such as hire date, job, pay, benefits and hours worked, and feeds payroll.

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The story

Today· Your shop

Where it starts

Every shop with hourly workers runs the same loop each week. People clock in. They work a shift. Someone adds up the hours, applies the overtime rules, takes out the taxes, and cuts the checks. For more than 130 years, people have built machines and software to run that loop. This is the story of how the clock, the payroll and the personnel file came apart, and what it takes to make them agree.
1888· Auburn, New York

The time clock

It starts with a clock. In 1888, Willard Bundy, a jeweler in Auburn, New York, made a clock that recorded when each worker arrived and left. Sources differ on whether that year marks the invention or the patent. His brother Harlow built a company to make them. By 1911, the Bundy business had been folded into the company that later became IBM. For the next 90 years, a card in a rack was the record of the hours.
1937 to 1943· Washington

Rules on the paycheck

Then the law moved into the paycheck. In January 1937, employers began collecting Social Security tax, 1 percent from the worker and 1 percent from the company. The Fair Labor Standards Act of 1938 required time and a half past 44 hours a week, stepping down to 40 hours by 1940. In 1943, the Current Tax Payment Act made employers withhold income tax from every check. Adding up the hours was now the easy part.
1953· London

The tea shop payroll

Payroll was one of the first jobs ever given to a business computer. J. Lyons, a British tea shop and bakery company, built its own machine, called LEO. By late 1953, LEO ran the regular weekly payroll. It handled tax, national insurance, loans, holiday and sick pay. It even counted the notes and coins needed to fill each pay packet. A clerk took about 8 minutes per employee. LEO took about a second and a half.
1954· Louisville, Kentucky

Payroll comes first

In America, payroll came first too. In January 1954, General Electric installed a UNIVAC at its Appliance Park plant in Louisville, Kentucky. It was the first electronic computer at an American business. Arthur Andersen wrote the payroll program. Getting it to run reliably took until about 1956, and sources differ on the exact date. Payroll is easy to describe. Getting it exactly right, every week, for every person, is hard.
1949 to 1971· The payroll bureau

Send it out

Most companies could not buy a computer, so they sent their payroll out. In 1949, Henry Taub started Automatic Payrolls in Paterson, New Jersey, working first with bookkeeping machines. Renamed Automatic Data Processing, it went public in 1961. In 1971, Tom Golisano started Paychex in Rochester, New York, for companies with fewer than 50 employees, the ones the big bureaus priced out. The shop sent in its hours. Checks came back.
1958 to 1985· Time and attendance

The clock goes electronic

By 1958, time clocks brought IBM less than 3 percent of its revenue, and IBM sold that business to Simplex. The clock on the shop wall barely changed. In 1977, Mark Ain founded Kronos in Massachusetts to build a time clock around a microprocessor. The first one shipped at the end of 1979. By 1985, Kronos sold time and attendance software for the personal computer. The punches were now data, ready for payroll.
1974 to 1992· HR records

The personnel file

Payroll knew what to pay people. It knew little else. Hire dates, job history, training, reviews and benefits lived in paper folders in a cabinet. In 1974, Michael Blair founded Cyborg Systems in Chicago to sell HR software. In 1985, SAP released its human resources module to customers. In 1992, Ceridian came out of Control Data, with one of the large payroll bureaus. The cabinet slowly became a database.
1987 to 2005· Client-server HR

One record per person

In 1987, Dave Duffield and Ken Morris founded PeopleSoft. Their HR software ran on the new client-server machines: a database on a server, and screens on desk computers across the company. HR, benefits and payroll could work from one record for each employee. Large companies bought it through the 1990s. In June 2003, Oracle made a hostile bid. In January 2005, after 18 months, Oracle closed the deal for about 10.3 billion dollars.
1994 to 2012· Recruiting

Hiring goes online

Hiring changed next. In April 1994, Jeff Taylor launched the Monster Board with about 200 job openings. Job ads began moving from the Sunday paper to the web. Applications arrived by the hundred, and employers needed software to sort them. Taleo began in Quebec City in 1996 as a French-language job board and grew into applicant tracking for large employers. In 2012, Oracle bought Taleo for about 1.9 billion dollars.
2005 to 2020· By subscription

Rented HR

Then HR software moved to the browser and was rented by the month. In 2005, Duffield and Aneel Bhusri founded Workday. For small companies, ZenPayroll started in 2011 or 2012, depending on the source, and renamed itself Gusto in 2015. In 2020, Kronos merged with Ultimate Software to form UKG. The clock, the payroll and the HR file could each be a monthly bill, from a different company, each with its own list of your people.
Today· Your shop

Three systems, one week

So here is the shop today. The time clock says one thing. The schedule says another. Payroll says a third, and someone fixes it by hand before the checks go out. Each system keeps its own copy of every worker. The loop is the same as it was in 1888. Clock in, work the shift, add up the hours, apply the rules, pay people. It can run on one system that agrees with itself. One you own.

Key dates

Where reputable sources disagree on a date or on who was first, the row says how.

Year	Thread	What happened
1888	Time clock	Bundy’s time clock. Willard Bundy, a jeweler in Auburn, New York, makes a clock that records when each worker arrives and leaves. Each worker has a key. Sources differ: Wikipedia dates the invention to November 20, 1888 and the patent to 1890. Other accounts describe a patent in November 1888. Source
1889	Time clock	Bundy Manufacturing Company. His brother Harlow Bundy organizes a company and starts making time clocks in quantity. Source
1900	Time clock	International Time Recording. Bundy’s time recording business and two others are combined into the International Time Recording Company. Source
1911	Time clock	Into the company that becomes IBM. ITR, Bundy and two other companies form the Computing-Tabulating-Recording Company, later renamed IBM. Source
1937	Labor law	Social Security tax collected. January 1937. Employers collect the first Social Security taxes: 1 percent from the worker and 1 percent from the employer, on the first $3,000 of wages. Source
1938	Labor law	Fair Labor Standards Act. A federal minimum wage of 25 cents an hour, and time and a half past 44 hours a week, stepping down to 40 hours by October 1940. Sources differ: The statute, as quoted in a 1940 court opinion, steps from 44 to 42 to 40 hours, reaching 40 in October 1940. A 1938 newspaper account gave 40 hours a year earlier. Source
1943	Labor law	Withholding from every paycheck. The Current Tax Payment Act, signed June 9, 1943, makes employers withhold federal income tax from wages starting July 1, 1943. Source
1949	Payroll	Automatic Payrolls, Inc.. Henry Taub starts a payroll service in Paterson, New Jersey, at first using bookkeeping machines and calculators. Source
1953	Payroll	LEO runs the Lyons payroll. Regular payroll moves to LEO by late 1953, including tax, national insurance and the notes and coins for each pay packet. A clerk took about 8 minutes per employee; LEO took about 1.5 seconds. Source
1954	Payroll	UNIVAC arrives at GE Appliance Park. January 1954, Louisville. The first electronic computer at a US business. Arthur Andersen programs the payroll. Sources differ: Sources differ on when the GE payroll first ran reliably. Most accounts say it took until about 1956. Source
1958	Payroll	Automatic Data Processing. Automatic Payrolls takes the name Automatic Data Processing as it moves clients’ payroll onto machines. Sources differ: Sources give 1957, 1958 or 1961 for the name change. Source
1958	Time clock	IBM sells its time clocks. The time equipment division is under 3 percent of IBM’s revenue. Thomas Watson Jr. sells it to the Simplex Time Recorder Company. Source
1961	Payroll	ADP goes public. With about 300 clients and 125 employees. Source
1971	Payroll	Paychex. Tom Golisano starts a payroll service in Rochester, New York, for companies with fewer than 50 employees, which the big bureaus priced out. Source
1974	Personnel records	Cyborg Systems. Michael Blair founds Cyborg Systems in Chicago. Hewitt buys it in 2003. Source
1977	Time clock	Kronos is founded. Mark Ain starts Kronos in Massachusetts to build a time clock around a microprocessor. Source
1979	Time clock	The first electronic Kronos clock ships. December 1979. Inventor Larry Baxter replaces the electromechanical clock with an electronic one. Source
1985	Personnel records	SAP releases its HR software. After 3 years of work, SAP’s human resources module for its R/2 mainframe system is released to customers. Source
1985	Time clock	Time and attendance on the PC. Kronos delivers its first time and attendance product for the personal computer. Source
1987	Personnel records	PeopleSoft is founded. Dave Duffield and Ken Morris start with HR software for client-server machines. Source
1992	Payroll	Ceridian. Ceridian is formed from the restructuring of Control Data. Its payroll service bureau competes with ADP. Source
1994	Recruiting	The Monster Board. April 1994. Jeff Taylor launches a job site with 20 clients and about 200 job openings. Source
1996	Recruiting	Viasite, later Taleo. Martin Ouellet starts a French-language job board in Quebec City. It becomes Taleo, applicant tracking for large employers. Source
1999	Recruiting	Monster.com. TMP Worldwide merges the Monster Board with Online Career Center. Source
2005	Personnel records	Oracle completes its PeopleSoft takeover. January 7, 2005, after a hostile bid that began in June 2003. About $10.3 billion. Source
2005	Cloud HR	Workday. Duffield and Aneel Bhusri start again: HR and finance in the browser, paid by subscription. Source
2011	Cloud HR	ZenPayroll. Joshua Reeves, Tomer London and Edward Kim start payroll software for small businesses. It launches in California in December 2012. Sources differ: Wikipedia gives November 2011 as the founding date. Other accounts say 2012, the year the service launched. Source
2012	Recruiting	Oracle buys Taleo. Announced February 2012, for about $1.9 billion. Source
2015	Cloud HR	ZenPayroll becomes Gusto. September 2015. The new name comes with health benefits and workers’ compensation added to payroll. Source
2020	Cloud HR	Kronos and Ultimate become UKG. The merger closes April 1, 2020. Time clocks, payroll and HR under one owner, by subscription. Source

Questions

What was the first HR software?

Payroll. J. Lyons ran its regular payroll on the LEO computer by late 1953, and General Electric programmed payroll for its UNIVAC from 1954. Getting the GE payroll to run reliably took until about 1956.

When was the time clock invented?

Willard Bundy, a jeweler in Auburn, New York, built a clock that recorded when each worker arrived and left in 1888. Sources differ on whether that year marks the invention or the patent. The Bundy business later became part of IBM.

When was ADP founded?

Henry Taub started Automatic Payrolls in Paterson, New Jersey, in 1949, to run payroll for other companies. It was later renamed Automatic Data Processing, or ADP.

Who founded PeopleSoft and Workday?

Dave Duffield and Ken Morris founded PeopleSoft in 1987. Oracle completed a hostile purchase of PeopleSoft in January 2005. Duffield and Aneel Bhusri founded Workday the same year.

Why do the time clock and payroll disagree?

In many shops the time clock, the schedule and payroll are separate systems, each with its own list of workers, so someone corrects the hours by hand before the checks go out.

Sources

Running the loop across too many systems?

KoldOps builds the way a shop already runs into one system, quote to invoice, and hands over the code and the data. Tell us what you run today. Kol reads every message.

Write to us

The short answer

Watch the film

The story

Where it starts

The time clock

Rules on the paycheck

The tea shop payroll

Payroll comes first

Send it out

The clock goes electronic

The personnel file

One record per person

Hiring goes online

Rented HR

Three systems, one week