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Ultimate Software Is All in the Family

July 2, 2009
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Related Topics: Corporate Culture, Human Resources Management Systems (HRMS/HRIS), Featured Article
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Ultimate Software is ultimately about the stuff of families.

Scott Scherr, founder of the HR software company and its CEO and chairman, is joined at the top by his brother Marc Scherr, the firm’s COO and vice chairman. Scott Scherr’s son-in-law, Adam Rogers, serves as senior vice president and chief technology officer.

Beyond these blood ties, CEO Scherr has sought to cultivate a close-knit community at his Weston, Florida-based firm. There are monthly group birthday celebrations, free tickets to Florida Marlins baseball games and night cruises on Fort Lauderdale’s inland waterways.

To Scherr, such feel-good measures for his nearly 950 workers ultimately translate into financial returns.

“The business is there to take care of the employees, and the employees are there to take care of the business,” he says.

This philosophy has something to do with the way Scherr’s father ran a data-processing firm in the New York City area. That 30-person company was like a clan, Scherr recalls. “I didn’t even know there was such a word as turnover,” he says. “The head of shipping was my godfather.”

Scherr has fired some employees for performance problems in the 19 years he has led Ultimate. But he’s proud to never have handed out pink slips, even though Ultimate suffered more than $45 million in losses earlier this decade.

This no-layoff history, combined with generous benefits, careful recruiting and office perks, helped Ultimate rank as the best medium-size company to work for in America in 2008 and 2009. The Great Place to Work Institute and the Society for Human Resource Management, which bestowed the honors, put Ultimate in the top 25 medium-size companies the previous three years as well.

Scherr started Ultimate in 1990, after stints at his father’s firm and at HR outsourcing giant ADP. He says his goal was not to become a software tycoon, but to prepare to be a good provider.

“I was never in it for the money,” he says. “I wanted to bring up my family and live happily ever after.”

But Ultimate and Scherr have prospered.

Thanks partly to an early transition to the popular on-demand software model and a commitment to customer service, Ultimate’s revenue more than doubled between 2005 and 2008, to $179 million. The firm has been profitable three of the past four years, and Scherr took home $3.6 million in total compensation last year.

As it happened, the company became part of Scherr’s family. Scherr, who has two grown daughters, says he has no plans to leave his company “baby.”

“It’s like I have three kids,” he says. “Joanne, Casey and Ultimate.”

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