Negotiating Your First Workday SaaS Subscription: Top 15 Strategies
1. Master Workday’s Licensing Model (FSE) and Optimize Counts
What to think about: Workday prices its software per employee using a Full-Service Equivalent (FSE) metric – essentially a per-employee-per-year subscription. Understand how FSE is calculated and negotiate how your workforce is counted.
Workday allows different worker categories (full-time, part-time, contractors, seasonal), each counted as a fraction of an FSE. You should define these categories upfront so that non-full-time workers count at a lower percentage (e.g., a part-timer might count as 0.25 of an FSE).
Also, research typical price-per-FSE benchmarks for companies your size. Workday is one of the priciest SaaS options (~$400–$500 per employee annually at scale), so you need to know a competitive rate. Don’t accept one-size-fits-all metrics or pricing without scrutiny.
Practical impact: Every employee counted (or miscounted) translates directly to cost. If you don’t get FSE definitions right, you pay for more “employees” than you have. Optimizing FSE counts can dramatically lower your billable headcount. For example, including thousands of part-time or seasonal workers at reduced weighting can cut your total FSE count by a significant percentage.
That means immediate savings, given Workday’s high per-employee fees. Conversely, locking in a lower FSE baseline protects you if prices rise – fewer units mean less exposure.
Ensure you also negotiate volume tier discounts based on your workforce size; Workday offers better per-unit rates at higher volumes, so push to be priced in the lowest band possible for your employee count. The goal is to minimize the counted FSEs and maximize the discount per FSE, lowering your annual subscription.
Example: Suppose you have 2,000 full-time and 1,000 part-time employees. If Workday counts everyone the same, you’d pay for 3,000 FSEs.
But if you negotiate a 25% weight for part-timers, those 1,000 counts as only 250 FSE. Your total drops to 2,250 FSE – a 25% reduction in licensable headcount. Table: Optimizing FSE Count with Worker Categories:
| Worker Category | Employee Count | Weight in FSE Calc. | Billable FSE Count |
|---|---|---|---|
| Full-Time | 2,000 | 100% (1.0) | 2,000 |
| Part-Time | 1,000 | 25% (0.25) | 250 |
| Total | 3,000 | — | 2,250 |
In this example, by adjusting the definition of part-time workers, the company avoids paying for 750 extra FSEs (3,000 vs 2,250). The bottom line is to assist with custom worker categories and nail down the FSE calculation in the contract to prevent overcounting. This one action can save hundreds of thousands of dollars over the term, given Workday’s per-employee pricing.
2. Balance Term Length with Flexibility
What to think about: Set the subscription term strategically. Workday’s standard initial term is often 3 years. They may offer discounts for longer deals (5+ years), but a longer-term lock locks you in. Consider your company’s roadmap: do you anticipate major changes or new module needs in a few years? If so, a shorter initial term (e.g., 3 years) gives you an earlier chance to renegotiate or adjust when that time comes.
A longer term could make sense to secure pricing, but only if you also secure protections (like locked pricing or exit options). Avoid committing to an excessive term without escape hatches. Also, plan out renewal terms: Workday might push for multi-year renewals (another 3–5 years) when the time comes. As the customer, you should choose a term length that aligns with your IT and business strategy, not just what Workday prefers.
Practical impact: Term length = leverage and flexibility. A shorter term means you’ll be back at the negotiating table sooner, which is good if you expect to expand or want to re-benchmark pricing. It allows you to course-correct if the relationship or product doesn’t meet expectations.
A longer-term (e.g., 5 years) might secure a slightly better upfront discount or postpone the hassle of renewal, but it drastically reduces your flexibility if things go wrong. For instance, if after 2 years you find the need for a different approach or if Workday underdelivers, a long-term contract leaves you stuck.
You risk being locked into older pricing structures or modules while Workday’s offerings evolve. If you do opt for a longer term, demand concessions, e.g., a bigger discount, capped price increases, or rights to terminate for performance issues. Make any extension worth your while in tangible value. Conversely, if you stick to 3 years, you maintain the leverage to renegotiate with the latest market conditions sooner. It’s often wiser for first-timers to start with 3 years, then evaluate extending at renewal once you have experience, unless Workday’s long-term offer is too good to pass up.
Example: A global enterprise initially considered a 5-year deal for Workday to lock in rates. However, they planned to roll out additional Workday modules in year 3.
By choosing a 3-year term, they gave themselves a natural opportunity to renegotiate when adding those new modules, rather than waiting until year 5. The flexibility allowed them to secure better pricing on the expansion (since it coincided with renewal) and adjust contract terms with the benefit of three years of usage data.
Key takeaway: Don’t let Workday’s push for a longer commitment override your need for flexibility. If you agree to a long-term, only do so in exchange for significant benefits – otherwise, keep the initial term shorter and more manageable.
3. Negotiate Baseline Commitments and Growth Safeguards
What to think about: Carefully define your baseline user count and growth terms. In Workday contracts, you commit to a minimum number of FSEs (employees) as your baseline. This is the minimum billable headcount you’ll pay for, even if your employee count drops during the term.
Picking a realistic baseline is critical since there’s typically no “true-down” (downward adjustment) allowed mid-term. Avoid an overly high baseline that overestimates your workforce. Additionally, address how growth will be handled: negotiate provisions for if your employee count increases. Workday can include growth bands or pre-negotiated discounts for overage, but you must ask for it.
For example, you might negotiate that if you exceed your baseline by up to 10%, those extra FSEs get a certain discount, and higher growth tiers get bigger discounts. This kind of growth clause isn’t standard in their first offer; it’s something you should proactively request. Essentially, plan for both contraction and expansion: how are reductions handled (usually not until renewal), and how are additions priced? Ensure the contract language covers these scenarios so you’re not caught off guard.
Practical impact: Overcommitting on your baseline means paying for “ghost” users, while unplanned growth can lead to sticker shock. If your company has a downturn or divestiture and your headcount shrinks, without concessions, you still pay the full baseline until renewal, wasting budget on unused licenses.
Conversely, if your headcount grows beyond the baseline, every additional FSE could be charged at the list price if you haven’t locked in a rate or discount for the excess. That can make expansion far more expensive than anticipated. By negotiating a growth allowance or pricing tier, you create a buffer.
For instance, with a growth discount table in place, if you grow 15% over the baseline, maybe those extra workers come at a pre-agreed 5% discount instead of the full price. This protects your budget during unexpected growth spurts. It also avoids situations where success (hiring more employees) results in a punitive cost increase. In short, well-crafted baseline and growth terms ensure your subscription cost scales fairly with your business – no nasty surprises whether you shrink or grow.
Example: A company signed for 10,000 FSE as a baseline. In the mid-term, they acquired another firm, adding 1,500 employees (15% growth). Because they had negotiated a growth band clause, those extra 1,500 were priced at a 10% lower rate than the baseline FSEs. This saved them a significant sum versus paying full price for each new employee. Conversely, another company that didn’t negotiate growth terms saw a spike in costs with an acquisition, as every new employee was billed at the top rate.
Lesson: lock in how additions are priced. Also, consider a clause for downturns: while Workday often resists lowering the baseline mid-term, one can negotiate a modest relief or at least the right to reset the baseline at renewal if headcount drops.
The key is to set a baseline you’re comfortable with, and build in pre-negotiated rates for reasonable growth to avoid penalties for success.
4. Co-Terminate New Modules and Plan Future Expansion
What to think about: Keep your contract dates aligned. As you adopt additional Workday modules or products (Recruiting, Learning, Planning, etc.) over time, insist on co-termination – meaning every add-on ends on the same date as your main subscription. Workday will prorate fees for off-cycle additions so they renew with your core. Co-terming is crucial to prevent a staggered mess of different end dates.
Also, if you anticipate adding a particular module in the next year or two, negotiate its terms now. It’s often possible to include a future product option or addendum that locks in pricing (and discounts) for a later purchase.
For example, you might secure the right to add Workday Adaptive Planning at $X per FSE next year with the same discount you’re getting now. That way, when you’re ready to expand, the key terms are pre-agreed. Essentially, think ahead: align everything to one renewal date and get future additions in writing.
Practical impact: Co-termination maximizes your leverage and simplifies management. When all modules renew together, you have a single big renewal negotiation where you can evaluate your whole portfolio and use the contract’s full value as leverage.
If modules had different end dates, Workday could corner you into renewing things piecemeal with less negotiating power (since you’d be loath to let one critical piece expire early). It also reduces administrative overhead – one renewal cycle instead of many. Meanwhile, pre-negotiating future expansions protects you from the “new customer” pricing shock later.
When you’re already locked in and want to add something mid-term without prior terms, Workday knows you have less choice and might charge a premium. But if you’ve locked in a price now (when you have competitive leverage), you avoid that premium.
It also helps with budget predictability – you know what that module will cost next year. In short, co-terming and planning ahead ensure you won’t be nickel-and-dimed on separate timelines and that any growth in scope happens on financially favorable terms.
Example: Company A added Workday Learning in year 2 of their HCM contract but did not co-term. Learning ended up on its 3-year term starting that year, meaning it came up for renewal one year before HCM. This staggered renewal weakened their negotiating position – Workday had less incentive to give concessions on Learning since the core HCM wasn’t up yet. Company B, by contrast, insisted that when they added Learning mid-term, the contract would prorate and end alongside HCM.
Company B could negotiate HCM and Learning together as a package at the main renewal, giving them more clout.
5. Bundle Strategically – Only What You Need
What to think about: Workday often encourages buying a broad bundle of modules (HCM, Financials, Payroll, Recruiting, Learning, etc.) as a unified suite. Bundling can yield better discounts across the board, but it comes with a risk: reduced flexibility to drop or swap modules.
Recent Workday master agreements sometimes prevent dropping a module mid-term; even at renewal, they may pressure you to keep the bundle intact. You must balance between locking in a good bundle price and not paying for things you won’t use (so-called shelfware).
Only commit to modules from which you are confident you will actually deploy and derive value. If Workday proposes a big bundle “deal,” scrutinize each component: do you truly need it now? If not, it might be better to exclude it or at least ensure you have the right to remove it later. Clarify what happens at renewal in the contract. Can you drop a module then without penalty? If not, negotiate that ability.
Bundling is optional – don’t let the vendor make it feel mandatory. It should be on your terms: bundle where it makes sense, not just for a bigger sale.
Practical impact: A smart bundle can save money upfront (bulk discount) and simplify procurement, but a bloated bundle ties up the budget in unused functionality. The danger is signing up for too many modules at once and finding that one or two are not adopted internally, yet you’re stuck paying for them until the term ends. This is a common source of overspending.
Moreover, suppose your contract prohibits dropping pieces of the bundle. In that case, you might also lose leverage at renewal (Workday could insist you keep everything or risk losing bundle discounts on the rest). By bundling only what you need, you maintain agility. If you must introduce a best-of-breed solution for one area, you won’t be trapped by an all-or-nothing suite. Financially, avoiding unnecessary modules prevents “shelfware” costs – paying license fees for something shelfed/not implemented.
It’s usually better to start with a core set of modules and add more later than to over-buy upfront; Workday will often allow you to buy more later at similarly negotiated discounts if you set that expectation. In summary, an effective bundling strategy can lower costs, but an overly aggressive bundle undercuts the value of those savings by wasting spend on unneeded software.
Example: One enterprise eagerly signed up for Workday’s full platform bundle (HCM, Finance, Recruiting, Learning, and more) to get an attractive bulk discount. Three modules remained barely used after two years. Come renewal, Workday argued those modules were part of the bundle and expected renewal for all of them.
The customer had limited contractual ability to drop them and ended up renewing some unused modules – classic shelfware. Contrast that with another company that took a phased approach: they licensed HCM and Payroll first, knowing they’d tackle Learning and Recruiting later. Workday pushed to include Learning in the initial deal, but the company declined, only adding it once they had a rollout plan.
They bundled what made sense (core HR+Payroll) and left the rest for future phases. As a result, every module they paid for was in use, and at renewal, they could decide on each product’s fate. They also ensured the contract allowed them to carve out a module at renewal if needed, without losing discounts on the remainder.
Key insight: Resist the allure of an oversized bundle. Bundle where you have immediate needs and ensure you’re not handcuffed to underperforming components. It’s easier to add later than to try to get rid of something you already contracted.
6. Expose Hidden Costs Early
What to think about: Look beyond the subscription fee. A Workday SaaS deal involves more than just licensing – significant ancillary costs may not appear in the proposal unless you ask.
Key areas to investigate include implementation and configuration (often delivered by Workday partners and can cost as much as your first year’s subscription); integration costs (connecting Workday to payroll providers, ERPs, etc., which might require additional modules or middleware); additional sandbox or test environments (Workday provides a limited number of tenants – extra ones may cost extra); training and change management (Workday training packages or resources which might be an added expense); and costs for new features or modules down the road (Workday might split out new capabilities into separate SKUs).
These “hidden” costs are not necessarily in the Workday subscription contract (some are in SOWs with integrators, etc.), but you must surface them during negotiations.
Ask Workday and your implementation partner what additional costs to expect and plan for. Where possible, negotiate to include or cap these costs – for example, ask for a certain number of free training hours or include an extra sandbox environment at no charge.
Practical impact: If you ignore these, your total cost of ownership (TCO) can balloon unexpectedly. It’s not uncommon that a Workday implementation’s service fees rival the software cost, meaning your budget needs might double if not accounted for.
By identifying these costs upfront, you can budget accordingly or negotiate offsets. For instance, knowing that you’ll need a Workday Extended Sandbox (premium test environment) allows you to negotiate it into the contract or at least get a quote, avoiding a surprise $50K+ add-on later.
Similarly, suppose a critical integration (say with SAP or a payroll system) requires a Workday Cloud Connector that isn’t included. In that case, you can negotiate a discount on that module or ensure your team builds the cost into the project. The practical impact of managing hidden fees is fewer budget overruns and a smoother deployment.
It also strengthens your negotiation stance: by showing Workday you’re aware of the full picture, you can potentially get concessions (e.g., “We know implementation will cost us $X; can you provide some free training or a reduced first-year fee to offset that?”). Ultimately, shedding light on all costs means no unpleasant financial surprises after you’ve signed.
Example: A large enterprise discovered during negotiations that the Workday implementation services from a partner would cost over $1 million, about equal to the first-year subscription fee. Forewarned, they negotiated some givebacks: Workday agreed to include an additional sandbox environment for free (worth tens of thousands), and the partner added extra training sessions at no charge.
Another company failed to ask about integration costs and later found out they needed a paid connector for their payroll system. This oversight led to an unplanned expense mid-project. Lesson: For each component outside the core subscription (data migration, integration, testing, user training), either negotiate it into your deal or ensure you budget for it.
As an example of preempting hidden fees, one CIO asked Workday during talks, “Do we need any additional Workday modules or fees to integrate with our existing HR payroll?” Upon hearing that a connector would normally cost extra, they bundled that connector license into the initial deal at a discount.
By being diligent, they prevented a future budget request. Always approach a Workday contract as more than a license: it’s a project with many cost components, all negotiable or at least plannable.
7. Cap Price Escalations and Annual Uplifts
What to think about: Lock in price increase limits. SaaS vendors like Workday often incur annual price escalations to cover “innovation” and inflation. A typical Workday contract may say fees increase yearly by CPI (inflation) + an additional X% (e.g., CPI + 4%).
In times of low inflation, this might have meant ~5% yearly increases, but with recent inflation spikes, it could become nearly 10% in one year.
If you do nothing, these compounding increases will significantly raise your costs at renewal. So, negotiate a cap or fixed ceiling on any annual price increases. For instance, you might cap increases at 3% per year, regardless of inflation, or even negotiate a flat fee for the initial term (no increases at all).
Most enterprises can successfully push back on open-ended CPI+ indexes and get a reasonable 3-5% cap. If possible, bring this up in the initial deal – it’s easier to get when Workday is eager to win your business rather than at renewal when you’re already locked in.
Also, be wary of any “innovation index” justification for increases; ask what tangible value you get for that uplift. Your guiding principle: future price hikes should be predictable and constrained.
Practical impact: Capping escalations can save millions over the contract’s life. An uncapped CPI+4% clause means that if inflation is high, your cost could jump dramatically year over year. For example, a $750K annual subscription can grow to over $1.15M by year 5 under a 9-10% annual increase scenario.
By negotiating a 3% cap, that same contract might only reach around $845K by year 5 – a huge difference. One company that insisted on a maximum 3% yearly escalation (instead of the ~9% Workday originally proposed) saved about $800,000 over a 5-year term.
That’s real money that stays in the IT budget.
Example: Company A’s initial Workday offer included CPI + 4% annual increases, no cap. High inflation effectively meant ~8-9% yearly fee hikes. On a $1M/year contract, by year 3, they’d be paying around $1.17M and climbing.
They pushed back and got Workday to agree to a flat 3% yearly cap. By year 3, they paid $1.09M, and they wrote into the contract that even at renewal, the starting point would be based on those capped increases. Over five years, the difference was nearly a million dollars saved.
Another organization negotiated a zero increase for the first two years (to account for ramp-up and limited initial use) and a 3% cap thereafter. The key was raising the issue early and being firm that uncapped escalators were a deal-breaker.
Unchecked price hikes are unacceptable, no matter how great the software, and vendors know customers will push back.
The result for these companies was a far smoother cost trajectory and happier finance teams. As one CIO said, “We wouldn’t sign without a cap, period.” Workday ultimately wanted the deal, so they yielded. Always get those uplifts capped or fixed—it’s Negotiation 101 for SaaS.
8. Avoid Auto-Renewal Traps – Plan Renewal Negotiations Early
What to think about: Watch out for automatic renewal clauses. Many Workday subscription agreements auto-renew by default for another term (often 12 months) unless you give advance notice of non-renewal or intent to renegotiate.
The notice period is typically 60 to 90 days before the term ends. It is critical to diary this date and treat it as a hard deadline.
You should plan to formally notify Workday well before this window that you intend to review or renegotiate terms. Even if you fully expect to continue with Workday, never let a term lapse into auto-renewal without discussion.
Vendors count on complacency; if you miss the notice, you lose the chance to negotiate and are locked in at whatever terms are already in the contract (including any built-in price increases).
So, establish a renewal preparation timeline: start an internal review of your usage, which needs to be completed at least 12 months in advance, engage stakeholders, and reach out to Workday with your intent to negotiate before that notice deadline. Treat the renewal as a new sourcing project, not a rubber stamp.
Practical impact: If you inadvertently allow an auto-renewal, you forfeit your negotiating leverage. Workday could continue charging the same or a higher price without new concessions since you’re committed to the next term. You also lose the opportunity to consider alternatives or push for improvements.
By proactively managing the renewal, you ensure competitive tension – Workday knows you are evaluating the deal. Also, starting early (a year or more in advance for large enterprises) gives you time to gather benchmarks, evaluate new modules or competitors, and even run an RFP if needed. Early planning means you won’t be pressured by time, which often favors the vendor.
Additionally, sending a notice of intent to renegotiate (rather than silently auto-renewing) signals to Workday that they can’t take your account for granted – you are expecting a discussion on pricing and terms. This often leads them to come to the table with renewal proposals proactively.
In short, avoiding the auto-renew trap keeps you in control of the renewal process. It also prevents the “Oh, we forgot to cancel in time, now we’re stuck for another year.” That mistake can cost dearly, especially if better deals or needed contract changes are on the table.
Example: A procurement manager sets a calendar reminder 12 months before their Workday term ends. Nine months out, they formally inform Workday that the company will not auto-renew under existing terms and wishes to renegotiate.
This allowed them to negotiate a new agreement (ultimately securing a better discount and updated terms) instead of passively rolling over. Another firm wasn’t as vigilant: they realized a few weeks before expiration that the contract auto-renew with 90 days’ notice required—by then, it was too late.
They locked in an extra year with a 7% price increase, which they could have fought. The difference is simply being proactive. For best results, start internal prep a full year ahead: assess how much Workday you’re using, your satisfaction, and what you might want to change.
Then, give formal notice (in writing) of your intent to review terms well before the deadline. Even if you love Workday and plan to stay, this step forces a conversation where you can seek better pricing or new concessions. It costs nothing and can save a lot. A CIO advisor said, “No one ever got a better deal by silently auto-renewing.”
9. Preserve Flexibility to Reduce Scope at Renewal
What to think about: Ensure you can adjust your subscription at renewal time. Vendors prefer you only grow and never shrink, but it’s important to have the right to reduce licenses or even drop modules if they’re not needed or delivering value. Check if your contract allows you to renew with fewer FSEs or remove a product.
Workday often sets the expectation that you’ll renew at or above the current scope. However, you can negotiate flexibility: for example, resetting your FSE baseline to actual employee counts at renewal (especially if your workforce declined), or discontinuing a specific module at renewal without penalty.
It’s wise to clarify this during the initial negotiation (or certainly by the renewal negotiation). If Workday’s standard terms don’t allow dropping a module because it was part of a bundle, push for an exception or a shorter term on that module. Contract language should not permanently bind you to something you no longer need.
Use your leverage to keep future options open, whether scaling down or swapping out products.
Practical impact: Business conditions change – you might divest a division (reducing headcount) or decide a particular Workday module isn’t delivering ROI. If your contract forces you to pay for the original quantities and components regardless, you’ll overspend on unused capacity or features.
We saw this, especially during economic downturns: companies with layoffs were stuck paying for pre-layoff employee counts because their Workday agreement had a fixed minimum and no renewal adjustment clause. Negotiating the ability to true-down at renewal or at least not pay for departed employees would have saved them millions.
Similarly, the freedom to drop a poorly adopted module means you can reallocate that budget to something more useful (or negotiate a swap). If Workday knows you have the contractual right to walk away from a module, they have an incentive to ensure you’re happy with it (or to price it more attractively at renewal).
On the flip side, you lose leverage if you allow them to assume everything stays in place. Retaining flexibility essentially forces a conversation about value: each contract piece must be re-justified. Practically, this ensures you’re only paying for what you need and use, especially in the long run.
Example: During renewal talks, a global firm pointed out that their employee count had dropped 15% due to a recent spin-off. Initially, Workday’s stance was, “Your baseline was 20,000 FSE, so that remains the minimum.” However, the customer had smartly negotiated a clause that, at renewal, they could reset the baseline to current counts.
They invoked this, saving a huge sum by aligning licenses to actual usage. In another case, a company had purchased Workday Learning as part of a bundle but found low adoption. At renewal, they wanted to drop it. Workday resisted, noting their contract tied Learning into the suite.
Because the customer had not secured a carve-out right, it was an uphill battle – they ultimately negotiated a compromise to swap Learning for another module rather than outright removal. This highlighted the importance of having that flexibility explicitly.
After that experience, their new contract included language allowing them to terminate an add-on module at renewal with notice.
The lesson: make sure your renewal isn’t an “all or nothing” proposition. Get terms that let you resize or reshape your Workday footprint to match your reality without financial penalty. You’ll thank yourself later if your needs change.
10. Secure Data Access and Exit Rights
What to think about: Protect your data and exit strategy in the contract. Workday will host critical HR/financial data for you, so it’s essential to spell out data ownership, access, and post-termination handling. First, ensure the agreement explicitly states that your company owns its data and can retrieve it anytime. This is usually standard, but double-check.
Next, define how you can export your data and in what format. Ideally, negotiate that if you decide to leave Workday, you will have a window (e.g., 60 days in read-only mode) to export all your data after the subscription ends. Also, discuss any transition assistance – will Workday (or a partner) help you migrate data to a new system, and under what terms?
While SaaS vendors don’t often volunteer much here, you might secure a commitment for reasonable support. Ensure there are no exit penalties – you should be able to leave at the end of the term without extra fees (aside from maybe data extraction services if you ask for them).
Clarify data retention and deletion: how long will Workday keep your data after termination, and can you extend that if needed for compliance? In short, plan the divorce while you’re still in the honeymoon phase – set terms so that if you ever break up with Workday, it’s on your terms, with your data safely in hand.
Practical impact: This is about avoiding vendor lock-in and safeguarding business continuity. If you neglect data access clauses, you could face a nightmare later: imagine your contract ends, your HR data is immediately inaccessible, or you find out it costs a fortune to retrieve it. By baking in an orderly exit plan, you ensure that you can transition to another system or retain historical data without service disruption.
Knowing you can extract all your records easily also gives you leverage in ongoing negotiations – Workday knows you have the freedom to leave, which can keep them more honest on pricing and service. Additionally, owning your data means you can use it in data lakes or analytics outside Workday during the term (nothing in the contract should block that).
And if you require extended data retention for legal reasons, negotiating it now avoids panic later. Essentially, strong data and exit terms remove a significant switching cost. Even if you never intend to leave, having that escape hatch improves your bargaining power. It also aligns with good governance: you ensure corporate data is always under your control, not a hostage to contract timelines.
Example: A company negotiated a clause that “upon non-renewal, the customer may access the Workday environment in read-only mode for 60 days to retrieve data”. When they later decided to switch to another platform, this clause was invaluable – they had two months post-contract to extract every last record and audit trail, ensuring a smooth migration.
Another firm asked Workday to commit to assisting with data export if needed and got an agreement that Workday’s support team would provide data dumps in CSV format for a fixed fee cap. On the flip side, a less prepared organization ended their contract and discovered they’d missed the narrow window to pull data – Workday had deleted their instance after 7 days per standard policy.
They had to scramble to restore from backups. This underscores the point: get it in writing how long data will be retained and accessible after termination. Also, confirm that leaving doesn’t trigger any unexpected costs.
Workday usually doesn’t charge a termination fee (beyond losing any multi-year discount), but it’s worth confirming there are no strings attached to walking away. The bottom line: your data is your lifeblood – make sure the contract treats it that way. If Workday knows you’ve secured your exit rights, they’ll work much harder to satisfy you as a customer.
11. Nail Down Support and SLA Terms
What to think about: Assess Workday’s support offerings and service levels against your needs. Workday’s standard subscription includes basic support and an uptime Service Level Agreement (SLA). Typically, they promise around 99.7% uptime per month (which equates to ~2 hours of downtime monthly) and have defined maintenance windows (e.g., a few hours on Saturdays).
Ensure this is sufficient for your business (99.7% is fine for most, but extremely critical operations might ask for 99.9%). More importantly, clarify the support process: Workday provides 24/7 support for critical issues by default. Do you need a higher tier of support? They offer Premier Support or Success Plans (like a named support manager, faster response SLAs, etc.) for an extra cost.
During negotiation, you can request some of these premium support features at no additional charge, at least for a period. For example, ask for a dedicated support manager or enhanced response times for the first 6-12 months post-go-live. Also, examine the SLA remedies: Workday usually gives service credits if uptime falls below guarantees, but often only after multiple failures.
You might negotiate stronger remedies (like credits kicking in on the first major outage or higher credit percentages). While Workday might not raise the uptime number easily, they can be more flexible on credits and support commitments. Lastly, ensure any critical support expectations are documented – e.g., if you expect a named Customer Success Manager and quarterly review meetings, get that in writing.
Practical impact: Support quality can make or break your SaaS experience. If an issue arises in payroll processing, you need to know that Workday will respond fast. By negotiating enhanced support, you reduce operational risk.
For instance, having a named technical account manager (TAM) means a go-to person knows your environment, expediting issue resolution. If you secure that as part of your contract (sometimes Workday will include it to sweeten the deal), it saves you from paying extra for premium support later.
On the SLA side, while a 99.7% uptime is standard, the value of negotiating is in the penalties/credits: if Workday falls short, you want meaningful compensation. This incentivizes the vendor to fix problems quickly and at least returns some value to you for downtime.
Agreeing on stronger SLA terms (like credit for any critical outage over a certain duration rather than needing two failures) gives you financial recourse if things go wrong. It’s also a signal to Workday that you expect high performance.
By nailing these down, you avoid disputes later (“We thought we’d get better support, but it’s not in the contract…”). Overall, solidifying support/SLA terms ensures reliability and accountability – you know what level of service to expect and what happens if it’s not met, which is vital for a mission-critical system.
Example: A multinational firm negotiated a Premier Support package at no extra cost for year 1, including a designated support liaison and 1-hour response targets for P1 issues. This was written into the contract as part of the deal sweetener (“customer will receive X support level for first 12 months, valued at $Y”).
When they went live, they had a named support manager who helped resolve initial issues quickly – a huge benefit that normally costs extra. In terms of SLA, another company pushed Workday to enhance the standard terms: instead of requiring two SLA breaches before credits apply, they got a clause that a single severe outage would yield a credit.
They also negotiated that if uptime fell below 99.5% in any month, they’d automatically get a 10% fee credit. These tweaks meant that the customer received a credit on that month’s bill when Workday had an extended downtime incident – a small but meaningful compensation for the disruption.
Additionally, because they had an executive sponsor named in the contract (Workday assigned a VP to their account for escalation), they had a direct line to escalate beyond the help desk when a serious issue arose.
Result: faster issue resolution and a clear understanding of consequences for Workday if SLA targets weren’t met. Remember to tie down support promises in writing – verbal assurances don’t count. A well-negotiated SLA/support clause is your safety net for system reliability.
12. Leverage Timing and Sales Quotas
What to think about: Time your negotiation to hit Workday’s sales pressure points. Like many enterprise software companies, Workday’s sales reps are driven by quarterly and annual quotas. The workday’s fiscal year ends on January 31, so Q4 (Nov-Jan) is typically a crunch time for them.
Also, the end of Q1 (April) can be a mini-push after year-end. If you have the luxury of planning your purchase timing, align it with these quarters to maximize leverage. Essentially, you want to be in a position where the sales team is eager to book your deal to meet their targets.
They may offer extra discounts or incentives to sign your contract by a certain date. Use this to your advantage: let them know that the signing speed depends on getting the right terms. For example, hint that “if we can finalize by the end of the month/quarter, we’d need an additional X% discount to justify accelerating our process.”
You’d be surprised how quickly a “final” price can improve when a rep tries to hit a quota. However, be careful not to let their timeline force you into an unready decision – only move fast if you’re comfortable. The key is using their urgency, not being used by it.
Practical impact: Timing leverage can result in significantly better pricing or freebies. Simply by choosing to negotiate in Q4, some companies have gotten concessions that weren’t on the table in Q2. Workday might throw in an extra module at a steep discount or increase the discount percentage to get the deal in before the fiscal year cutoff. From your perspective, these are “free” wins – the product and terms haven’t changed on your side; you’re just capitalizing on their internal motivation.
Also, by signaling that you could wait (e.g., “We could sign next quarter after more internal review…”), you put the onus on them to sweeten the pot for you to sign now. This can accelerate internal approvals for special pricing on their side.
Companies that leverage timing often see an improvement in the final offer in the last weeks of a quarter. It can be as straightforward as an extra 5-10% off, which on a million-dollar deal is substantial.
Another impact is that if you sync your negotiation with their year-end, you might get more attention from senior sales management, who have more authority to approve discounts, because every big deal is crucial in that window. Remember your project schedule – don’t rush implementation or agreement review to meet their deadline unless the deal is truly worth it. Ideally, you prepare everything on your end, then pull the trigger at the optimal time to get that final bit of value.
Example: An enterprise was finalizing Workday negotiations around December. They knew Workday wanted to close by January 31 for FY results. The customer team conveyed, “We’re inclined to wait until February to wrap this up.” The rep returned with an additional 5% discount and 3 months of free usage (deferred start fees) if they could sign in January.
That incentive tipped the scales, and the customer signed a great deal on January 30. In another scenario, a company intentionally initiated an RFP in Workday’s Q4, creating a competitive evaluation that would conclude right as Workday was hungry for deals.
This timing yielded aggressive pricing from Workday, which knew the customer had alternatives and that it was their last chance in the fiscal year. The result was a substantially lower price-per-FSE than the same customer was quoted just six months prior.
These examples show that timing isn’t just about saving a little money – it can be a strategic tool to extract concessions. Plan your process timeline with the vendor’s calendar in mind. A well-timed “we’re ready to sign if…” can unlock value that might otherwise stay on the table.
13. Maintain Competitive Pressure with Alternatives
What to think about: Keep other options visible on the table. Even if you strongly prefer Workday, it’s crucial to make it clear that you have viable alternatives. This can be at two levels: full-suite competitors (Oracle Cloud, SAP SuccessFactors, Ceridian Dayforce, etc.) and best-of-breed point solutions for individual modules (e.g., Cornerstone for Learning, Anaplan for planning, etc.).
During negotiations, tactfully mention that you are evaluating these alternatives. If Workday knows that a competitor could win either the whole deal or parts of it, they will sharpen their pencil on pricing and terms.
This doesn’t mean you have to run a full formal RFP if you don’t want to, but at minimum, do your homework on competitor pricing and capabilities and signal that knowledge. For instance, if negotiating Workday Payroll, you might say “We’re also considering continuing with our legacy payroll provider or another solution.” For Workday Talent modules, mention checking out specialized vendors.
The goal is to inject doubt in Workday’s mind about the certainty of your business. The strongest leverage is if Workday truly believes “no deal” or “partial deal” is an option – so don’t let them think it’s Workday-or-nothing. Even if Workday is the frontrunner, maintain a competitive mindset.
Practical impact: Competitive pressure often leads to better pricing, higher discounts, and more favorable terms. Workday sales reps have discretion, but they usually must justify deep discounts by citing competitive situations. If they can go to their approvers and say, “We’re in a tight race with SAP” or “The customer might choose a point solution for recruiting instead of Workday – we need to offer more,” they’re more likely to get approval for lower prices or special conditions.
You are creating a narrative that Workday must fight to win or keep your business. This can also stop them from being complacent about renewal terms; if they know you might move a module elsewhere, they’ll be more motivated to be reasonable.Additionally, exploring alternatives might reveal a hybrid approach that serves you better (for example, maybe you do use a specialist for learning management and negotiate Workday without that module, saving cost). At minimum, it ensures you’re paying a market rate, not a monopoly price. If Workday believes there’s no competition, they’ll charge accordingly. You’ll get a much more competitive deal if they know you’re informed and willing to walk
Example: A CIO clarified in discussions: “We are comparing Workday against SAP and Oracle for the HCM system of record.” Even though the company favored Workday, this stance led Workday to provide a reference discount that they only give in competitive takeaways. In another case, a customer only bought Workday’s recruiting module (already had core HR).
They informed the Workday rep that Cornerstone and LinkedIn Talent Hub were also being considered. Sensing a risk of losing this component, Workday cut the recruiting module price by nearly 30% to match the competitor’s ballpark. Similarly, a large enterprise evaluating Workday Adaptive Planning casually mentioned Anaplan’s capabilities and cost.
In response, Workday offered additional users of Adaptive Planning at no extra charge in the first year to prevent a split decision. These outcomes were possible only because the customer leveraged alternative options in conversation. Importantly, you don’t have to badmouth Workday; you make it known that every part of the deal is competitive. As one negotiation advisor said, “Never let them think they’re the only girl at the dance.” The presence of credible alternatives makes Workday’s proposals much more honest and customer-friendly.
14. Use Benchmarks and Third-Party Expertise
What to think about: Arm yourself with market data and expert advice. Workday pricing can be opaque, and every enterprise deal is unique. You gain an objective yardstick for a good deal by obtaining pricing benchmarks from similar deals. If you have contacts at other companies recently signed up with Workday, discreetly ask about their price per FSE for comparable modules.
Even better, consider engaging an independent software licensing advisor (such as Redress Compliance or others) specializing in Workday deals. These experts have databases of deals and can tell you what “best-in-class” pricing looks like for your size and scope. They can also help identify any unusual contract terms to watch out for. Essentially, treat this like any major sourcing initiative – gather intelligence. Benchmarks should be recent (Workday’s pricing in 2025 can differ from 2020, for example, as modules and market conditions change).
Focus on comparable scenarios: a company of your size, a similar number of employees, and a similar set of modules. Generic benchmarks (e.g., “50% off list”) are less useful than specific metrics (e.g., “$XX per employee per month for HCM at 20k employees”). With data in hand, set target pricing and term objectives. Advisors can also run a “mark-to-market” assessment on your quote, highlighting where it’s above or below the industry norm. This preparation ensures you go into negotiations well-informed, which is exactly how to get a fair deal.
Practical impact: Without benchmarks or outside input, you’re negotiating in the dark – you might end up overpaying by 20-30% and not realize it. Workday’s initial proposals can be significantly higher than what other companies pay, especially if those companies negotiate hard. Using third-party expertise, one company identified that Workday’s quote was out-of-market and pushed for a reduction, ultimately saving over $11M over five years compared to the original offer (per an Redress case study). The practical impact of good intel is tangible savings and better terms.
It can also speed up negotiation – when you counter with data (“Our analysis shows competitive deals for this scope are around $XX”), Workday knows you’ve done your homework and often will cut to a more reasonable number faster. Moreover, an independent advisor can help you avoid common pitfalls and “gotcha” clauses they’ve seen with other clients.
Engaging such expertise might have a cost, but the ROI is typically high in the context of a multi-million-dollar SaaS contract. In effect, you level the playing field by having someone in your corner who speaks Workday’s language and has seen behind the curtain of other deals. This reduces the risk of agreeing to a term you’ll regret later.
Example: A Fortune 500 company worked with a licensing consultant who provided benchmark data showing that companies of similar size paid around $45 per employee per year for a certain Workday module, while their initial quote was $75. Armed with this, the company pushed back and eventually secured a rate in the high $40s, translating to hundreds of thousands saved annually. In another case, a firm had never negotiated a SaaS agreement of this magnitude and brought in an expert from Redress Compliance.
The expert reviewed the draft contract and pointed out that the price escalation clause was above market and that no cap was present, citing how most clients manage to get a 3-5% cap. This insight directly led to the client adding a cap (and avoiding a potentially huge cost increase). The advisor also benchmarked support terms and helped negotiate a free Premier Support year, noting other customers had gotten the same.
Overall, using external benchmarks and advisors gave these companies confidence and factual backing in negotiations, leading to materially better outcomes. The message is clear: don’t go in blind – leverage available data and expertise to negotiate like a pro.
15. Don’t Get Swayed by Unneeded “Shiny New” Modules
What to think about: Stick to your requirements and timeline – avoid being upsold on new products you’re not ready for. Workday regularly introduces new offerings (e.g., Workday Extend, Prism Analytics, Skills Cloud, etc.), and sales reps often pitch these during negotiations as add-ons with “special” pricing. It can be tempting to say yes and bundle an emerging product (especially if pitched at a discount), but carefully evaluate if you have a clear, immediate use case.
If not, it’s likely to become shelfware. Workday Extend, for instance, is powerful for building custom apps but requires effort and usually a partner to utilize – if you don’t have a specific plan for it, don’t buy it just because it’s trendy. The same goes for analytics or AI add-ons: only invest if it replaces something you’d otherwise buy or if you have resources to take advantage of it now.
It’s perfectly fine to tell Workday, “Not at this time,” for these extras. You can also negotiate a right-of-first-refusal or price lock for a year or two, so if you decide to adopt it later, you get today’s terms. The guiding principle is to focus on what you need on day one (or within this term). Don’t let the excitement of new tech or a sales push distract from your core objectives.
Practical impact: Saying “no” to unnecessary add-ons will save you money and complexity. Every additional module has subscription costs, implementation, and support overhead. By resisting the urge to over-purchase, you keep your project simpler and your costs contained.
Many organizations have learned this the hard way: they bought, for example, Workday Prism Analytics because it sounded great, only to realize a year later that they hadn’t had the capacity to implement it, effectively wasting that year’s fees.
Alternatively, they discovered a module was more of a “nice-to-have” that didn’t justify the spending. By deferring these, you preserve the budget to maybe do a pilot later or consider alternatives. Moreover, you maintain leverage – if Workday wants to sell you a new product, they’ll likely give you a great deal later when you have a real need (especially if it’s a newer product they want adoption for).
In contrast, if you take it upfront without need, you’ve given them extra revenue for nothing in return. Staying disciplined on requirements also helps ensure user adoption of what you buy; your team isn’t spread thin trying to roll out too many new tools simultaneously. In essence, every module you license should have a planned business value, otherwise it’s extraneous.
Example: During negotiations, Workday offered a large retailer an attractive deal to include Workday Extend (low-code platform) in their contract. The retailer’s team realized they didn’t have any concrete app development plans on Workday and would likely not touch Extend for a year or more. They declined to include it despite the “bundle” offer.
The result was that they saved six figures in software cost that would have delivered zero value that year. Workday initially also pitched Prism Analytics; the retailer said they might consider it later once core HR/Finance was live.
They negotiated a side letter that said if purchased within 18 months, Prism would be at a 20% discount off the then-current list, honoring the spirit of the initial offer. This way, they preserved the option without paying immediately. Another company, in contrast, agreed to add a new Skills Cloud feature that sounded promising.
Their data and processes weren’t ready to use it, and the feature sat idle. They essentially paid for a beta product they weren’t prepared for. Their advice afterward: “Only buy what you can consume.” Workday will always have shiny new modules to upsell, but you should politely decline anything that isn’t in your near-term roadmap. It’s better to add later with a clear value than to overspend now on unproven needs.
Final Thoughts: Negotiating a Workday SaaS agreement for the first time is a complex endeavor, but these strategies break down the key areas to focus on. Licensing and pricing structure, contract flexibility, anticipating growth, and safeguarding against hidden pitfalls are all within your control if approached methodically.
By thinking like a Gartner-style analyst and a shrewd negotiator, you can secure a deal that meets your enterprise’s needs without overpaying or overcommitting. Remember, Workday’s sales team negotiates these contracts daily – leveling the playing field means doing your homework (benchmarks, use cases) and not hesitating to seek expert help.
With the 15 tips above, procurement leaders, IT finance managers, and CIOs can approach Workday negotiations with confidence and a clear game plan. The result should be a balanced agreement that delivers value from Workday while protecting your organization’s interests for the long term. Happy negotiating!
