I always wondered why. One of my assumptions is that since payroll/timekeeping does not really change, the incentive to update these systems is not there.
Also I bet these systems have lots of little moving parts under the surface no one really considers, but these little parts prevent an upgrade.
Kronos is very very good at account management, so baseball tickets and steak dinners. Everyone agrees their product is awful but it’s very hard to break that hold. (Disclosure: competitor)
I worked for a medium size payroll software company.
Payroll is highly regionalized problem - every state and city has different rules/taxes and very unique ones as well. Its often not so simple to generically describe a payroll tax and plug in different configs per region. Much hidden complexity that's grown organically over time as laws/taxes change (which they do!).
A rewrite would be an archaeological dig. I would have to be paid a lot to take that problem on.
It's also not trivial software to manage, so often it's outsourced as a service (run by humans) on top of software that cut the checks for your employees. Makes me think that the margins are low? I dunno.
Also I bet these systems have lots of little moving parts under the surface no one really considers, but these little parts prevent an upgrade.