Vendor Analysis
published on Nov 06, 2017
Report Overview:
This NelsonHall vendor assessment analyzes ADP's offerings and capabilities in Next Generation Payroll Services.
Who is this Report for:
NelsonHall’s Payroll Services vendor assessment for ADP is a comprehensive assessment of ADP’s payroll services offerings and capabilities designed for:
- Sourcing managers monitoring the capabilities of existing suppliers of payroll outsourcing and identifying vendor suitability for payroll services RFPs
- Vendor marketing, sales, and business managers looking to benchmark themselves against their peers
- Financial analysts and investors specializing in the support services sector
- HR and payroll decision makers.
Scope of this Report:
The report provides a comprehensive and objective analysis of ADP’s Next Generation Payroll services offering, capabilities, and market and financial strength, including:
- Identification of the company’s strategy, emphasis, and new developments
- Analysis of the company’s strengths, weaknesses, and outlook
- Revenue estimates
- Analysis of the profile of the company’s customer base including the company’s targeting strategy and examples of current contracts
- Analysis of the company’s offerings and key service components
- Analysis of the company’s delivery organization including the location of delivery locations.
Key Findings & Highlights:
ADP is a global provider of HR BPS services via a software and service based delivery model, and is the largest payroll company globally, providing payroll services to ~700k clients across 112 countries, and in ~30 languages.
ADP's business is organized into the following two business segments:
- Employer Services (accounting for ~74% of its revenues): provides HR management/workforce management services, payroll services, time and attendance management, benefits administration, recruiting and talent management including RPO, insurance services, retirement services, and payment and compliance solutions to ~690k clients worldwide
- PEO Services (~26% of revenues): under ADP TotalSource, provides employment administration outsourcing services for organizations with 10 - 200 employees including payroll, benefits admin, and compliance services through a co-employment relationship; servicing ~490k worksite employees in the U.S.
This profile will focus on ADP’s payroll service, which it has offered since its inception in 1949. It pays ~40m employees across 700k payroll clients (~$1.85 trillion annually moved on behalf of its clients and client employees); paying one in six 6 U.S. workers. Approximately 70% of its business is based in the U.S., where it is the largest provider of payroll. ADP provides payroll services to clients with anything from a single employee, up to >150k employees. Since 2010, it has undergone a number of acquisitions which have increased its global capability and ability to service global clients.
ADP has ~57k personnel worldwide within its Employer Services business, of which ~65% are in client-facing roles. NelsonHall estimates that ~75% of ADP’s staff support payroll.
To support its ~112 country payroll offering, ADP has a local payroll presence in 18 countries, and directly services 30 countries. The remaining countries are serviced through local partners, via the Streamline offering; Streamline supports 112 countries. The service delivery mechanism, via ADP directly or through a partner, is driven by the client volumes within each country.