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ADP - Payroll Services 2021

Vendor Analysis

by Elizabeth Rennie

published on Feb 26, 2021

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Report Overview:

This NelsonHall assessment analyzes ADP's offerings and capabilities in Payroll Services

Who is this Report for:

NelsonHall’s Payroll Services profile on ADP is a comprehensive assessment of its offerings and capabilities, designed for:

  • Sourcing managers monitoring the capabilities of existing suppliers of managed payroll services and identifying vendor suitability for security services RFPs
  • Vendor marketing, sales, and business managers looking to benchmark themselves against their peers
  • Financial analysts and investors specializing in the HR and payroll technology and services sector.

Scope of this Report:

The report provides a comprehensive and objective analysis of ADPpayroll services offering, capabilities, and market and financial strengths, 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, founded in 1949 and headquartered in Roseland, New Jersey, is a provider of HCM management software and services.

ADP's business is organized into the following two business segments:

  • Employer Services (~70% of revenues): provides HR Business Process Outsourcing (BPO) and technology-enabled HCM solutions; offerings include payroll services, benefits administration, talent management, HR management, time and attendance management, insurance services, retirement services, and tax and compliance services to over  850k clients worldwide
  • PEO Services (~30% of revenues): under ADP, TotalSource provides employment administration outsourcing services for organizations with 1 to 999 employees, including payroll, benefits administration, and compliance services through a co-employment relationship; servicing over 12.5k clients and over  571k worksite employees in the U.S.

Within Employer Services, ADP's offerings include software and services for:

  • Payroll services
  • Tax and compliance
  • HR administration
  • Workforce management (WFM)
  • Benefits administration
  • Recruitment process outsourcing (RPO)
  • Talent management
  • Insurance services
  • Retirement services
  • Payment and compliance solutions
  • Pre-employment

In 1998, ADP launched its first SaaS-based payroll solution, EasyPayNet, and currently has several cloud-based HCM solutions available, including:

  • ADP TotalSource: for existing PEO clients
  • RUN Powered by ADP: for organizations with <50 employees
  • ADP Workforce Now: for mid-market organizations with up to 5k employees in the U.S. and Canada, and offers integration with ADP Global Payroll
  • ADPNext-Gen HCM: for U.S. headquartered organizations with >3k employees and outside the U.S. via integration with ADP Global Payroll 
  • ADP Global Payroll: for multinational organizations of all sizes; available in ~140 countries.

ADP's has offered payroll services since its inception in 1949, and as of June 30th, 2020, pays ~36m employees (~22m in the U.S. and ~14m internationally) across ~840k payroll clients (~$2.2 trillion annually moved on behalf of its clients and client employees) paying one in six U.S. workers.  ADP provides payroll services to clients with one employee up to >150k employees. 

ADP targets and supports organizations of all market sizes, offering services and solutions to meet each market segment's specific needs. ADP's client base is derived primarily from North American headquartered firms (~97% of its clients).

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