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ADP - Benefits Administration 2022

Vendor Analysis

by Elizabeth Rennie

published on Feb 17, 2022

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Report Overview:

This NelsonHall vendor assessment analyzes ADP's offerings and capabilities in Benefits Administration Services.

Who is this Report for:

NelsonHall’s Benefits Administration profile on ADP is a comprehensive assessment of ADP offerings and capabilities, designed for:

  • Sourcing managers monitoring the capabilities of existing suppliers of Benefits Administration 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 Benefits Administration Services sector.

Scope of this Report:

The report provides a comprehensive and objective analysis of ADP’s Benefits Administration Service offerings and 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:

This NelsonHall vendor assessment analyzes ADP’s offerings and capabilities in Benefits Administration Services. ADP, founded in 1949 and headquartered in Roseland, New Jersey, provides HR management software and services.  ADP’s business is organized into the following two business segments:

  • Employer Services (~70% of 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 ~920k clients worldwide. Within Employer Services, ADP business supports comprehensive HR outsourcing with two different models:
    • ADP Comprehensive Services (CS), targeted at 25 to 5k employees sized organizations, offers payroll, HR, and benefits outsourcing to the US and Canadian markets and is based on the ADP Workforce Now technology platform.
    • ADP Comprehensive Outsourcing Services (COS), targeted at U.S. organizations with over 3k employees, offers managed payroll services, HR, talent, time, and benefits administration services. Its services are based on the ADP Next-Gen, Vantage HCM, and ADP Enterprise HR technology platforms. 
  • PEO Services (~30% of revenues): ADP TotalSource, provides employment administration outsourcing services for small and mid-sized businesses, including payroll, benefits admin, and compliance services through a co-employment relationship; servicing ~660k worksite employees in the U.S.

Benefits administration services are managed across the ADP’s Employer Services business and PEO Services. ADP’s Benefits Administration services are offered through two operating models (with share of revenue):

  • Co-sourced (64%): technology with administration
    • ADP’s mid-market-sized organizations with 50-999 employees leverage ADP Workforce Now with Service Connect, which allows a client to log a case and see the status
    • ADP’s Enterprise sized organizations with over 1k employees, technology only clients (not CS/ COS) where additional benefits service support is provided (client retains administration services).
  • Fully-managed services (36%):
    • PEO services: Benefits tools and administration supporting H&W Benefits, Section 125 FSA and Commuter Benefits, EAP, Employee Discount Programs, and Retirement Savings Plan 401(k). ADP handles all benefits administration tasks for the client, including carrier rate negotiation and employee open enrollment.
    • ADP Comprehensive Services (CS)  and ADP Comprehensive Outsourcing services (COS): Benefits technology module and administration/processing support, with employee call center services; CS targets organizations with 50+ employees; COS targets organizations with +1k

Technology solution: ADP Next-Gen, Vantage HCM, and ADP Enterprise HR technology platforms with case management technology, Client Engagement Hub (CEH). Clients use this tool to access configuration control to manage text changes, rate changes, and documents. Within CEH, a self-service tool, Service Connect,  gives visibility and progress of open cases with ADP.

ADP has been offering benefits administration services for more than 20 years, adding its first H&W administration clients with voluntary benefits integrated with Corestream, including a hospital with ~35k employees and a finance company with ~3k employees.

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