Automatic Data Processing Inc.’s Balanced Scorecard

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Introduction

Automatic Data Processing, Inc (ADP) is a United States company that provides software and services to optimize and manage human resources. The company’s long history and constant profit growth have established it as one of the most reliable in the market for already 14 years in the ranking (ADP, 2020). ADP primarily started as a payroll company, gradually increasing its competence in human resource management and keeping pace with technology. A brilliant business strategy, entering the international market, and a series of acquisitions of companies of different directions, up to e-commerce, made ADP one of the most critical players in the market for such services. Moreover, the company is constantly developing control systems within its own business processes for the benefit of the main goal of maintaining high employee satisfaction with work, collecting statistics and conducting monthly surveys. It allows ADP to set a good example for clients and use positive experiences in their decisions.

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Dominant Value Proposition

ADP deals with human resource management at all stages of the work cycle, right up to retirement. Among the company’s clients are the companies in which ADP has to serve more than tens of thousands of workers. Services provided include HR outsourcing, employers organization, and payroll. Almost seventy years of company experience has allowed collecting a vast amount of information in the industry. The company’s primary goal is to provide effective solutions that meet the market’s needs ahead of time (Banerjee, 2018). Consequently, ADP focuses primarily on employees of various companies, and as a result, on its direct clients – organizations that need ADP services.

One of the central values of ADP emphasizes the balance of work and personal life of each person. ADP maintains statistics regularly, collecting data on employees’ viability, engagement, and satisfaction with their jobs (ADP Research Institute, 2021). Over the years, the company has identified a problem indicating that only a third of employees at work are satisfied with the employer’s career performance (Banerjee, 2018). ADP aims to create a more transparent environment for each employee to assess their workload and potential benefits most accurately. Success in this area will help create a more honest and fair relationship between the worker and the employer and increase the employee’s involvement in the work process.

Customers value in this company reliability, experience, longevity in the market for such services, many successful cases that form an impressive portfolio of the company and, finally, adherence to modern technologies and methods that are clearly applied in the company itself, as an example.

The critical success factors lie in the plane of the variety of technologies, the flexibility of management, and the ability to cover all human resource management issues. Human resources aspects such as working hours, wages, benefits, and talents are considered by the company in a single complex and not isolated from each other. Flexibility is also achieved by combining data aspects in software, which avoids repeated data entry, supports multiple databases, and solves the problem of data consistency in different modules.

These benefits also extend to the financial side of the industry. An obvious plus for the company was acquiring the Global Cash Card company (Banerjee, 2018). This company made it possible to automate the payment process, offering the employer several possible payment modes in compliance with all norms, benefits, and laws, saving managers from unnecessary work. In the context of the popularization of outsourcing and the increasingly frequent practice of hiring temporary employees in various projects, this innovation corresponds to modern trends.

Finally, adaptability to the ADP market is manifested in creating the ADP Marketplace, which presents high-quality company products and solutions from external partners. In addition, a critical success factor can also be called the provided programming environment, where advanced users can create their application with all the specific and necessary functions. This set of solutions provided, covering the entire life cycle of an employee, fully echoes the company’s value proposition and is a crucial factor in its success. Consequently, the company’s value proposition is modern, ergonomic products for human resource management that meet the latest technological standards, as well as the ability to create your own unique product based on the company’s many years of experience and receive its service from highly qualified specialists.

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Key Financial Strategies

The customer retention strategy has an overall impact on the financial success of the company. Most of the client payments in ADP are recurring after a certain period. Therefore a reliable client-oriented strategy guarantees stable financial security of the company. In turn, the guaranteed profit allows the company to plan its activities for the long term, which in general allows making more informed decisions, reducing the possibility of risks.

In general, this industry is not the leader among other industries in terms of relative profit. In addition to the essential services for human resources support for clients, the company has adhered to horizontal growth from the very beginning. Modern trends are developing in the industries already known by the company, and completely new directions are opening up. The former includes the takeover of a company that manages freelancers to develop a promising direction (Deutcher, 2018). The second case reflects involvement in dealerships, where software and business solutions require a much more specific and in-depth approach (Smoak, 2017). Thus, the company’s financial success is explained by the constant positive dynamics of development and the preservation of income from regular customers, which grow together with ADP.

ADP operates in a rather complex industry, where low-quality services would lead to losses for customers, and therefore to a negative reputation for the company. Extremely high responsibility, no margin for error, lies entirely with ADP. If this were not the case, the company’s history would not have spanned seven decades of continuous growth. The retention of clients with whom ADP has worked for many years speaks of a positive relationship between the companies and the growth of a client company that has remained on the market under ADP for such a long time. In addition, it prevents market share erosion, which creates a high barrier to market entry for potential competitors and retains the customer (Smoak, 2017). As a result of maintaining a strong leadership position in the market, ADP has the right to charge a higher price for its services.

It is also worth noting the market segmentation provided by ADP. The lowest profit is presented in the smallest segment, which can be partly explained by the small budgets of companies in this segment (Trefis, 2021). However, the high competition in the segment of small companies that are ready to order outsourcing for payroll and other duties related to human resources is also explained by the specifics of the client company and territorial location. Moreover, as one of the market leaders, ADP can offer higher prices for its services, the quality of which is guaranteed. Consequently, client companies can choose more financially attractive providers of such services. Nevertheless, they will be denied access to the company’s rich experience, which has “educated” many large firms, optimizing only one side of their activities.

Key Internal Business Process Strategies

ADP leadership posits the following values: honesty, fairness, respect, open communication, hard work, and financial management (ADP, 2021c). These values are valid to both the professional skills of the company and the foundations of corporate ethics, which are an essential part of ADP’s work. Over its long history, the company has gained incredible experience in accompanying employees in various types of companies. All the positive features of this experience are undoubtedly used within the company. Customer satisfaction is one of the metrics that ADP assesses continuously, both among customers and its team. Maintaining such an atmosphere includes creating a comfortable working environment for employees and career prospects for moving up the ladder, the opportunity to express ideas, and seek a better position or salary through our efforts.

ADP does not seek to create multiple levels and local guidelines in its hierarchy. Each employee in this company is essential, and each has its own purpose and responsibilities. Consequently, any changes in the company are not news to employees, since in most cases, they put forward these changes. It ultimately leads to happier employees and better customer service (Smoak, 2017). In addition, ADP itself does not neglect outsourcing, especially when it comes to innovation and expertise. It suggests that the business organization services offered by the company are a reflection of ADP’s own human resource management model. This fact only emphasizes the reliability of the company in the eyes of potential customers.

Moreover, the company develops every element of human capital management, many of which are government-regulated. We are talking about benefits, pensions, compliance with labor conditions, up to the consent for the processing of personal data. The company’s many years of experience help avoid problems and inconsistencies with the requirements of the law, not only for its clients but also within its regulation by human capital. Big data and systems integration are some of the potential challenges that any company in this industry can face. Thanks to modern technologies and activities that aim to solve the company’s main tasks, these problems are solved by the company, and the services provided by it help solve them with clients-employers.

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Key Learning and Growth Strategies

The growth of the company is dictated by the different coordinated activities of all ADP modules. The development of products for customers keeps pace with technologies that are developing exceptionally rapidly these days. Products are developed considering the company’s experience, market needs, and trends, which the company determines in the course of statistical and survey activities. Expanding the list of industries to which ADP provides products is also a priority for the company. In addition to construction companies, manufacturing, car dealerships, financial services, and retail, the company entered the market of medical, government, educational, and even non-profit institutions (ADP, 2021c). ADP monitors its activities not only by the assessments of the employers-clients themselves, but the company is also critical about employees’ feedback, who also fully become the company’s clients. The main factor in assessing the performance of ADP is precisely the satisfaction of employees because, as mentioned above, it affects both engagement and, therefore, their productivity. The success of the entire company and the result of cooperation with ADP depend on the employees’ activities.

Company training involves adapting and internalizing company policies based on integrity. Be sure to use mentoring at this stage. An employee can retain a mentor after training and seek advice. In addition to training in corporate ethics and direct responsibilities, the employee also gains leadership experience and practical communication skills (ADP, 2021b). Each employee is constantly tested to identify strengths. ADP then creates the conditions for these strengths to be revealed, and the employee himself received the opportunity for career growth. In addition, all employees have access to training materials within the company. The Skills Program has been enhanced through self-directed training in business acumen, time management, teamwork, collaboration, and career management (ADP, 2021b). What is more, live broadcasts and business conversations with management are held, which is to maintain constant contact with their employees, plan the further development of talents, and combine all the organization’s needs. Effective communication with customers and employees within ADP creates a dynamic team culture that leads to positive results and maintains good team relationships in the workplace.

Talent management also takes place with the help of the StandOut product. This tool is based on an initial assessment of the strength of each team member, which is backed up by weekly reviews that identify actions employees love and hate (ADP, 2021b). These indicators adjust the distribution of responsibilities according to the employee’s strengths and conduct more targeted training. Continuous monitoring of employee satisfaction pays off in the company’s productivity and the relative percentage of happy employees in the company (ADP, 2021b). An ongoing training program is also a critical part of the success of ADP employees. In addition to leadership skills, employees study emotional intelligence and the most common problems in managers. Recently, ADP has been training using artificial intelligence technology.

Key Corporate Social Responsibility Strategies

ADP does not seek to complicate the business, even as it proliferates. Humanity and simplicity are one of the essential values of the company. The constant need to work with such an aspect of human resources as talent allows the company to develop its social responsibility in this direction. The company’s social activities also include supporting LGBT communities, diversity, and inclusiveness among employees, with constant adherence to corporate ethics (ADP, 2021a). This policy is implemented at every stage of the employee’s life cycle.

First, the HR stage uses a conflict avoidance approach, building a friendly atmosphere, using a cross-cultural experience to approach each person. Second, equality is maintained through equal pay practices that exclude any possibility of discrimination. Thus, ADP follows current trends and norms of corporate and social responsibility. For this company, this is most important since corporate ethics is a critical aspect of human resource management. As a company that has been in the market for many years, ADP needs to set a good example through its own experience.

Conclusion

Thus, ADP has gained a foothold in the market for human resource management services, which has begun to develop quite recently actively. The company has been providing these services for about seventy years, which makes it reliable and time-tested in the eyes of potential customers. Consequently, ADPs can have higher prices in the market, contributing to their financial well-being and a recurring customer payment scheme. Constant work with employees allows us to apply all the company’s positive experiences within its business processes. In addition, the company has many development vectors, along with a low likelihood of competitors emerging. ADP conducts activities accompanying corporate social responsibility, the central theme of current trends in promoting equality among employees, regardless of nationality, gender, and other distinctive characteristics. This scorecard fully confirms the company’s value proposition and distinguishes it from competitors in the industry of similar services.

References

ADP Research Institute. People at Work 2021: A Global Workforce View. Web.

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ADP. (2020). ADP Recognized on Fortune Magazine’s 2020 “World’s Most Admired Companies” List for 14th Consecutive Year. Web.

ADP. (2021a). Corporate Social Responsibility. ADP. Web.

ADP. (2021b). Training and Development. ADP. Web.

ADP. (2021c). Who we are? ADP. Web.

Banerjee, I. (2018). Creating Inspired Employee Experiences: In conversation with Linda Mougalian, ADP. HR Technologist. Web.

Deutcher, M. (2018). Payroll giant ADP acquires worker management startup WorkMarket. SiliconAngle. Web.

Smoak, A. (2017). Strategic Analysis of ADP. Anthony Smoak. Web.

Trefis. (2021). ADP Revenues: How Does ADP Make Money? Web.

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BusinessEssay. 2022. "Automatic Data Processing Inc.'s Balanced Scorecard." November 21, 2022. https://business-essay.com/automatic-data-processing-inc-s-balanced-scorecard/.

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