Automatic Data Processing Inc.’s Company Analysis

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Company Background

Automatic Data Processing, Inc. (ADP) is a provider of human capital management (HCM) solutions for employers, offering solutions for businesses of all sizes. The company also provides business process outsourcing solutions. Its segments include Employer Services and Professional Employers Organization (PEO) Services. The Employer Services segment offers a wide range of HR business process outsourcing and HCM technology solutions. These offerings include payroll services, benefits administration, talent management, human resources management, time and attendance management, insurance services, pension services, and tax and compliance services. ADP TotalSource, ADP’s PEO business, offers HR outsourcing to SMBs through a shared employment model (Wolters Kluwer Editorial Staf, 2021). As a PEO, ADP TotalSource provides HR services while the client continues to manage employees’ day-to-day work-related responsibilities.

Mission Statement

The company operates through two segments: Employer Services and Labor Leasing Services (PEO). The company offers its solutions for employers in approximately 100 countries. The service markets are the US, Canada and Europe, and Automatic Data Processing offers payroll and tax collection services, as well as money transfer services in the United States, Canada, the United Kingdom, the Netherlands, France, Australia, India and China (Wolters Kluwer Editorial Staf, 2021). The company offers PEO services throughout the United States. Thus, the main mission of the corporation is to provide financial services and leasing in the territory of several large states.

Business Goals

The main business goal of the corporation is to provide income from investments, and not from the sale of services. Today, Automatic Data Processing Total Source has approximately 63 offices in more than 31 states and serves approximately 8,700 customers with employment management outsourcing solutions (Wolters Kluwer Editorial Staf, 2021, p. 190). Net profit of Automatic Data Processing in 2015 amounted to $1.5 billion (Wolters Kluwer Editorial Staf, 2021, p. 191). The company’s shares are included in the S&P 500 index (Information Technology Sector), traded on the NASDAQ stock exchange (Allman-Ward & Allman-Ward, 2018). The fact is that the organization is arranged in such a way that interested parties in the territory of several states invest in the development and increase in the efficiency of systems provided by Automatic Data Processing.

Keys to Success

As a result of the analysis of the structure and activities of the company, two main success factors were identified. The most significant is the high competitiveness of the organization, which is manifested in the use of innovative technologies and ease of implementation. This creates an advantage over competitors who bring the corporation to leadership positions in its niche (Allman-Ward & Allman-Ward, 2018). The second factor is the flexibility of the company, which consists in quickly and painlessly adapting to unfamiliar conditions. This is clearly seen in the example of cooperation with China, where laws and economics are significantly different from America or Canada. However, the organization does not lose and shows itself in the most efficient way.

Protecting privacy and data confidentiality in the context of digitalization is a key principle for an organization. That is why the company has a personal data protection system, and employees sign papers on non-disclosure of any data received in the offices (Allman-Ward & Allman-Ward, 2018). At the same time, the corporation has prohibitions on discrimination, which is demonstrated by the fact that persons of any gender, race and age can work in the company without any special features or infringement.

Management Structure and Ownership of the Company

The company has its own director and president, who is engaged in organizational and managerial activities. It is important to note that it is he who owns the ownership of the company. At the same time, the corporation has an accounting department that deals with financial calculations and payroll activities, as well as brokers involved in trading on the stock exchange. Thus, the management system in the company is hierarchical, but interdependent. In other words, each department and body of the company is endowed with its own powers and works independently of each other, but under the direction of the president.

Products and Services

The company operates through two segments: Employer Services and Labor Leasing Services (PEO). The company offers its solutions for employers in approximately 100 countries. The markets for services are the USA, Canada and Europe. Automatic Data Processing also offers payroll and tax collection and money transfer services in the United States, Canada, United Kingdom, the Netherlands, France, Australia, India, and China. The company offers PEO services throughout the United States.

The Employer Services segment includes payroll services, benefits administration, recruiting and talent management, human resource (HR) management, time and attendance management, insurance and pension services. This segment serves a wide range of customers ranging from small businesses to large enterprises with multinational operations (Allman-Ward & Allman-Ward, 2018). As a labor leasing (PEO) service, Automatic Data Processing provides human resources management services, which includes personnel and employee benefits management, employer liability management.

Financial Management

During the reporting year, the company collected new orders in the amount of $1.65 billion, which is 5% less than a year ago. ADP Employer Services, which provides corporate payroll and HRM solutions, saw revenue up 4% to over $9.5 billion (Bauer et al., 2019, p. 74). PEO Services, which offers end-to-end HR services, jumped 13% in revenue and reached almost $3.5 billion (Bauer et al., 2019, p. 77). It is about outstaffing, which is understood as a service in the field of personnel management for the removal of personnel from the staff of the customer company and placing it in the staff of the provider company. The average salary at workplaces managed by PEO Services reached $462 thousand at the end of the year. It follows from the report that in 2017 ADP earned $6.4 billion from the implementation of integrated systems for personnel management (Bauer et al., 2019, p. 65). The company, referring to several studies, calls itself the leader in this market in terms of the number of customers and considers itself to be the second largest sales of payroll systems.

References

Allman-Ward, M. and Allman-Ward, P. A. (2018). Optimizing company cash. A guide for financial professionals. Wiley.

Bauer, T., Erdogan, B., Caughlin. D. and Truxillo, D. (2019). Fundamentals of human resource management. People, data, and analytics. SAGE Publications.

Wolters Kluwer Editorial Staf. (2021). Directory of corporate counsel. Wolters Kluwer Law & Business.

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