Fall conference season is in full swing and my first stop this September was at ADP’s annual Analyst Day at the ADP Innovation Lab in New York City. ADP opened the session outlining their past success, their penetration into the HR market that is by far the deepest of any vendor which is quite an achievement on its own but ADP is squarely focussed on bringing new capabilities to the market with their Next Gen platform which they feel will propel them to new heights in the future.
If you are thinking of ADP as only a payroll provider, you may be surprised at the breadth of their solutions.
• They have a complete suite of HCM solutions in the cloud. Currently, ADP is the #1 or #2 provider by category for HCM solutions in the cloud with 810,000 clients globally.
• The scale of their HRO and PEO Solutions is also massive with a total of 562,000 worksite employees as of June 30, 2019.
• Let’s not forget that ADP has a global footprint which lets their customers leverage ADP solutions wherever they do business. Their global payroll is available in 140 countries.
To break this down a little further, here are the areas that ADP addresses with some interesting stats:
• Payroll: ADP last year paid 41M people and moved $2.1 Trillion dollars. They offer a number of different programs to achieve this which include Global Cash Card, Aline, Wisely Pay by ADP. They also support this with a dedicated mobile banking app to make transacting with the system very easy and intuitive for the employee.
• HR and Benefits: Like their payroll footprint, their benefit enrollment is also at a very large scale processing 30M employee records and it too is supported by a mobile first self-service app (which is a top 5 business app with a 4.7 rating in the Apple App Store). The adoption rate of their app which supports onboarding, benefit enrollment and pay averages 75M logins monthly.
• Workforce Management: again, they offer a host of solutions that serve 75k clients and a total of 13M employees.
• Talent Acquisition: All worker types are supported which includes Gig workers. That is an important distinction as we see the number of contract workers in the workforce mushroom. Of the permanent workers, the were 1.7M jobs posted on an ADP application last year with 20M resumes received, 15M background checks completed and 1.6M candidates hired. From the freelancer perspective, there were 10M assignments posted with a total value of $1.5B.
• Talent Activation: According to the ADP Research Institute study 84% of the workforce is not fully engaged at work which is a bad statistic. Users of ADP’s talent engagement module are in fact having regular conversations with their leaders and getting regular priorities set to help them have clarity of what they need to do to stay successful. Last year, across the ADP client base there were 4.5M conversations with leaders and in turn 16M priorities set for the same period. So how did this happen? Clients changed how conversations take place in the workforce. For the team leader, they changed from having employees and managers setting annual goals to allowing for regular adaptable goals. They went from having managers conduct performance conversations 2 times per year to allowing for weekly check-ins. And instead of conducting the annual engagement study, they built in the capability to have on-demand engagement pulse surveys. That all lead to providing the organization with real-time data on performance which allows the organisation to make better decisions with the data collected which leads to effective actions. ADP internally uses StandOut and the results speak for themselves – 97% of associates completed the StandOut assessment to learn more about themselves and customize the system. 32k associates check-in with their team leader every week, to prompt strengths coaching and engagement. The employees who use StandOut are 2 times more engaged at work than employees who don’t adopt StandOut. This has had a measurable impact on performance: what ADP has found is there is 18% higher retention rate for those that are fully engaged, 10% more of the highest performers are fully engaged than their lowest performers, and the most engaged sales associates sell 12% more than the lowest engaged. This all translates into better retention, improved performance and increased productivity.
• Data Insights: ADP provides embedded data insights with artificial intelligence and machine learning to help you get deep insights. AI and Machine Learning are only as good as the dataset that you have to work with. Due to ADP’s massive footprint, they have data available to analyse from 740k companies, with a total of 90M unique employees across 2.4k job types.
• ADP Marketplace: For items you can’t get with ADP, they have a very robust ADP Marketplace which has a dynamic, open platform with self-serve capabilities. In total they offer 380 apps and have over 1,200 more in the pipeline. This marketplace in embedded directly into their WorkforceNow solution making the task of completing transactions with their partners seamless.
It is good to see stats but event better when you get an opportunity to learn about actual successes. One such story was from ABB Optical who wanted to address employee turnover which was affecting the company’s overall productivity. Their HR team looked at ABB turnover vs the Benchmark from ADP for turnover of companies like theirs which showed that they were worse off than the industry average (provided by ADP data). This led them to understand that there was an opportunity to drive bottom line impact for the company on cost per unit. This led HR to create collaborative effort with operations team to identify drivers of high turnover. The net result was a 20% reduction in turnover over a 12 month period and resulted in a savings of $3.5M.
Next Gen HCM and Payroll
For the past few years, ADP has been discussing their next gen system and now it has gone live. The next few years will see quite a bit of growth in adoption. ADP sees this as a major differentiator for them. Here are the key components of their new offering which are quite different from what is currently on the market.
Dynamic Teams: Built for how work really happens – in dynamic teams. ADP feels strongly that the trend is teams vs. the static manager, employee structure. Now the workforce (combined with permanent and freelancers) work together in team based environments. Many will be participating in various teams and some will be on multiple teams at the same time. They have built teams at the core of its new offering. It is aimed to empower team leaders to track and measure where work truly happens – including freelancers. It is designed to drive engagement and performance where it matters by providing teams and leaders the critical insights they need.
Work & Pay Your Way – Extreme Personalization: ADP has created consumer grade, app-based experiences that enable teams to work and get paid the way they want.
They say that one can work better with app-driven, consumer-grade, non-monolithic, team-specific tools. They enable the worker to create personalized experiences by location, function or team by enabling native or 3rd party apps. For example, they have created mini aps to give unprecedented personalization for each member of a team with tools that they need specifically for that team goal to achieve maximum results. A team member may need a small customized pre-built app like OKR Goals or Pulse Surveys or integration into a 3rd party app like Slack or Fidelity or others.
ADP can also pay teams and individuals the way they want with their Next Gen Payroll engine which will be a differentiator when looking to recruit and retain talent. The Next Gen Payroll engine provides worker level continuous pay calculation, enabling flexible team compensation – with this, workers can get paid when they want, not just on payday. This improves employee engagement as they don’t have to worry about things like payday loans etc. just to make ends meet. The system is transparent payroll for practitioners and workers, by providing a clear breakdown of payroll calculations.
In addition, it comes with tools to enable fast implementation of changes and localizations and it uses AI and machine learning based policy configuration to provide a simple implementation even if you are using a competitor’s payroll.
This new payroll capability is currently deployed to 15 clients in the US across a number of industries. The plan is to roll this out to hundreds of new clients in USA and then Canada and Australia in 2020 and then increase to thousands in 2021 and start EMEA and APAC regions.
Global Compliance: The workforce is becoming more global as labor markets tighten and regulations become increasingly more complex. To combat this, while teams are increasingly working from locations around the world, companies must be able to support them in a compliant way without creating an unnecessary administrative burden. ADP can deliver compliant global capabilities easily and rapidly on a global scale.
AI Everywhere: Innovation should be present throughout the entire HCM life cycle—making all interactions intelligent and actionable. AI-driven insights are served up in the flow of work when and where executives, managers and team leaders need them to make intelligent decisions to move their businesses forward. The massive dataset that ADP has across their HCM platform provides accurate insights across their platform. As we approach 2020, the reliability of data will be critical to enable timely, data-driven insights that power decisions and we believe ADP has one of the richest set of HCM anywhere.
Adaptable Tech Platforms: Increasingly, segments of the workforce are looking for true customization and on-demand adaptability in all facets of their lives – and the workplace is no exception. At the core of this technological movement is a simple, easy-to-use interface, making it easy for non-technical users to modify an existing app and go from building to deployment seamlessly.
You can see that ADP has being doing a lot of work behind the scenes and are well positioned to have a large impact on the HR Tech market moving forward as they have been fully engaged on these pillars of Dynamic Teams, Extreme Personalization, Global Compliance, AI Everywhere and Adaptable Tech Platforms. You should see a variety of new solutions set to hit the market over the next year as they continue to develop their new platform. At HR Tech in Las Vegas, they just received the “Awesome New Tech” Award so stay tuned in on what they have next to offer.
ADP Demonstrates the Power of their New Forward Thinking HR Tech
Source: HR.com Articles