Automatic Data Processing, Inc. (ADP) is a private American human resources and data management software company. The company also provides other services such as payroll, and tax and benefits administration tools.
Automatic Data Processing, Inc.
Roseland, New Jersey, US
Business services, Software
How ADP Makes Money
A larger fraction of ADP’s annual revenue (about $7.4 billion in worth) is realized from its HRM service. The service includes personnel management, payroll processing, and tax payments for 470,000 companies.
ADP has a recruitment, performance management, succession planning, training, and compensation management suite which they administer at a service cost.
ADP Similar Companies
The biggest rivals to ADP are;
In the world technology industry economy today, HRM technology is reshaping how large-size companies (in terms of workforce load and organization structure) approach human resources in the fast-growing fields with large markets. The HR tech service industry already earns 47.4 billion U.S. dollars in revenue annually as of the year 2021 – Statista
Now, let’s talk in more detail about the top ADP alternatives.
Paychex Inc. is a merger of human resource management services and payroll solutions. The fintech company was founded by Thomas Golisano in 1971. The administrative multiservice company administers its operations in 6 countries, namely; the US, Sweden, Denmark, Germany, Norway, and Brazil.
The software-service operation grew to include 18 contracts and partnerships. The franchise contracts were eventually consolidated into one private company in 1979.
Paychex held an initial public offering in 1983 and began trading on the NASDAQ (PAYX).
In 2020, Paychex repurchased $171.9 million of its stock in the first quarter. The company currently has a market capitalization of $30.155 billion.
Paychex as a human resources management and payroll administration company works as a Business Process Outsourcing industry, using organizational principles peculiar to small and medium-sized businesses to administer its roles.
Paycheck is quite similar to ADP in terms of employee training features and an open appraisal system.
In HR management, ADP has grown at a rate of 14% in the recent year. Paychex has been able to achieve a close growth rate of 12%. Both companies have the largest payroll processing capacities.
Similarities between Paychex and ADP
Size and Complexity – ADP is fairly similar to Paychex in terms of capacity for accounting-related HR solutions and payroll processing. They both work with short and medium-sized business enterprises.
Paychex and ADP offer additional services that other payroll/HR solutions providers don’t offer. Services include financial advisor, partnership deals management, and tax admin services.
Zenefits provides a platform for small and medium-sized businesses to manage and administer HR functions; track, onboard, record-keeping performance appraisal and payroll services, and manage benefits for companies.
Zenefits trades with a legal name, YouPeople, Inc. The company was founded in 2013 by Parker Conrad and Laks Srini. The SaaS company manages human resources and other administrative functions including payroll, tax, and insurance coverages. The company is headquartered in San Francisco and has offices in Vancouver, Bangalore, Tempe, and Charlotte.
In 2020, Zenefits laid off 15% of its leftover staff due to the COVID-19 pandemic. The company added collaboration tools to cater to remote workforces. The People Hub and Employees Engagement Surveys were implemented to assist managers during the coronavirus pandemic. Zenefits was recently valued at $4.5 billion.
Similarities between Zenefits and ADP
Mobile App – both companies have mobile apps with payroll information clear to employees.
Both platforms allow companies to manage shift schedules with employees, freelancers, and contractors.
Both apps have clear and detailed reporting and insights.
Workday Inc., is a public cloud-based human capital and financial management software vendor. The company was founded by David Duffield in 2005.
Workday announced $85 million in fresh funding in 2011, from a $75 million funding cap led by New Enterprise Associates in 2009. The total capital was raised to $250 million, upon which the company sold $22.7 million Class A investment shareholding, raising $637 million.
Investors in the latest round included Morgan Stanley Investment Management and Rowe Price. In 2012, Workday organized a successful IPO (Initial Public Offering) that placed the company’s value at $9.5 billion.
Workday provides its services in subscription plans. The company does not sell its software to any app vendor or any organization that needs an HRM API for its functions.
The company’s realized revenue is publicized over the span of multi-year contracts.
Similarities between Workday and ADP
ADP Workforce and Workday HCM are similar solutions, as both software services help to manage all human resources processes in one place.
For both, pricing figures, features, reviews, integrations, and security don’t differ much.
Gusto, formerly known as ZenPayroll, Inc., was founded in 2011 and is operational in the 50 states of the United States.
Gusto handles human resources, payroll, and benefits management through software for businesses in the United States. In its shift (from a former, ZenPayroll), the company broadened its focus to also border its service on health benefits and employee compensation by integrating the features into its payroll software.
Gusto also extends its service to paperwork management on tax, import-export, labor, and immigration laws peculiar to client companies being managed.
In 2021, Gusto expanded its private business to serve as an API to external platforms. The new product, “Gusto Embedded Payroll”, serves vertical SaaS companies by providing payroll support to their clients or customers.
Gusto amassed a $20 million Series A funding in 2014 at a valuation of > $100 million, and $60 Series B funding in a round led by Google Capital, in 2015. The company raised $200 million at a $3.8 billion valuation in 2019. Gusto had more than 50 new products added as of 2020 and approved PPP loans worth $2.5 billion.
Paycor (legally named; Paycor HCM, Inc.) was founded in 1990 by Bob Coughlin. The public company, was founded to provide cloud-based onboarding and keep payroll and other HR functions for leaders with teams.
The company’s employee-friendly software product helps to keep a track of recruitment, styles for coaching, payment plans, and training and retaining employees.
With Paycor, companies of large industry sizes can administer functions easily over tailored industry solutions to provide a competitive advantage in whatever industry – restaurants, professional services, manufacturing, retail, and nonprofits.
Paycor’s Human Capital Management software also focuses on developing rising talents and workforce management that benefits whichever work structure benefits the administration. Paycor is used by over 40,000 businesses nationwide. Businesses that use Paycor include Detroit Zoo, PURE Dental Brands, SEAWAY & Wendy’s.
Similarities between Paycor and ADP
Both of these human capital management software products are offered by subscription.
Both have cloud-based command features for a variety of HR and payroll solutions.
Insperity (formerly Administaff, Inc.) is professional human resources and administrative services employer organization founded in 1986 by Paul Sarvadi. The company provides its services to small and medium-sized businesses. The company’s operating income was $38 million USD in 2010 with a net income of $22.4 million USD.
Insperity has subsidiaries including Administaff of Texas, Inc., Administaff Services, L.P, Administaff Retirement Services, L.P, and more.
The HCM and HRO functions of Insperity’s service help to resolve conflict issues in any workspace. The HRO provider presents a definitive workflow and job descriptions to employees.
Insperity’s user-friendly software helps managers to automate and streamline instructional guides, directives, and clear commands at work points for synchronized decision-making and project executions.
Similarities between Insperity and ADP
Both platforms offer employee screening, handbooks, OSHA compliance, and talent management features.
Insperity and ADP serve small, medium, and large companies.
ADP’s biggest competitor is Paychex. Paychex’es growing client base is becoming as much equal to ADP’s. Paychex compares to ADP in size and complexity and operational structure.
Other HRM business alternatives like Paycor and Insperity are also fast developing with additional HR development pro tools, goal setting plans, OKR, feedback, reviews, and programs for a hands-on management experience. Paycor won the Cincinnati Business Courier’s 15th annual Fast 55 program, adjudging the company as the fastest-growing company in Cincinnati.
Darrell Burges - Business Analyst & Technical Writer
Darrell Burges is a skilled business analyst and a technical writer for WCS. Based on his 5+ years of experience, he writes in-depth articles about competing companies and encourages individuals to explore alternatives in the business world. He is the one who knows how to engage you in the world of competitors and explain complex concepts in simple terms.