Campbell Langdon, President of Tax, Pre-Employment...
Transcript of Campbell Langdon, President of Tax, Pre-Employment...
Campbell Langdon, President of Tax, Pre-Employment Servicesand Retirement Planning
Pre-Employment Services
Annual Financial Analyst ConferenceMarch 22, 2007
© 2007 Automatic Data Processing, Inc.
Pre-Employment Services
Pre-Employment Services Market– Multi-billion dollar market– One of the fastest growing segments in HR services – Low penetration of automated solutions
Current status of ADP Pre-Employment Services– Revenue $120 million FY’07– 40% growth this fiscal year (20% Organic / 20% Acquisitions)– Profitable– Very strong momentum
PES Key Metrics
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Pre-Employment Services
Applicant Management Services:– Applicant workflow for contingent, hourly and salary employees
including job requisition, job posting, candidate search, ranking, on-boarding and reporting
Tax Credit Services:– Employment Based Tax Credits and Negotiated Economic
Development Incentives - Work Opportunity Tax Credits (WOTC), Welfare to Work (WTW), State Tax Credits, location advisory services
Screening and Selection Services:– Screening, Selection and Compliance Services - background
checks, identity validations, and reference verifications
PES Description
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Pre-Employment Services
June ’06 – PES Announcement
August ’06 – Mintax Acquired
October ‘06 – Virtual Edge Acquired
January ‘07 – Phase 1 Integration
March ‘07 – Release to Clients
Introduced ADP Pre-Employment Services combining offerings from SASS (background checking) and TCS (job tax credits)
Provides negotiated economic development incentives and other Federal and State tax credit programs
Provides applicant management services for professional and high volume workforces
Virtual Edge integrated with ADP Tax Credits and Enterprise HR. ADP Background checks scheduled for June ’07
New PES product launch at ADP Meeting of the Minds client conference
Recent Events
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Pre-Employment ServicesWhy Bundle PES? Why ADP?
Applicant workflow – Integrating the hiring steps– Automated workflow of all hiring steps including background checks and
tax credit screening– One system of record for recruiters, hiring managers, candidates and HR– Integrated platform ensures compliance with company policies around:
I-9’sBackground checksTax credit screening
PES and ADP– Automates the data transfer from the new hire process into payroll & HR
systems– Provides a closed loop with payroll data on new hires to ensure compliance– Captures the right payroll data for tax credit calculation– Leverages ADP’s client relationships and sales channels
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Pre-Employment Services
ADP PES Products AvailableSmall
Business Services
Major Accounts Services
National Accounts Services
ADP GlobalView
Applicant Tracking *On-Boarding Portal * *Tax Credits WOTC/WTW *Tax Credits / Business Incentives
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Background Checks
Reference Checks
PES Target Markets
Current Availability* Future Availability 6
Pre-Employment Services
FY08 – FY12 Outlook– 20%+ CAGR Organic revenue growth– Significant margin expansion – Continue penetration of ADP client base and standalone
relationships– Additional product and feature launches– Selective acquisitions to further round out offering– Strategic alliances
PES Key Metrics
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Regina Lee, President of National Account ServicesHR BPO & Health and Welfare Services
Annual Financial Analyst ConferenceMarch 22, 2007
© 2007 Automatic Data Processing, Inc.
HR BPO Success Rooted in Market Fit
Flexibility and competency to participate in both mid-market and up-market growth is unique and significant
ADP Strengths Align Well With Segment Needs
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Comprehensive Solutions for Mid-Market Buyers
Comprehensive Outsourcing Services (COS) offers a robust, multi-process solution for the emerging US mid-market
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Focused Payroll Offering for the Up-Market
Up-Market need for a best-practices payroll solution fits wellwith ADP’s HR BPO model and core competency
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Traditional Outsourcing
ApplicationSoftware
ApplicationHosting &
Management
IT Infrastructure
BACK OFFICETransactionProcessing &Fulfillment
Process Administration
FRONT OFFICE
COS
EmployeeCall Center,Self Service
What Does ADP Offer?
Current COS Services Include:PayrollTime & Labor ManagementHR Data ManagementBenefits AdministrationApplicant Management / Pre-Employment
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Near/Off-Shore Resources Help to Drive Service and Margin Improvement
US Service CentersAlpharetta, GA
Augusta, GA
Bothell, WA
Des Moines, IA
El Paso, TX
US Service CentersAlpharetta, GA
Augusta, GA
Bothell, WA
Des Moines, IA
El Paso, TX
Off-Shore Service CentersHyderabad, India
Off-Shore Service CentersHyderabad, India
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HR BPO Performance to Date (US)
Clients under contract – 50– 40 clients live
Employees under contract – Approximately 540,000Average client size – 11,000 employeesAnnual revenue – Over $100MAverage number of services used – 3
Approximately 80% of clients were net-new payrolls for ADP
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Localized HR BPO solution built on ADP’s proprietary, local,
proven platforms
Global Presence
ADP GlobalView HR BPO built on a single global platform
leveragingmySAP™ ERP HCM
Best-in-Country
ADP ES International HR BPO Solutions
Localized In-country Presence
GlobalView®
Current ES International Services Include:Payroll and Personnel AdministrationHuman Resources Data ManagementApplicant Management
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Health & Welfare Services
ApplicationSoftware
ExceptionProcessing
Hosting
BACK OFFICE
Vendor Management
Audits and Document Handling
FRONT OFFICE
ADP
ParticipantService Center
IT INFRASTRUCTURE
CarrierData
Exchange
Self-Administered to ADP Administered Services Continuum
Payroll-like margins from a beyond-payroll service
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Summary
Focus on continued growth and improvementHR BPO– Comprehensive Outsourcing Services– GlobalView
Health and Welfare Services
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Carlos Rodriguez, President of TotalSourceTotalSource Overview
Annual Financial Analyst ConferenceMarch 22, 2007
© 2007 Automatic Data Processing, Inc.
TotalSource® Professional Employer Organization (PEO) provides an integrated comprehensive employment administration outsourcing solution to small and mid-sized businesses through a co-employment arrangement.
Our value proposition is to help clients attract and retain employees, manage risk, reduce employment-related liability and focus on growing their business. Our product offering includes:
– Payroll, tax and benefits administration– Health and workers’ compensation insurance– Dedicated HR support, including support with recruiting and selection– Assistance with regulatory/compliance and risk/safety management
TotalSource revenues have grown organically at a CAGR of 27% over the FY 2002-2006 period as a result of double digit unit growth and an increase in revenue per paid client employee.
Pre-tax earnings have grown at a 74% CAGR over the same period as the business benefited from scale efficiencies.
TotalSource® Professional Employer Organization
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TotalSource Professional Employer Organization
Average Paid Client Employees Revenue Per Client Employee
Our business metrics all show strong growth
Number of salespeople
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120,000
160,000
FY 2003 FY 2004 FY 2005 FY 2006 FY 2007(F)
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FY 2003 FY 2004 FY 2005 FY 2006 FY 2007F
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FY 2003 FY 2004 FY 2005 FY 2006 FY2007F
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TotalSource Professional Employer Organization
Market remains fragmented and mid-sized players are attracting private equity investments to spur consolidation
Market opportunity over $25B nationwide – however, current PEO industry spend is estimated to be $3.2B, leaving a significant growth opportunity
FY06 revenue increased 22% to over $700M and FY07 revenue forecasted to exceed $870M or 25% growth
TotalSource® is well positioned as the largest PEO in a fragmented underpenetrated market
Significant opportunity to upsell ADP payroll customer base to PEO
Improved products and service resulting in another great retention year
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ADP Resource® ─ ASO Offering
The value proposition for ADP Resource® is based on simplifying HR administration through a single source provider that can deliver HR support, payroll, compliance and employee retention tools cost-effectively
Current market spend is estimated to be $250M, while the addressable market opportunity is estimated to be over $25B –expands the universe of available prospects beyond limits inherent in the PEO model
ADP Resource is an ASO (Administrative Services Offering) and is a natural outgrowth of the PEO business. Its distinguishing features are the absence of co-employment and use of the client’s own health and workers’ compensation policies rather than the PEO’s
Like the PEO, ADP Resource will leverage the existing ADP sales force for leads and to up sell existing ADP clients
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Bundled solutionAccess to HR Business
Partners, EE call center, other customer
service staff
Product
Service & Delivery
A cost-effective suite of services designed to help small
and mid-sized companies remain HR compliant and
better positioned to attract/retain talent
HRTrainingHandbooksManagement manualsCompliance infoPosters
Risk managementWorksite safety analysisOSHASafety postersToll-free support
PayrollProcessingTax filingDirect depositGLi, Standard Reports
Benefits AdminCOBRAEAPPOPEE call center (non-health)
SUIClaims adminEE coaching for hearingsToll free supportRate analysis
Add-onsBackground checks401(k) administrationPay-as-you-go workers’ compFSARecruitingTime & AttendanceCustom Management Reports
One-stop shoppingSimple, transparent, integrated billingUnified reporting
EE & EmployerWeb Self-service
Access to state-of-the art technology (client and employees)
No co-employment relationship
Flexibility in choosing additional services
“Core Bundle”
ADP Resource® ─ ASO Offering
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PayrollTax complianceMoney Movement
Payroll ASO 5-99 EEs PEO 10-250 EEs
ComplianceWorkers’ Comp401(k) AdminEPLI InsuranceEAPFSATS-sponsored group benefit plans*Supplemental voluntary benefits*Employer-sponsored Life/Disability insurance*
Add-on features:Pay-as-you-go workers’ compFSA 401(k)TLM
Basic HR services
TotalSource Professional Employer Organization
1x1x 1010--12x12x44--5x5x
Add-on features:TLM Recruiting
Basic HR services
* - Pass through RevenueRevenue multiple per client EE:
PayrollTax complianceMoney Movement
Add-on features:Pay-as-you-go workers’ compFSA 401(k)TLMRecruiting
PayrollTax complianceMoney Movement
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TotalSource ─ Summary
Market is fragmented and under-penetrated
New markets and increased sales force productivity will drive growth
TotalSource is the market leader
New products like ASO will expand the opportunity
Our experienced team is very well positioned to extend TotalSource’s market leadership position and to generate
very strong future revenue growth 8
Q&A SessionThere are no slides during this portion
of the presentation
Thank YouThe conference has concluded