The European Challenge: ADP Employer Services Sets Sights on Multinational, Full-Service HR Outsourcing Client Base

With FY04 revenue of $4,809 million, ADP Employer Services (ADP ES), a division of Automatic Data Processing (ADP), is the largest provider of payroll outsourcing solutions in the world. However, in Europe, as in the U.S., the economy continues to experience low GDP growth and ADP ES like many payroll and HR service providers has seen a slowdown in its revenue growth rates as its clients have either slowed or frozen their hiring programs.

To counter this impact, ADP has pursued a two-pronged strategy of increasing wallet share with its existing client base through the up-sell of a broader HR services portfolio and a value-added, multinational proposition for its global client base, focused on the integration of HR and payroll systems and reporting.

"ADP is undoubtedly a heavyweight in Europe, but one that has yet to fully realize the synergies of its extensive multicountry presence," says IDC's HR Services Research Manager, Mike Friend. "As a result, although ADP occupies an enviable top 3 position in France, Germany, the Netherlands, the U.K., Spain, Italy, and Switzerland, it has failed to deliver the knockout blow to its competitors."

This IDC insight offers an analysis of ADP ES' strengths and weaknesses and asks what strategy ADP ES is pursuing in order to energize growth rates and expand its footprint in the European payroll outsourcing market.