Don Aleshire is our Payroll services member. Don stated that ADP is a 62 year old company.
Although ADP is thought of as a payroll preparation services company, only 18% of their revenue is generated in that product line. Don presented us with an insight into their Professional Employer Organization (PEO) segment of their services. Companies that use PEO services are in effect outsourcing their employer tasks. ADP offers these Fortune 500 benefits to even their small business clients. This is the largest growing segment of ADPs business. They take care of hiring and firing employees, benefits and can guarantee renewal rates through their large pool of buying power. Don stated that not all companies that apply for PEO services are eligible. They do not accept high risk business companies. As mentioned, they offer guaranteed rates and healthcare. An eligible company must have a minimum of 7 employees and 50% must be on benefits. They are very picky about the companies that qualify. The cost savings to the participating company who use ADP’s PEO program is another benefit.
Remember Don Aleshire and ADP when you hear your associates mention that they are looking for alternative payroll and human resources functions for their companies.