ADP

ADP adds analytics and pay benchmarks to its payroll and HR products

The benchmarks come from the HR and pay data of ADP’s own clients

A peer figure only helps if the peer group is large. That is the main reason to look at ADP. ADP draws its benchmarks from aggregated, anonymised HR and pay data from its U.S. client base. On its DataCloud page ADP counts 1 million employers and 39 million employees. On ADP Marketplace it counts 1.1 million employers and more than 42 million employees. In a January 2024 release it counts over one million clients in 140 countries and 41 million wage earners worldwide. The three counts differ, so ask ADP which one your benchmark uses.

The benchmarks rest on more than 30 measures. They cover compensation, time and attendance, workforce demographics and how much people use ADP systems. ADP also runs a benchmarking engine that refreshes every month. It offers market pay benchmarks and talent market insights.

The figures can also reach people who are not in HR. You can set access to workforce insights for people who have no need to log in to the HCM platform. Data quality checks and warnings sit inside the analytics. That helps when the numbers reach people outside HR.

Which ADP product fits depends on the system you run today

ADP sells analytics inside more than one product. The right starting point depends on what you run today.

ADP’s customer stories give a rough idea of what to expect. They are ADP’s own reports. Ewing Irrigation is a landscaping business in Phoenix, Arizona, with 1,300 employees. Its executive vice president puts turnover at 31 percent before ADP and 25 percent after one full year. The same executive reports about $750,000 saved from reduced turnover in the first year. Central Trust Bank is a financial services firm in Jefferson City, Missouri. It has 3,000 employees. It moved from two days to two minutes to share a turnover figure.

Camping World has 12,000 employees. Its vice president of payroll, benefits and compliance reports that DataCloud helps analyse data and forecast needs. NexusTek’s HR vice president reports that DataCloud helps set, measure and meet its diversity goals. Ask ADP for a customer of your size and industry, and ask what else they changed in the same year.

Check ADP’s data terms, which features need Enhanced Insights, and the turnover scores

Four things can change your decision after the demo. The first is what the terms let ADP do with your employees’ data. The second is which features need a separate subscription. The third is how the scores about individual people are meant to be used. The fourth is who can read ADP’s security reports, and when.

Under ADP’s Enhanced Insights terms, ADP may use customers’ and their employees’ information for purposes other than providing the application. That information is aggregated and anonymised. Under the same terms, the customer has no ownership interest in that data. The terms of your existing services agreement with ADP govern the application, except the payment terms you agree at checkout. Your legal team should read both documents.

ADP said in January 2024 that it trains its AI on its own dataset. It uses only dedicated ADP copies of large language models. It keeps the personal data in its models to a minimum.

Several features need Enhanced Insights. Saving, exporting and sharing data across the organisation needs it. The Power BI connector and the Tableau connector each need an Enhanced Insights subscription. Enhanced Insights itself is available to clients who use People Analytics powered by ADP DataCloud. So price the products together.

Some scores point at individual people. People Analytics tells users which employees are likely to leave and why. ADP’s turnover risk headlines tell users which members of their team are most likely to leave. Enhanced Insights has a model that picks out top performers with a high chance of leaving. On decisions that affect a person’s employment status, ADP takes a position for its Marketplace. AI and machine learning models should not be the deciding factor. ADP also tells users to validate AI-generated content for accuracy, relevance and completeness. Treat each score as a reason to talk to a manager. Decide who may see it before you switch it on.

ADP issues SOC 1 Type 2 and SOC 2 Type 2 reports over select products and services. ADP maintains ISO/IEC 27001 and ISO/IEC 27701 certifications for select services and locations. ADP generally restricts the SOC reports to prospective and existing clients who have signed non-disclosure agreements or contracts. Check that the products you plan to buy are among the select ones.

Enhanced Insights costs $3.00 per employee per month

Enhanced Insights is only one of the products you may need. So add up the whole bill. ADP Marketplace offers one Enhanced Insights edition at $3.00 per employee per month. The first payment is 100% off.

The edition includes unlimited users, HR and pay benchmarks, and a diversity, equity and inclusion dashboard with its own benchmarks. It also includes data mashups that combine two or more data sources, and tools ADP calls data explorers. The Power BI connector has a free edition for existing Enhanced Insights clients only.

A price per employee grows with headcount. If ADP bills every employee, 1,000 employees cost $3,000 a month and 2,000 cost $6,000. Ask which headcount ADP bills on. Ask for the price of People Analytics powered by ADP DataCloud too. Enhanced Insights is available to clients who use it. Ask for the price of Workforce Now, Lyric and Real Income if you need one of them.

Leaving is the other cost to plan for. Customers can export results to Power BI and Tableau. DataCloud lets users save, export and share data across the organisation. API Central lets your developers connect ADP workforce data to other systems. Under the Enhanced Insights terms, you have no ownership interest in the aggregated, anonymised data. Ask ADP in writing what happens to your data when the contract ends.

Seven questions for ADP

These questions settle the open points above before you sign. They cover the full price, the benchmark group, the data terms, the security reports and the risk scores.

1. Which products do we need besides Enhanced Insights, and what does each one cost? Good answer: A written quote that covers every product and gives a price per employee per month.
2. Which headcount do you bill on? Good answer: A written rule, such as every employee on payroll, in the order form.
3. Which group of companies does our benchmark come from? Good answer: A named peer group, the number of employers in it and the countries it covers.
4. Will you limit what ADP may do with aggregated, anonymised data from our employees? Good answer: A written list of purposes, or a clause that removes our employees’ data from the terms.
5. Can we read your SOC 2 Type 2 report before we sign, and which products does it cover? Good answer: Yes, under a non-disclosure agreement, with our products named in the report.
6. Who sees the turnover risk headlines, and can we limit them to HR or switch them off? Good answer: A role list that we set, and a switch that we control.
7. Which ADP Assist Agents can customers use today? Good answer: A dated list of what is live now, kept apart from what is being built.

Alternatives to ADP

ADP’s case rests on the size of its benchmark pool. So compare the pool each alternative uses. Four alternatives build analytics into their own payroll and HR products. They are Dayforce, Paycom, Paycor and UKG. A fifth, One Model, connects workforce data from several systems.

UKG’s Workforce Intelligence Hub compares overtime, turnover and other metrics against UKG customers of similar industry, region and size. UKG builds its benchmarks on anonymised workforce activity from approximately 80,000 customers. Dayforce has a library of pre-built dashboards and KPIs inside Dayforce. Paycom’s Report Center builds reports across payroll, talent and time data. Paycor gives real-time insights and benchmarking, and lets users build custom dashboards.

One Model suits a different job. Its Data Mesh connects, governs and structures workforce data for analytics, reporting and AI. Look at it if the data you want to analyse sits in more than one system.

Buying nothing is the last option. If you run Workforce Now or Lyric, use the analytics in it first. Then see what questions are left.