ADP 2007 Annual Report Download - page 12

10
WHAT WE ACCOMPLISHED
IN 2007
This year, more companies than ever
used Employer Services including PEO
Services (ES) solutions to help identify,
attract, hire, pay, and retain employees.
In fiscal 2007, we:
• Served over 560,000 employers worldwide
• Paid nearly 33 million workers in over 30
countries, including 1-in-6 U.S. employees
• Provided over 50 million workers with
one or more of our services
• Moved over one trillion dollars in client
payroll taxes, direct deposits, and related
funds in the United States and Canada
The demand for ES products and services
created strong growth in new business
sales, higher revenues, and excellent
client revenue retention.
Significant Revenue Growth
This year, total ES revenues grew over
12% to $6.5 billion —with over 11%
organic growth and 1% growth from
acquisitions. In the United States,
revenues from traditional payroll and
payroll tax filing, our oldest, largest
and most profitable businesses, grew 9%.
U. S. revenues derived from services
other than our traditional payroll and
payroll tax filing businesses – what we refer
to as “beyond payroll” revenues – grew 21%.
Consistent New Sales Growth
New sales – annualized recurring revenues
anticipated from sales to new clients and
additional services to existing clients –
grew 11% to over one billion dollars. This
was our third consecutive year of double-
digit new sales growth in ES.
New business sales growth is the single
most important contributor to future
revenue growth. Adding new clients creates
incremental opportunities to cross-sell
additional products and services.
Higher Client Longevity
In 2007, we achieved record client revenue
retention. ES clients are staying an average
of 10 years, based on revenue life cycle.
Our largest clients, both in the United
States and in our international markets,
generally are with us on average for about
15 years.
Increased client longevity is a key ES
business metric, because it directly relates
to margin improvement. Revenue from
existing clients is more profitable than
revenue from new clients, where there
are offsetting selling and implementation
expenses. [See Abercrombie & Fitch case
study, page 14.]
Acquisitions
We made several acquisitions to help us
expand our client base and reach into
adjacent markets:
• Employease®— a leading Web-based solu-
tion for HR and benefits professionals,
featuring employee self-service — which
we are branding as ADP’s HR/Benefits
Solution [See Access Insurance Holdings
case study, page 16.]
• VirtualEdge®– a robust, hosted, multi-
lingual, multi-country solution for
recruiters and hiring managers that adds
value and capabilities to our existing
screening and selection services
• Intuit’s fully outsourced payroll business
• Mintax®— a provider of state and local tax
credit incentives, complementing our
existing business that focuses on federal
incentives
• Taxware®– a provider of transaction-
processing solutions for sales and value-
added taxes that leverages our extensive
money-movement capabilities
Serving the Growing Trend Toward
HR BPO Solutions
The demand for HR BPO (business
process outsourcing) “bundled” solutions
among companies of all sizes continues
to grow, and we are actively meeting that
market demand with a comprehensive
suite of scalable solutions for companies
of every size:
PEO and ASO – for small-
and medium-size businesses
ADP’s Professional Employer Organization
(PEO) – TotalSource®– is the largest PEO
in the United States in terms of number of
worksite employees paid. The revenue oppor-
tunity from PEO clients is seven-to-ten
times that of a traditional payroll client.
This year, we increased the number of
worksite employees served by our PEO
to 159,000 from 139,000 last year.
[See Universal Imaging case study, page 18.]
Of the six new offices we opened nationwide
this year, four are in California, one of
our fastest-growing markets.
EMPLOYER SERVICES