Adp
ADP runs payroll for roughly one in six American workers, which is the kind of stat that gets quoted in press releases but rarely explained. The short version: they're the default for any HR director who doesn't want to be blamed for picking the wrong vendor. The longer version is more interesting.
What ADP is actually good at
Tax filings. That's the headline. If your payroll runs across multiple states and you've ever had a state revenue department send you a $4,000 nastygram because some W-2 box got marked wrong, you understand why an enterprise pays ADP to make that problem theirs. Workforce Now handles the multi-state mess without you needing to know which state taxes severance and which doesn't.
The second thing ADP is genuinely good at is integration with the boring infrastructure of work — 401(k) carriers, benefit brokers, time-tracking hardware. Their biometric time clocks tie back to payroll without anyone touching a spreadsheet. For a 200-person warehouse, that's most of the value.
Where they overcharge
Anyone under 25 employees should not be on ADP. The pricing isn't transparent, the per-employee fee creeps up after year one, and the support tier you get below the enterprise plan is a callback queue. QuickBooks Payroll or Gusto will run a sub-50 headcount cleanly and you'll actually know what you're paying month to month.
The other place ADP overcharges: their PEO product. The idea sounds good — they become the employer of record, you offload benefits and compliance. The price is brutal once you do the math. For most companies under 100 employees, a good HR compliance handbook plus an actual HR person at $75K runs cheaper than the PEO margin ADP keeps.
The economic story buried in their results
ADP publishes a monthly private-sector employment report. Economists treat it as a leading indicator for the BLS jobs number. It's not bad data, but it's not the same data — ADP only sees employees of ADP's clients, which skews toward larger firms in certain industries. Don't take the monthly report as gospel. Anyone trading on it should have a decent macro reference book on hand to cross-check.
The interesting trend in the last two years is the share of ADP's revenue coming from analytics and benefits services rather than payroll processing itself. That's the moat. Payroll is a commodity. Knowing what your workforce costs you per hour, broken out by department and trended against your industry — that's the upsell, and it works.
If you're shopping vendors right now
Get three quotes. ADP, Paychex, and a modern competitor like Gusto or Rippling. Tell each of them the others are bidding. ADP's first-year discount will be substantial; what you actually want to know is the year-two and year-three number. That's where they make their margin. Get it in writing. A good contract negotiation guide pays for itself the first time you renegotiate.
Pick ADP if you're over 100 employees, multi-state, and have someone whose job title contains "controller" or "HR director." Pick anyone else if you don't.
Ready to shop? Compare Trending Now across stores →
