Going Mobile

In early November, my colleague Linda Merritt wrote a blog titled “Mobile Apps Are Ringing Up HRO.” It recognized ADP as one of the early entrants with its payroll app “RUN Powered by ADP” for small business owners, which was launched in October 2010 for the iPhone, iPad, and iPod touch with plans to release Android and RIM-compatible versions this year.  Well, it’s hard to believe it has been this long for those of us considered middle-aged, but 40 years ago, Pete Townshend of the rock band The Who wrote “Going Mobile.” The song was about taking a vacation by riding around in a car with no particular destination, something Pete liked to do.  I don’t think Pete was thinking about processing payroll while riding around in his car, but this week ADP issued a press release with some very impressive statistics noting that there are already 100,000 users for its RUN payroll app.

A comment by one user, Scott McKain, stated “with just a few clicks, we process payroll conveniently and securely… and since transitioning to the RUN Powered by ADP mobile platform, we can now process payroll securely over a mobile device, no matter where our busy schedules take us.” Hopefully, Scott is not processing payroll while driving around in his car on vacation.

The article also references a 2010 nationwide survey conducted by ADP Research Institute that found that small businesses are leading the trend toward increased mobility, with 90% of small business executives out of the office an average of 23% of the time per 40-hour work week.

Since ADP released its app, other providers have announced mobile offerings for HR services as well, which include:

• Raet’s iPhone and iPad app for gross and net payment calculations and accessing jobs and news from Raet (March 2011)
• Manpower’s mobile recruitment app for candidates and recruiters (February 2011)
• Wipro and McGraw-Hill’s partnership to develop “mConnect,” an open-standard mobile learning (m-learning) platform targeted at low-income, rural, and otherwise underserved students and workers in emerging markets (January 2011)
• Buck Consultants’ (subsidiary of ACS, a Xerox Company) two iPhone apps for health and insurance information: Benefits Genie Lite and Benefits Genie, which give individuals the ability to set future appointment reminders and track health and insurance information (November 2010).

Other providers to launch mobile apps include SourceRight Solutions, Kenexa, and The RightThing.

Out of the necessity to provide payroll services, I think we will continue to see increased mobile payroll for processing payslips, viewing payslips, and performing other associated functions such as direct deposit.  In general, mobile offerings for other HR service lines including benefits, recruitment, and learning will be more gradual to take off because they are not as time-sensitive as payroll.  I believe that mobile recruitment will take off but initially more so for hiring managers to approve job requisitions when out of the office and candidates to check on status of jobs they are submitting for.  M-learning will initially be for more self-paced learning to access content and as I stated last fall in my blog I do believe benefits mobile apps will be important for accessing benefits information, including doctors and other medical care providers for such instances when you are on vaction and an emergency arises or as Pete Townshend would say for when you are Going Mobile.

Gary Bragar, Lead HRO Analyst, NelsonHall

ADP Sets a Steady Course For Continued Growth

ADP announced fiscal Q2 2011 Employer Services revenues of $1,663m, up 7% year-over-year.  PEO Services came in at $358m, up 15%.

Payroll and tax filing revenues were flat primarily because certain end-of-year service billings fell into January.  U.S. beyond payroll revenues increased 16% with the help of recent acquisitions and growth across tax services, T&L services, benefits administration, BPO, and HR services.

Pretax margins for Employer Services declined 80 basis points for the quarter due to planned higher selling expenses, investments in sales and service headcount, and recent acquisition activity.

For the second quarter in a row, ADP increased its 2011 forecast.  Employer Services revenue growth is now expected to be 5%, up from 4%.  Including acquisitions, Employer Services revenue is expected to be 6% to 7%, up from 5%.  With a solid pipeline, increased sales force, and its own unique payroll window into economic recovery, ADP is confident in achieving higher results than the original forecast of 1% to 3% revenue growth.

In a sign of general business health, ADP has seen an uptick in clients funding wage increases and paying bonuses.  Its U.S. clients increased employee payrolls by 2.4%, the single largest quarterly increase since 2007.  Also, the ADP large client segment is finally seeing growth in employee payrolls.  While Europe is not adding employees back yet, the rate of decline is slowing.

Employer Services completed two acquisitions during the quarter, including MasterTax for approximately $10m and Byte Software, the largest payroll and HR products and services provider in Italy, for c. $60m.  ADP was already the second largest provider in Italy and now it will be solid in the top position.

The quarterly earnings call was handled from Barcelona, Spain where senior ADP leaders were hosting their annual Global View conference for more than 100 clients.  This is a great opportunity to listen and learn about client HR service needs and gain business insight into the large multinational market.  This was especially important for Global View which represents a major investment for ADP.  Even with growth on track and a solid pipeline, the platform is not expected to breakeven until fiscal year 2013.

In February, ADP’s RUN mobile payroll app, which is already available for the iPhone, will be released for other Smartphone platforms.  Watch for ADP to roll out more HR mobile apps with increased functionality later this year.

ADP knows its business and understands how each aspect is linked to growth and margins and it continues to confidently execute on its long-term strategy of balanced organic growth and expansion through acquisitions.  Steady as she goes – forward.

Linda Merritt, Research Director, HRO, NelsonHall

Mobile Apps are Ringing up HRO

Smart phones, mobile devices and “apps” are more and more ubiquitous and indispensible in our personal and business lives. But while the HR phone is ringing in invitation, is HR, and are HRO providers, ready to answer?

Workforce.com’s article, “Avoid These Hurdles to Adopting HR Mobile Apps,” covers a number of the issues HR faces with mobile apps, perhaps the most critical of which is employee and corporate data security. What data is accessible, and how can you safeguard secure data if the device is lost or stolen? Will only organization-provided devices be allowed mobile access to corporate data? To address this piece of the apps pie, IBM Global Process Services is currently developing HR mobile apps  with authentication and encryption capabilities to address its HRO clients’ data security issues, needs and concerns. It will move to client use and testing pilots in 2011.

In-house HR departments and internal IT groups can wrestle with issues across a variety of technology systems, vendors and applications. Those with a multi-process HRO provider,  or at least an HR technology and administration vendor, will have a partner that can lead in the development of security, integration and even the design of applications that work with the major HR ERP systems and integrate standalone applications, like talent management, thereby reducing the burden on in-house IT.

For buyers using the new SaaS HRO platforms, providers will be developing mobile apps that meet the needs of multiple clients, as well as rolling out applications as they become available by the provider of the underlying HR system (usually Oracle or SAP.)

What HR mobile use offerings make sense? Thoughtful design is required to develop a cost effective strategy for the client and the HRO provider, one based on user needs and usability in a mobile setting. Anything that smacks of bells and whistles and looks pretty but is too complex, or does not add to user productivity, will not add value. User research and testing must be utilized to identify and prioritize which features and functions will make sense from a cost, integration and security perspective.

One of the early entrants is RUN Powered by ADP® mobile payroll, now available on the App Store for its small business RUN payroll clients, and is available for iPhone, iPad and iPod touch. In early 2011, ADP will extend the app to other smart phone platforms like Blackberry, Windows Mobile and Droid.

My colleague Gary Bragar commented on mobile HR apps in his blog, HRO Themes at the HR Tech Conference: Portals, Platforms and Self-Service. He noted that not the just concept, but examples of specific uses, such ability to access your insurance medical provider data while traveling, would be valuable.

This is all now emerging technology for HR and HRO, but users are way ahead, with many adopting the “mobile lifestyle” for work and play on the go, anytime, anywhere. Will HRO be there?

Linda Merritt, Research Director, HRO, NelsonHall