Tech Story

Automatic Data Processing, Inc., referred to as ADP, is a leading provider of payroll management services in the US. It is regarded as one of the very few companies in the US, that had an AAA credit rating issued by both Standard & Poors and Moody’s. Here’s a look at everything you need to know about the growth of ADP.

About the Founder

Henry Taub was born on September 20, 1927, in Paterson. The American businessman who has both Hungarian and Jewish ancestry co-founded ADP. Taub attended Eastside High School, and did his graduate studies from the New York University in accounting, graduated in 1947. Two years later, in 1949, Taub founded Automatic Payrolls Inc., which was a payroll processing service in New Jersey. That company later came to be Automatic Data Processing and grew to become the leading computerized payroll management service in the U.S.

He retired from ADP in the mid-1980s. Taub served as the president from 1949 to 1970 and then worked as a CEO for seven years till 1977. Also, he was a chairman till 1985, served as an honorary board member till his death.

After retirement from ADP in the 1980s, Taub served as a Board of Governor in American Technion Society between 1990 and 2003. He passed away in 2011, owing to complications which arose as a result of his leukaemia.

While at ATS, his wife and he were responsible for handling several projects such as the Henry and Marilyn Taub Science and Technology Center, a Faculty Recruitment Program and the Taub Fund for the Future.

Founding ADP

n 1949, Henry Taub and his brother Joe together founded Automatic Payrolls, Inc. which served as a manual payroll processing company. The brothers were joined by Frank Lautenberg and in 1957, Lautenberg, who had previously worked in the sales and marketing division, became a partner.

While starting, the brothers had to make do with a shoestring operation and so often delivered payrolls by bus and even cleaned their own offices during the night.

Henry provided the vision and strategy for the company, while Joe managed the operation and regular running of the company. Meanwhile, Lautenberg handled all the sales and marketing the company had to do to gain clients.

After four years, in 1961, the company switched names to Automatic Data Processing, Inc. and upgraded their manual business to a more automated form which utilized card machines, printing machines, and computers.

The company went public the same year, employing over 125 people, and having around 300 clients. ADP generated revenues worth US$400,000 in its first year.

When the business started picking up, the brothers decided to expand, and so, in 1965 they set up a branch in the UK.

By 1970, Lautenberg had taken over as the president and ADP switched over from the American Stock Exchange to the New York Stock Exchange. In 1974, they acquired Time Sharing Limited, which was a company that specialised in providing computer-related services, and a year later they acquired Cybernetics.

By 1972, the company had several dealer franchises and renamed its auto-division, ADP Dealer Services to CDK Global. Lautenberg remained the CEO until he resigned when he became a part of the US Senate in 1982.

Bringing in the Big Bucks

The company grew exponentially in the 1980s and by 1985 was making more than $1 billion a year. The company handled almost 20% of the entire American payroll market. Such growth helped propel them into other avenues such as employee services management.

In the 1990s, ADP acquired HR companies such as Autonom, GSI, and Chessington Computer Centre which handled administrative services. By the early 2000’s they were expanding aggressively, having acquired companies such as Kerridge Computer Co.

which specialised in creating dealer management systems for auto part dealers. A year later, ADP made its foray into the world of brokerage and insurance, by setting up the ADP Brokerage Service Group. In 2010, they bought the auto-marketing enterprise Cobalt, to improve their footing in the field of automobile manufacturing.

Automatic Data Processing Inc

Fast forward seven years to 2017, Automatic Data Processing Inc. was employing more than 56,000 people worldwide and generated revenues over $12 billion.

This helped the company become the largest HR service provider in the Northern half of the world, with services spread across Europe and North America. In 2018, the company acquired WorkMarket, which helps companies manage freelancers and contractors.

The company now operates in over 112 countries and has won several accolades and laurels such as, “Most Admired Fortune 500 Company”, “100% CEI rating” and 47th on a list of Best places to work by Computer World.

Such growth rates and revenues make it clear, without reasonable doubt that ADP is the largest HR service provider for the whole of North America, Europe, Latin America and the Pacific Rim.

With the handling of employees becoming a growing concern for companies around the world, it is safe to say that the company will be making big bucks in the years to come.