Improved Payroll Process Efficiencies For Small Markets On Managed Services

Evidence and data. Interviewees reported that prior to adopting ADP’s managed services model, payroll processes in small market populations relied heavily on manual inputs. Processes varied significantly across local vendors and HR teams were required to enter employee data multiple times across HR and payroll systems. For these smaller markets, limited employee headcounts created a disproportionate administrative burden due to the need for file preparation, data validation, exception handling, and vendor follow-up.

Integrating ADP managed services into the organization’s human resources information system (HRIS) enabled these payroll systems to be operated through standardized workflows supported by automated data flows.

• The head of global reward and people operations from the retail beauty organization noted that before implementing ADP, payroll inputs were largely manual, which required HR teams to create forms, prepare files, and send them to local vendors. This resulted in duplicate data entry for hires, promotions, and transfers across multiple systems. After implementing ADP Global Payroll and integrating it with their HCM system, these inputs were automated, and data entered into their HCM system would be directly populated into ADP Global Payroll. This reduced manual effort, lowered error rates, and eliminated many local vendor touchpoints, creating noticeable time savings for payroll and HR operations teams.

Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:

• A team of two FTEs managed the payroll effort on the legacy platform.

• The implementation of ADP Global Payroll reduces effort by an average of 75%.

Risks. This benefit may vary across organizations due to:

• Localized salary amounts for payroll across regions. Forrester has used local salary information based on TEI standards with a 3% year-on-year increase from the 2023 ADP Global Payroll TEI study.

• The extent to which the legacy environment had manual practices for payroll.

Results. To account for these risks, Forrester adjusted this benefit downward by 15%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $1.1 million.

Improved Payroll Process Efficiencies For Large Markets On Managed Services

Evidence and data. Interviewees reported that efficiency gains were more pronounced in smaller markets, as larger markets already operated with more mature and established payroll processes. Even so, the shift to ADP Global Payroll still delivered meaningful reductions in effort and time for teams in larger markets, allowing payroll staff to redirect capacity toward more strategic work such as data analysis and improving pay quality.

• The senior director of global payroll from the manufacturing and home appliances organization highlighted the consistency that ADP Global Payroll provided. This becomes especially valuable for large markets where high employee volumes demand strong controls, standardized processes, and reliable global reporting. With ADP Global Payroll, a single report can pull data across all major markets, making global oversight significantly easier.

Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:

• Prior to adopting ADP Global Payroll, organizations in large markets had an average of four FTEs managing payroll.

• Localized salary amounts for payroll per region. Forrester has used local salary information based on TEI standards with a 3% year-on-year increase from the 2023 ADP Global Payroll TEI study.

• After implementing ADP Global Payroll, effort is reduced by an average of 30%.

Risks. This benefit may vary across organizations due to:

• Differences in the legacy payroll process setup in different organizations.

• Variances in localized salary amounts for payroll per region.

Results. To account for these risks, Forrester adjusted this benefit downward by 15%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $756,000.

Cost Savings From Decommissioning Legacy Systems

Evidence and data. Interviewees emphasized that by consolidating and retiring legacy payroll systems, their organizations avoided substantial ongoing operating and maintenance expenses. This resulted in savings directly tied to system rationalization and decommissioning.

• The head of global reward and people operations from the retail beauty organization shared that implementing ADP Global Payroll enabled the elimination of 29 legacy payroll solutions, which generated ongoing operational savings that offset the implementation cost of ADP Global Payroll.

• The senior director of global payroll from the manufacturing and home appliances organization reported that 30 to 35 legacy payroll systems were eliminated with the implementation ADP Global Payroll, which generated approximately US$3 million in net annual cost savings from consolidation.

Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:

• The average license fee of the legacy payroll systems for large and small markets is based on information provided in current and former interviews for the TEI of ADP Global Payroll in 2023.

Risks. This benefit may vary across organizations due to:

• Variances in legacy license fees.

Results. To account for these risks, Forrester adjusted this benefit downward by 10%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $2.2 million.

Cost Savings From Improved Regulatory Compliance

Evidence and data. Interviewees highlighted that consolidating payroll with ADP reduced regulatory compliance risk, particularly around statutory reporting and tax-related obligations. Their organizations operated fragmented payroll environments in the previous environment with multiple vendors, inconsistent market-level processes, and limited visibility into statutory obligations. This made it difficult to stay up to date with legislative changes, which increased the risk of late or incorrect filings with authorities. ADP’s managed services model centralizes legislative updates, standardizes statutory reporting, and embeds local expertise which reduced reliance on external legal advisors. As a result, participating organizations avoided compliance penalties, interest charges, and other government-imposed fees.

• ADP Global Payroll’s provision of reports and standardized IT controls supported Sarbanes–Oxley (SOX) and GDPR compliance, giving teams greater confidence in passing regulatory audits. The director of global payroll from the security and asset protection organization explained: “Failing an SOX audit could bring significant financial and reputational consequences for us. The fact that we use ADP means we can rely on their SOC 1 report, which makes our audit process much easier and puts us in a much stronger position to pass.”

• Interviewees cited fewer penalties related to payroll and time savings from more efficient audit preparation, with some reporting that audit preparation effort decreased by up to half once processes were standardized. The same interviewee noted, “It would probably take twice as long to prepare for an audit if we didn’t have ADP because we’d have so many different variations.” Overall, these efficiencies also supported smoother, more consistent compliance activities.

Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:

• The average annual penalty for organizations for noncompliance is at $1.5 million for large markets and $750,000 for small markets.

Risks. This benefit may vary across organizations due to:

• Differences in compliance regulations across markets and industries, which can significantly influence the likelihood and magnitude of penalties.

• Employee headcount variations, since markets with very small populations often have disproportionately high compliance risk due to part-time roles, shared responsibilities, or under-resourced teams.

• The maturity of existing payroll processes and controls, where organizations with already strong compliance mechanisms may see smaller gains.

Results. To account for these risks, Forrester adjusted this benefit downward by 15%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $6.4 million.

Reduced Payroll Labor Costs Through Shared Services Consolidation

Evidence and data. Interviewees also emphasized that one of the biggest labor-related efficiencies came from consolidating payroll work from dispersed, in-market payroll teams into shared-services hubs enabled by ADP’s standardized processes and integrations. Instead of maintaining separate in-market payroll teams, organizations shifted work to lower-cost centers, which reduced the need for hiring or retaining payroll talent in high-cost markets. This meant eliminating manual data entry, reducing duplicate work, and consolidating processing into shared-services locations. As a result, the organization required fewer payroll administrators and specialists across markets.

By centralizing payroll operations and leveraging common systems and automation, organizations avoided significant ongoing labor costs, reduced reliance on expensive in-market specialists, and scaled payroll operations more efficiently as the business grew.

• The head of global reward and people operations in the retail beauty organization highlighted that by transitioning from in-market payroll and HR operations to a centralized delivery model, they achieved an estimated 20% to 30% reduction in employee costs. This shift addressed the inefficiencies created by operating in many small markets where local staff were performing both payroll and HR operations. The same interviewee shared: “By consolidating this work into centralized teams located in lower-cost markets such as Poland, Spain, or Mexico, we reduced the need to maintain separate roles in every market, resulting in headcount reduction and more scalable resource deployment. This combination of leaner staffing and optimized geographic footprint delivered substantial, sustainable cost savings.”

• The senior director of global payroll from the manufacturing and home appliances organization explained that ADP’s standardized processes and its integration with HR systems enabled the reduction in headcount and avoidance of hiring costs for payroll administrators. Previously, in-market payroll teams were necessary because data had to be manually entered, corrected, and reconciled locally. The HR-to-ADP integrations automated the flow of employee data into global payroll systems, which eliminated manual entry and reduced duplicate work. As a result, they no longer needed to staff local payroll roles, avoiding headcount costs and relying instead on a centralized managed services team.

• The director of global payroll in the security and asset protection organization emphasized that ADP Global Payroll enabled the company to consolidate payroll processing into lower-cost shared-services hubs, most notably in India. Because payroll was unified by ADP systems, work could be moved out of more expensive markets and handled centrally without sacrificing quality or compliance.

Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:

• Ten percent of payroll roles previously located in high-cost markets are reallocated to lower-cost markets as a result of ADP Global Payroll and shared services consolidation.

• Prior to implementing ADP Global Payroll, a total of 60 payroll specialists supported global payroll operations annually.

Risks. This benefit may vary across organizations due to:

• Localized salary amounts for payroll talent in high-cost and low-cost markets.

• Differences in the ability to centralize or relocate work, depending on legal, regulatory, union, or labor requirements.

• Complexity of local payroll requirements. High-complexity markets may still require some in-market expertise.

• Differences in existing system integration. Organizations with limited HR system standardization may face higher effort or slower consolidation benefits.

Results. To account for these risks, Forrester adjusted this benefit downward by 10%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of nearly $2.3 million.

Reduced Full-Time IT Support Costs

Evidence and data. Interviewees emphasized that ADP’s managed services model significantly reduces the internal staffing required to operate, integrate, and support global payroll. ADP’s Global Payroll owns system configuration, maintenance and integrations, which eliminated the need for organizations to dedicate in-house technical teams to maintain payroll platforms. Several interviewees estimated that this avoided hiring technical FTEs who would otherwise be needed to support system updates, troubleshooting, interfaces, and compliance configuration across markets, which translated into substantial ongoing cost savings.

Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:

• Prior to implementing ADP Global Payroll, it required 20 support FTEs to manage payroll systems, processes, and technical support.

Risks. This benefit may vary across organizations due to:

• Differences in existing payroll and IT operating models, as organizations with more mature support functions may see smaller reductions in number of FTEs.

• Variation in system integration complexity, where organizations with fragmented payroll systems may require more internal support even after adopting ADP.

• Differences in regulatory requirements, which may necessitate maintaining internal IT or technical staff despite ADP managing much of the infrastructure.

Results. To account for these risks, Forrester adjusted this benefit downward by 15%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $1.5 million.

Cost Savings From Fewer Payroll Errors

Evidence and data. Interviewees emphasized that automation and standardized processes in ADP significantly reduced payroll errors that previously created financial leakage and costly rework. In the prior environment, manual data entry, upstream HR data issues, and inconsistent local processes frequently resulted in incorrect payments, missed earnings, overpayments that required recovery, and reissued pay checks.

These errors created both direct costs (e.g., paying employees incorrectly or being unable to claw back overpayments) and indirect costs (e.g., staff time spent correcting mistakes and handling employee inquiries).

• The senior director of global payroll in the manufacturing, home appliances organization shared that while upstream data issues such as incorrect values entered by managers or HR partners were inevitable in a self-service environment, ADP Global Payroll significantly reduced the financial impact of those errors. ADP’s systems added a layer of automated validation and guardrails that prevented invalid data from entering the payroll systems, allowing teams to correct issues before they affected paychecks.

• The head of global reward and people operations from the retail beauty organization shared that ADP helped organizations significantly limit high-cost payroll risks by reducing manual intervention and strengthening controls. They estimated that without these improvements, errors and compliance issues could have cost the organization 1% to 2% of its total payroll, representing millions of dollars for a workforce with 6,500 employees. This avoided cost reflects the downstream effects of manual processes such as incorrect payments, unrecoverable overpayments, lost earnings, and other leakages that occur when errors go undetected.

Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:

• The composite organization processes 1 million payroll transactions annually, an assumed constant over the three-year period. These transactions include regular pay runs, off-cycle payments, bonuses, adjustments, corrections, and any other employee compensation events that trigger a payroll action.

• The average cost of a payroll error begins at $889 and increases annually. This amount encompasses both direct financial impacts (e.g., overpayments, payment claw back challenges, corrective runs) and indirect impacts (e.g., manual effort, process leakage, and employee productivity effects).

Risks. This benefit may vary across organizations due to:

• Differences in payroll volume and transaction complexity. Organizations with fewer or less complex payroll cycles may see smaller reductions in error-related costs.

• Variation in payroll accuracy and process maturity before the implementation of ADP Global Payroll. Organizations with higher accuracy rates or more automated payroll workflows may experience lower incremental improvements.

• Differences in the cost structure associated with payroll errors. Factors such as labor rates, ability to recover overpayments, internal reprocessing effort, and local labor regulations can significantly impact the cost per error.

Results. To account for these risks, Forrester adjusted this benefit downward by 15%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $3.1 million.

Unquantified Benefits

Interviewees mentioned the following additional benefits that their organizations experienced but were not able to quantify:

• Improved operational resilience and global governance. Interviewees described a significant improvement in global governance and operational standardization after moving to ADP. Prior to implementing ADP, payroll was managed through dozens of local systems and vendors with inconsistent ownership, controls, and processes across markets. ADP’s global platforms and managed services model enabled customers to establish unified processes, standardized controls, and clear accountability across local, regional, and global levels. Interviewees emphasized that this consistency simplifies oversight, strengthens compliance posture, and creates a more predictable and well-governed operating structure across markets.

• Enhanced support experience for internal teams. Interviewees emphasized the value of ADP’s clear and well-structured escalation path for resolving payroll issues. Local payroll managers work directly with in-market ADP support teams, and most issues are resolved at this level without further involvement. In the rare case where additional assistance is needed, issues can be escalated first to regional leads and then to global contacts, with executive-level access available if necessary. Customers noted that this layered escalation structure provides predictability and confidence, ensures that issues are addressed quickly by the appropriate teams, and minimizes the time and effort required from internal stakeholders.

• Improved EX. Interviewees shared that moving from manual, inconsistent payroll processes to a standardized digital model significantly improved the overall EX. In several markets, payroll activities — including payslip distribution — were previously handled manually, creating delays and variability in how employees accessed their information. The introduction of a centralized digital platform now allows employees to benefit from a more reliable, self-service experience that provides consistent access to payroll information across all regions.

Flexibility

The value of flexibility is unique to each customer. There are multiple scenarios in which a customer might implement ADP Global Payroll and later realize additional uses and business opportunities, including:

• Enabling business expansion through a scalable, integrated payroll platform. ADP’s global platform provides the scalability and operational foundation that organizations need to support future growth. Customers noted that ADP offers the global reach, automation capabilities, and multinational expertise required to enter new markets without increasing operational complexity. ADP’s strong ecosystem integration with HRIS systems creates a unified data and process foundation that supports smooth expansion into additional regions while eliminating dual entry and improving data quality, and concurrently ensuring consistent, reliable reporting. Together, these integration and standardization capabilities that position ADP as a strategic enabler of broader business transformation, allowing organizations to scale their operations and pursue new expansion opportunities with greater confidence.

Flexibility would also be quantified when evaluated as part of a specific project (described in more detail in Total Economic Impact Approach).