ADP, best known by the adjective “payroll processor,” will need to launch a rebranding campaign. Something like, “ADP, the full-service human capital company.”
It’s the second acquisition for ADP in as many months. In September it bought Asparity Decision Solutions, a supplier of employee health benefits decision support tools.
Besides giving ADP a strong and immediate presence in the burgeoning RPO business, The RightThing’s AIRS unit brings a sophisticated recruitment technology and a well-regarded recruiter Internet training component.
Deal makes ADP a serious RPO player
However, the announcement strongly suggests that it was the RPO side of the house that ADP was after in the acquisition.
“With the addition of The RightThing’s industry-leading RPO services, technology and management team, ADP will not only expand into a strategic adjacent market, but will also immediately become a principal player in the RPO industry,” said Regina Lee, President of ADP’s National Account Services, Major Account Services, GlobalView and ADP Canada business units. “Expansion into complementary markets – such as RPO – will be of great benefit to our clients and is a critical element in our plan to grow our business.
As a privately-owned company, The RightThing does not disclose its financial details. However, when the company acquired AIRS, which reported its 2006 income as $9.1 million, CEO Terry Terhark reported The RightThing was the larger of the two companies. At the time of the sale, AIRS had a staff of 62. The RightThing had about 450 employees.
ADP, which has more than 51,000 workers, has been aggressively pushing into the human capital market for several years. Even though it’s widely known for its payroll processing and benefits administration, ADP has a strong HR technology line-up and services for auto dealers.
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Acquisition fills one of ADP’s gaps
ADP started building out its HR tech products in 2006, when it bought Virtual Edge, which had a strong talent acquisition system. Over the years, it’s added a number of other companies to strengthen its business process outsourcing, as well as to expand its HR tech services. In 2010, it acquired Workscape, giving it a compensation component.
The year before, ADP and Cornerstone OnDemand partnered up with ADP gaining the rights to license and sell Cornerstone’s talent management suite, which included succession, performance, and learning. Now, Vantage integrates all those components into an HR suite aimed at the enterprise market.
The RightThing acquisition helps ADP fill in one of the few remaining gaps in its obvious quest to be a 360 degree, HR services provider. By its own count, the company already does business with 500,000 companies of all sizes through its payroll and benefits handling arm. That gives it unique access — and intelligence — into the hiring practices of its customers.
With The RightThing, ADP can now provide recruitment services of one type or another to even the smallest — or the largest — of employers.