ADP Payroll History

This article was written by Phin Upham

Payroll isn’t the sexiest industry around, but there is one name that is found consistently at the top. Today, we call them Automatic Data Processing, but they began life in 1949 as Automatic Payrolls Inc. Henry and Joe Taub began the manual payment processing company with Frank Lautenberg. Lautenberg became the CEO in 1952, and changed the company to its current name in 1957.

Right around this time, ADP began phasing in the usage of punch cards, check printing machines and early mainframe computing. Their success and innovation led to a public offering in 1961. The company had amassed 300 clients, 125 employees and had revenues approaching the half-million mark.

By 1985, and since, the company has had revenues that exceed the $1 billion mark. It held a ten-percent market share on payroll checks in the United States, which has only increased since they became a professional employer organization. They shifted from simply helping a company’s HR department to becoming the whole department itself. Employers could outsource anything from recruiting to risk management.

The ADP business model has not changed much since the company began. It takes care of a company’s transactions so that they can focus their efforts on the core business model. Payroll takes time, and it requires staffing to handle all aspects of it. ADP fills an important role for businesses looking to save money on the human resource aspects of managing a company. ADP supplements this goal with an emphasis on embracing technology, and so it encourages clients to move to new payroll systems that are more effective and easier to track.

About the Author: Phin Upham is an investor at a family office/hedgefund, where he focuses on special situation illiquid investing. Before this position, Phin Upham was working at Morgan Stanley in the Media & Technology group. You may contact Phin on his LinkedIn page.

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