Automatic Data Processing Inc

NASDAQ:ADP

Earnings Call Transcript 2021-Q3

[Operator]

Good morning, my name is Crystal, and I'll be your conference operator. At this time, I would like to welcome everyone to ADP's Third Quarter Fiscal 2021 Earnings Call. I would like to inform you that this conference is being recorded and all lines have been placed on mute to prevent any background noise. After the speakers' remarks and will be a question-and-answer session. [Operator Instructions] Thank you.

I will now turn the conference over to Mr. Danyal Hussain, Vice President, Investor Relations. Please go ahead.

[Danyal Hussain, Vice President of Investor Relations]

Thank you, Crystal. Good morning everyone and thank you for joining ADP's third quarter fiscal 2021 earnings call and webcast. Participating today are Carlos Rodriguez, our President and Chief Executive Officer; and Kathleen Winters, our Chief Financial Officer. Earlier this morning, we released our results for the quarter. Our earnings materials are available on the SEC website and our Investor Relations website at investors.adp.com where you will also find the investor presentation that accompanies today's call.

During our call, we will reference non-GAAP financial measures, which we believe to be useful to investors and that exclude the impact of certain items. A description of these items along with a reconciliation of non-GAAP measures to their most comparable GAAP measures can be found in our earnings release. Today's call will also contain forward-looking statements that refer to future events and involve some risk. We encourage you to review our filings with the SEC for additional information on factors that could cause actual results to differ materially from our current expectations. And with that let me turn it over to Carlos.

[Carlos Rodriguez, President & Chief Executive Officer]

Thank you, Danny. And thank you everyone for joining our call. This morning, we reported another strong set of quarterly results that were ahead of our expectations. With revenue growth of 1% and adjusted EBIT margin down 90 basis points, combining for a modest adjusted diluted EPS decline of 2%.

This of course was the final quarter, before we begin to lap the impact of the pandemic, and I'm very proud of our organization's ability to have delivered positive revenue and earnings growth for the first nine months of the fiscal year despite unprecedented challenges in the economy and the labor markets.

I'll start with a review of some of our key performance drivers and an update on the operating environment, we've been experiencing. This quarter, our Employer Services New Business Bookings reaccelerated and we delivered 7% growth, a strong result for the team. The improved year-over-year growth compared to the second quarter was driven by every business unit.

Importantly, we ended the quarter on a particularly strong note with record March sales performance that was well above pre-pandemic fiscal 2019 levels, which we see as a positive signal for client engagement in the quarters ahead. The selling environment will likely continue to evolve, month-to-month, and with differences on a regional basis as COVID cases and the reopening trajectories stabilize. We are optimistic that with vaccine deployment progressing steadily, our clients are in the best position since the pandemic started to begin making buying decisions again.

Also encouraging is that we started to hold more in-person sales meetings with over a third of our field sales force, having conducted at least one in person meeting this quarter. We expect in person engagement to pick up over the coming quarters as well. With our Q3 performance and the trajectory we see in Q4, we're pleased to now our bookings range around a higher midpoint. We now expect growth of 20% to 25% for the year versus 15% to 25% prior.

Achieving this growth rate would put us at first full year sales productivity, close to 90% of pre-pandemic levels, which would be an incredible achievement for our sales associates. Our retention which has been a key driver for our strong results this year was a positive development once again, and performed slightly ahead of even our revised and elevated expectations. Retention remains at record levels.

Many of you have been asking about how sustainable this improved retention performance is for ADP, it's a great question and hard to answer with precision given the unpredictable environment we're all in, but our belief is that during the pandemic, there have been some temporary benefits from client hesitancy to make major decisions plus lower out of business losses given government support in North America and Europe, but we also believe there will be enduring benefit resulting from the record client satisfaction we've seen as our product and service both have continued to improve.

Next quarter we expect to be in a better position to talk about retention expectations for fiscal 2022. But clearly, we feel very good about what we've achieved this year. On the back of our record Q3 performance, we are pleased to raise our guidance and now expect full year retention to be up at least a 125 basis points from 2020 versus our prior guidance of up a 100 basis points. As a reminder, this guidance would put us in record territory for the year.

Moving to the overall employment picture our pays per control metric performance was softer than expected as an improved only modestly from Q2 and rounded again to a decline of 6% for Q3. But that said, we are encouraged by the recent trends in employment data, particularly in the US as more of the economy reopens.

As of April, we've now started to lap the pandemic affected pays per control figures and have been pleased with the positive year-over-year growth we've seen so far in Q4. So, we're making no change to our full year pays per control outlook of down 3% to 4%.

I'd like to now provide an update on some of our key product and strategic initiatives. In February, we announced the launch of "Roll", a new payroll and tax filing product for small businesses. "Roll" combines, the simplicity of an AI driven chat based interface with the power and scale of our Payroll and tax filing expertise. So digitally and delivered through an app only interface. With this offering, we believe we can expand our reach into the US small business market beyond the businesses we've historically targeted with RUN, as the target clients for all users is with simpler needs who prioritize a mobile first fully chat based interface.

This is a different set of users compared with the target clients for a more comprehensive run solution. We look forward to sharing Roll's progress with you in the quarters ahead. Parallel to this, we are also making great progress in increasing the amount of digital onboarding, we're conducting with RUN, and we've continued to scale up this capability since we discussed it with you during our Innovation Day in early 2020.

This quarter alone 15000 or over one-third of our new RUN clients on-boarded themselves digitally, enabling a better experience for the clients, as well as cost savings for ADP. This initiative is just one of many digitally enabled efforts we are making to drive improved efficiency at ADP, and as we've mentioned in the past, we have more to look forward to as our digital transformation continues.

Our next-gen Payroll engine also continues to scale up and demonstrate success in the mid-market. In this quarter, we sold 100s more clients and continued to expand our capability set to accommodate more complex payroll needs. We now have over 400 clients live on Workforce Now with our Next Gen Payroll engine and we expect to accelerate this further in the coming quarters.

In addition to its improving position in the mid-market, workforce now continues to scale nicely into the enterprise market, and in this quarter, ADP was recognized as a customer's choice leader in Gartner's "Voice of the Customer" for Cloud HCM Suites from North American companies with 1,000 or more employees. This is a great milestone for the team and strong validation of the flexibility of Workforce Now as we've continued to sell it to larger clients in recent years, while of course concurrently scaling implementation and service of our Next Gen HCM platform.

Ultimately these product enhancements are all designed to drive growth, and I'm happy to report that this quarter our client count reached 900,000, a remarkable achievement, particularly during the pandemic. This is a testament to both the strong retention we've experienced this year as well as better than expected year-to-date sales performance. We're very proud, our execution so far this year, and we look forward to putting the impact of the pandemic behind us. On that front, we recognize there is a lot of interest in our potential growth in earnings profile for next year.

As you can appreciate, it's still early to discuss fiscal 2022 with any precision given the dynamic environment and the fact that we're still going through our operating plan process for next year. But Kathleen will share some additional perspective on fiscal 2022 in a moment. I'd also like to share that we plan to host a virtual Investor Day later this calendar year, where we plan to update you on our strategy and discuss our post-pandemic aspirations. We are tentatively aiming for November and we'll share a date shortly.

For now, we remain focused on maintaining our very positive momentum as we close out this fiscal year. And with that, I'll now turn the call over to Kathleen for more detail on the quarter and the outlook.

[Kathleen Winters, Chief Financial Officer]

Thank you, Carlos, and good morning everyone. Q3 represented another strong quarter for us with our performance on both revenues and margins driven by excellent execution across the organization. Our revenues grew 1% on both a reported and organic constant currency basis, which represented a slight acceleration versus Q2.

We delivered this growth despite incremental drag from client funds interest versus Q2, as well as some incremental pressure related to our usual seasonal Q3 revenue drivers such as annual W-2 Form. I'll share more on these in a moment. As anticipated, we also experienced a margin decline as we continued to make additional growth in productivity investments and as we experienced a more significant client funds interest revenue decline compared to prior quarters, but the 90 basis points of margin decline was better than our expectations.

Combining this revenue and margin performance, our adjusted EBIT was down 2% to $1.1 billion. Our adjusted effective tax rate increased slightly compared to the third quarter of fiscal 2020, as we had less contribution from excess tax benefit on stock comp, but our share count was lower year-over-year driven by share repurchases, and as a result, our adjusted diluted earnings per share of $1.89 was down a modest 2% versus last year.

For our Employer Services segment, revenues declined 1% on a reported basis and 2% on an organic constant currency basis, demonstrating steady growth rates compared to last quarter, despite additional pressure from two sources as I just mentioned, both of which were fully anticipated.

First, with greater pressure from client funds interest, our Q3 has a seasonally larger client funds balance than other quarters of the year and as a result, it skews more to cash and cash equivalent investments where interest rates have been pushed down to near zero. As a result, our client funds interest declined 32% versus last year with average yield down 70 basis points, more than offsetting our strong balance growth, which improved to 6%. Second with the headwind related to seasonal Q3 revenues like the annual Form W-2 which effectively makes our Q3 slightly more sensitive to pays per control and employment turnover trends and other quarters.

Looking past these two headwinds, underlying ES performance showed sequential improvement driven in part by continued record level retention that was partially offset by slightly lower than expected pays per control. Employer Services Q3 margin was down 120 basis points compared to last year ahead of our expectations. We continue to invest in headcount to support our growing client base. We also started lapping lower incentive costs from last year and we experienced greater pressure from the lower client funds interest revenue compared to the first half of this year. But at the same time we kept our focus on prudent cost control and continue to execute on our transformation initiatives.

Our PEO also had another very strong quarter. Average worksite employees increased sequentially to 594,000, this was flat on a year-over-year basis and this strong result was supported by retention outperformance and a slight sequential improvement in pays per control, which was more impactful than what we experienced in our ES segment.

Although PEO sales growth still lags that of our ES segment we did see an improvement in sales performance in Q3 and are encouraged that unit sales growth for the PEO with positive. Our PEO revenue growth meanwhile was very strong at 7%, and revenues excluding zero margin benefits pass-throughs grew 10%, both ahead of our expectations.

Once again, the strong performance benefited from higher payroll for WSE supported by employee mix. Additionally this quarter, revenue per WSE was further supported by more favorable SUI rate environment as some states have started to increase SUI rates.

Workers' comp rates remained a headwind in the quarter. PEO margin increased 100 basis points in the quarter driven by revenue growth and continued expense discipline, as well as roughly 50 basis points of contribution from workers' compensation reserve true up.

I'll turn now to our updated guidance for fiscal 2021, with only one quarter remaining, we are pleased to raise our guidance midpoints for several key metrics and narrow our guidance ranges for others. Beginning with the ES segment, we now expect revenue to be up one -- to be up about 1% for the full year versus our previous expectation for flat to up 2%. There is no real change in our revenue expectations in this revised outlook includes the impact from the following drivers.

We now expect our ES new business bookings to be up 20% to 25% compared to our prior forecast of up 15% to 25%. This reflects Q3 sales performance that came in slightly ahead of our expectations and our better line of sight into Q4. We're very happy to raise our bookings guidance again and although this doesn't materially change our revenue expectations for this fiscal year, it does add to our optimism about next year.

We now expect our ES retention to be up at least 125 basis points versus up 100 basis points prior. Similar to our updated bookings guidance, this improvement is driven by our Q3 performance and encouraging visibility into Q4 retention. We are raising our client funds interest expectations slightly and now expect $415 million for the full year. We have seen the interest rate environment improved compared to what we had contemplated last quarter, however those improvements only apply to our new fixed income purchases over the last few months of the year. There is no material change to our expectation for 1.6% average yield in our client fund's portfolio for fiscal year 2021. We are encouraged by the signs of improvement in the US labor markets. But as we mentioned, over this last quarter pays per control did underperform our Q3 expectations modestly. We have tempered our Q4 expectations slightly as a result, but our full year fiscal 2021 outlook remains a decline of 3% to 4%.

For our expected Employer Services margin for the year, we are narrowing to a decline of 50 basis points to 75 basis points, while we experienced stronger-than-expected margin performance in Q3, we will reinvest some of this on discrete projects in Q4 to further accelerate our growth, investing for example in our NextGen rollout, Wisely card program, and additional marketing and advertising.

For our PEO segment, we now expect revenue up 5% to 6% versus our prior forecast of up 3% to 5%, and we expect average worksite employees to be up 1% to 2% versus our prior forecast of flat to up 2%. We also expect our revenues excluding zero-margin pass-throughs to be up 5% to 6%, compared to our prior forecast of up 3% to 5%. Our top-line rate for the PEO is driven primarily by the strong Q3 performance we experienced and slightly higher payroll per WSE assumptions for Q4.

Last, for PEO margin, we now expect to be up about 75 basis points in fiscal 2021 versus our prior forecast range for up 50 basis points to 100 basis points. Our visibility into Q4 has improved and year-to-date, we've seen stronger revenue performance and better-than-expected contribution from workers' compensation true-ups, offset by greater pass-through revenue.

For our consolidated outlook, we now anticipate total ADP revenue to be up to 2% to 3% in fiscal 2021, versus up 1% to 3% prior. And we anticipate our adjusted EBIT margin to be down 50 basis points to 75 basis points, an improvement of our prior guidance of down 50 basis points to 100 basis points.

There is no change to our expected effective tax rate of 20% for the year, and we continue to assume a net share count reduction in our guidance. Net of all these changes, we are updating our adjusted diluted EPS guidance to be flat to up 1% versus our prior guidance of down 2% to up 2%. As you know with Q4, we will begin to lap the impact of the pandemic, and we recognize there is a lot of interest in what our growth rate will look like as conditions continue to normalize.

With that said, we're still going through our planning process. As usual we will provide fiscal '22 guidance when we report our fourth quarter results but I'd like to share some preliminary considerations. The most important factor for us in accelerating growth is driving strong new business bookings, and we expect our sales productivity to improve further next year as in person visits increase and clients and prospects continue to reengage more fully.

As that productivity continues to progress towards pre-pandemic levels and beyond, the contribution it makes to our revenue growth will likewise continue to build. Pays per control should provide a tailwind and the magnitude of contribution will depend on the pace of global employment recovery. We've provided sensitivities to pays per control in the past and we'll share our pays per control assumption next quarter.

Client funds interest will likely remain a headwind, if the current rate environment holds, there should be much less of a headwind than we are experiencing in fiscal 2021. And on retention, improving economic activity could mean greater clients switching levels compared to this year, but we're not seeing pressure yet and we will remain focused on holding onto the gains we've achieved. We'll share our assumption about it next quarter.

Clearly, there are a number of moving pieces, but the net effect should be favorable. The 2% to 3% revenue growth, we expect to deliver this year demonstrates the resilience of our business model, and we look forward to building from this higher revenue base and accelerating our growth back to pre-pandemic levels as quickly as we can. We are going into next year from a position of strength and our aim is to deliver an improved market position, stronger top-line growth, and margin expansion while maintaining the steady cash flows that have allowed us to increase our shareholder distributions consistently for more than 7 decades.

More on all of this will come next quarter and we look forward to updating you then.

I will now turn it back over to the operator for Q&A.

[Operator]

[Operator Instructions] And we will take our first question from Ramsey El-Assal from Barclays. Your line is open.

[Ramsey El-Assal, Barclays]

Hi, thanks so much for taking my question this morning. I wanted to ask about the increase in person engagement with the sales force, can you kind of contrast for us the productivity you're seeing from those in-person meetings relative to the remote meetings? Is that something that we should consider to be an incremental sort of driver of productivity maybe beyond what we were expecting, as we go forward?

[Carlos Rodriguez, President & Chief Executive Officer]

Yes, I think that's right. I think you would look at it really as incremental, because if you recall, like our first quarter, we had pretty robust sales results really with almost 100% of our sales force working virtually at that at that point. So we expect that the increased activity, if you listen to the tone of our comments that it's really incremental and hopefully gets us quickly back to the same productivity levels we were pre-pandemic, which we were approaching in the third and fourth quarter here, and then hopefully beyond that, because obviously part of our model before was that we expected some incremental improvement in productivity each year, in addition to increases in headcount and when you have combine those factors in addition to kind of new products and other things, that's what kind of drove our new business bookings growth, the combination of increases in headcount, and increases in productivity. So you're right, that's the path is this will help us get quickly back to our previous productivity and hopefully allow us to get above that, which is I think, important for us in terms of our long-term growth expectations.

[Ramsey El-Assal, Barclays]

Okay. And I wonder if you could comment too, on the environment around potential tax reforms. As I recall when the corporate tax rates fell, that was translated into lower client interest balances for you or client funds balances for you. I know it's early days and everything needs to move through Congress, but can you comment on the degree to which some of these changes may or may not be factored in your budgeting process or what you're expecting here in terms of tax changes going forward in the impact on your business?

[Carlos Rodriguez, President & Chief Executive Officer]

I think for corporate, I think, if you're referring to really was clearly on the team, we've -- there's a lot of discussion about a lot of different things, including an increase in the kind of tax rate for the higher income individuals. But right now from -- And there's obviously discussion about capital gains taxes as well. But right now the thing that is probably most prevalent in discussions is corporate income tax rate, and I'm trying to think through I don't believe that there has really any direct impact on our balances obviously have an impact on ADP corporate itself, but I don't think that you have.

[Danyal Hussain, Vice President of Investor Relations]

Yes, you're definitely right about the individual tax brackets having an impact on our float balance. So, back when we had the previous corporate tax reform in the individual bracket changes, it was a headwind. I think about a percentage point or in that ballpark. So, in theory, what will drive the tailwind to our growth will depend on the actual change in rates here and what that means for overall individual income taxes. So it would be a contribution is not factored in to our outlook at this time, but obviously it's something we would benefit from.

[Ramsey El-Assal, Barclays]

Terrific, thanks for taking my questions this morning.

[Danyal Hussain, Vice President of Investor Relations]

Thank you.

[Operator]

Thank you. Our next question comes from Dan Dolev from Mizuho. Your line is open.

[Dan Dolev, Mizuho]

Hi, good morning. Thanks for taking my question. I got -- just a quick housekeeping and then longer-term strategic question. You guiding I think to 4Q EPS slightly below the Street. Is there any margin pressure to call out in the fourth quarter?

[Carlos Rodriguez, President & Chief Executive Officer]

Well, I think if you -- from our prepared comments, you'd probably see that the pressures are what I would call self-inflicted in the sense that we believe is an opportunity for us to make some investments that improve our long-term growth prospects, both for '22 and beyond. And I think Kathleen particularly mentioned the two or three things that we're investing. And so the answer is no, there's no kind of mysterious margin pressure. In other words, the business continues to move in the right trajectory like almost every metric we have has improved in fact I say every metric we have has improved sequentially, even the pays per control, even though it was modest, it's still rounded to 6% down. We know now after watching the data at the beginning of Q4 that that's heading in the right direction and we can all tell from what's happening with unemployment but that-- that's going to also continue to improve fairly quickly here. So when you really kind of add it all together, like we're in a very strong position have very strong momentum and people who have known us for a long time, know that when we experience that we try to reinvest some of that and I think that's exactly what you're seeing in the fourth quarter. So I would say that those are conscious decisions that we are making.

[Dan Dolev, Mizuho]

Yes.

[Kathleen Winters, Chief Financial Officer]

And that's exactly right. And I'll just add in, in addition to what I think is smartly doing those investments in the fourth quarter and accelerating some of that, we've also got some year-over-year comp things going on right? As you would expect with selling having been down Q4 last year versus Q4 this year, we'd see incremental year-over-year selling expense in Q4 as well.

[Dan Dolev, Mizuho]

Got it. And just my follow up is, it was very impressed to see bookings kind of back to fiscal '19 levels. Really strong. Can you maybe talk a little bit about how Next-Gen Payroll engine is helping bookings?

[Carlos Rodriguez, President & Chief Executive Officer]

It's a relatively modest contribution because despite our level of excitement about really all of our Next-Gen platforms and even Roll, which you could argue that that's a NextGen solution as well. Again it's just because of the size and scale of our company like right now from a dollar impact standpoint, it's really not, that's not what's moving the needle really across the board, really in every business unit in every channel and every category, our bookings have been improving again sequentially every quarter and they continue to do that this quarter. So we believe that medium to long term, that's the key to us, sustaining kind of our multi-decade growth rates is these Next-gen platforms, but I just continue to caution everyone to because we want to give you the updates and we want to continue to focus on next-gen and I like, I appreciate the question important to kind of separate what's driving the quarters and what's driving the next fiscal year versus what's driving the next three to five years.

And I would say that Next-gen payroll is going to be increasingly important in the next year or two from a bookings standpoint and we'll start to probably make a difference and will then give you that color in terms of what difference its making, but we should be cautious about revenue impact, just because of the recurring revenue model just takes a while for that to get into the revenue growth numbers, but it was positive, but really not. Now, we're really moved the needle.

[Danyal Hussain, Vice President of Investor Relations]

And I would just add that. We shared that we sold hundreds of clients on our Next-Gen Payroll engine with Workforce Now, just for context, that compares to typically few thousand clients that we sell in the mid-market. So it's still a piece of the overall puzzle. But as that scale to become the majority and then ultimately, all of our mid-market sales then you truly feel the incremental benefit.

[Dan Dolev, Mizuho]

Got it. So...

[Carlos Rodriguez, President & Chief Executive Officer]

That come is really the message there.

[Dan Dolev, Mizuho]

Thank you. Great stuff. Thanks.

[Operator]

Thank you. Our next question comes from Eugene Simuni from MoffettNathanson. Your line is open.

[Eugene Simuni, MoffettNathanson]

Good morning. Thank you for taking my question. So I wanted to ask about down market and great to see the introduction of Roll to target the micro customers. I was hoping you can speak a little bit more broadly about evolution of competitive landscape through the pandemic down market, how RUN has done and kind of coming out of the pandemic, what opportunities exist for ADP to continue gaining share in the segment as I believe it has done prior to the pandemic?

[Carlos Rodriguez, President & Chief Executive Officer]

Well, I mean I think there is a number of moving parts. And I think it probably depends on people's current business model. So, as you know, our business model is really more about providing not just a software-based to support right support you call service, you can call it compliance, and I think what we saw this year with all of the activity that the government had around the various stimulus programs to help companies and individuals and so we're that created a lot of complexity for employers, it appears that we're entering into an environment where despite the pandemic hopefully fading, there will be increased levels of government activity around employment and incentives and that kind of that kind of thing.

I think that's a good environment for ADP and for our down market business because most small businesses, don't have the time or the inclination to really focus on these things and to take care of these things. So it works for some clients and we believe that that's why we're rolling out Roll, no pun intended, but once you get to even a little bit slightly larger you do end up running into issues that you need help with and you need support and you need advice and much of that can be automated, but you still need it. So for example, a lot of our PPP support reports were automated. So it doesn't mean that somebody has to get on the phone and have a discussion about your PPP report, but you have to be focused on providing the support and the compliance in addition to just the software. So I think that helped us this year and again, so to answer your question, how do we believe we're set up competitively right now? I think we're set up excellently, competitively, because we now have very simple solutions for the micro-market where people want to self-buy, self-install, and don't have complexity and maybe don't have issues with taxes or compliance or don't want to ask questions, because it's not priced or built to ask questions. But we also have the ability to provide this assistance that is important for even small clients for sure it's important for mid-sized clients and for larger clients, but I think what really got highlighted this year is that small clients need a lot of help and need a lot of assistance and you can see it in our growth rates in our retention in our client satisfaction, like in all of our metrics in our small business division that we happen to be in the right place at the right time I think to be able to help our clients and then hopefully no benefit from the tailwind of the demand that that's going to create on a go-forward basis. So anyway long-winded way of saying, I think we're in a great position, because of our business model.

[Eugene Simuni, MoffettNathanson]

Got it. Excellent. And then a quick follow-up from me on the global business. So just thinking about what we're seeing now, I think is strong kind of bifurcation of the recoveries in the US and abroad. Strong expectations for US recovery in your business in Global, is it growing, is it going slower? And is the implication that global might be kind of headwind to growth over the next couple of quarters?

[Danyal Hussain, Vice President of Investor Relations]

As usual for us, things are a little more when you peel the onion back, there is a little bit more complexity because you're just the image you have is correct, but it hasn't really, translated into the results, our results have actually been quite good internationally, both in terms of bookings as well as just the performance of the business overall in terms of revenue, pays per control et cetera. Some of that is that a large portion of our business is in Europe and there were a lot of government programs there as well to help companies and to prevent high levels of unemployment. And so for example, our pays per control metric never got to the negative levels that we saw in the US, in Europe, so that was a benefit.

At the same time, our bookings have been quite strong and I have to admit that I've been looking for the explanation for that other than really good execution on the part of our sales force as they moved into a virtual environment because they had to sell virtually there as well. But I would say it's strong differentiation of our products. Again, the service aspect to our solutions, the ability to provide support and to provide compliance and help, all of those things probably helped our bookings performance internationally as well. So I would say that our global business actually is probably one of the bright spots. I would say despite what is obviously a very difficult environment, and we obviously feel for our businesses in not just Europe which now it happens to be improving again, particularly in the UK, but we're having challenges now in Toronto, we're having in Canada and in Brazil, we're having challenges. Obviously, as you know in India as well. But it's, it has not translated into negative results. So I think it's a testament to the resiliency and the strength of the business model. But I don't want to take anything away from the fact that it also obviously shows great execution by our international leaders as well.

[Eugene Simuni, MoffettNathanson]

Got it. Thank you very much.

[Operator]

Thank you. Our next question comes from Bryan Bergin from Cowen. Your line is open. Please check that, your line is not on mute.

[Bryan Bergin, Cowen]

Sorry about that. Question for you on ES versus PEO performance. It seems like pays per control appear to be a key difference, can you just dig in more on the at the mix aspects that seem to drive a pretty notable disparity of performance between those two. And should we expect that difference to persist in 4Q? Or do you expect more even performance?

[Danyal Hussain, Vice President of Investor Relations]

I don't believe we've provided Lake that data, so I'm surprised you came to that conclusion but we maybe it's part of our tone. So there isn't a huge difference between ES pays per control performance and PEO, they both have been improving every quarter sequentially and the PEO doesn't include -- we generally stay away from very, very small clients. So we don't have a lot of clients that are one to two employees or five employees. The average size client in the PEO, I think is somewhere around 40, and so by definition, it tends to skew a little bit bigger than maybe our average client size for sure for small business, so actually, I'm looking at these figures last night. And it makes perfect sense kind of where we are, which is that the PEO is performing a little bit better in terms of absolute level of pays per control and have been improving sequentially just as ES has as well.

So, and again I'm probably not allowed to say this, I'm going to get in trouble, but last night I got a note from the PEO that we experienced the first positive pays per control week. Now, the problem with pays per control is that it does vary based on payroll cycles. So if you have weekly payrolls or by-weekly payroll so you and I can't read anything into that. It's the first time we've had a positive pays per control in any week over the last 12 months. So that's a very positive sign.

[Bryan Bergin, Cowen]

Okay. And then just on margins, you should outperformance here in the quarter. But at the same time you've called out incremental headcount investments higher incentive comp, and I think elevated implementation costs, can you just talk about the drivers there and then how do we connect the elevated implementation cost with more efficient digital onboarding commentary?

[Danyal Hussain, Vice President of Investor Relations]

Well, the efficient digital onboarding, I think, we were pretty clear with a FPS, we would love to, at some point in the future, extend that into the mid-market and maybe someday into the upmarket. But as you know, like you know better than us, because you've talked a lot of the competitors, there's not a lot of digital on-boarding going on for example of large complex ERP installations, not to pick on any competitors, but it's pretty. I know the images that the stuff, all kinds of its installed itself, but most of many of our competitors use third-parties. So there is still quite a lot of implementation activity and expense, whether it's done by the seller of the solutions or if it's done by a third-party. We haven't have a model where we do a lot of it ourselves. And so as bookings pick up and demand picks up, we need to add to our capacity for implementation in particular in the mid-market, the upmarket and also global, which as I mentioned has been strong.

So it doesn't mean that we're not adding in the down market also. But in our small business segment as we alluded to, and as I think you pointed out, the digital on-boarding capabilities obviously reduce the need to grow headcount as much as we otherwise would have. But even in small business, we have a lot of growth in bookings and so it's a matter of the trade-off of how much can we on-board digitally versus how much we still need some help with, in terms of people being involved in.

In terms of some of the other items that, we alluded to, I mean, some of this is just kind of natural to the business model, as we bring on more clients, we obviously expect productivity improvements every year, whether it's in sales or implementation or everywhere, but we are seeing a recovery of our business and very strong GDP forecast, and so, we're anticipating improved prospects for bookings and for revenue and for growth, and we need to make sure that we have the right staffing levels based on the productivity metrics that and the productivity goals that we have to be able to handle that business, so we can maintain our high clients of level -- high level of client satisfaction that we've, that we've experienced.

And then we have some natural growth in expenses like I think Kathleen alluded to sales expense is clearly something that grows as you have sales success and as sales grow year-over-year. So I wouldn't, I wouldn't read too much into it rather than that, we made some conscious decisions to reinvest in some specific things in the fourth quarter to really position us well for 22 and beyond, but most of this is just kind of natural stuff where, again, as our revenue growth picks up over time, we still have a great incremental margin business where we would expect to have good operating leverage as we grow those revenues.

[Bryan Bergin, Cowen]

Okay, thank you.

[Operator]

Thank you. Our next question comes from Mark Marcon from Baird. Your line is open.

[Mark Marcon, Baird]

Good morning and thanks for taking my questions. Wondering if you can talk a little bit about the investments in Q4, just in terms of Next-gen, Wisely, marketing and advertising, just how much incremental spend will there be and are you seeing signs with regards to Wisely, that the interest is picking up and therefore, that's a great place to invest?

[Carlos Rodriguez, President & Chief Executive Officer]

I don't feel like it's appropriate to give you, I think you asked for the numbers, I don't know that how -- I think you can probably do the math yourself, like in terms of, when you look at the trajectory that we're on, you could probably back in into some rough this is not in the hundreds of millions of dollars again. But again I respect the short-term orientation that we have here in that you guys are trying to. But I would not read as much as you may be reading into these fourth quarter investors, as we've done this in all the way back to my, Gary taught me everything I know and you Gary, I think as well Mark. And we are a long-term oriented company. And we -- when we see opportunities to improve and to invest in things that are either going to drive our bookings or drive our client satisfaction or drive our efficiency, that's what we are going to do it.

We've been doing that all along. So this is, it's not like we hadn't invested, we've been telling you that we've been investing for the last three quarters. And that was a conscious decision, we took a little bit of a bidding for that at the beginning of the year. Fortunately, we had positive surprises on the revenue side and on pays per control and other things, but we committed that we were going to invest through the downturn and that's what we've -- that's what we've done. And now, we feel like there are few things that we can do that I would call -- I don't want to call them housekeeping items -- But they're not -- These are not in the hundreds of millions of dollars, but they put some pressure on our fourth quarter margin. And we knew that it would create some questions even though, it really has nothing to do with 22 or kind of our future expectations of either revenue growth or operating leverage, but I guess I understand the question, but I don't think that maybe Danyal can give you a little bit more color, but I am not sure we giving you an exact number is probably the right approach.

[Kathleen Winters, Chief Financial Officer]

I mean you could -- Yes, I mean -- Sorry, Danyal, I would just I think about it as kind of these are tweaks to the amounts we're spending in Q4 versus kind of wholesale changes to the program here. So it's somewhat modest and what Carlos said it's not in the hundreds the millions of dollars here.

[Mark Marcon, Baird]

I appreciate it.

[Danyal Hussain, Vice President of Investor Relations]

[Indiscernible] your wisely question, Mark. The one thing we did see was stimulus drove some uptick in the card spent per card. Other than that, during the pandemic, there hasn't been any real notable changes in the Wisely growth trends. So really it's the per card economics that have seen a slight to tick up recently.

[Carlos Rodriguez, President & Chief Executive Officer]

Yes. And I think it's something that we've been excited about. But again, it was hard to get excited about, there was a lot of natural tailwind because people wanted more digitally oriented payment methods in the last three quarters, but from a focus standpoint like for the first couple of quarters of the year, we were focused on a lot of things, and this may not have made it all the way to the top of the list, but it was on a top of the list kind of pre-pandemic, if you recall, and so I think, I would see this is more of a re-emergence of some of the themes and some of the things that we had been talking about that excite us because I think the opportunity is a big ones, I'm glad that the team brought this forward in terms of as an investment opportunity because we were excited about it, call it 12 to 18 months ago, we should just as excited about it today. But admittedly, it wasn't our number one focus, and in the middle of the pandemic, if you will, at the beginning of the pandemic.

[Kathleen Winters, Chief Financial Officer]

Yes. And then just one last comment is we always look very hard at the timing and amount that we spend on marketing and advertising but with economic activity continuing to have momentum and pick up and client engagement picking up, we felt this was the right time to increase that a little bit as well.

[Mark Marcon, Baird]

I really appreciate that color. And it is completely consistent with the long-term track record. Going back to Art. Even before, Gary, can you talk a little bit about this Danyal or can you just remind us what the sensitivity on the pays per control to revenue is?

[Danyal Hussain, Vice President of Investor Relations]

It's 25 basis points of revenue impact for every 1 percentage point change in pays per control.

[Mark Marcon, Baird]

I appreciate that. Thank you.

[Operator]

Thank you. Our next question comes from Kevin McVeigh from Credit Suisse. Your line is open.

[Kevin McVeigh, Credit Suisse]

Great, thanks. Hey, Carlos, I think you alluded to kind of a record high on account none of us have sense about. Can you give us a sense of where that splits across enterprise mid-down market and how that sits relative to historical trends in the business?

[Carlos Rodriguez, President & Chief Executive Officer]

Yes, I can give you some -- I'll give you some color. We don't -- I don't think that's something that we've disclosed in terms of the actual breakdown by business, but I can give you a general ideas. So we had that 6% growth, the 900,000, and we had call it growth of somewhere around that for RUN, our WSN growth was around that as well. And global view was around that as well. So from a client -- pure client growth standpoint if you look at our strategic platforms, they kind of grew in the kind of that neighborhood from a client growth standpoint, which we see as really great news given the very difficult environment that we're in.

Obviously, when you look at the mathematically, the overall growth rate and the overall number It's driven in large part by our small business division, because that's where we have the bulk of the absolute number of clients. But I wanted to give you a little bit of color around, if you look at WF, if you look at Workforce Now, across our multiple channels, just remember we start Workforce Now, just in the -- not just in the mid-market but we saw it in the upmarket, and we saw it in the PEO. The PEO platform as well, we also have that platform in Canada.

And so that gives you some sense of Canada how well that platform is growing, which is really satisfying to us. So hopefully that helps a little bit.

[Kevin McVeigh, Credit Suisse]

Now, that's helpful. And then just on the retention, real quick, I think you took it up from the 125 basis points, up from 100 basis points. Can you just refine that a little bit, is that kind of the Q4 run rate or is that the full year number of this at being fourth quarter is even higher than that? Or is that infinite? The EPM number, and then just any thoughts you could just may be frame on a little bit more [indiscernible].

[Carlos Rodriguez, President & Chief Executive Officer]

You've stumped us.

[Danyal Hussain, Vice President of Investor Relations]

I think, we said in the opening remarks that it's on the Q3 performance being stronger than expected.

[Carlos Rodriguez, President & Chief Executive Officer]

Yes, I think it's generally it's been consistent like it's really frankly remarkable, which is why we keep emphasizing some caution because we hope there is no plan, we're not going to give it back and we're not hoping for give back. But in this business like people who've been following us for a long time, like when we have a 10 basis points to 20 basis point move in retention. It's a big deal. So to have this kind of retention on top of the retention that we had last year is pretty remarkable. And so we're pretty excited about it and I think the key for us is trying to determine like when I look at the retention figures, there is a lot of improvement in what's called the controllable losses. So the ones that are related to kind of service issues and so forth.

So we're excited that we might be able to hold on to some of this gain, but at the same time, we're realistic enough to acknowledge that some of the stuff that was related to pan out of business and government stimulus there might be a little bit of give back there, but it's been pretty consistent like every -- It seems like every quarter, the improvement has been in that same neighborhood year-over-year, hence why we kind of tweak the full year because we're probably going to end up in the range that we gave you, which is a little higher than we had before, but it wasn't, we were trying to like send any kind of message about the fourth quarter in particular.

[Kevin McVeigh, Credit Suisse]

Helpful. Thank you.

[Operator]

Thank you. Our next question comes from Tien-Tsin Huang from JP Morgan. Your line is open.

[Tien-Tsin Huang, JP Morgan]

Hey, thanks so much. I think a lot of good questions already. Just thinking about the retention feels like it's industry wide to some degree. So just trying to better understand your new sales, the reacceleration is it driven more from upselling, and in new business formation, and any surprises in the net switching over the balance of trade from a head-to-head standpoint?

[Carlos Rodriguez, President & Chief Executive Officer]

I don't have a lot to report on. We obviously watch all that stuff where you referring to the balance of trade. And as you said, it's hard for me to tell about retention in terms of the rest of the industry you guys would be the experts on that because my casual review of some 10-Ks makes it kind of hard to compare like some people would say retention of their annual recurring revenue cloud revenues, which is not the same as the retention for their company.

So it's kind of hard for me to say, I mean, some of it I would say it's probably more variable than you think, based on what I'm seeing in terms of variability of growth rates, because it's clearly been a huge part of our ability to outperform. I mean this is a pretty remarkable revenue performance given what we've been through. And given the pays per control headcount and by the way, what we brought up yet, but we have a huge headwind on client funds interest, which is going to abate here in the fourth quarter and is going to abate next year as well. There may still be a little bit of headwind, but this was really the worst quarter that we had, and these nine months were bad and was $130 million drag just from client funds interest.

So when you put everything into the pot, without really good strong retention, it's hard to outperform the way we have and we've done some work on the relative performances of us versus some of our competitors and we feel pretty good about that and about our -- to the potential for retention to be one of the needle movers there, making some other factors that I'm not, we're not, we haven't thought about, but no, I don't think there's anything else really big out there like we've done a little bit better against some of our -- the usual competitors that you know about, in terms of balance of trade but there's others that are still challenging for us. And so, net-net we're pretty comfortable with where we are and determined to continue to drive our growth.

I think all of us are probably benefiting from overall economic growth. And the fact that it seems like maybe there are some either in-house or regional providers that are because you can see our, we're growing our units. In Workforce Now, and in RUN. And so, we're -- it seems like we're all have some ability to grow in this environment, which is I guess good for everyone.

[Tien-Tsin Huang, JP Morgan]

Yeah, I'm glad you said all that, we shouldn't take it for granted. Just quickly on client satisfaction, notably higher would you attribute it Carlos more to the -- of course support efforts you guys have invested in, but the Next-gen platforms and some of the digital initiatives or are you also seeing just clients maybe building it more better goodwill with ADP spending more time with them during these tough times during the pandemic, just trying to understand, because it seems like it could be -- if it carries over we could see some compounding in the retention?

[Carlos Rodriguez, President & Chief Executive Officer]

Yes, I think it's a great question. And I -- we obviously we're trying to figure that out because it's very important to the long-term value creation of the company. And it's all the things you mentioned are you obviously know the business well enough that you hit on all the question is how much is each of those rates, like the last one that you mentioned about the goodwill, there is no question that of being there like there were two or three months where people could not talk to anyone other than us about what to do. Right? What to do about the PPP loans that the government was offering around tax credits, because if you buy software from someone, you can't call to ask them those questions, I just want to remind everyone, right, you can call them that we're about the software and you can send in a ticket to get your software issue resolved, but you can't call to ask about tax deferrals or tax credits or PPP reports or any of that kind of stuff. So we clearly built a lot of goodwill. But on the other hand business is business. And goodwill, it doesn't last forever, so we're not, planning a living off of that for the next five or 10 years. So that brings me back to kind of the basics of client satisfaction, which is we have to be there for our clients when they need us not just during the pandemic, but at all times. So I would say that the second major factor besides the goodwill that I mentioned and some of the digital initiatives to like making easier for our clients and improve our user experience is that we did not panic at the onset of the pandemic. And if you recall, we took some lumps for that because we really maintained our investments both not just in R&D, we maintained our investments in headcount and an implementation. That doesn't mean that we didn't have some drift down as a result of some turnover, which we did and our head count did decline because we had a temporarily a drop in volume, if you will, but that was really, really important right, to be able to kind of get through this period and be able to deliver on our commitments to our, clients and back to the comments I made about productivity before, that's one of those things that we watch very carefully because we want to improve productivity but we weren't -- we can't be naive and think that if our obviously if our headcount was 10% lower, we have higher net income, the problem is, what would your client satisfaction be and your retention.

And so that's the magic right of being able to figure out what's that right balance and you have tools to figure that out, you have monitoring systems right to understand what the client satisfaction levels are in relation to how quickly you're getting back to people to resolve their problems for example and how well trained your people are. So there's a number of different factors that we look at, but the key is to be committed to delivering high levels of client service, which we are and I think we just proved it. If we can do it during the pandemic, we can do it anytime.

[Tien-Tsin Huang, JP Morgan]

Yes. Got it. Thanks so much.

[Operator]

Thank you. Our next question comes from Jason Kupferberg from Bank of America. Your line is open.

[Jason Kupferberg, Bank of America]

Good morning, guys. Thanks. I just wanted to start with the bookings question just to make sure you've got the expectations right here, just trying to do the math on the Q4 implied guide. I think it would be about 90% growth. So I wanted to see if that's accurate, obviously you've got the super easy comp there and maybe as part of that can you just talk about some of the activity you've seen through the first month of the quarter. I mean I assume you've got pretty high visibility here, just given that you raised the low end of the full-year guidance range for the bookings?

[Danyal Hussain, Vice President of Investor Relations]

Hey, Jason. It's Danyal. You don't have the weightings by quarter. But what's implied for the fourth quarter is over a 100% bookings growth. And for example, we're tracking right in line with expectations.

[Carlos Rodriguez, President & Chief Executive Officer]

Yes, I would say that you should not read anything into that other than what we said, which is, we're still really positive. We believe we're going to continue to get sequential productivity improvements, but the percentage growth rate is really related to the base effects, really when you get down to whether it's 110 or [indiscernible]. Not that, I know, you know, it's not that for. I think you're trying to get a number you using the percentage we get to the number. But, yes, yes, you should probably -- if I were you, I would look at maybe call it the second quarter or maybe 2019 fourth quarter or something has got to be something else that would give you something good as a proxy, right? Where we don't expect to be back at 100% productivity levels in the fourth quarter, but we should be getting close to like where we were in 2019, and there may be other small moving parts there from 2019. So I don't want to go out on a limb and say that's the right analog but anyway, I think that's hopefully helpful.

[Jason Kupferberg, Bank of America]

Yes. So it is -- your comp certainly would matter more. I just wanted to make sure people kind have the right numbers in their models for the quarter. And then just a quick follow-up on the pays per control, I think you mentioned it was a little worse than you anticipated in Q3 and you tempered your Q4 expectations a little bit. I'm just curious, which part of the portfolio is driving that? It just things maybe a little incongruous with the US employment data that we're seeing at a high level, which obviously has continued to outperform expectations?

[Carlos Rodriguez, President & Chief Executive Officer]

Yes, it's a 100% timing related because we can see in the data, we have other datasets like to show us, like for example, job postings and background checks, screenings and so forth. And so, you shouldn't read anything into it and we did not temper our fourth quarter at all, and in fact we kind of try to clarify that we kept the full year, the same despite the third quarter being a little bit softer in part because we think we're on the same positive trajectory that I think that we thought we were on.

So we're seeing the same thing you're seeing in terms of employment and unemployment, and we would fully expect these pays per control numbers to improve rapidly here. And remember that we're talking today about numbers that were through the end of the third -- Sorry through the end of March and those numbers are for three months. Correct? So if you look at the third month in March is different than it was for January. And January, February, I know it's hard to remember to think back that far and how bad things were, that was a completely different picture and the picture we had in early April and maybe in the last, very last week of March. So I wouldn't, I wouldn't read anything into it other than timing.

[Kathleen Winters, Chief Financial Officer]

Yes. And you know just to clarity -- I were just to clarify, was just a slight tweak to the Q4 number and holding the full year at down 3% to 4%. So it's really kind of very minor tweaks.

[Jason Kupferberg, Bank of America]

Okay, perfect. Thank you, guys.

[Operator]

Thank you. And our next question comes from Pete Christiansen from Citi. Your line is open.

[Pete Christiansen]

Good morning, thanks for the question, Carlos. I think the high customer sat scores, the goodwill truly a testament to ADP's capabilities and certainly the service -- the service business model. But I guess clients' needs certainly change and we've been hearing from some of our other companies that talent acquisition has been I guess even more challenging than in the past and I recall at the last Analyst Day that ADP had really been making a lot of strides in improving its recruiting management tools so on and so forth. How would you, think that you, stack up competitively in that area, particularly in recruiting management tools and do you think that could be in another vehicle or vessel to maintain the high retention levels that you're currently experiencing?

[Carlos Rodriguez, President & Chief Executive Officer]

Absolutely. I think that you're right, I mean, some of this obviously is cyclical, right in the sense that 12 to 18 months ago people were looking for other tools, other than client acquisition tools. So you have to be careful about not kind of shifting with the necessarily to be consistently able to help people throughout the whole lifecycle of HCM and right now that happens to be an important one.

And so I would say that there's two things, one is we build our own tools, as you said around recruitment management and we also have an RPO business, and we have other tools to help with the talent acquisition process. We also partner and we have some really strong partnerships. I'm not sure -- if I mentioned the names of the companies are not but the names that you hear a lot of kind of advertising about, we have a very strong integration and partnerships with some of those companies to really make it easy, in particular in small business, but also even in the mid-market for people to use those tools to really help with the recruiting needs that they that they have, but we feel we've been making, we have made significant investments in our recruitment management platform and our talent acquisition platforms, nothing to do with the pandemic, so that you could call it for tools, that we had done that before the pandemic, and we would expect that those would be contributors to our overall value proposition into our revenue -- Sorry, into our bookings growth because those are generally tools that create incrementality around your bookings number.

In other words, what you can charge clients is typically there is a core set of solutions and then recruitment management, things like time and attendance will workforce management, those tend to be more incremental around the basic package, if you will, of HCM. So we're positive, we're bullish on it and I think we're very, just as a reminder, our app marketplace is creates a very easy and seamless way for people to use different solutions in HCM and this would be a category that we would have a lot of partners in that market app -- in that app marketplace that allow you to get all the other benefits, you mentioned about ADP's business model and still be able to fulfill your talent acquisition needs, if you don't believe that ADP has what you need, which we believe you do, but if you don't, you can always get it through one of our partners.

[Pete Christiansen]

That's helpful. And apologies if this was addressed earlier, but given the change in the yield curve, has there been any thoughts on potentially extending duration of the portfolio or any other investment selection choices as you head into '22?

[Carlos Rodriguez, President & Chief Executive Officer]

Probably not worth mentioning. The -- as you know in the yield curve, like right now kind of 5 and 7-year is a little bit better than two and three just because of the way the Fed is managing the curve, if you will. So I think there are always, I'll call them tactical opportunities. But no, I mean I think our duration has been in the same range since I've been CEO, and I would anticipate that not changing and we're not changing laddering strategy and we're not changing our client funds interest strategies. The good news is that it appears the worst is behind us in terms of drag from client funds interest which was painful. I think we had a $50 million drag just this quarter. So, again, not to beat a dead horse, but it just shows the strength of the business that we didn't mention that to you. And if we kind of overcame that drag $130 million for the year.

So we're looking forward to better times ahead, and I did see an interesting chart. Again, I probably shouldn't say this, but we had $16 billion in balances in 2008 and we had $635 million in client funds interest. I'm sorry, $685 million not $635 million, in client funds interest. So just shows to you the magnitude, I mean, you all know what's happened to interest rates, but that was 2008, that wasn't like in a different century or in a different country like that was here, and so today, our balances are call it the mid $20 billion number for the year and that's the expectation, so I think you could probably do the math yourself in terms of, if we do believe that there's going to be some inflation here and if you look at the inflation breakevens and you look at some other things that are going on, We're looking forward to better times ahead for client funds interest.

[Pete Christiansen]

And the adjusted EBITDA margin was 19% back then. You're already above that, that's great, thank you so much.

[Operator]

Thank you. And we have time for one more question that comes from Jeff Silber from BMO Capital Markets. Your line is open.

[Jeff Silber, BMO]

My questions have already been asked.

[Operator]

Thank you. And this concludes our question and answer portion for today. I am pleased to hand the program over to Carlos Rodriguez for any closing remarks.

[Carlos Rodriguez, President & Chief Executive Officer]

So as you can tell from our comments, we continue to, I think, have the same level of optimism, as we had last quarter and we're really, really thankful for the performance of our sales organization and also our frontline associates in terms of what they've been able to do for our clients and at the risk of ending on a negative note though, all of this positive, and all of this positivity and enthusiasm, we don't want to overlook the fact that we still have some challenges and some people still have some challenges in other parts of the world. This is a US headquartered company with over 80% of our revenues in the US. So that's probably why you're hearing all of this optimism, but we're not only in the US, we have associates in India, in Brazil, in Canada, and in Europe.

And the situation is not the same there. Even though the businesses are performing well, we just as back in the spring of last year, it was enormous suffering and challenges here in the US among our associates, the same thing is happening for some of our associates in some other parts of the world, in particular in India. And we are not going to forget them, we're doing everything we can to help them. We appreciate what the US government is doing along with the Indian government and local governments to help as well. And we look forward to have helping them kind of get through the same difficult situation that we managed to get through and they too will have their vaccination rates pickup in all of those parts of the world and they too will emerge from the pandemic. But it's clear that it's going to take a little bit longer and we should all remember to be there to help them and support them in any way we can, and I think people will do exactly that. But, having said that, we are --close to seeing the situation in the rearview mirror here and we're really anxious to see our growth rates, we accelerate to kind of where we were pre-pandemic here at some point in the future and getting back to the business and to helping our clients with their challenges and helping our associates build careers and helping all of you and our other shareholders and stakeholders get a fair, a fair return for their investment.

So again, as always, we appreciate your interest in ADP and we appreciate you tuning in and we will be back in a quarter with our outlook for fiscal year '22. Thank you!

[Operator]

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation and you may now disconnect. Everyone, have a great day.