ADP Europe

The newly decreed advance financing of social insurance taxes will come into effect as of January 2006. “This seems to be innocent – but it definitely is not”, says Andreas Kiefer, Manager at ADP, largest HR services provider worldwide. “The fact that from now on social welfare taxes have to be paid three days before the end of each month instead of 15 days after will cost the economy many times the advantages the Government is hoping for. The expected reduction in non-wage labor costs is totally swallowed by the absurd bureaucratic machinery.”

Specifically, the approximately 370 billion euros the government collects annually via companies will now be paid around 19 days earlier. According to calculations carried out by the DIHK (the Association of German Chambers of Industry and Commerce), the interest shortfall to be expected for German companies amounts to 400 million euros per month whereas the interest advantage for the government will rise correspondingly.

BRIEF PROFILE OF THE HEINZ GOLDMANN FOUNDATION

Geneva-based Heinz Goldmann International Foundation was founded in 1981. The Foundation’s objective is the “Promotion of Business Communication”. Its work focuses on communication training for senior executives completed by events providing information exchange platforms for top managers.

The Managing-Change conference took place for the first time in 1998 and is now recognized as the largest business conference in Germany. Speakers are those top managers who, thanks to their management methods, have succeeded in managing major crises. Speaking openly and naturally, they relate their strategies and refute the misperception that this type of success applies only to American Managers.

What is forgotten is the fact that the companies, in order to be able to transfer the correct amounts, will have to face considerable extra financial and administrative tasks. All systems calculating work hours will thus have to be reorganized and corresponding IT-systems adapted as a consequence. Timetables for payroll calculation will have to be reassessed and adapted. For employees receiving flexible wages, it could become necessary to carry out double payroll operations.
And for several million employees receiving shift allowances, wages calculated on work hours, piecework wages or wages on a commission basis, there could be a risk of late payment.

The extra charges estimated by ADP in collaboration with Professor Walter Gora, Manager of Valora Management Group and working at the Berlin-located Institute of Electronic Business (IEB), for the probably necessary double payroll processing alone, will amount to at least 1.8 billion euros per year. This amount is based on the assumption that two payroll procedures, at a present cost of 10 euros each, will be required for 50% of approximately 30 million employees. This amounts to at least four times the interest earnings of the Government. Says Andreas Kiefer “if this is bureaucracy reduction, we cannot but ask the question of what lies ahead for this country”

About ADP

ADP (Automatic Data Processing, listed on the NYSE), is the global leader in human resources outsourcing.

For more than 50 years, we have been managing the entire payroll and human resources administration processes of companies, local or multinational, large and small, from diverse business sectors.

With a presence in 29 countries around the world, 13 of which are in Europe, ADP is the best-placed to serve the needs of multinational companies.Our flexible range of outsourcing options are tailored to fit every client's needs and strategy. ADP services are compliant with languages, currencies, social regulations, and adapt seamlessly to companies' changing structural and business needs.