AO World, the UK’s largest online-only electricals retailer, found that as its business grew, a new partnership with Tesco and the impact of COVID-19 added complexity to hiring and payroll. To stay ahead, AO was in need of a HCM software to help make payroll a more strategic business function, streamline processes, reduce duplication and help ensure accurate, compliant pay across a fast-growing workforce.
AO at a glance:
- Founded in 2000
- Over 3,000 employees across the UK and Germany
- Largest online-only electricals retailer in the UK
- Unique UK recycling arm for electrical goods
We looked at many other solutions, but at the end of the day, ADP’s iHCM was the only solution that met our requirements and delivered the best solution for our needs.
Graham Pugh,
Group Payroll Manager
AO/AO World
Who is AO World?
Founded in 2000, AO specialises in household appliances and electricals and is the largest online-only electricals retailer in the UK. The business operates across the UK and Germany with more than 3,000 employees in multiple offices, warehouses and outbases, and runs a recycling arm in the UK.
AO also runs its own recycling arm in the UK and is the only online electrical goods company to do so, underlining its commitment to responsible operations. With ambitions to be the best electronics supplier in the UK and Europe, AO’s continued growth and expansion have placed increasing demands on its HR and payroll infrastructure.
Why did AO World need a new payroll and HCM system?
AO’s rapid growth, new partnership with Tesco and the disruption of COVID-19 put payroll under intense pressure, with more than sixty new starters a month, rising volumes of digital data and fast-changing legislation making it clear that payroll and HCM needed to support broader business goals, not just day-to-day processing.
Key challenges included:
- Faster onboarding needed. The payroll team was processing over sixty new starters per month and needed to onboard staff quickly and accurately.
- More complexity to manage. Vast amounts of digital data, continued expansion, and a new partnership with Tesco increased operational pressure.
- Stronger coordination required. With payroll split between Bolton and Crewe, including responsibility for time and attendance, communication across teams and locations was essential.
- Greater agility needed. As COVID-19 hit and legislation changed quickly, AO needed a streamlined, intuitive and flexible HR payroll integration that could support remote working, compliance, and growth.
What HR solution did AO World choose?
AO needed a system that could support both technical and strategic goals, including a single master data source, less complexity, and less duplication of effort. Having worked with AO for seven years, ADP already understood the evolving needs of the business and was well placed to provide advice, guidance, and expertise throughout the move to iHCM2.
ADP’s iHCM solution was chosen for:
- Single data foundation: AO’s primary objective was to move from ADP Freedom to ADP iHCM2 and create one master source of payroll data.
- Better fit for growth: ADP iHCM2 gave AO a single, real-time, fully integrated system aligned with its growth strategy and process needs.
- More strategic insight: Customisable data reporting helped support business decision-making while simplifying onboarding.
- Trusted partner choice: After seven years working together, ADP was well placed to guide the transition and support AO through every stage.
This modern HCM system ensured AO’s payroll was no longer viewed as a background activity, but as a central part of company strategy and an enabler of continued growth.
How did AO World implement ADP iHCM2?
ADP supported AO through every stage of the transition to iHCM2. The implementation was designed to support AO’s HCM transformation while maintaining continuity of service during a period of intense operational pressure.
Implementation highlights:
- Guided transition: ADP provided advice, guidance, and expertise throughout the move from ADP Freedom to iHCM2.
- Remote continuity: As COVID-19 hit, the platform and ADP support teams enabled payroll to keep operating remotely and maintain business as usual.
- Cross-border support: ADP teams in the UK and Germany helped AO manage delays, respond to change and keep payroll moving.
- Clear legislative updates: AO received clear, concise updates on legislation changes in both countries to support compliance.
What results did AO World achieve with ADP iHCM2?
ADP iHCM2 gave AO a more integrated, resilient payroll operation that better supports growth.
- Single integrated platform – AO created a single, real-time, fully integrated system that supports its growth strategy and streamlines process variation across locations.
- More accurate, reliable payroll – The solution delivers secure, efficient payroll that reflects AO’s requirements and helps ensure employees are paid the correct amount at the correct time.
- Less manual intervention – Feeds from the time and attendance system reduce manual input, while improved collaboration with pension administrators and HMRC has led to more timely transactions and fewer retrospective corrections.
- Stronger resilience and compliance – The solution can adapt to fast-changing legislation, support furlough reporting with new earnings and deduction codes, and help ensure all colleagues were paid on time throughout the COVID-19 pandemic.
Throughout COVID-19, iHCM2 and ADP’s managed payroll services ensured all colleagues were paid on time, despite shifting rules and new reporting demands. New earnings and deduction codes were created quickly to meet reporting requirements and to help finance teams identify furlough payments accurately and efficiently.
Key outcomes include:
- Single, real-time, fully integrated payroll and HCM system that supports AO’s growth strategy.
- Secure, reliable, and efficient payroll aligned to AO’s complex requirements.
- Reduced manual input through automated feeds from time and attendance systems.
- Stronger collaboration with pensions administrators and HMRC, with fewer retrospective corrections.
- Consistent, on‑time pay for all colleagues throughout the COVID‑19 pandemic.
Without the ongoing assistance of ADP and the managed service teams, day‑to‑day processing for all our payroll services would have been very challenging indeed. Thanks to ADP, all colleagues have been paid on time during the whole pandemic.
Graham Pugh,
Group Payroll Manager
AO/AO World
Ongoing compliance support
Beyond the technology, AO highlights the value of ADP’s service and support. During a period of intense change, ADP’s teams in the UK and Germany helped AO navigate delays, respond to legislative updates, and keep payroll running smoothly, giving the business added confidence in both the partnership and the solution.
The help and assistance we’ve received from ADP has helped us immensely throughout this crisis. Gabby and her team in the UK, and Petra in Germany, have been fantastic – very patient and understanding when we’ve run into delays and going the extra mile to help us... We’ve received numerous, clear and concise updates on legislation changes in both the UK and Germany.
Graham Pugh,
Group Payroll Manager
AO/AO World
This feedback highlights an important part of AO’s transformation: the value came not only from the platform itself, but also from having a supportive partner on hand to offer practical help, clear communication and reassurance as the business managed rapid growth and constant change.
