And I think the answer to that question is, it’s still early in the year. And so, if we do continue to outperform retention in the way that we outperformed in the first quarter, we hope that we will outperform for the full year. It’s just early to take away that conservatism sitting here just, three short months into a very long year.
James Faucette: Yeah. And then, I want to go back to kind of a headline related question. You saw that — you saw or you indicated that you’d seen kind of a 25,000 sequential improvement in retirement services and — for clients, you alluded to some state mandates there, particularly around SECURE Act 2.0. Can you talk a little bit about what state mandates you’ve seen or that may be impacting that business or how long before we start to see benefit in their retirement services, post a new state mandate? So maybe we can help track headlines and anticipate like, how big of an impact any new requirements may have?
Maria Black: Absolutely. So I think I’ve spoken quite a bit to retirement services as well as the SECURE Act over the last year or so. And I will tell you, I was excited to report the new milestone today in part because that business continues to show strength, but also because it’s a business that I know is adding tremendous value into the world of work. And so, it is an exciting time. It does come as a byproduct of the offering, the investments we’ve made into the offering, and also these state mandates, some of which are anchored into the SECURE Act at the federal level, some of which are anchored state by state. Candidly, I could probably spend an hour with you and go state by state in terms of all the various mandates. What we see over the next year or so is the threshold of companies that need to comply with the state mandates starts to creep into, call it, the further down market, if not the micro market.
And so, as all these states, a lot of them being on the West Coast, if you’re looking for headlines tracking states like California, as they continue to pull down at what level do you need to comply with the state mandates and/or the SECURE Act, the more opportunity we will have to ensure that we’re helping our clients to solve for this piece, keep them compliant. But again, back to doing good in the world, it’s also something that’s bringing the value to each one of these employees that are engaging with these clients, so.
James Faucette: Great. Appreciate that color.
Operator: Thank you. Our next question comes from Bryan Keane with Deutsche Bank. Your line is open.
Bryan Keane: Hi, guys. Good morning. Just want to ask about the decline in PEO. Looking at the employee base of PEO declining versus not necessarily the case, looks like almost the opposite in the employer services. So just trying to think about the trends. And does, typically the trend you see in PEO bleed into employer services and why maybe it’s been a little bit weaker for pays per control there in PEO versus employer?
Maria Black: Yeah. So just to clarify, pays per control in PEO is actually higher. We don’t give that number, but it is actually higher than employer services. So I think the first piece suggests is that the bases are actually just different, right? So if you look at the pays per control across the broader ADP, it’s really a reflection of a mix of industries. As I mentioned earlier, the PEO tends to skew, by design, by the way, for the offering. It’s really — the offering is the most valuable if you will to the cohorts that we offer it to, which tends to be more professional services, tech-oriented companies that want to offer employers or their employees benefits of choice, if you will, to be employers of choice. And so that skews that base slightly differently than the overall.
And what we’re seeing within the PEO base is a delineation between those cohorts and the rest of the base, if you will. So we cited it in the prepared remarks, but the deceleration that is happening at the PEO is still a byproduct of within that base having professional services and tech decelerating at a faster clip than the rest of the base. So to answer your question, does it bleed across? I think, we’re already hearing these headlines in the market in terms of — and we see it within our own ADP Research Institute data with respect to professional services and tech hiring being in a different position than the rest of the market. So I think I would suggest it’s already been bleeding across. If you look at the last couple of quarters of that, by the way, that also tracks BLS data shows the same thing.
You see it in wages. And so all of that to suggest, I would say, the trend we’re seeing in the PEO is already in the macro, but the bases are slightly different, which is why you would feel it, the impact of it perhaps more significantly in the PEO PPC than you would in the broader PPC. That was a mouthful, by the way.
Bryan Keane: No that was helpful though. Thanks for that clarification. And then the other question I just had is the strength you saw in the ES new bookings especially in September and the way the pipeline looks, but you’re not changing the total outlook of 4% to 7%. Just trying to figure out — do you feel like you guys are maybe trending if things hold trending above the guidance range for bookings given the strength you saw in September in the pipeline and for SMB strength in the quarter?
Maria Black: Yeah. What I would offer is that I’m incredibly pleased with the results in the first quarter, especially on the heels of what was an incredible finish last year. And so the pattern that we saw in the first quarter and the strength in September is not a typical of the pattern we see in this — the first quarter on the heels of an incredibly strong fourth quarter. And so I am excited about the first quarter results, I am excited about the strength in September. But the excitement is actually less about, call it, the finish in September and more about what we see on the year-on-year demand environment, what we see in activity, what we see stepping into this next quarter. And that does give us confidence into our full year guide at that 4% to 7%.
What I would also offer though is it’s a long year, and when you think about where the skewing, if you will, or the contribution of new business bookings happens for us on a full-year basis, it is in that third and fourth quarter. I’ll much call it larger than the first and second quarter. And so we believe it’s prudent to given the line of sight that we have today, just a quarter in. But we feel confident in the guide, we’re excited about the performance, we’re excited about how we’re stepping into the quarter. The second quarter that is but we also still have an entire year ahead of us.
Bryan Keane: Got it. Thanks for taking the questions.
Maria Black: You bet. Thank you.
Operator: Thank you. Our next question comes from Ramsey El-Assal with Barclays. Please go ahead.
