For employers it offloads employment and salary verification. Instead of having to pay someone to answer verification calls all day they just upload the data to The Work Number and let them handle it.

Are employers obligated to provide employment and salary verification?

If they didn't their employees would be pretty pissed when they're unable to get a mortgage.

So go to HR and say "please sign this form that says I make $X" rather than preemptively broadcasting it?

Here's how I imagine this goes down:

ADP Rep: "Hey, we have an exciting new feature to offer you! We partner with the worlds premiere credit and employment reporting agency to eliminate the hassle of salary and employment verification."

VP, HR: "Go on..."

ADP: "If you opt in to this innovative program, you'll never again have to respond to your employees' lenders or landlords. 97% of banks participate in this program. Instead of them asking their applicant—your employee—for paperwork that you have to deal with, they come direct to the source automatically. Again, this is at no additional cost. It's included with our Premium Payroll Plus offering. Interested?"

HR: "Yeah, of course. One less thing I have to deal with"

ADP: "And the best part is you'll then qualify for a substantial discount on our partner's Employment Data System. Rest easy with unlimited verification reports for all your prospective new hires"

HR: "Anyone ever turn this down?"

ADP: "Almost never."

This is exactly what happened when I applied for a mortgage here in Ireland. Seemed fine.

Banks and organizations that are considering lending you credit (i.e. buying a house / car / getting a credit card) can know if you're getting in over your head with finances and might be higher risk to repay. They can set their interest rates and fees appropriately.

Although all that said for any major loan the bank is going to ask you to provide detailed proof of all income, assets, etc. They likely use this service as a check to make sure you aren't trying to overstate your income.

From what I recall at my time there, banks use it as supplemental source of creditworthiness validation. The government also pays for the data to verify eligibility for welfare and other social services. Employers...I don't think were a major revenue source although I wouldn't be surprised if some used it to inform their salary thresholds.