Paychex, Inc. (NASDAQ: PAYX): Delivering Integrated Human Capital Management Solutions for Payroll

Martin Mucci, CEO, Paychex, Inc. (NASDAQ: PAYX)Martin Mucci, CEO 2010. The economy was still hostile to recover from the post-crisis levels of employment and output. In the midst of it all was a newly appointed CEO, Martin Mucci with his struggling company Paychex Inc. On the heels of the recession, Paychex had its first-ever drop in service revenue in fiscal 2010, falling 3 percent to $1.9 billion.

Mucci was in a dire state. “Thomas Golisano and the company he founded were a true legend in the annals of business history. I didn’t want to lose it,” he mentions.

Truly, it was a success story that Golisano had achieved through Paychex. Both the company and the entrepreneur struggled for years before they hit their strides to turn Paychex into a billion-dollar company. Located in Penfield, New York, Paychex was first started in 1971. Golisano originally founded the company with just $3,000. By 1979, the company expanded to include 18 franchises that were later consolidated into just one company.

"The HCM product suite integrates recruiting and applicant tracking, employee onboarding, payroll, employee benefits and HR administration, time and attendance, and retirement services"

Seeking inspiration, Mucci laced up and what followed next was nothing short of brilliant. A number of moves—including a series of broad changes to the company’s sales team, along with investments in technology—and a gradual improvement of the economy put the company back on the growth track. “When I came into the CEO role we were at a point where we needed to reposition the company. We were always a company known for our great service and very personal service, and we had a lot of investment into technology,” recalls Mucci. “Over that period, our investments into research and development of our products and acquisitions of our products have gone up 80 percent. It really became a focus for us five or six years ago, when I had responsibility for IT and product management and knew the competition was going to come more on the technology side. We added a lot in software-as-a-service development and did cloud-based products.”

Mucci, who previously served as president of telephone operations for Frontier Communications and CEO of Frontier Telephone of Rochester, spent eight years as Paychex’s senior vice president of operations before he was named CEO. He has led investments in technology as the company expanded its online and mobile offerings. Paychex also has steadily built its human resources services, which soon approached 40 percent.

Today, Paychex is a recognized leader in the payroll, human resource, and benefits outsourcing industry, with a steadfast commitment to success and a record of achievement that continues a tradition of delivering excellence.

The Future of Work offers tremendous opportunities for employers that emphasize flexibility, mobile technology, and training

The company serves more than 650,000 payroll clients across more than 100 locations and pays one out of every 12 American private sector employees.

Built for Today’s Payroll Market

Paychex offers an ever-growing variety of payroll and human resource products and services that help clients do what they do best—run their business. With a wide range of services—including payroll processing, retirement services, insurance, and a fully outsourced human resource solution— Paychex customizes its offering to the client’s business, whether it is small or large, simple or complex. The company’s software, Paychex Flex is a modular, web-based human capital management solution designed to meet the needs of employers of any size and industry. With a single login, users can access recruiting and applicant tracking (ATS), onboarding, HRIS, benefits administration, time and attendance, payroll, retirement, and more.

Built on a central platform, using a single data profile for each employee, Paychex Flex tracks information in real-time and across the customizable applications. Some of the major software functions include applicant screening, electronic onboarding, job and labour costing, garnishment payments, drag-and-drop visual scheduling and automatic compliance testing. Further, Paychex also offers multi-tiered options for customer service, which allows companies to choose from a variety of options to best fit their size and complexity.

Paychex Flex streamlines workforce management through technology and flexible choice of service. The platform uses a single cloud-based platform, with single client and employee records, and single sign-on, including self-service options and mobility applications. “The HCM product suite integrates recruiting and applicant tracking, employee onboarding, payroll, employee benefits and HR administration, time and attendance, and retirement services,” adds Mucci. Paychex Flex also provides technology-enabled service, with options that include self-service, around the clock dedicated service center, individual payroll specialist and integrated service through the multi-product service center. Its platform services its small-business clients, mid-market clients and its PEO business.

Making Payroll Process Seamless

The Company’s payroll processing services includes the calculation, preparation and delivery of employee payroll checks; production of internal accounting records and management reports; preparation of payroll tax returns, and collection and remittance of clients ‘ payroll obligations. The Company’s payroll-related ancillary services include payroll tax administration services, employee payment services and regulatory compliance services. It offers HR services, including Paychex HR Services, retirement services administration, insurance services, HR administration services, and Other HR services and products.
It offers various accounting and financial services to small- to medium-sized businesses that offer benefits for small-business owners, including purchasing of accounts receivable as a means of providing funding to clients in the temporary staffing industry; a cloud-based accounting service; payment processing services; payment distribution services, and a small-business loan resource centre.

The payroll tax administration services provide preparation and filing of quarterly and year-end tax returns, as well as the electronic transfer of funds to the applicable tax or regulatory agencies (federal state and local). In connection with these services, the company electronically collects payroll taxes from clients’ bank accounts, typically on payday, prepare and file the applicable tax returns, and remit taxes to the applicable tax or regulatory agencies on the respective due dates. Its employee payment services provide an employer with the option of paying their employees by direct deposit, payroll debit card, a check drawn on a Paychex account (Readychex), or a check drawn on the employer’s account and electronically signed by the Company. It offers new-hire reporting services, which enable clients to comply with federal and state requirements to report information on newly hired employees and also HR outsourcing solutions that provide businesses a full-service approach to the outsourcing of employer and employee administrative needs.

The Future of Work is Now

Recently, Paychex released a new report which examined the factors reshaping virtually every aspect of how, where, and when work takes place. The report, entitled “The Future of Work is Now: How Shifting Dynamics, Technological Innovation, and Worker Preferences Are Disrupting the Workplace of Today,” evaluated the demographic, technological, and behavioral factors that are changing the workplace of today and setting the course for the Future of Work. The report is based on payroll and HR data of a subset of Paychex small business clients with 1-49 employees and survey responses from more than 500 U.S. workers. An overview of the data was shared today in Washington, D.C. at “Workers & the Innovation Age,” a policy briefing event presented by The Hill.

In the past decade, the generational makeup of the workforce underwent a dramatic evolution that will continue to reshape foundational aspects of American work. Since 2009, a new generation has joined the workforce (Generation Z), Millennials took over as the largest generation in the workforce, and Baby Boomers began to exit the workforce as they reached retirement age. The mobile-centric preferences of Millennial and Generation Z workers have also influenced the tools their employers use to share information. Five years ago, only 14 percent of employees used both mobile devices and desktop computers to manage HR tasks. Today, that number is up to 43 percent. The report breaks down the impact of an increasingly multi-generational workforce, advancements in technology, the evolving preferences of today’s workers, and highlights generational shifts, advancements in technology, and evolving worker preferences. “The Future of Work offers tremendous opportunities for employers that emphasize flexibility, mobile technology, and training,” informs Mucci. “This report offers valuable insights on what businesses can do now to both prepare for the continuing evolution of work and attract and retain qualified candidates in today’s tight labour market.”