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Paychex - Next Generation HCM Technology 2021
Vendor Analysis
published on Jul 29, 2021
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Report Overview:
This NelsonHall assessment analyzes Paychex's offerings and capabilities in Next Generation HCM Technology
Who is this Report for:
NelsonHall’s HCM technology profile on Paychex is a comprehensive assessment of its offerings and capabilities, designed for:
- Sourcing managers monitoring the capabilities of existing suppliers of HCM technology platforms and identifying vendor suitability for RFPs
- Vendor marketing, sales, and business managers looking to benchmark themselves against their peers
- Financial analysts and investors specializing in the HR technology and services sector.
Scope of this Report:
The report provides a comprehensive and objective analysis of Paychex HCM Technology offering, capabilities, and market and financial strengths, including:
- Identification of the company’s strategy, emphasis, and new developments
- Analysis of the company’s strengths, weaknesses, and outlook
- Revenue estimates
- Analysis of the profile of the company’s customer base including the company’s targeting strategy and examples of current contracts
- Analysis of the company’s offerings and key service components
- Analysis of the company’s delivery organization including the location for key centers.
Key Findings & Highlights:
Paychex (NASDAQ: PAYX), founded in 1971 and headquartered in Rochester, NY, is a provider of human capital management solutions, offering HR, payroll, benefits, and insurance services for small- and mid-sized businesses primarily throughout the U.S. and in select countries of Northern Europe. It is currently both the largest 401(k) recordkeeper (by total plans administered, currently >98k plans & >1m plan participants) and the 28th largest insurance agency in the U.S., managing ~$2.6b in premiums annually.
Paychex offers a comprehensive suite of HR technology and managed services; each is enabled through its proprietary HCM technology, including:
- HR outsourcing services (HR, payroll, benefits)
- PEO services (co-employment model)
- Retirement planning services
- Insurance services.
As of May 31, 2021, Paychex employed ~15k workers across its businesses and supported >710k clients and ~1.7m client worksite employees, providing payroll to an estimated 1 in 12 U.S. private-sector workers.
Paychex Flex is a mobile-enabled, HCM platform technology offering built on a unified framework and delivered as a cloud-native, multitenant solution. The current configuration supports the U.S. and includes both English and Spanish languages. Paychex Flex consists of the following suite of modules, including:
- HR Records (HRIS)
- Payroll
- Recruiting and Applicant Tracking
- Onboarding
- Performance Management
- Learning Management
- Time and attendance
- Expense Management
- Benefits
- Retirement
Paychex targets small and middle-market clients (generally <5k) for its technology and service offerings. However, its solutions and platforms can scale to support larger middle market clients (>5k). As of May 31, 2021, Paychex supported ~710k U.S.-based small and midsized businesses, with ~80% actively leveraging its Paychex Flex HCM technology.