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Paychex - Payroll Services 2021
Vendor Analysis
published on Jan 05, 2021
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Report Overview:
This NelsonHall assessment analyzes Paychex's offerings and capabilities in Payroll Services
Who is this Report for:
NelsonHall’s Payroll Services profile on Paychex is a comprehensive assessment of its offerings and capabilities, designed for:
- Sourcing managers monitoring the capabilities of existing suppliers of managed payroll services and identifying vendor suitability for security services RFPs
- Vendor marketing, sales, and business managers looking to benchmark themselves against their peers
- Financial analysts and investors specializing in the HR and payroll technology and services sector.
Scope of this Report:
The report provides a comprehensive and objective analysis of Paychex payroll services 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 of delivery locations.
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 >91k plans & >1m plan participants) and the 22nd largest insurance agency in the U.S., managing ~$2.5b 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.
Paychex targets small and lower middle market clients (generally <5k) for its managed payroll services offering. However, its solutions and platforms can scale to support larger middle market clients (>5k).
Paychex offers both partial and fully managed payroll services solutions. Beyond its HR and payroll services offering, Paychex also offers a range of add-on complementing solutions targeted to small and medium-sized business owners. The solutions provide a "one-stop-shop" for small business administrative needs
As of May 31, 2020, Paychex employed ~16k workers across its businesses and supported >680k clients and >1.4m client worksite employees, providing payroll to an estimated 1 in 12 U.S. private-sector workers.