If the last 25 years of Anthony Tortorella’s career were his training, E-chx Inc. is his Olympics.
The longtime Paychex Inc. vice president for human resources left the company last year, looking for an opportunity that would allow him to make full use of his decades of experience in sales, operations and budgeting.
As Tortorella puts it, he was like an athlete who had readied himself for years and now yearned for the next level.
"All those skills I had acquired were kind of wrapped up in my identity at that point," Tortorella, 50, says of the period after leaving Paychex.
His wait was not long. Soon after leaving Paychex he talked with Richard Aab, the founder and then-CEO of Brighton-based payroll and human resources services company E-chx.
"He asked what I wanted to do next, and I said I was looking to re-create the general manager concept that many companies lack today," Tortorella says, "to put a person in charge of a mission and a corporate culture and let that person be a lightning rod."
E-chx was ready for him too, naming Tortorella its president and CEO in December. He has some big plans for the next few years: harnessing its strong performance during the recession to bring more client growth, hiring and expanding its physical plant. The company’s expansion plan will be fueled by operations, though Tortorella says that depending on the needs, the company could look to other sources of capital such as private equity or capital markets.
Tortorella would not divulge revenue for the private company, but company officials have said the goal is to become one of the 10 largest payroll processors in the nation, and E-chx has made the Rochester Top 100 list of fastest-growing private companies in each of the last four years.
Tortorella has had an immediate impact. Bringing him on board was a big story for the company, not just in Rochester but across the payroll and human resource services industry, says David Whowell, E-chx director of marketing.
He has energized people within E-chx, too.
"We needed a person who was ready to take the company to the next level," says Richard Brienzi, E-chx chief financial officer and longtime friend of Tortorella. "Then in late 2009, when we found out he was available, the timing was perfect. It’s exciting to see how quickly things are changing now under him."
Coming to E-chx was not a difficult choice for Tortorella. Aside from Aab’s endorsement and the encouragement from Brienzi, he saw a company with competitive edges poised to expand.
The ease of its payroll software is one advantage, Tortorella says. The system allows a small-business owner or human resources manager to see a simple screen where he or she can easily add or delete an employee or change deductions. The payroll specialists at E-chx see the same screen, adding a level of ease to interactions.
"That allows us to not get bogged down with clients on basic things like payroll technical editing, but instead spend time on things like setting up a deduction column for a complex benefit plan or a system to pay employees overtime in a multi-state environment," he says.
The software also has a portal that lets employees access their relevant information, view 401(k) accounts and print out payroll stubs. Because the software was built with a high level of flexibility by Brad Wayne, E-chx executive vice president and chief information officer, it can easily be adapted to meet client demands, Tortorella says.
Despite its national reach, E-chx is still a relatively small company, so when a client does raise a concern about a problem or inefficiency in the software, the suggestion can quickly reach programmers. Tortorella says he places a high priority on getting feedback from clients and keeping the connection between them and management close.
"Getting feedback is one of the most important things we do, especially in times like this that can be difficult for (those small-business owners)," says Cathy VanHaneghem, a team leader at E-chx.
E-chx is not alone in having a strong payroll technology, but Tortorella says many other companies with such platforms do not actively market them or interact closely with clients. Instead, most turn to the Internet to set up shop, essentially letting the technology market itself, he says.
"We try to marry the technology innovation with a classic business service bureau mentality," Tortorella says. "I think we deliver the best of both worlds. We understand that the average businessperson needs to talk to someone about their payroll and needs that support on a per-pay-period basis."
As it projects a growth period over the next five years or so, E-chx plans to increase the level of support offered to its clients, Tortorella says. During that period government requirements for tax filings are expected to increase, states will collect revenue faster and legislation will change the way employees save for health care and retirement, he adds.
E-chx is prepared to run counter at a time when business in general is moving away from person-to-person interaction and toward greater automation.
"The future plan of this organization is to make it easier for our clients to be in touch with their assigned payroll specialist," Tortorella says. "We’re so used to getting on the Internet and having a commerce transaction without having a human interaction, but I don’t think payroll could ever be that way."
Interaction is important within E-chx too. Tortorella says his favorite part of the job is talking with his employees and traveling to visit different branches, keeping the channel of communication between the front-line employees and management open. He holds town hall meetings so employees can bring their ideas or questions directly to him.
"It’s that two-way dialogue between the CEO and the actual employee that touches the client, that unfiltered communication, that I crave and I think moves the company forward in a geometric growth as opposed to a linear growth," he says.
Leading the path
For nearly his entire career, Tortorella has been leading the pack in the payroll and human services realm.
After graduating from St. John Fisher College in 1981-in the same class as Brienzi and current Paychex vice president Martin Mucci-Tortorella went to work for Allstate Insurance. He and his wife moved to New York City but after a few years had an itch to move back to Rochester.
In Rochester, Tortorella met Gene Polisseni, then Paychex vice president, who convinced him to give the newly public company a try.
"It was 1987, and as a young man in the business world I was looking for a combination of a company with the strengths of a multiproduct, multistate footprint that still had the wonderful entrepreneurial spirit that small companies have," Tortorella says. "Paychex was so much like that under Tom’s leadership," he says of founder Thomas Golisano.
The world of payroll services Tortorella first entered was different from today’s. Few services were automated, a fact he memorializes by keeping a hulking relic Paymaster machine on a table in his office, a sort of typewriter/calculator for creating checks.
Because the terrain of payroll services for small businesses was still so fresh, it allowed Paychex to become a trailblazer in the realm of human resources services, with Tortorella helping to lead the way. In the late 1980s he saw how small businesses lacked the ability to provide the same suite of services Fortune 500 companies enjoyed and helped Paychex fill the niche.
After writing and instituting an employee handbook for their own company, Paychex officials saw how cheaply and efficiently they could do the same for other small businesses. In his first official duty in human resources, Tortorella served as the operations point man, putting company handbooks together.
The services Paychex offered expanded from there, with Tortorella again playing a key role. In the early 1990s he approached Golisano about administering a 401(k) plan, which until then had been cost-prohibitive for smaller businesses.
"I built a business case that if we could successfully (integrate 401(k) and payroll), it would take a lot of the cost out of the plan, thereby allowing affordability for a small business to buy it," Tortorella says.
Tortorella and the Paychex team pitched the idea to Merrill Lynch & Co. Inc. and Federated Investors Inc., gaining them as partners. A few years later the company used the same concept to offer workers’ compensation by integrating it into payroll, collecting premiums on a per-pay-period basis rather than two to three times a year.
The going was difficult in the early years, he says. There were few early adopters, and many competitors in the industry still viewed small businesses as untouchable with many of their products, thinking they either did not see the value in the products Paychex was beginning to offer or would not be able to afford them.
Tortorella took the criticism in stride.
"We had a lot of resistance from our strategic partners, and I learned a valuable lesson in that," Tortorella says. "When people tell you that you can’t do something, there are two types of individuals who react to that.
"There are those who agree and move on, and then there are others who push and prod and try to develop new strategies, to find where the resistance is coming from and instead of pushing against it let it come to you and parry it in a direction you can benefit from."
While it was daunting to encounter such resistance early in his career, he says, it helped teach him tenacity and how to find strategic alliances. He recalls the conversation with Merrill Lynch and how a small group of motivated Paychex executives was able to convince the investment firm of the untapped potential of human resources services.
"They loved the idea and saw a whole market they weren’t reaching," Tortorella says.
Within Paychex his creativity also was supported by Golisano, who Tortorella says helped the company remain nimble.
"I really respected his style-which is typical of entrepreneurs-that if you were in the huddle together and you wanted the ball, he would let you run with it," Tortorella says. "I think you had to stand on your own merits, and if you did well he supported you, and if you didn’t he redirected you."
Future at E-chx
Now at E-chx, Tortorella plans to be an agent of growth himself.
After completing fiscal 2010 in a strong position and with growth in clients, E-chx will look to continue this accelerated client growth in part by purchasing the client bases of smaller payroll processors over the next four to five years, Tortorella says.
"We have a very targeted acquisition appetite right now," he says.
The client base is projected to grow in areas near E-chx’s offices, including California, Georgia and Rochester. Close to one-third of the company’s clients are on the West Coast, with the others split between the Southeast and the mid-Atlantic region, Tortorella says.
Though much of the country has been mired in a recession that stifled small businesses, there have been pockets where the entrepreneurial spirit is vibrant, Tortorella says. And he says E-chx has been lucky to be able to tap into at least two of them-California and Florida.
"Florida is a marketplace that, from a real estate standpoint aside, has a lot of resiliency to the economic tailwinds," Tortorella says. "There’s tons of small business there."
Areas with more traditional businesses, such as the classic manufacturing and production facilities of the Northeast, nevertheless have afforded opportunities for E-chx because of its complex payroll offerings, he adds.
An important part of that growth will be developing employees who will help "take E-chx to the next level," Tortorella says. It is something he will devote much of his time to in the next few years. This means there will be hiring and expansion of its offices, including its Brighton headquarters.
Tortorella’s own office is less than a month old, a converted conference room that he moved into when the company purchased a second floor for its sales and marketing managers. E-chx is expanding its northern and southern California offices and its Chicago office.
He says the expansion plans the company has for the next few years will be a boon for the region’s economic recovery.
"We’re on a hiring path, and I think we’ll be a great contributor to the growth here in the Rochester community," Tortorella says.
Tortorella is ready to dig in to help E-chx along on its path. A longtime board member of the WXXI Public Broadcasting Council and his alma mater, Bishop Kearney High School, he left both positions at the end of his terms so he could focus on the company.
While the Fairport resident still does enjoy his weekly golf outings, boating and traveling with his family, professionally Tortorella is narrowing his focus on ways for E-chx to grow.
One such area will be serving as the go-between for clients and purveyors of benefits.
"I see us providing virtually a clearinghouse of data and money to allow clients to integrate better with their benefits providers," Tortorella says.
It is still unclear just how such a system will play out, but Tortorella says he is up for the challenge of finding it, just as he was more than 20 years ago when doubts abounded on whether Paychex could offer human resources benefits to small businesses.
"That’s what I like to do, to go and bring clarity to cloudy areas," he says.
Position: President and CEO, E-chx Inc.
Education: B.S. in management, St. John Fisher College, 1981
Family: Wife, Patti; daughter, Jenelle, 21; son, Stephen, 19
Activities: Golf, travel, fishing
Quote: "When people tell you that you can’t do something, there are two types of individuals who react to that. There are those who agree and move on, and then there are others who push and prod and try to develop new strategies, to find where the resistance is coming from and instead of pushing against it let it come to you and parry it in a direction you can benefit from."
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