Paychex Inc.’sBoard of Directors has voted to increase its board to 12 members up from 11 and has named Theresa M. Payton to fill the new position.
Payton
Payton is the founder and CEO of Fortalice Solutions, a firm advising Fortune 150 Boards, C-Suite and regulators on secured technology innovation and transformation efforts regarding customer delivery and privacy.
Before overseeing IT operations as CIO for the White House from 2006 to 2008, she held executive roles in banking technology for two of the country’s top financial institutions.
In 2008, she founded Fortalice Solutions which has since completed over 500 global engagements advising and securing digital transformation programs and delivering business intelligence services for some of the nation’s largest organizations.
“As a respected technology expert, successful entrepreneur, and CEO, Theresa Payton is a rare combination of highly sought-after skills,” said Martin Mucci, Paychex board chairman in a statement. “Her business acumen, intense focus on the needs of clients and her ability to provide sound governance insights on digital and security risks will make her a strong addition to our Board of Directors.”
In addition to her professional experience, she has served on the Federal Advisory Board of CyberArk, a publicly traded cybersecurity product company and as a member of the Transformation Innovation Advisory Board of UniCredit S.p.A., the largest pan-European bank headquartered in Milan.
Paychex Inc. has sued a former mid-level manager in the payment products division, alleging he intends to pass confidential trade secrets to a competitor.
Paychex claims Eric Wade of Webster downloaded to his personal email account details and documents relating to a yet-to-be-launched product “that would be wholly unique in the payroll industry.”
The company is alleging breach of contract, breach of fiduciary duties and misappropriation of trade secrets.
In court papers filed Monday in State Supreme Court in Monroe County, the Fortune 1000 company contends Wade transferred from his Paychex email address to a private Gmail address an entire PowerPoint presentation detailing the specifics about upcoming new products.
The suit alleges Wade intended to take the information about real-time and pay-on-demand payroll features to his new employer, Patriot Software LLC of Canton, Ohio, a direct competitor, according to Paychex.
Wade had worked at Paychex since 1994 and moved into his most recent role, as product strategy manager for payroll products, in January 2020. He submitted his resignation on Oct. 11, with the intention of leaving the company on Oct. 28, but Paychex moved him out on Oct. 13 following discovery of the alleged theft of company secrets, court papers say.
The PowerPoint presentation allegedly taken by Wade included “confidential, proprietary and trade secret information” detailing the market need for the products, project build-out and launch costs, technical details on implementation, and a launch timeline, the lawsuit says.
“In short, the presentation contains the entire playbook and roadmap for the development and launch of a new Paychex product,” states the complaint, filed by Stephen J. Jones and Eric M. Ferrante of Nixon Peabody.
The complaint states Wade knew of the restrictions regarding proprietary information, and that he signed both a Confidentiality, Non-Solicitation and Non-Compete Agreement as well as a Restricted Stock Unit Award Agreements.
Paychex contends in the complaint that Patriot Software does not offer the products detailed in the PowerPoint presentation, and that Wade “was particularly keen on joining a company that would have an interest in — and need for — real time and pay-on-demand products.”
The lawsuit also alleges that Wade’s knowledge of Paychex’s confidential, proprietary and trade secret information and new product strategies “would give Patriot a distinctly unfair advantage in competing with Paychex for business,” and that his new employer would be able to launch a similar product.
Paychex is seeking monetary damages as well as injunctive relief, plus cancellation of all restricted stock awards in the previous 24 months.
Employers can build and retain top talent by offering educational and skill-building opportunities for employees, new research from Paychex Inc. shows.
The survey of over 600 employees nationwide, conducted in partnership with Future Workplace, an Executive Networks member company, highlights workers’ desires to sharpen their skills and advance their careers with the support of their employers.
Sixty-three percent of respondents said they would be more likely to stay at their organization if they were provided with better learning opportunities.
The report further revealed that employers are providing the right learning and development opportunities for full-time, in-office employees, but have gaps to fill when it comes to remote, hybrid and part-time workers.
“The American work experience is more varied than ever before — even between workers in the same roles,” said Alison Stevens, director of HR Services at Paychex. “With employees yearning for more educational and career-building experiences, employers will need to pay attention to the differences between these groups to curate programs that keep employees engaged and stimulated regardless of their time in an office.”
The board of directors at Paychex Inc. has voted to expand to 11 members from 10, effective immediately, and has appointed John B. Gibson Jr., Paychex president and CEO, to fill the new position.
Gibson
Gibson succeeds Martin Mucci at the Paychex helm, whose retirement took effect today. Mucci – who remains board chairman – served as CEO since 2010.
Gibson is the fourth president and CEO in the 50-year history of Paychex.
In addition to his appointment to the board of directors, Gibson will serve on the executive committee of the board.
“John’s leadership and experience, deep understanding of our market and focus on driving innovative technology and HR advisory solutions for our 730,000 clients make him a valued addition to our board of directors,” Mucci said, in a statement.
Gibson joined Paychex as senior vice president of service in May 2013, bringing with him more than 20 years of experience in HR solutions, technology and business services.
In December 2021, he was promoted to president and chief operating officer, leading the daily operations of the company, including sales, service, marketing and product management.
Prior to Paychex, Gibson served in senior executive positions at HR outsourcing and technology companies, including Ameritech (now AT&T) and Convergys, where he served as president of the HR management division.
Gibson holds a Bachelor of Arts degree from Indiana University. He also earned certifications at Northwestern University’s Kellogg School of Management and the international business program of INSEAD, a global graduate business school.
Hourly earnings growth stood at 4.98 percent in September, falling below 5 percent for the first time since April.
The Small Business Job Index, which measures the rate of small business job growth, also slowed slightly from the previous month, down -0.19 percent to 99.75.
““With low unemployment levels continuing, small businesses are relying on their current staff to do more, driving an increase in hours worked,” said Martin Mucci, Paychex chairman and CEO, in a statement. “The moderation in hourly earnings growth is of particular note, though, as it may be a sign that the Fed’s actions are possibly having an impact in the battle against inflation.”
In further detail, the September report showed:
One-month annualized hourly earnings growth fell to 3.35 percent, the weakest growth rate since April 2021;
Small business employment gains slowed during the spring and summer as monthly decreases averaged -0.26 percent from April through September;
North Carolina remained the top state for small business job growth; Florida was once again the top state for worker hourly earnings growth (6.47 percent);
Dallas continues to lead U.S. metros in small business job growth and hourly earnings growth for workers, and
Other services (except public administration) remained the top sector for job growth in September at 102.68.
Drawing from the payroll data of approximately 350,000 Paychex clients with fewer than 50 employees, the monthly report offers analysis of national employment and wage trends, as well as examines regional, state, metro and industry sector activity.
The days when an employer told a job candidate about their company’s benefits package with the implication to take it or look elsewhere are on unlimited PTO.
“I think everybody recognizes there’s been a dramatic shift into the employees’ hands in terms of options and flexibility and power in the marketplace,” said Adam Clouden, employee benefits consultant with Lawley. “Every employer you talk to right now is hiring and they have open positions.”
Clouden
Businesses that have a handful to a few dozen employees may more acutely feel the gap caused by a vacancy.
“It plays into job seekers’ or current employees’ hand in terms of being able to leverage that to get what they expect,” Clouden said. “Honestly, I think that’s a good thing because you’re balancing family and work life to find the situation that best fits. And they have the power to go get it.”
What once were called perks now are expectations. The offerings go beyond health insurance, and have expanded to include access to mental health and overall wellness services.
Today’s job candidates seek voluntary access to accident or disability coverage as part of a total compensation package, as well as opportunities for advancement and training. Retirement plans are almost a given. Now, flexible schedules and the option to work from home in order to establish that coveted work/life balance are high on many people’s lists.
“I’ve seen more people that I know move jobs again in the last year and a half because once the total work from home model went away and they got used to it; they wanted to continue with that,” Clouden said. “So they found a job that offered that as a condition of employment.”
In some instances, a candidate may be willing to give up a little in salary if the total value package meets the prospect’s needs.
Stevens
“Small business owners need to be able to package it so they can accurately convey to a candidate that your pay is (this amount), but also let’s look at the total package of what I’m offering,” said Alison Stevens, director of HR services at Paychex. “These are the benefits that I’m offering that you might not be able to get down the street at competitor B or C.”
Paychex conducted a retention survey in early May 2022 of 604 employees in small to midsize businesses. The results showed that health insurance and retirement plans were the top two benefits that kept employees in the long run. Financial benefits such as tuition reimbursement, student loan repayment and child-care support ranked third.
Paychex also looked at the employer side. In a survey of 1,000 human resource decision-makers at U.S. companies with 20 or more workers, the Pulse of HR survey found that organizations have increased the benefits they offer by 22% on average since 2019. Among the changes: 72% of organizations with 20 to 500 employees offer health insurance benefits compared to 61% before the pandemic. The increase in benefits came from listening to employees’ needs about their families and worker desires for more options.
Stevens said it’s crucial for small employers to listen to their workers about why they stay, and why they leave. They also need to hear what they, as leaders, can do and make sure their staffs understand how those offerings meet their needs in the current workplace.
“I look at all the things we’ve learned and how that translates into new experiences for employees and the fact the flexibility is a much larger part of the conversation than it was before, where companies never even considered what was possible” before COVID-19. “Dear God, let’s hope we will not face another pandemic. But we all learned we can do hard things and so that agility becomes really important.”
Erick B. Bond, president of Bond Benefits Consulting, said that offerings among small businesses tend to be more variable.
Bond
“You’ve got some who are saying, ‘I want to kind of do the bare minimum to get by,’ but others who are saying, ‘Hey, employees are my family and I want to take really great care of them,” he said. “So there’s really a wider disparity in what’s offered and in how much employers pay in the small employer marketplace.”
In general, he said small business owners are choosier in what they offer, to make sure the benefits are valued by employees and, in the case of some types of insurance, get enough workers to participate.
But the flip side is that these owners may have more leeway to offer benefits that align with their personal and corporate values.
“Understand that you as an employer can use benefits to attract and retain the people you want. You can use that to set and reinforce your values.”
Bond mentioned a client who believes in education, to the point where the business offers tuition reimbursement and student loan repayment assistance. He said that is unusual for a small business, “but it very much aligns with the owner’s values and, frankly, with the employees that the business is trying to recruit and retain.”
Dan Martin, strategic benefits and communications consultant at Gallagher Benefits Services, said successful employers look holistically at the needs of their employees. “We all recognize coming out of the pandemic that we’re coming to work for different reasons and we have different purposes that we’re looking to fulfill in life.”
Martin
The most effective rewards packages help employees be better at their jobs and also at home and in their community. “That’s extremely important moving forward as we start to see the shift and expectations of employees,” he said.
Employers who win recruiting battles recognize that benefits aren’t costs – they are investments in building partnerships with workers.
“When we’re talking to employers or CEOs and owners of organizations, one of the first questions out of my mouth is, ‘Do you feel like your employees are so lucky to work for you, or do you feel like your employees are so lucky to be working with you?’ said Kevyn Rustici, strategic human capital consultant at Gallagher. “Very big difference. … If we’re working as a team, you value my insights, you value my feedback, I’m trusting of the environment.”
An effective benefits package improves what Martin called presenteeism – the ability of the worker to focus on the job and not be distracted by worries about how to manage child care or tend to aging parents.
“Employers have a vested interest in ensuring that they’re addressing those different areas of stress,” he said. “(Employees) are not only present to do the work, but they’re passionate about being there and understand why they work with that particular employer.”
Patti Singer is a freelance writer in Rochester. Contact her at [email protected].
Average hourly earnings growth increased to 5.18 percent, matching a record set in May.
Meanwhile, the pace of job growth at small businesses moderated from the previous month, slowing -0.20 percent. The Small Business Jobs Index stands at 99.94.
“Our August jobs index results reveal a continuation of last month’s trend: the demand for workers at U.S. small businesses is high and the supply is low, making it more difficult for small businesses to fill many open positions,” said Martin Mucci, Paychex chairman and CEO, in a statement.
In further detail, the August report showed:
At $30.71 per hour, hourly earnings increased by $1.51 in the last 12 months;
At 99.94, the national jobs index fell below 100 for the first time since September 2021;
The South’s Job Index lead continued as it was the only region to top 100 (100.55). The South also led in hourly earnings growth, at 5.53 percent, and weekly earnings growth, at 5.00 percent;
Small business employment growth in the West slowed 0.30 percent in August and ranked last among regions for the first time since 2020, with West Coast metros San Francisco, San Diego, Riverside and Seattle all dropping more than two percent during the past quarter;
North Carolina remained the top state for small business job growth; Florida was once again the top state for worker hourly earnings growth (6.45 percent);
Dallas continues to lead U.S. metros in small business job growth and hourly earnings growth for workers, and
At 102.89, other services (except public administration) remained the top sector for job growth for the third consecutive month.
Drawing from the payroll data of approximately 350,000 Paychex clients with fewer than 50 employees, the monthly report offers analysis of national employment and wage trends, as well as examines regional, state, metro and industry sector activity.
Paychex Inc. has acquired Flock, a benefits enrollment and administration, onboarding and human resources information system provider in San Francisco. Financial terms of the acquisition were not disclosed.
Paychex, a leading provider of integrated human capital management software solutions, will gain a state-of-the-art benefits administration software that is aligned with the company’s commitment to driving innovation and delivering a suite of digital services, Paychex officials said in a statement.
“Paychex provides HR services to more than 1.7 million worksite employees and is among the 30 largest insurance agencies in the U.S.,” said Paychex President and CEO Martin Mucci. “The combination of Paychex’s full-service HR and benefits capabilities and Flock’s innovative platform will position us for continued growth and expansion in the marketplace.”
Human resources leaders are looking for solutions that allow them to increase efficiency and automate tasks, according to Paychex proprietary research. Officials said the HR software available through Paychex and the benefits administration functionality of Flock will provide a “powerful” solution that will help employers drive efficiency and adapt to the myriad HR challenges brought about by the pandemic.
“Flock launched a little over six years ago with the goal of helping employers efficiently manage their workforce and for employees to better understand and enroll in their health insurance and benefits. Building something significant can be challenging and Flock has been fortunate to have the support of our incredible customers, our highly talented employees, partners and investors, said Flock CEO Raj Singh. “The customer-first mindset at Paychex aligns perfectly with Flock’s culture and ethics, and together we will work even harder to deliver an industry-leading experience for employers and their employees.”
Officials noted that Flock will continue to operate as it has and all Flock employees will join Paychex.
New research from Paychex Inc. shows that nearly one-third of employees say their comfort level with in-person work has decreased because of the COVID-19 delta variant.
The research was conducted as the first in a series of surveys that Paychex is launching with human resources expert Jeanne Meister and Future Workplace, a human resources research and advisory firm, to explore key workplace issues affecting employees.
Some 31% of respondents said their comfort level with in-person work has declined as a result of the delta variant, while 46% reported that their level of comfort had not changed.
“Planning and implementing in-person work policies have been a moving target for HR professionals for months, and as employees’ comfort levels shift based on rising COVID-19 cases and new variants, employers will need to respond accordingly,” Alison Stevens, Paychex director of HR services, said in a statement.
Nearly one-quarter of respondents said they would leave their current company if it mandated a COVID-19 vaccination. The younger generation was most adamant, with 31% of Gen Z, 27% of millennials and 26% of Gen Xers saying they would leave their current company if it mandated vaccinations. Just 12% of baby boomers expressed the same opinion.
The survey asked respondents about the current and potential future safety measures their employers are instituting. Forty-one percent said they are mandated to wear a mask regardless of their vaccination status, while 27% said they are being asked for proof of vaccination. Some 37% of employees said they do not need an incentive to be vaccinated because they already have received the COVID-19 vaccine.
For those who have not yet received the vaccine, 27% said the most attractive incentive for getting it would be a financial bonus.
“While employers may be eager to see employees back in the office, surging COVID-19 cases tied to the delta variant are igniting safety concerns for workers that employers cannot ignore,” Meister said. “Workers are looking for their employers to prioritize the implementation and communication of safety measures such as mask mandates, physical distancing and proof of COVID-19 vaccination before returning to in-person work.”
Paychex Inc.’s board of directors has voted to expand the board from nine members to 10. The board has appointed Kevin Price to fill the new position.
Price is the founder and president of PartsScription, an innovative e-commerce platform that helps national and regional retailers to expand their product and parts capabilities. Prior to founding the company in 2006, Price served as customer care network vice president for Sears Holdings Corp. He brings more than 35 years of experience to the Paychex board.
“Not only is Kevin a strategic executive, but he is a successful entrepreneur whose experience building his own business is representative of many clients Paychex serves today,” said Paychex President and CEO Martin Mucci in a statement. “His insight and knowledge will make him a valuable addition to the Paychex board of directors.”
Separately, Paychex announced a quarterly dividend of 66 cents per share payable Aug. 26 to shareholders of record as of Aug. 2, 2021. Additionally, the board has authorized the purchase of up to $400 million of its common stock. The authorization expires Jan. 31, 2024.
“At Paychex, we take great pride in the company’s history of providing exceptional shareholder value,” Mucci said in a statement. “Today’s dividend and stock repurchase announcement are an illustration of that commitment and positions us to continue to make strategic investments in the long-term growth of Paychex.”
In June, the Rochester-based company reported fourth-quarter earnings of 72 cents per share, compared with 61 cents in the year-ago quarter. Adjusted net income for the quarter was $260.8 million, up from $220.6 million in the fourth quarter last year.
For the full year, sales were $4.06 billion, compared with $4.04 billion in fiscal 2020. On a per-share basis, adjusted earnings were $3.04, compared with $3 in fiscal 2020.
“We ended this year with strong momentum having navigated through a fiscal year of unprecedented challenges. Our fourth quarter results were driven by record client retention levels, record sales results and stronger checks per client, which were driven by improving macroeconomic conditions and gains in employment,” Mucci said in a statement in June. “Client base growth was strong and we ended the fiscal year with over 710,000 clients. We are proud to finish the year with positive service revenue growth which is a testament to the resiliency, innovation and commitment of our employees and the strength of our business model. Having navigated through the uncertain environment of the pandemic, we are well-positioned with the continued innovation of our technology and product suite to meet the continuing needs of businesses and help them succeed and thrive as they begin to bring employees back to work and adjust to the changes of how, where, and when work gets done.”
Paychex Inc. this week reported third-quarter sales and earnings that fell short of 2020 numbers.
For the quarter ended Feb. 28, the Rochester company reported total revenue of $1.1 billion, down 3 percent from $1.16 billion in the year-ago quarter. Net income for the quarter was $834.5 million, down 5 percent from $877.4 million a year ago. Adjusted net income for the third quarter was $841.6 million, compared with $862.6 million in the same quarter last year.
On a per-share basis, diluted earnings were 97 cents, down 1 percent from a year ago. Adjusted earnings were 96 cents per share.
Martin Mucci
“Client retention remains strong and at record levels, and our results for the third quarter show that our resilient business model has helped us navigate the uncertainties created by COVID-19,” said Paychex President and CEO Martin Mucci in a statement. “We continue to see progress in our key indicators and remain committed to providing our clients the flexibility, technology and resources they need to respond and adapt to the uncertainties of the COVID-19 environment.”
Company officials said results of operations continue to be impacted by the pandemic, but noted that client retention remains strong and at record levels.
“We’re anticipating client needs with solutions that prepare them for what’s next. Our sales, support, product development and marketing teams carefully listen to customer feedback — bringing to market new tools and technology designed to efficiently manage payroll, staffing, time tracking and scheduling,” Mucci said.
Paychex updated its full-year guidance, expecting revenues to be flat to decrease by 2 percent. Adjusted diluted earnings per share is expected to be in the range of flat to decrease by 2 percent.
The Small Business Jobs Index increased to 94.25 in March.
The latest Paychex | IHS Markit Small Business Employment Watch shows significant increases in job growth in March across each of the four U.S. regions and nearly all states and metros analyzed in the report.
The Small Business Jobs Index increased to 94.25 in March. Although the index remains 4.03 percent below its March 2020 level, last month’s 0.30 percent increase was the most substantial one-month gain since 2013.
Hourly earnings reached 2.98 percent, its fourth month of growth. Weekly earnings also increased, rising to 3.58 percent, a result of growth in weekly hours worked.
“The Small Business Jobs Index revealed a meaningful increase in March. But there remains much ground to make up,” said James Diffley, chief regional economist at IHS Markit.
The South continues to lead all regions in small-business job growth, and Florida remains the top state for job growth. Leisure and hospitality saw the greatest improvement among industry sectors, up 1 percent, and the sector also saw a significant gain in hourly earnings growth, according to the report.
“With vaccinations ramping up across the country and business restrictions easing as a result, small business employment growth is starting to move in a positive direction. Increased hiring and wage growth in the leisure and hospitality industry, which was particularly impacted over the past year, are promising signs,” said Paychex President and CEO Martin Mucci. “The extension of the Paycheck Protection Program for two more months provides additional support as the loans should help qualifying businesses weather remaining challenges resulting from the COVID-19 pandemic.”
The monthly report is compiled from aggregated payroll data of approximately 350,000 clients on the Paychex human capital management (HCM) suite. The national jobs index uses a 12-month same-store methodology to gauge small business employment trends on a national, regional, state, metro, and industry basis.
New research from Paychex Inc. has found that three of the biggest obstacles businesses face are financial instability, bringing employees back to the office and developing a COVID-19 vaccine policy.
The survey showed that small- and mid-size business owners continue to be in a dangerous position financially in the wake of COVID-19. Some 61 percent of Paycheck Protection Program (PPP) loan recipients in the survey characterize the 2021 PPP loan as important to their business’s survival. Overall, more than half of companies with 50 to 500 employees characterize the funds as critical to their business survival this year, up 14 percent from 42 percent reporting that sentiment last year.
Two in five respondents will apply for the second PPP round, on par with application rates in 2020 and the likelihood to apply increases with company size, as it did in 2020, the survey found.
Just two in five respondents said they were aware of the Employee Retention Tax Credit (ERTC), which, according to the Consolidated Appropriation Act 2021, can now be taken in combination with a PPP loan. Only one in five business owners plans to claim the ERTC. Awareness and planned usage increase with company size as half of the mid-sized businesses will claim the ERTC.
To help maintain customer loyalty, many businesses are carefully coordinating a plan for employees’ safe return. Some 55 percent of small- and mid-size companies surveyed remain at least partly remote, while 12 percent say that some or all of their workforce will permanently work at least part of the time remotely following the pandemic. More than 40 percent of small- and mid-size businesses are still working out the details of bringing employees back to the workplace.
Business owners weigh in on the importance of the new round of Paycheck Protection Program loans to the survival of their business.
Vaccination will play a critical role in getting staffers back to work. Many business leaders see themselves having a role in employee vaccination. Three-quarters of small business owners (10-49 employees) and 85 percent of mid-sized businesses (50-500 employees) plan to motivate their employees to get the COVID-19 vaccine. Some 25 percent of all survey respondents expressed concerns around potential legal liabilities if they were to incentivize employee vaccination.
The business impact of a slow vaccine rollout is the greatest concern among small- and mid-size businesses, followed by lack of vaccine efficacy. Beyond that, business leaders are most concerned about customer notification, employer guidelines and employee vaccination refusal.
More than half of respondents say their employees want the COVID-19 vaccine, with a slight increase with company size. Roughly one in five employees have either expressed reluctance or not commented.
“From the financial toll COVID-19 has taken on businesses, to the confusion around returning employees to the office, and what to consider when building a vaccination policy, business owners are facing a level of complexity never seen before,” said Mike Trabold, Paychex director of compliance risk. “That’s why we’ve created educational resources addressing a spectrum of new challenges. Whether it’s a full shutdown, seeking funds to keep doors open, struggling to manage a remote workforce, or hiring to meet new and unexpected demands, we’ll continue to guide business owners through the difficulties identified in this research.”
These insights are based on the company’s latest survey of business owners, conducted Jan. 27 through Feb. 2, 2021, which polled 300 principals of U.S. companies with two to 500 employees.
[email protected] / 585-653-4021 Follow Velvet Spicer on Twitter: @Velvet_Spicer
Paychex Inc. reported a slight decline in revenue in the second quarter, but an earnings improvement of 4 percent.
For the second quarter ended Nov. 30, 2020, the Rochester payroll and benefits company posted a 1 percent drop in revenue to $983.7 million, with service revenue coming in at $968.9 million. Net income for the quarter increased 5 percent to $272.4 million, or 75 cents per diluted share. Adjusted net income was $264.8 million, or 73 cents per share.
Martin Mucci
“Financial results for the second quarter showed continued recovery in our key business metrics. The effects of the COVID-19 pandemic impacted our results and year-over-year comparisons, however, client retention remains strong and our sales performance has resulted in year-over-year growth in the number of clients sold and serviced,” said Paychex President and CEO Martin Mucci. “We remain focused on providing excellent customer service, human resource expertise, and product innovations to support our clients through the challenges of the pandemic. In addition, our margins have demonstrated sequential improvement as our cost-saving initiatives have proceeded as expected.”
Company officials said operations in the second quarter improved but continued to be impacted by COVID-19. Total revenues grew 6 percent from the first quarter, while earnings grew 16 percent compared with the previous quarter.
“More than ever before, companies are turning to technology solutions to maintain operations, stay connected with employees and keep their people productive,” Mucci said, noting that the company recently introduced additional enhancements to its Paychex Flex platform to help clients manage risk, stay compliant, better assess performance and adapt to mobile and artificial intelligence-driven trends.
“Headlining these product releases are an Apple Watch/Google Assistant device integration allowing employees greater access to their information, a professional employer organization Protection Plus Package to protect clients against unforeseen costs and additional forward-looking solutions in our platform to help employers and their employees complete key tasks quickly, safely, and accurately in a paperless, mobile fashion,” he added. “We believe our continuing investments in our service delivery platforms strongly position us to meet the demands of the current business environment and support employers no matter where they are in their HR journey.”
For the first six months, total revenue decreased 3 percent to $1.9 billion. Operating income decreased 8 percent to $638.3 million, with adjusted operating income of $670.5 million. Diluted earnings per share fell 8 percent to $1.34, with adjusted earnings per share of $1.36.
Cash, restricted cash and total corporate investments at quarter’s end were $963.4 million. Total short-term and long-term borrowings were $803.9 million. During the six months ended Nov. 30, Paychex paid dividends of $446.7 million and repurchased 400,000 shares of common stock for $28.8 million.
Looking ahead, Paychex expects full-year total revenue to range from a 3 percent loss to flat, with a loss in adjusted diluted earnings per share of 1 to 4 percent.
Nearly two-thirds of business owners nationwide feel the worst is behind them in terms of the impact of COVID-19 on their operations, new research from Paychex Inc. shows. But 4 in 5 business owners are somewhat or very concerned about a possible second wave of infection.
“Over the past couple of weeks, as all 50 states have begun some phase of reopening, many business owners have turned their attention to determining how to best operate safely and efficiently in this new landscape,” said Martin Mucci, Paychex president and CEO. “After an extended period of uncertainty, with more questions remaining, it’s encouraging to see that business owners are optimistic about their recovery from this crisis while remaining cautious about the economy and a potential second wave.”
As part of a COVID-19 survey series, Paychex polled 300 randomly selected business owners with two to 500 employees beginning April 17. The most recent survey was conducted from May 15 to May 17. Some highlights:
• 46 percent of business owners report they are fully open and operational
• 42 percent are open on a limited basis
• 12 percent are closed but plan to reopen
• Of the businesses that are open, 30 percent closed at one point during the pandemic
• Of the businesses that are closed, half plan to open by July, and one-quarter will open as soon as they are allowed
In terms of PPP loans, some 37 percent of businesses are not clear on how to apply for PPP loan forgiveness, although 68 percent are very or extremely confident that they will meet the requirements for loan forgiveness. Roughly one-quarter don’t think the PPP loan will be enough for them to survive.
Some 45 percent of respondents think it will take three or fewer months for their business to return to pre-COVID norms, while 57 percent of respondents think it will take seven or more months for the U.S. economy to return to normal. Nearly 20 percent of businesses say they have already returned to pre-COVID revenues.
Business resilience has remained steady since wave one of the survey, fielded April 17-20, at 70 on a scale of 1-100. Businesses with 50 to 500 employees, fast-growth businesses and Midwestern businesses appear to be more resilient than their peers.
Business owners’ top priorities:
• 23 percent are focused on maintaining customer relationships;
• 21 percent are focused on managing business as usual;
• 14 percent are focused on reducing expenses;
• 5 percent are focused on revising their go-to-market approach.
Reopening their businesses has become a higher priority since wave three of the survey, fielded May 1-4.
One-third of businesses are concerned that they won’t have sufficient customer demand upon reopening, while 31 percent are worried about keeping employees safe at work. Some 84 percent of businesses are somewhat or very concerned about a possible second wave of infection, while
64 percent feel they could survive a second wave financially.
“Paychex will be with these businesses every step of the way, helping them navigate each challenge from access to federal relief to applying for loan forgiveness to bringing employees back to work,” Mucci said. “We will do this by continuing to offer resources online, tools in Paychex Flex and effective recommendations from our team of certified HR professionals.”
We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept”, you consent to the use of ALL the cookies.
This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
Sign In
Free Newsletter
