Paychex at 50: From Golden Opportunity to Golden Anniversary
This year marks the 50th anniversary of the founding of Paychex. We’re proud to celebrate this important milestone by upholding the principles on which our company was built — listening to clients, anticipating their needs, and supporting them with innovative technology and dedicated, personalized service.
Paychex began with an industry-shaking insight. Our founder B. Thomas Golisano was working for a company that provided payroll services to large regional and national businesses. Tom knew that about 90 percent of U.S. businesses had only a few employees — a statistic that remains true today. He recognized that payroll providers ignored the needs of millions of small businesses even though they shared many of the same challenges as larger companies.
When Tom’s employer didn’t share his vision to serve small and medium-sized businesses, he decided to do it himself. As he says in his book, Built, Not Born, “Focus on ensuring all your customers, vendors, and employees get a good deal that works for them and for you.” Over the years, his ideas, drive, and the critical contributions of thousands of employees have transformed our company — and the industry.
Fast forward to 2021. Paychex now pays 1 in 12 U.S. private sector employees; we’re the country’s largest 401(k) recordkeeper by number of plans; we have a top 25 insurance agency; and we’re one of the country’s largest providers of HR outsourcing for small and medium-sized businesses, supporting 1.6 million worksite employees.
Since 1971, we’ve continued listening to clients and delivering the technology and service to help them manage their business — giving them the freedom to succeed. For the first 20 years of our existence, that meant communicating by phone or fax. Our early employees spent many days and nights entering payrolls by hand (and later computer punch cards). With the internet, we added email support and online resources. And as it became more difficult for our clients to manage their human resources, 401(k) administration, health insurance, workers’ compensation, and business insurance, we expanded our offerings to anticipate those needs as well.
Today Paychex not only helps clients start, build, and grow their business, we support their employees by providing easy mobile access to their pay, retirement plans, insurance, time and attendance, and W-2s, to name a few. We meet clients and employees where they need us, with mobile-first technology, self-service, chat, Siri®, Google® Assist, text notifications, and other ways to save time and simplify administration.
But technology isn’t a complete solution without knowledgeable people providing support. While some companies have entirely focused on technology, experience has shown us the power of people to get the job done. Our U.S. based customer service team is there to answer questions 24/7/365, our compliance experts monitor changes in employment laws and regulations, and our more than 600 certified HR Professionals offer their clients support, guidance, and recommendations based on their specific HR needs.
The importance of personal service has become especially apparent since the start of the COVID-19 pandemic. Thanks to our employees, and our ability to quickly and safely transition many of them to alternate work arrangements, we were helping businesses with the reporting needed to apply for a Paycheck Protection Program (PPP) loan on the day the program opened. We were also the first to provide clients with a PPP payroll report, available directly through their Paychex Flex® login. By processing more than 500,000 special COVID-19 payroll reports, Paychex helped vulnerable businesses stay in business and retain their workers, which had a significant, positive influence on national, state, and local economies.
That level of commitment and ethics extends to the communities we serve as well. We’re honored to be named among the World’s Most Ethical Companies® for 2021 — our 13th time overall. Our employees have volunteered thousands of hours and donated more than a million dollars last year to causes in their communities through the United Way and other efforts through Paychex. Tom Golisano himself has given $300 million in philanthropy to important causes, and the Golisano Foundation is a powerful advocate for disability rights.
Throughout our history, Paychex has also produced significant growth, operating profit performance, and financial results for our investors. It still amazes me that what started as a rented office in Rochester, New York with one client and one employee is now a publicly traded, international HR, payroll, and benefits company with more than 700,000 clients, 15,000 employees, and a market cap of $37 billion. A $1,000 investment made when Paychex went public in 1983 would be worth $1,000,000 today, and since then we’ve paid shareholders approximately $10 billion in dividends.
We thank our clients, employees, and investors who have been a part of our success for 50 years. I’m proud of how far we’ve come, and I’m excited to share the technology and service insights and innovations that will take us well into the next 50 years and beyond.