If payroll and benefits services are a good economic indicator, times may be looking up for small and medium sized businesses.
Martin Mucci, president and CEO of Paychex (PAYX) - Get Paychex, Inc. Report, the nation's second largest payroll processor, told Jim Cramer on a recent episode of Mad Money that demand from the clients the company serves is rebounding as employees return to work. When it comes to small businesses, Mucci added that growth is moderating, but is still quite strong as the recovery continues.
In a recent Real Money column, Bruce Kamich looked at what the charts say about Paychex. “Hold longs, but raise stops,” was Kamich’s takeaway from the stock’s recent performance.
Mucci told Cramer Paychex’s just completed quarter saw 16% revenue growth. On Oct. 6 Paychex announced it acquired Flock, a benefits enrollment and administration, onboarding, and human resources information system (HRIS) provider, based in San Francisco.
When asked about the ongoing labor shortages across the nation, Mucci said that the lack of workers has been caused by a combination of early retirements, parents staying at home with their children and ongoing safety concerns about the workplace. He speculated that many of these shortages, particularly related to home services and repair, will likely continue for the foreseeable future.
Paychex serves approximately 670,000 payroll clients across more than 100 locations and pays one out of every 12 American private sector employees.
ADP is the largest payroll processing company in the United States.
Mucci assumed the role of president and chief executive officer in 2010. Under his leadership, Paychex has significantly expanded upon its foundation as a payroll services company to provide integrated human capital management solutions for small and mid-sized businesses.