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Paychex – PEO and HR Outsourcing Services

By
Matt D'Angelo
,
business.com writer
| Updated
Sep 20, 2019
Home
> Human Resources
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Paychex provides midsize businesses with comprehensive PEO features, including risk management, human resources outsourcing, payroll software and benefits administration. The national company operates in all 50 states and provides numerous onsite and virtual training resources, giving your company access to the latest HR training solutions. This company represents thousands of employees and businesses of all sizes, so you'll be joining a provider that is equipped to handle large organizations. It also offers an HR generalist who remains your point person as your business grows and a mobile application so you can access your services on the go.

Paychex

Paychex

The Best PEO Service Providers of 2019

The Verdict

Paychex's full-featured PEO service is ideal for midsize businesses looking for personalized coverage on a large scale. Its HRO services are ideal for small businesses, as they provide several HR services with attentive customer service.

Its human resource outsourcing (HRO) services are also impressive. Small businesses looking for nationally acclaimed and certified services can find them at Paychex. It offers solid HR support, reliable payroll processing and benefits that are ideal for small business, all under a different contract model compared to its PEO agreement.

View all of our recommendations for PEO services and HR outsourcing services on our best picks pages.

Paychex has an A+ with the Better Business Bureau and is accredited by the private agency. However, it has several negative reviews. The accreditation and high rating from the BBB can be a big draw, though – some of the companies we reviewed have a low grade or don't even have a profile with the BBB. Paychex is also accredited by the IRS and Employer Services Assurance Corporation (ESAC). Very few PEOs receive accreditation from one of these companies, let alone both.

You'll need at least five employees on your payroll to qualify for Paychex's services. This is a standard requirement among the companies we evaluated. Paychex's services are scalable – as your business grows, your PEO package can grow with you. This makes Paychex an ideal partner for midsize businesses. While it can support small companies, its top-level services are just as valuable for larger companies. Its extensive training resources and the support it provides in all areas of PEO service makes it a great company to partner with. For these reasons, Paychex earns our pick for best PEO service for midsize businesses.

Paychex Pricing and Terms

Paychex has a convenient pricing model for midsize businesses. Like many PEOs we reviewed, it charges on a per-employee basis. Some companies we reviewed charge businesses a certain percentage of their total payroll. The latter could be a better deal if you're a large business with a lot of employees, but it also means your costs could fluctuate as your payroll changes. For a midsize business that likely has a much larger payroll than a small business, this could have major implications. The per-employee structure allows you to predict and budget for what you owe Paychex.

The contract structure is good for businesses of all kinds. Paychex, like many companies we reviewed, doesn't require long-term contracts for its services. You can cancel your service at any time. Most companies require a 30-day written notice to do so. When we spoke with Paychex sales representatives, they didn't mention this 30-day notice, but it's something to ask about.

The flexibility of the agreement structure extends to your services. Paychex doesn't make you pay for a full bundle of services, instead allowing you to choose from a menu of services. This ability to mix and match services, only paying for what you use, is a boon for businesses of all sizes. You won't waste money on features you don't need.

However, some of the backbone services may still be mandatory. While Paychex doesn't specify that you need to enroll in its payroll processing service to access its other features, this is a standard practice of PEOs we reviewed, as it is the way most of the companies can bill your business for services. If you're interested in working with Paychex under the PEO model, you'll want to discuss the service and feature requirements with your sales representative.

PEO Features

Paychex has multiple features that stand out against its competitors. The training offering, which touches on relevant topics such as HR onboarding and safety, is one of the most extensive of any company we reviewed. Paychex also offers thorough payroll processing software and HR policy development.

  • HR Services: Paychex provides extensive HR support. Its clients have access to onboarding and recruiting resources, handbook and policy development, HR assessments and consulting, termination and dispute assistance, benefits orientations, employee screening and training, and other HR-related services. You can view Paychex's full HR offering here.
  • Benefits: This PEO provides health, retirement, vision, dental and employee wellness packages. Employees and employers can manage their benefits online through Paychex's platform. Paychex will also help you find the right benefits plan for your business and educate you on the various health options. You can view the company's full benefits list here.
  • Payroll: You can use the payroll processing software to track employee hours, paid time off and sick days. The payroll service also includes compliance with government regulation and state and local taxes, timeclocks, and other payroll features. Like other PEOs we reviewed, Paychex provides a mobile app for payroll and HR management. You can learn more about Paychex's payroll solution for midsize businesses here.
  • Risk and Compliance: Paychex ensures your company meets the requirements for state and federal regulations, COBRA and reporting, workplace safety training, development of workplace safety policy and guidelines, workers' compensation, return-to-work programs, unemployment insurance, and onsite safety inspections. You can read more about the company's risk management and compliance services here.

HRO Services

Paychex is an exemplary PEO provider, offering HR support, benefits administration, payroll processing, risk compliance services and full-fledged training programs. In addition to its PEO offering, Paychex provides some HRO services as well.

These services are similar to the features found in its PEO offering but come with a different contract agreement. PEOs ascribe to a co-employment model where your employees appear on the books of a national organization for tax and labor law advantages. The HRO model is one without this type of contractual agreement; you can scale services and enjoy some of the same support under a different arrangement.

It's not clear what the specific contract would look like in an HRO situation (they vary based on business type and size); it's important to work closely with your Paychex representative so you understand the services and the implications of this type of arrangement for your business before making a commitment. Paychex HRO services include the following:

  • Hiring and managing employees
  • Employee handbook creation
  • Employee benefits orientation
  • Employee training
  • Annual enrollments
  • Workplace safety
  • Employee termination assistance
  • Plan and track benefit plan profiles, enrollments and employer/employee costs
  • Risk compliance services
  • Payroll processing

For a breakdown on Paychex's HRO offering, a good place to start is its HR services page. Some companies start with HRO services and then scale to PEO services. Make sure you work closely with your Paychex representative to find the right services for your SMB.

Training

This PEO offers onsite safety training on more than 80 topics, plus a library of online training resources. It also conducts onsite and online workplace safety training and program development. This breadth in training resources ensures you offer the right education programs for your business.

Customer Service

Paychex provides a designated team of experts who each specialize in a different area of your PEO plan. You get a dedicated HR generalist who acts as a point person between your business and the various experts you need. This person doubles as an HR consultant, so you can work through your HR questions and issues with them as well. Regardless of how your business grows or changes, your HR generalist will remain your go-to partner who knows and understands your business's needs. This service team model is consistent with just about every company we reviewed. It's a good option to have a point person who doubles as an HR generalist, as they can facilitate HR services and connect you with experts for you to learn more about your services.

We set up a hypothetical business and interacted with Paychex sales representatives to better gauge the company's service. We reached out over live chat, email and phone to gain insight into the overall Paychex customer service experience. In all instances, the representatives were informative and polite, helping us learn more about the company's services without pushing for a sale. They also helped us learn more about the PEO model and what we could expect as business owners with Paychex. Paychex's customer service is another reason it earned our best pick for midsize businesses.

Paychex is one of the few PEOs we reviewed that offers phone, email and live chat support. It also has FAQs pages for quick reference on PEO-related issues. In addition to all these avenues for general support, you can always contact your HR generalist and other PEO specialists.

Limitations

There were multiple negative customer reviews on Paychex's Better Business Bureau page – more than what other companies we reviewed had. However, Paychex addressed every single review and worked through the issue with the customer.

Editor's note: Looking for the right HR Outsourcing services for your business? Fill out the below questionnaire to have our vendor partners contact you about your needs.

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Paychex

Paychex

The Best PEO Service Providers of 2019

The Verdict

Paychex's full-featured PEO service is ideal for midsize businesses looking for personalized coverage on a large scale. Its HRO services are ideal for small businesses, as they provide several HR services with attentive customer service.

Matt D'Angelo
Matt D'Angelo
Matt D'Angelo is a staff writer covering small business for Business.com and Business News Daily. After graduating from James Madison University with a degree in journalism, Matt gained experience as a copy editor and writer for newspapers and various online publications. In addition to his writing and reporting, Matt edits articles. He reviews small business services, including PEOs, small business loans and GPS fleet tracking services. He's been with Business.com and Business News Daily since 2017.