About Paylocity Holding Corp

Paylocity Holding Corporation operates as a cloud-based provider of human capital management (HCM) and payroll software solutions that deliver a comprehensive platform for the modern workforce. The company’s HCM and payroll platform offers an intuitive, easy-to-use product suite that helps businesses attract and retain talent, build culture and connection with their employees, and streamline and automate HR and payroll processes. Excluding clients acquired through acquisitions, as of June 30, 2023, the company provided its software-as-a-service, or SaaS, solutions to approximately 36,200 clients across the U.S. The company markets and sells its products through its direct sales force. The company generates sales leads through a variety of focused marketing initiatives and from its extensive referral network of 401(k) advisors, benefits administrators, insurance brokers, third-party administrators and HR consultants. The company derives revenue from a client based on the solutions purchased by the client, the number of client employees and the amount, type and timing of services provided with respect to those client employees. Strategy The company intends to strengthen and extend its position as a leading provider of cloud-based HCM and payroll software solutions. The key elements of the company’s strategy are to extend technological leadership; grow its client base; expand its product offerings; and further develop its referral network. Products The company’s HCM and payroll software solutions deliver a unified platform for the modern workplace. The company offers an intuitive, easy-to-use product suite that helps businesses attract and retain talent, build culture and connection with their employees and streamline and automate HR and payroll processes. The company’s product suite includes the following categories: Payroll Payroll and Tax Services – The company’s Payroll and Tax Services solution is designed to simplify payroll, automate processes and manage complex compliance requirements within one system. The company’s payroll solution leverages data from its Time & Labor and Human Resource solutions to accurately calculate wages, deductions and withholdings, without the need for manual reentry. Clients work with its experts to configure general ledger integrations, accruals and complex reports to enable data-driven decision making. The company’s integration capabilities also automatically transfer 401(k) information, retirement plans and benefit files to third-party providers. Through its Tax Services solutions, the company accurately prepares and files the necessary tax withholdings and filing documents for local, state and federal jurisdictions. Global Payroll – The company’s cloud-based global payroll solution enables U.S.-based companies to manage payroll for employees outside the U.S. in line with complex local and country-specific requirements across many countries. It also provides consolidated reporting capabilities to efficiently manage a global employee base with real-time access to payroll data. Expense Management – The company’s Expense Management solution enables mobile app capture of receipts and imports transactions from credit cards, reducing manual entry errors and minimizing employee and approver paperwork, while also eliminating spreadsheets, calculators and manual approvals through automated workflows that route approved expenses for payroll reimbursement. On Demand Payment – On Demand Payment provides employees with visibility into their earned wages in between pay cycles based on their hours worked and offers financial flexibility to employees through access to a portion of their earned wages before their scheduled payday without impacting the client’s standard payroll process. Garnishments – The company’s Garnishments solution provides the calculation, setup and maintenance of historical deduction records and performs calculation validation against state and federal legislation to mitigate compliance risk and prevent penalties and errors. Human Resources Human Resources – Human Resources solutions streamline processes using modern, mobile-enabled tools that help save time by automating administrative tasks and providing data-driven reporting. Clients can track headcount and status for positions, manage position and manager changes, manage compliance tracking and reporting and employee data and documents in one central location. Employee Self-Service – The company’s Employee Self-Service module provides employees with access to their information 24/7, which allows them to view checks, request time off, clock in and out, update personal data and collaborate with teammates. Employees can also enroll in benefits, view coverage, access Learning Management System training or view course completion status on-the-go via its mobile app. Workflows & Documents – Workflows & Documents serves as a central location to securely store personal employee files, such as offer letters and performance reviews to help clients stay compliant and organized by replacing manual processes and paper files. HR professionals can search electronic documents and easily upload, store and download documents while managing access with its role-based permission settings. HR Compliance Dashboard – With its HR Compliance Dashboard, clients save time and money by staying up to date with new laws and regulations related to topics, such as employment verification, Equal Employment Opportunity and compensation. HR Edge – HR Edge supports human resource leaders’ navigation through complex compliance requirements, social issues and HR policies. Clients can also access a comprehensive library of detailed articles, guides and other resources to make informed decisions on compliance topics, such as healthcare reform, wages and hours regulations, employee leave, state laws, discrimination and more. Time and Labor Time and Attendance – The company’s Time and Attendance solution accurately tracks time and attendance data, eliminating the need for manual tracking of accruals and reducing administrative tasks. Employees can request and manage time off, edit timecards and manage schedule changes. A customizable supervisor dashboard provides at-a-glance visibility to missed punches, pending time off requests, attendance exceptions and more. Scheduling – Clients can automate schedule tracking by creating and adjusting work schedules as needed, including leveraging templates and building policies based on duration, time between shifts and availability without having to manually correct payroll data. Managers and employees can easily manage their schedules from the company’s mobile app to ensure the appropriate shift coverage. Time Collection – The company’s wide variety of time collection devices include kiosks, state-of-the-art time clocks, and mobile and web applications to meet unique needs of different companies while enabling employees to clock in wherever business is conducted. Advanced features include specifying geographic parameters for mobile punch-in, requiring employees to punch in with a photo, answering attestation prompts and other health and safety checks. Talent Recruiting – Recruiting helps clients find the right candidates by offering intuitive tools to streamline talent acquisition processes from application creation to candidate acceptance. By modernizing the experience, clients can conveniently reach candidates wherever they are, including through embedded text messaging, and instantly track conversations in its platform. HR professionals can customize job applications and reach more candidates by automatically posting to online job portals. To promote an inclusive culture, clients can activate masking of certain candidate details to promote recruiting without bias, while still collecting all essential details, including diversity information. Additionally, the company’s solution provides clients with the ability to auto-fill and simplify background checks, maintain and track personal and confidential data, and has real-time access to candidate information to enable timely staffing decisions. Recruiters can communicate with modern candidates in the ways they expect, including email and text messaging from right within its platform. Onboarding – Onboarding enables new employees to complete all pre-hire tasks through digital data collection to gather important personal and confidential information and documentation right through the company’s platform. Clients can streamline processes, such as handbook acknowledgment, tax withholding forms, I-9 document verification, E-Verify and many others. Additionally, new hires feel an instant connection to their team and employer with welcome notes from leaders, introductory videos, company culture information and company policies. Learning – The company’s Learning tools allow clients to easily assign courses tailored to training their employees on new skills, policies, products, and other topics with a variety of course delivery methods including on-demand and webinars, all of which are available via its mobile app. The company’s clients can create a variety of content for their employees including via a Sharable Content Object Reference Model (SCORM), embedded video and various document types. The client’s custom content is supplemented by a library of standard trainings provided by the company to help in areas like anti-harassment, new hire, workplace safety, diversity in recruiting and many more. Clients can also empower their employees to create trainings so that internal subject matter experts can share their expertise with colleagues. LMS also offers numerous diversity, equity, inclusion and accessibility courses, modules, and instructional kits to help ensure employees are educated to support a diverse workforce. Performance – The company’s Performance tools enable transparent, two-way communication, allowing teams to have ongoing performance conversations. With the ability to manage employee review cycles at the center of the performance management solution, employees can also manage goals and track their career development. The company’s tools help facilitate ongoing, goals-driven conversations using Journals, giving employees a record of their tasks, goals and accomplishments. Additionally, the company’s clients can prepare succession planning assessments across their employee population by using its 9-box tool that provides context to employees’ performance and the ability to visualize the distribution of their workforce. Compensation – The company’s Compensation tools help clients ensure alignment between organizational goals, budgets and participant eligibility in an efficient process that reduces manual effort and paper-based budgeting activities. The company’s customized dashboards provide visibility to individual performance and compensation history at custom permission levels and the full value of an employee’s compensation and benefits. Clients can create employee-facing Total Rewards Statements in bulk to demonstrate the full compensation an employee receives—including not just pay, but also benefits, time off, and more. Benefits Benefit Enrollment & Updates – Clients can plan and administer competitive benefits packages in one place while offering a smooth, mobile-friendly enrollment and management experience for employees with its tool. Benefit administrators can add enrollment rules, manage benefit offerings for different employee groups, customize user plan limits, and view plan documentation, among other features. Employees can manage their own elections in Employee Self Service or via the mobile app, access open enrollment, account balances and more. Clients can also use embedded experiences like notifications and training to help employees easily stay apprised of important dates and understand the benefit options available to them. Third-Party Administrative (TPA) Solutions – The company’s TPA solutions are designed to modernize the administration of HSA, FSA, Health Reimbursement Arrangement (HRA), Transportation Management Account (TMA) and Premium Only Plan (POP) benefits by providing users with a single, unified access point for payroll, HR, and benefits administration. The company’s TPA solutions include mobile and web access, allowing users to view transaction details and account balances while having the ability to submit claims from its integrated employee portal. These solutions also ease the administration of COBRA coverage and retiree billing. Employee Experiences Community – Community is an integrated part of the company’s platform that streamlines communication and fosters a culture of engagement not possible with broadcast emails, antiquated intranets or break room bulletin boards. It empowers clients to engage all employees—even those that are remote, on-the-go or do not have corporate email, which is more critical than ever in the new hybrid world of work. With Community, clients can optimize broadcast communications with a company feed that streamlines announcements into a single location. Announcements can be managed, sent and tracked with an intuitive dashboard. Clients can support their employees at scale with Ask an Expert groups where employees can pose questions to designated group experts who manage questions from a dashboard. Community also offers premium capabilities, such as one-to-one and one-to many chat functionality to improve real-time communication; the ability to upload, create, edit, and share files; the automatic creation of team groups for supervisors and direct reports; updated user profiles allowing employees to list interests, team members, education, skills or hobbies and enhanced directory and search capability to easily find, follow and engage with co-workers. Video – Video provides clients the ability to record, upload and embed videos across the company’s HCM platform to increase collaboration, morale, engagement and productivity. Clients can embed videos seamlessly into tasks that are critical to their business such as leadership announcements, job postings, onboarding, performance journals, surveys and more. Surveys – The company’s Surveys tool help clients gather valuable employee feedback to encourage ongoing and transparent conversations while staying in touch with their workforce. Recognition and Rewards – Recognition and Rewards promotes positive interactions by allowing employees to recognize and celebrate colleagues’ achievements. It also gives employees the ability to post accolades on their profiles and share with co-workers. Insights and Recommendations Modern Workforce Index – Leveraging data from more than 36,200 clients, the company’s patent-pending Modern Workforce Index (MWI) puts sophisticated AI into an HR intelligence dashboard that gives clients insight into employee sentiment, performance metrics, and engagement. With MWI, clients can identify gaps and get smart, actionable recommendations on how to improve their organization’s health by increasing employee productivity and reducing turnover. Data Insights – With the company’s Data Insights solution, its clients can evaluate the health of their organizations with actionable insights in areas such as headcount, turnover, labor costs and composition of their employee populations so they can customize, fund and deploy strategies to support diverse employees and identify needs of underrepresented groups. Reporting – Clients can build and customize reports within the company’s platform. The company also offers hundreds of standard reports that clients can use as is or adjust to suit their needs. New reports are added regularly in response to regulatory changes, compliance updates and client feedback. Client Support Teams The company supplements its comprehensive software platform with an integrated implementation and client service organization with deep subject matter expertise. The company’s core operation consists of various specialists, including implementation teams, account managers, payroll processing and tax service teams. Delivering a positive experience and a high level of support is an essential element of its ability to sell its solutions and retain clients. Implementation and Training Services The company’s clients are typically either migrating to its platform from a competitive solution or are adopting their first online HCM and payroll solution. These organizations often have limited internal resources and rely on it to implement their HCM and payroll solutions. The company typically implements its product suite within one to eight weeks, depending on the size and complexity of each client. Each client is guided through the implementation process by its knowledgeable consultants for all implementation matters. The company’s ability to rapidly implement its solutions is principally due to the combination of its emphasis on engagement with the client, its standardized methodology, its cloud-based architecture and its highly configurable, easy-to-use products. The company offers clients the opportunity to utilize on-demand or in-class training designed to provide clients with general knowledge on its solutions. The company also hosts an annual client conference for clients to learn about new products and features and allow clients to provide feedback and learn best practices. Client Service The company’s client service model is designed to serve and support the needs of its clients and to build loyalty by developing strong relationships with clients. The company strives to achieve high revenue retention, in part, by delivering high-quality service. The company has also built an online knowledge repository for clients that provides industry content and Paylocity product and service information. Tax and Regulatory Services The company’s software contains a rules engine designed to make accurate federal, state, and local tax calculations that is continually updated to support all pertinent legislative changes across U.S. jurisdictions with the support of its tax compliance professionals. The company’s tax service teams provide a variety of solutions to clients, including processing payroll tax deposits, preparing and filing quarterly and annual employment tax returns and amendments and resolving client employment tax notices. The company’s tax filing and compliance departments perform multiple audits to ensure that clients remit timely and accurate tax payments. In addition, a series of audit routines are run to ensure that quarterly tax filings are accurate and submitted on a timely basis. Clients Excluding clients acquired through acquisitions, as of June 30, 2023, the company provided its HCM and payroll software solutions to approximately 36,200 clients, across the U.S. Clients include for-profit and non-profit organizations across industries, including business services, financial services, healthcare, manufacturing, restaurants, retail, technology and others. Research and Development The company’s research and development costs, including research and development costs that were capitalized, were $219.6 million for the year ended June 30, 2023. Competition The company’s competitors vary for each of its solutions and primarily include payroll and HR service and software providers, such as Automatic Data Processing, Inc.; Ceridian HCM Holding Inc.; Paychex, Inc.; Paycom Software, Inc.; Paycor, Inc.; Ultimate Kronos Group; and other local and regional providers. History Paylocity Holding Corporation was founded in 1997.