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Alexander Hamilton Awards

The Opportunity Cost of Risk Avoidance

Paychex wins the 2019 Silver Alexander Hamilton Award in Financial Risk Management!

Nearly 50 years ago, Paychex was launched as a provider of outsourced payroll services to small and midsize businesses in Rochester, N.Y. Since then, the company has expanded dramatically. Today, its 14,000-plus employees serve more than 8 percent of all private-sector workers in the United States. The company’s menu of services and solutions has also grown. Now clients can outsource most HR activities to Paychex, from hiring and employee on-boarding to time-keeping, retirement services, and insurance services. A robust software platform enables Paychex to make most of these offerings available via self-service online portals.

Still, payroll processing remains core to the business. And the Paychex risk management team recently uncovered a missed revenue opportunity in a crucial payroll-related process. Extreme risk aversion among operational decision-makers was eliminating a significant amount of interest income on clients’ tax payments.

“In addition to sending out payroll checks, we offer a payroll tax administration service that entails filing and paying taxes on behalf of our clients,” explains Ken Bersani, operating risk manager with Paychex. “We file with the IRS, with the Social Security Administration, and with various state agencies.”

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Meg Waters

Meg Waters

Meg Waters is the editor in chief of Treasury & Risk. She is the former editor in chief of BPM Magazine and the former managing editor of Business Finance.

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