Paychex CEO: We saw huge jobs growth in this area

As Jim Cramer prepares for Thursday's big non-farm payroll report from the Labor Department, he decided to take a closer look at what to expect from one of the top payroll processing companies in the U.S.

Paychex is the country's No. 2 payroll processor, specializing in small- and medium-sized businesses, and has a growing human resources management division. Cramer has always said that Paychex will give the best read on small-business hiring in the U.S.

While Paychex' stock has not had a significant move this year, the company reported on Wednesday morning and provided better than expected guidance for the full fiscal year.

But here's the real kicker to Paychex: If you expect the Federal Reserve to raise rates later this year, then Cramer thinks this could be the stock for you. The company collects interest on cash that it holds from its clients before it goes into your paycheck.





Job seekers wait to be interviewed during a job fair at California's Great America theme park in Santa Clara, Calif.
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Job seekers wait to be interviewed during a job fair at California's Great America theme park in Santa Clara, Calif.

That means Paychex will become substantially more profitable when interest rates rise. To find out more, Cramer spoke with the CEO of Paychex, Marty Mucci.

He confirmed that Paychex saw a 9 percent revenue growth year to date, and its non-payroll business hit a new high mark over $1 billion.

"I would say it's probably 70 percent of our existing clients who we are adding more value to. The other 30 percent we certainly are taking share from other clients," Mucci said.

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Most interestingly, Mucci also saw a significant increase in part-time workers. They are no longer working at one big job for their career; rather they are putting together a mosaic of hours at various jobs.

"We saw from the index this month that we are up a percent and a half in part-time workers across the country, which is really interesting from an overall worker environment perspective," the CEO added.

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