Martin Mucci
Chairman and Chief Executive Officer at Paychex
Thank you, Aman. And thank you for joining us for our discussion of the Paychex second quarter fiscal year 2022 earnings release. Joining me today is Efrain Rivera, our Chief Financial Officer.
And this morning before the market opened, we released our financial results for the second quarter ended November 30, 2021. You can access our earnings release on our Investor Relations website, and our Form 10-Q will be filed with the SEC within the next day. This teleconference is being broadcast over the Internet, will be archived and available on our website for approximately 90 days. I will start today with an update on the business highlights for the second quarter, then Efrain will review our financial results for the quarter and provide an update on fiscal '22. We will then open it up for your questions.
Today we reported strong financial results for the second quarter of fiscal 2022 as both Management Solutions and PEO and Insurance revenues increased double digits year-over-year and adjusted diluted earnings per share increased 25%. We continued to have strong momentum from the first quarter with positive trends across the entire business. Client bases across all major solutions have continued to grow. Sales performance for the second quarter was strong across the board resulting in our highest year-over-year growth in new annualized revenue in over five years and in fact a record high level of annualized revenue sold for the second quarter and the first half of the year.
The investments we've made in our technology, product, sales, and digital marketing have positioned us well for success in today's environment. Our client retention remains near record levels. This is reflective of both the resilience of small businesses in the US and the value provided by our unique blend of software solutions and HR expertise.
Macroeconomic tailwinds persisted and resulting in strong growth in checks per payroll and increases in worksite employees in our HR outsourcing clients. The tight labor market and war [phonetic] for talent has been very challenging for all businesses. In response, Paychex ourselves we've taken proactive steps implementing incentives and programs to compete for talent and we've made significant progress in hiring over the past quarter and we're well prepared heading into the calendar year-end and selling season.
COVID-19 and its variants continue to pressure businesses of all sizes and we constantly enhance our robust set of COVID-19 related solutions. Most recently within 10 days of the legislation surrounding COVID-19 vaccination and testing, we introduced a digital solution that businesses can leverage to confidentially capture and store employee vaccination status and request testing results for the unvaccinated. To help our clients stay up to date on all federal and state regulatory changes, we continue to introduce new methods of communication to proactively keep them informed and educated through white papers, webinars, videos and our podcast series on the mark.
We closely monitor topics that may have a significant impact on our clients such as vaccine management, updated guidance on employee retention tax credit or ERTC and the return of mask mandates in specific states. We remain a trusted resource to support small and mid-sized businesses. The trends we saw accelerate during the pandemic continue including the need for HR advice. The need to upgrade employee benefits and retirement solutions to attract and retain talent and the acceleration of digital technology solutions to support a distributed workforce and tools to help businesses maximize available stimulus from the government.
We've seen the benefits of these trends and strong demand for our HR Solutions. Another business that is benefiting from strong demand is our retirement business where we have reached the 100,000 client milestone. As a leader in this space, we are uniquely positioned to help businesses meet the growing number of state mandates for retirement plans and provide a critical benefit, offering to drive employee retention and satisfaction. In fact, in January we were one of the first to release a PEP plan or Pooled Employer Plan, and 11 months later, not even a year later, we now have over 10,000 PEP clients.
The access to stimulus funding has been a powerful retention tool for Paychex. We're proud that we've been able to help clients obtain billions in Paycheck Protection Program loans and approximately 90% of our clients have leverage our award winning PPP forgiveness tool to gain some or all level of forgiveness for those loans effectively transitioning the PPP loan into a grant.
We've also help businesses gain access to over $6 billion in employee retention and paid leave tax credits. Returns for clients leveraging our ERTC service representing significant amount for any business. Two of our most recent technology innovations focused on employee retention. Our retention insights offering uses predictive analytics based on a few dozen unique data elements to help employers identify employees who may be more likely to consider leaving their organization. This is Paychex's first client facing predictive analytic and could not come at a better time given today's competitive labor market.
We also introduced a completely enhanced total compensation summary that can be used by employers to communicate the impact of their total pay and benefits packages for employees. These are just two examples of the powerful technology and use of information we're providing to help employers compete and retain talent. We continue to enhance our technology solutions to deliver efficiency for our clients, their employees and paychecks through self service and chatbots. Use of our cloud-based applications continues to grow with double-digit increases in both desktop and mobile devices.
During our recent open enrollment period for our PEO clients for example, 99% of our PEO worksite employees completed their open enrollment digitally resulting in a 26% reduction in call value. Our continued emphasis and expanding the digital capabilities of Paychex Flex was validated by several recent awards. We were named by NelsonHall, a leading global analyst research firm as a leader in their annual NEAT, Vendor Evaluation report for Human Capital Management. Paychex placed in the leader quadrant of the next generation HCM Technology report. This designation was based on our ability to deliver immediate client benefits and meet clients' future requirements.
In addition, Brandon Hall Group has just recognized Paychex Flex with two excellence in Technology awards. Our ERTC service was recognized in the category of Best Advance in HR and Workforce Management Technology for small and mid-sized businesses. And Paychex's Pre-Check was recognized in the category of Business Strategy and Technology Innovation. This is our 9th consecutive year we've been recognized for our technology in this award program, the largest and longest running award program in the HCM space.
Before closing, I'd like to take a moment to discuss the recent change in executive leadership roles that took effect on December 1. I have assumed the role of Chairman of the Board and will continue to serve as Chief Executive Officer. Tom Golisano, our Founder and prior Chairman will remain as board member and will continue to play a role in the governance and oversight of the company. John Gibson, our Senior Vice President of Service since 2013 has been promoted to the role of President and Chief Operating Officer. John has been an integral part of our Executive Team and has led the service and operations of all Paychex businesses division, including HR outsourcing, payroll, retirement and insurance. There remains continuity of leadership to drive Paychex of the future. And I'd like to thank Tom for his leadership and for his continued support as we move forward, and wish John well in our future growth.
In summary, we are proud of our performance during the second quarter. We are well positioned with our set of innovative technology and service solutions for the selling season and to continue providing industry leading value to our clients.
I will now turn the call over to Efrain to review our financial results for the second quarter. Efrain?