The release of Fiscal Year 2009 third quarter earnings for Paychex Inc. (PAYX) provides a glimpse into the current state of employment change in The United States.

Paychex is the Rochester, New York provider of payroll and integrated human resource and benefit outsourcing solutions for small and medium sized businesses in the US. The company employs 12,700 people to handle administrative services to its clients.

For the period ending February 28, 2009, Paychex reported an earnings decline of 8% from the previous year level. The company earned $31 million, or $0.36 per share compared to $0.39 for the third quarter of fiscal year 2008.

The decline in revenue occurred primarily in the company’s investment portfolio, which holds AAA rated government of agency securities of short duration.

The earnings were right in line with the consensus of analysts polled by Thomson Reuters, who had forecast earnings of $0.36 for the period.

The company issued guidance for the balance of the year, reducing the projected increase in revenue to 0% to 2%, from the previous forecast of an increase in the range of 2% to 4%.

While the company generated higher revenues during the third quarter in its human resource and administrative outsourcing division, revenues from the processing of payrolls decreased. Paychecks processed per client dropped by 4.3% for the quarter. The decrease for the nine month period is 2.44%

The acceleration of the rate of drop in paychecks processed per client is an indication of the increase in layoffs occurring in the economy as a whole. Paychex is projecting further decreases in this number for the balance of their fiscal year.

Automatic Data Processing (ADP) recently issued guidance of earnings at the low end of the previously forecasted range. Administaff (ASF) expects lower earnings from this activity as well.

Each of these companies will provide an indication of the success of the Obama administration stimulus program. As the economy recovers and jobs are added, the volume of paychecks issued by Paychex will increase, providing an early indication of any improvement in the job market.

While the payroll processing component of Paychex has seen a decline in revenues, companies are increasing their use of human resource outsourcing, converting a fixed cost to a variable one. It can be expected that this trend will continue, and some companies will make the change permanent in order to improve margins.

This article was written by Jamie Dlugosch, contributor to InvestorPlace Media. For more actionable insights likes this, visit www.InvestorPlace.com.