Paul Sarvadi: No, Mark. We really haven’t seen any of that. And I’ll tell you the reason I would suggest that, that wouldn’t be happening in our case, is our target customer base, of course, we call the best, small and medium-sized businesses in the country, and they’re a lot of times fast growing and a lot of times, just they’re really after an environment that really, are they people-centric and how they think about their business. And so benefits is really important there and they’re — they want to make sure what we’re able to do it. So we’ve always had kind of in the industry, the highest percentage participation and highest kind of percentage rates of what customers are contributing toward the cost. So we don’t really see that.
Now we do have sometimes mix changes that affect the overall numbers that you see because sometimes mid-market customers or customers that have more part-timers, of course, those people aren’t eligible for the coverage. So we have some moving around on that number to some degree, but it’s not reflecting any change in what people are signing up for.
Mark Marcon: Great. And that the benefit cost expectation for this year and what it was actually in the fourth quarter in terms of year-over-year increase?
Paul Sarvadi: So for this year — every year when we look ahead, we trend every component of the cost, and we compare, obviously, to our pricing. Good news, we feel super strong about how effective we were on the pricing front. When we look at trends going forward, you have years that offset certain parts of the trend. In the marketplace, you’re seeing 7% to 8% of trend in cost and then we have things that offset, and that’s why you look at our history, as Doug just mentioned 3.5%. This year, we would expect more like 4% to 5% because you’ve got demographic changes, things of that nature that play in. This particularly, we don’t have — we did introduce a couple of new benefit plans that will lower cost when people choose those new options, but we didn’t make any planned design changes that would offset the cost of this particular year.
And we knew that, of course, last year, and that’s why our pricing was done in a way to make sure that, that all matched up. So that’s kind of what we’re looking at for this year. I hope that helps you.
Mark Marcon: It does. And then you mentioned, I didn’t catch the retention for the full year. So I’m wondering what that is. And then also, in terms of the slower hiring among the client base, to what extent did you see variances? Were there any clients that were actually reducing headcount or are there any regional differences or industry vertical differences that are discernible?
Paul Sarvadi: Thank you for the question. So our retention last year was exceptional. It actually went up from 82% in the prior year in 2021 to 85% last year. And of course, that’s benefited by a really strong year-end transition last year where we had kind of record low attrition. This year was a little bit higher than that, but even better than our average over the last few years. So we expect a good year on the retention front for this year. But the issue about net hiring in the client base, it’s interesting, we obviously have dug in very deeply on this and then did our survey to try to understand what’s happening out there with our customer base specifically. And I will say that in the fourth quarter, the slight increase in net hiring really was an issue kind of across the board.
