That being said, we’ve done it for decades. I mean, we’re not the lowest cost provider out there, and haven’t been for decades. And I think what you see is when you look at our retention levels with our existing clients at record highs, I think that says something about the value proposition. At the end of the day, I think small, medium-sized business owners buy on value, not necessarily on price. So, we’re going to be competitive. We’re going to meet people where they are head to head, but we’re not going to be stupid. And you can see that we’re being competitive, we’re winning where we’ve been in combat in the market. We’ve got a good pipeline and a good track record of success. And as you can tell from our margins, we’re not giving away the store.
Kartik Mehta: And then, Bob, just on the Management Solutions and you’re talking about the seasonal employees, is that just — if we kind of consolidate all that, is it just a matter of your pays per control expectations were X, but they came in a little bit less because of what you’re seeing?
Bob Schrader: Yeah. I’d say it’s more than that, Kartik, because as we’ve talked about, on a full-year basis, we had some moderate expectations for clients adding employees. It wasn’t a big driver of growth overall, as I mentioned, across both Management Solutions and PEO, that was a little bit softer. But what we’re really seeing is not on the low end of the market. It’s with our larger size clients, particularly in those ASO and PEO models. They’re bigger client sizes, and we typically get some seasonal hiring. We get it every year. We had some assumptions around what that would look like in Q2, and that hasn’t materialized to the level of our assumption or what we’ve seen in prior years. So, it’s really — it is across the board. It’s a little bit softer than what we anticipated. But to John’s point earlier, it’s not that small businesses are getting rid of employees, they’re just not adding to the level that we assumed in the plan.
Kartik Mehta: Thank you both. Appreciate it.
Bob Schrader: You’re welcome.
Operator: Thank you. Our next question comes from Samad Samana with Jefferies.
Samad Samana: Hey, good morning. Thanks for taking my questions. Maybe just stepping back, since the last time you guys reported, the company put out midterm financial goals. And I was wondering if maybe you could just provide us some context on the assumptions in that upper single-digit growth target for revenue, just especially as we think about employment maybe peaking and rates doing what they are. Just what was in that assumption, especially given that it was put out there between the last time you guys reported and now? Just maybe help us understand what the building blocks are?
Bob Schrader: Yeah — oh, you want me to take it?
John Gibson: No, go ahead. Go ahead.
Bob Schrader: Yeah. Samad, I’ve gotten this question a lot. I think if you look back at — and we’ve talked about this area. I’ve talked about it with many of you on this question specifically. But if you look at what we’ve done from a revenue growth, whether it’s over the last five years or 10 years, it’s well within the range of that midterm guidance that we gave. I would also say the guidance that we’re providing this year, at least the way I think about it, is well within that range as well. And as you know better than anyone, we have a way we go about delivering that growth. It’s a mix of client-based growth, and then, I would say that we would assume that to be similar with past performance. One thing that we’re really good at is getting a larger share of wallet out of our client base, particularly with our higher value solutions, ASO, PEO, retirement.
We still think there’s a lot of opportunity inside the base. When you look at a lot of those key solutions, the penetration rates are fairly low. And so, we believe we have a lot of opportunity to continue to drive growth there. As John mentioned, we have pricing power, right? We deliver a strong value proposition and our expectation is that, hey, we might not be capturing price to the level that we did over the last couple of years where inflation was, but we believe we have a strong value proposition that is going to enable us to continue to capture price in the future. And I think when you put all that together — I’d say the other component of it, when you look back historically, is we have used M&A as a way to drive growth in the business, and that has been part of our growth formula.
It’s part of what we’ve delivered over the last five and 10 years, and we expect that we’ll continue to look for opportunities, and that will be part of our growth in the future. So, when you kind of put that all together, that gives us confidence that we can continue to deliver in that upper single digit level. It’s not going to be — it’ll vary year by year, but for the most part, we expect it to be in that range.
Samad Samana: Understood. Thanks for that. And then maybe just a follow-up. Based on the trends that you guys have called out so far or what you observed in this most recent quarter, how should we think that may be your own near-term hiring plans for quota-carrying sales reps or just in your own sales organization, any change to that plan based on what you just observed in the prior quarter?
John Gibson: No. We’re fully staffed, and our intent is to continue to grow sales. Look, the business starts are up. We feel like the opportunity in the marketplace is strong. Now, I will tell you, the thing we are trying to balance is the productivity gains that we can get out of some of the go-to-market strategies. As I said, we did some testing learns in the PEO that showed some really good lift. And so, quite frankly, I think we’re going to apply those in the mid-market and upper end of the SMB market. And I think those could also be a lift as well, but we have no plans of pulling back on investing in growth.
