Burton M. Goldfield: So that’s a great question. First and foremost, we have a tremendous amount of referrals. And from a driver standpoint, I would say complexity, which is the multistate issue, cost control, and that varies depending on customer, but that’s a big driver and then it’s risk reduction. As you get into these challenging environments, you get into some more challenging situations from an employment standpoint. On your second question, overall close rates are up. The sales force is maturing and they’re growing. But I would be remiss if I really didn’t dig into the fact that our investments in technology to deliver an exceptional product are paying off. And what I mean by this is in the HR world, there’s been a lot of change over the last couple of years.
A few examples of the PPP loans came out of nowhere, you have the ERTC tax credit issue, which is another complexity. And I believe that it requires you to own your own technology and invest in the future, and that is paid off from us. Now, I do not believe that a commoditized PEO platform shared by hundreds of other PEOs is an enduring strategy, and I don’t believe it differentiates yourself in the industry. Especially when you’re putting sensitive customer data into these platforms and then relying on somebody else to make investments. So, I believe that the platform is distinguishing itself. You asked about the close rates. They’re up across the board. But notably, our close rates are up 50%, if we do a technology demo. So, we’re distinguishing ourselves with technology and the service goes right along with the technology.
So there’s a momentum. And as you realize, position is one thing, but momentum is an entirely different thing.
Andrew Nicholas: Interesting. That’s all helpful. And then maybe I could kind of take a step back and ask a bigger question around kind of pricing and aggressiveness and how you think about risk? It seems like in looking at ICR, you’ve been awfully profitable in the insurance services revenue line here for several years in a row. When you think about that line, I don’t want to ask about margins on a go-forward basis as much as I want to ask if you could potentially use that profitability to be more aggressive on price and potentially use that as a lever to grow work-site employees faster or if the inclination from your perspective, Burton is to kind of try to stay around levels that you’ve been at the last four years? And if that comes with a little bit slower work-site employee growth, so be it?
Burton M. Goldfield: So we will always price the risk. We have exceeded the net insurance margin, and I’m targeting that margin and going to continue to try to get to that margin. We are using more sophisticated tools. And obviously, as you approach that margin, which is less than today, it gives you some incremental price advantage. So there’s no effort to drive a higher NIM. It is just having the sophistication in the book of business, having visibility into the claims to drive towards the targeted NIM that we had. So I think the answer to your question is, as the technology advances and we get more sophisticated in as much as that price drives incremental growth, so be it because the goal has always been to price to our targeted NIM.
Andrew Nicholas: That’s very helpful. And then if I could just ask one more, if you don’t mind. I think within Zenefits and HRIS, you have a little bit of a structural change is going on in terms of the technology that you can offer to support that channel. What could that mean in terms of the opportunity set here? And how different is it from what you’ve historically done in that channel? I generally think of TriNet as being more oriented towards selling direct. But just kind of curious about that kind of strategic shift and how it sets you up going forward? Thank you.
Burton M. Goldfield: Great question. So, we’ve talked for a couple of quarters about how impressed we are with the benefits administration capabilities, which came with Zenefits. It opened our eyes to the fact that by binding that ben admin tool directly with the PEO model, we have seen some interesting results. We have started to open that up to a broker community. So this would be an additional channel, not an end or it would be an end not an or. And as we’ve talked about, we believe there is a deep and vast market for TriNet. We’re still less than 50% of our quotes are against another PEO. So we have a plentiful mentality. We believe a select set of brokers could really help get this product to a completely different set of customers, and we’re in the early stages.
So that isn’t built into the model today. We are starting to leverage that ben admin tool on a more fulsome basis. Right now, it’s a small amount of our business. But what I think you’ll see over the next couple of quarters as we implement the full solution, the idea of bringing your own benefits and also enjoying the full breadth and depth of the PEO solution will become a reality.
Andrew Nicholas: Thanks Burton. Appreciate it.
Burton M. Goldfield: No, I appreciate the questions.
Operator: And our next question will come from Jared Levine with TD Cowen. Please go ahead.
Jared Levine: Thank you. Burton, with the 4Q 2022 earnings, you expressed confidence on growing WSEs at a high single-digit rate starting FY 2024. And being mindful of the fact that you have lowered CIE expectations for FY 2023, a few points since then. Is mid-single-digit WSE [ph] growth for FY 2024 reasonable at this point, assuming fairly stable retention rates CIE consistent with what you’re witnessing in FY 2023 and what you’re anticipating for January bookings?
Burton M. Goldfield: So look, I don’t control the CIE. I still will not back off from trying to drive that through sales force capacity, exceptional retention, and we’re at a level of retention as high as I’ve seen in my 15 years at TriNet based on great service and great technology. And as we give guidance for 2024, I’ll give you a better answer to that. But if you’re asking me today, if I’m dissuaded from that, the answer is no. With a flat to a couple percent CIE, that becomes a significant challenge, but I also believe our diversified customer base and by the way, some of the external studies that we’ve done, where new business formation is way up, I’m still optimistic about the future. I am a pretty optimistic guy to begin with, but I do believe we’re taking the right steps to drive towards that goal, whether it’s Q1 or not, I can’t tell you, but I do believe that the economy will rebound a bit of help from CIE.
