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Growing California PEO will open Houston office in Texas expansion

Saturday August 23, 2008

Burton Goldfield, president and CEO, says TriNet sees prospects in Houston beyond the reasons typically cited by expansion-hungry national firms.

The city’s fast-growing population, energy industry and more resilient economy are attractive factors, but Goldfield likes the Houston region’s burgeoning mix of potential white-collar corporate clients because TriNet targets professions such as medical, law or accounting firms.

“From a market standpoint, we’ve targeted a lot of venture-capital funded firms, but in Texas we do well with law firms, CPA firms and community banks,” says Goldfield, who joined TriNet in May. “Houston is our next play, and I’d like to get into the Austin market.”

Goldfield says the company — owned by private equity giant General Atlantic LLC — expects a 30 percent revenue increase in 2008 to $100 million. Houston is the firm’s 12th regional office and third to open this year, besides Irvine, Calif., and Parsippany, N.J.

Nationally, the 20-year-old company has 470 employees with 30 positions to be filled this year.

The new Houston office, headed by Joe Bello, regional sales manager, and Steven Sorce, director of human capital consulting, will open with a staff of about 11, while TriNet’s existing Dallas office has about 30 employees. The firm entered the Texas market in 2003 when it acquired Dallas-based E3 Group Inc.

Adds Goldfield: “We expect to double our Texas presence pretty quickly.”

Local presence needed Debra Squyres, director of human capital consulting at TriNet’s Dallas office, saw the importance of having staff on the ground in Houston.

“You need to establish more longer-term relationships with clients, and I was starting to spend more and more of my time in Houston,” says Squyres. “We don’t take a cookie-cutter approach and you need that (local) presence.”

Lisa Rowan, a research analyst with International Data Corp. who tracks the human resource services market, says TriNet is well-positioned in a competitive industry.

About 800 PEOs nationwide handle benefits for as many as 3 million employees. According to the National Association of Professional Employee Organizations, the industry generated revenue of $61 billion in 2007, a 15 percent increase from 2006.

TriNet competes with other PEOs such as publicly traded Gevity HR Inc., based in Bradenton, Fla. TriNet has recently been mentioned as a possible suitor for rival Gevity, in which General Atlantic, TriNet’s parent, also owns a 9.5 percent stake.

Rowan says TriNet focuses on clients with professional staff with higher compensation levels than are typically targeted by PEOs.

The average employee salary at companies served by PEOs is about $31,000, while TriNet’s customer average salary is closer to $100,000. TriNet’s typical client companies — which also include nonprofits and architectural firms — have about 30 employees.

Says Rowan: “PEOs tend to be geographic in nature and don’t tend to be nationwide, but the majority of them go after different kinds of businesses from machine shops to hair-dressing salons. So entering Houston is a good thing for (TriNet).”

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