Insperity, Inc. (NYSE:NSP) Q4 2022 Earnings Call Transcript

Paul Sarvadi: No. We really haven’t seen any of that. Our pricing strategy is really specific, and relative to every client’s specific information throughout their organization and then how we’re trending things for going forward and building in increases is based on all the underlying trends that we’re seeing plus, like I mentioned, one of our key success factors in our five year plan was to also build in a reasonable level to deal with inflation that’s going on in the marketplace. Obviously, wage inflation is significant and 60% of our operating costs are in personnel cost as a service company. So we’ve been really — our team has done a really great job at meeting those targets, and so we’re in good shape on that front, and it really hasn’t affected us on the competitive landscape.

Daniel Maxwell: Great. Thanks a lot guys.

Operator: Thank you. Your next question is coming from Tobey Sommer from Truist Securities.

Tobey Sommer: Thanks. I was wondering if you could give us some color on trends in the Workforce Acceleration area, sort of any kind of color about growth, et cetera? And where do you want to go in terms of the transition and the ability to shift customers from Optimization to Acceleration and back and forth? And how long might it take to get to sort of an end state where that’s a relatively smooth and sort of automated process?

Paul Sarvadi: That’s a very good question, Tobey. And we’re really all over that front. I mentioned that last year, we had a 40% increase in our Workforce Acceleration growth. We also, over this year, made some of these incentive changes, commission changes in our organization that really have aligned everybody in the organization. With this other key success factor that we believe, which is really growing this Workforce Acceleration business, because of the benefits that I listed in my prepared remarks. So we see that where this is going for us, now that we’ve synced things up. I wanted to be really careful about that because we wanted to make sure that we weren’t pulling away any from our Workforce Optimization sales through how we went about this.

And we have done a beautiful job of that. But now we’re ready to really see that all synced up, see that continue to grow faster and we believe that there’ll be a significant effort now. We’ve already had customers go both directions from WX to WO from WO to WX. We had more this past year than we did the year before that. But what our effort will be going forward is to now make sure our customer base knows about these options earlier, so we don’t have to have this discussion after a customer’s thought about making a move or maybe like toward our year end transition. The numbers that we have in attrition every year, we want to see if we can address that. So we’re going to go after that more aggressively this year on how we do that. And your question about how long you think it will take, I think it’ll get a lot better this year, but it will take a couple of years before we really see that really happen.

So that’s — hopefully, that helps you.

Tobey Sommer: It does. Thank you. You talked about BPAs and some pretty good high-single digit growth. Could you refresh us and put that into context relative to the last couple of years, where you’re able to hit pretty good rates of WSEE growth with more flattish BPAs by optimizing marketing and some other things? Maybe just give us some color on the go-forward strategy and the interplay between BPA growth and WSEE target growth?