Maria Bartiromo:
Welcome back. Wages continue to surge and this is a major issue for business. TriNet provides more than 23,000 small and medium-sized businesses with HR solutions. The company says in its first quarter, average salaries for employees of TriNet clients rose 10.5%. Out of all industries, TriNet works with financial services, which saw the biggest increase, a 13% year over year increase in wages. Joining me right now to break it all down and give us a sense of business today, is the CEO and president of TriNet, Burton Goldfield. Burton, it's great to have you this morning. Thanks very much for being here and I'm sorry to miss you there in the studio.
Burton Goldfield:
Well, it's great to be back, Maria. And also to have some good news this morning. The state of small businesses in America is very, very strong, and hiring is strong as well.
Maria:
I love that. That is wonderful. You've reported earnings and that comes through in the quarterly numbers. Tell me about what's driving it, because we've got CEOs coming on every day telling us that the cost of labor has far exceeded their expectations, and this is probably the biggest issue that they're facing right now. Give us a sense of small and medium business in terms of the demand side of the equation.
Burton:
There's a lot of innovation going on, Maria, and that innovation requires great people. And last time I was here, we were talking about the great resignation, which I call the great reevaluation, and now it's become a migration from large companies to smaller companies. The smaller companies are hiring at the highest rate we've seen in 30 years. And with that, there's some inflation, as you talked about in wages.
Maria:
Yeah, I mean, job openings hit a record high in March, Burton reaching 11 and a half million, according to the Bureau of Labor Statistics. Businesses are struggling to find the workers that they need. That's how tight this labor market is. We're waiting on the jobs numbers this morning, but tell us how clients are handling this labor shortage.
Burton:
Well, the TriNet clients are providing phenomenal benefits. That includes great medical benefits and ancillary benefits. People want the full package when they come to a new job and they're getting that. And our companies are winning the war of talent. So with hiring above 10%, we're seeing our clients find great people.
Maria:
And as a result of that, you are seeing a great quarter. You just announced last week strong first quarter earnings reporting—15% year over year increase in total revenue, $1.2 billion. Burton, talk about what's driving your business right now and the growth plan that you've put in place for the rest of the year.
Burton:
Well, thank you. It was a phenomenal Q1 driven by our amazing clients who were growing and prospering. There's new innovation going on and we are going to be there to support them as they grow over time. But it's good to have a part of the economy and a part of the world that is growing and frankly, very optimistic.
Maria:
But Burton, how do you deal or your clients deal with inflation? Bob Nardelli came on the show about a week ago telling us that he's invested and on boards of several large companies, he says inflation is killing their business. So what are your clients saying about handling this 40-year high of inflation?
Burton:
Everybody's dealing with the inflation issue and what I see is the great ideas are still being funded, and we're seeing new company formation at an all-time high. So as long as companies continue to get funded, as long as they have great ideas that will grow, they're dealing with the higher wages. This wage surge occurred in Q1. Frankly, it lagged a little. Last year we did not see the wages increase at the same rate as inflation, so Q1 was a big catch up in the wage inflation.
Maria:
Is there anything you see on the horizon that cools this labor tight market or this wage inflation down? Jamie Diamond came on this program about now almost several months and said, look, this is the biggest or hottest time I've ever seen in my career that the price of labor and wages are as hot as they are. Brian Moynihan was with me just last week saying, that continues. So for financial services, you're seeing a real impact.
Burton:
A tremendous impact. The highest wage increases were in financial services year-over-year, but the fact is that as long as the demand is there, you're going to see some wage inflation, and I don't see the demand slowing. So with the 23,000 companies we're serving the 600,000 employees, there's still a great demand for new people. And frankly, as you talk about, there's going to have to be increased salaries to attract and retain those employees.
Maria:
And we're, we're also talking about an increase in investment in the headquarters to lure employees back. What are you seeing there?
Burton:
We are seeing that the remote work will never go away, but we're also seeing some migration back to a headquarters. It's a much more complex environment when some of your employees are remote and some are at headquarters, and those are the kind of things that TriNet deals with every single day.
Maria:
Yeah, I know that. Burton, it's great to get your sense. You've got to come back and walk us through the changes because I'm sure you're seeing the most incredible change ever as this migration continues and companies deal with employee changes and the way they approach their work.
Burton:
Well, we appreciate you, Maria. And we'll be there to support our clients. Thank you so much.
Maria:
All right, Burton Goldfield joining us. Thank you, sir, from TriNet.
