Risks pay off for human resources company
The Houston company provides employment-related benefits such as payroll services, health insurance and 401(k) retirement plans.
Human resources company G&A Partners had a good year last year as it bought up competitors, opened new offices and expanded existing ones.
The Houston-based company, which provides employment-related benefits such as payroll services, health insurance and 401(k) retirement plans, reported $2.4 billion in revenues last year, up from $1.6 billion in 2017. G&A Partners had 46,000 work site employees last year, compared with 36,000 in 2017.
The company, which got its start in 1995, bought Zogg Benefits in Dallas last year, which added about 4,000 work-site employees and gave the company a firmer foothold to expand in Dallas, a growing city with several corporate
headquarters and many service companies. G&A Partners also opened an office in Chicago, banking on a strong Midwestern economy and strong manufacturing presence that would be drawn to human resource management services.
“We felt it was worth the risk,” said chairman and CEO Antonio Grijalva, who runs the privately owned company out of a 40,000square-foot office in the Energy Corridor. The company has 320 corporate employees, including 170 in Houston, who manage the human resources for a variety of companies including golf courses, car dealerships, law firms and light manufacturing firms.
Growth is important because of the cost of technology to design and operate benefit enrollment packages, payroll administration, training programs and retirement plans, he said. To do that, companies such as his need a large base of work-site employees to be competitive. The more they add, the more they can spread out the costs.
The industry, which depends upon persuading entrepreneurs to turn over the reins to a third-party that shares employer responsibilities, never took off like the industry hoped it would three decades ago and today only about 7 percent of small businesses opt to share employment responsibilities. But to
G&A Partners, that lowlevel penetration rate provides opportunities, especially in places such as California, which has some of the most complex statespecific employment laws including state restrictions on arbitration clauses, non-compete agreements and overtime wages that must be paid if employees work more than eight hours a day.
Earlier this year, G&A Partners bought Californiabased Focus Management Group, a deal that added about 1,000 work-site employees and gives G&A Partners a beachhead in a state where it would like to expand.
As for the next move? Grijalva said he would like to open new offices in the South and along the East Coast, focusing on regions that are booming, amenable to outsourcing and where outsourced human resources services aren’t as commonplace.