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Scaling the PEO Model for HR: Interview with Pravin Kumar, VP of Product Management at TriNet

Megan Headley
Megan Headley
November 17, 2015

Scaling the PEO Model for HR: Interview with Pravin Kumar, VP of Product Management at TriNet

TriNet is an HR software and service provider focused on the professional employment organization (PEO) model, meaning TriNet takes on the HR risk for employees at customer companies. We talked to Pravin Kumar, VP of Product Management, about the company’s tri-fold growth, in terms of revenue, geography, and verticals. Kumar also explained how policy changes like the Affordable Care Act make the HR landscape more complex, motivating TriNet’s technology + services approach. TriNet offers three packages—TriNet Ambrose, TriNet Passport, and TriNet SOI—to serve of private firms, office workers in white-collar industries, and “mainstream USA.”

Introduction to TriNet

Give us an introduction to TriNet.

TriNet is an HR service provider, and we leverage state-of-the-art software along with deep domain expertise and services to our clients in easy-to-use formats.

We are one of the largest providers in the space, and we’re growing at an incredible pace. We are more on the SMB side; we target companies from five to 500 employees, though we are flexible outside of that. We provide all services from payroll to benefits to risk management along with the traditional HR tools like time off and job change capabilities.

Who are TriNet’s competitors?

Our largest competitor is a mishmash of services that have been put together, with separate modules for payroll provision, insurance brokerage, and workers compensation. They use internal spreadsheets and email for HR needs.

We focus on the professional employment organization (PEO) model, and there are other companies positioned this way as well. We want to be working with our customers to take on risk. When a customer joins us, we take on joint risk for everything on the HR side, and their employees become joint employees of TriNet. This allows them to minimize liability and spread out the risk. For example, all managers in the state of California have to take harassment courses every other year, and we make sure that every one of our customers’ managers are compliant.

We are the fastest growing and most progressive in this space. Many other companies in this space are very small; we manage over 300,000 employees, so we dominate the PEO space.

There are smaller firms coming who provide insurance services, acting as a broker for insurance companies. These companies tend to do everything through technology without offering services. We think we have found the right balance between technology and service.

Changes in the Landscape

Tell us more about TriNet’s balance between technology and service.

HR is incredibly complex, in large part because there are 50 states and each requires different regulations. With new policy changes such as the Affordable Care Act and potential changes to minimum wage, the landscape becomes more and more complex every day. A pure technology solution is not the right answer. CEOs of small companies might need a more personal touch than just a piece of software.

One of the things that we pride ourselves on along with our technology is the strength of the services that we provide.

Can you share with us what kind of growth TriNet is experiencing? Are there any particular areas in which you’re seeing higher growth?

We are growing 15% per year in terms of revenue, and this is correlated to the number of employees on our platform. Our growth is up across the board, from both a geographical standpoint and a vertical standpoint. Geographically, we are growing across the country. There are several states that currently make it hard to run a PEO business, but those regulations are starting to go away.

In terms of verticals, we provide solutions across the entire set of verticals. We have three major products that we provide: TriNet Ambrose, TriNet Passport, and TriNet SOI.

TriNet Ambrose is a high-touch, white glove service. A customer has a named account manager, who they can always call at anytime for assistance. This is primarily used by financial services, hedge funds, and private equity firms.

TriNet Passport focuses on white-collar industries, such as technology companies, professional services companies, and accounting firms. It is built specifically for companies with traditional office workers.

The third product, TriNet SOI, is focused on “mainstream USA.” This includes retail, hospitality, and manufacturing firms. Because of the volumes of employees that we have in the mainstream verticals, most of our employee volume comes from SOI.

Customers & Key Use Cases

At what point do companies need TriNet? How and why are most customers coming to TriNet?

Usually, when a company is growing, especially into multiple states or with multiple sites, the HR complexity becomes large enough that they could use TriNet. If a company is trying to do payroll in two states, they can use TriNet. Another example use case is for quickly growing companies, especially those with recent VC funding.

For startups and technology companies, talent is so critical right now, and it is especially important to have the right benefits. A lot of customers come to us because they can get access to certain benefits through TriNet that they might not typically be able to add otherwise. This is one of our key differentiators. Because of our co-employment model, we can work with customers and go to insurance companies as one company to negotiate the benefits. The benefits plans that we can get are significantly more robust than companies using a broker. There are other companies who have built around this model, but most are much smaller, and it has been a challenge for them to scale at the level that we have.

How many customers does TriNet have? Who is buying the software?

We have approximately 12,000 customers for which we handle 300,000 employees.

In smaller companies, our conversations are typically with the CEO; for slightly larger companies, we talk to the CFO, and for enterprises, we work with the head of HR.

What are the key pain points that TriNet works to solve?

We think that HR is just generally painful, and it can vary by vertical, by segment, and sometimes even by geography. For example, companies in the hospitality vertical, especially hotels, need to understand who can be classified as part-time instead of full-time to withhold the right amount of taxes and to follow all local and federal laws. People are terrified of the Affordable Care Act today, because companies can be fined for up to $3,000 per employee per month if violated in certain situations. We work with companies to ensure compliance across verticals regardless of segment. Additionally, multi-location payroll can be complex, and we are built to handle that as well.

Looking Forward: Innovations & Trends

What are some of the innovations that TriNet is bringing to space?

Many of our competitors have a “one-size-fits-all” approach, but we don’t think that’s really the way the world works. We have robust vertical capabilities that can be bundled, and this is a really important aspect of our strategy.

Secondly, we have a marketplace for our customers. For example, if an accounting firm came to our platform, they would be able to offer their services to the rest of our customers. Many of our customers recoup a significant part of their fees through the marketplace, which drives revenues by letting companies offer services and potentially receive discounted goods or services.

What are some trends you see in the HR space?

One of the key trends is employee engagement. Many HR service providers are just providing benefits to the company but not engaging directly with the employees. We believe that employees need to be engaged with on a direct level.

Another trend: integrated offerings. Many of our competitors still have different platforms and different pieces, but we offer integrated capabilities.

We recently ran a survey that interviewed thousands of millennials to learn about employee engagement from a millennial perspective. For the older generation, a salesperson would come into pitch, make a proposal, and then move on to negotiation and potentially implementation. We found that millennials don’t want to have that conversation. They want to do their own research, sign up online, and get going. Millennials are increasingly more entrepreneurial, and it is important to cater to them because many small businesses today are run by millennials.

To share your own user insights, write a review of TriNet ExpenseTriNet HireTriNet LearnTriNet Perform, or TriNet Time on TrustRadius.

About the Author

Megan Headley
Megan Headley
Megan leads Research at TrustRadius, whose mission is to ensure TrustRadius delivers high quality, useful and, above all, trustworthy user feedback to help prospective software buyers make more informed decisions. Before joining TrustRadius, Megan was Director of Sales and Marketing at Stratfor, where she was in charge of growing the company’s B2C revenue stream through email marketing and other channels. She enjoys traveling, reading, and hiking.

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