By Sarah G. McC. Moise
Staff Writer

Most employees think it’s a nice gesture for the office to take the team out to lunch.

But as part of its February review and planning meeting, local technology company Benefitfocus.com Inc. thanked employees for its astronomical 2004 revenues by opening the “BF Bank.”

President and CEO Shawn Jenkins donned a green visor and armband with his fellow executives to pay out cash—$100 for every month of employment in 2004.

Then they all got fried chicken.

Jenkins credits last year’s 236% growth in business to clean corporate structure and a mercilessly efficient product.

“We survived the thinning out of companies. A lot of people got too much venture capital, and they spent it on marketing and all kinds of crazy stuff and didn’t deliver technology and services that work,” he says.

Now five years old, Benefitfocus.com started on modest capital from a handful of local investors and put it all to work producing employee benefits software to allow businesses to enroll employees in benefits online. It can be used via the Internet and touch-screen kiosks. Benefitfocus added 785 clients last year and now has more than 1,700 employers using its software.

“We built a product that works, and now we have a great reputation,” says Jenkins. “The market demand is growing and we have a fantastic reference base from clients like Michelin, Publix USA and Blue Cross.”

Last year, 80% of the company’s revenue came from its oldest product, electronic enrollment.

Clients have grown from five groups and no carriers in 2000 to 1,291 groups and 12 carriers in 2004 and the team is prepared for tremendous growth next year with smarter deployment and software releases. But while e-enrollment will remain the company’s single biggest earner, that percentage won’t be as high in 2005, thanks to the company’s new products.

One new product uses eExchange to send data for 70 insurance carrier clients and partners.

The software simplifies the transformation and transmission of employee and payroll data for error-free communication between systems.

Benefitfocus expects this new business unit will open the market for health carriers, government, dental, prescription benefit managers, large employers and other software partners.

Electronic billing is their largest product, which is responsible for building up the sales and marketing force. “eBilling is the new big demand we’re responding to in 2005,” says Jenkins. “Only about 10 percent of insurers have it now, and we think as much as 75 percent will have it in the next 36 months. It’s a big market—we’re speaking on the subject at a national payment conference in a couple of weeks.

“This is our fifth year in business, and we’re on track in the next 36 to 60 months to cross $100 million in revenue,” predicts Jenkins. And with the largest U.S. population growth predicted to be from immigration, the company is already adding to its multilingual support services and offering on-site corporate Spanish classes to employees.

Going forward, the one perpetual problem Benefitfocus and other local technology companies face is attracting key people.

“Our biggest challenge moving forward is making sure we hire enough people to keep up with the demand we’ve created,” says Jenkins. Last year, the company saw 50% growth in employees and plans to add 60 more employees this year to its current 150-person team in Charleston and Greenville.

In 2004, half of the company’s engineers were hired from out of the area and that number is expected to remain the same in 2005.

“We are competing for people in Atlanta, the Northeast, Philadelphia and New York. We’re competitive on a national scale, and we have to be. There are not enough software engineers in Charleston, and the only way to get them to move here is to pay them competitively with where they’re at,” Jenkins says.

He adds that part of Benefitfocus’ employee retention plan is its mission to be the best company to work for in the country.

“We’re consumed by being No. 1 at everything,” he jokes. “The startup phase is a rough environment, and our people worked long hours even though we couldn’t offer things that older companies have. As we get bigger and more stable, what we can offer is more substantial and we’re able to compete with these 20-year-old companies as far as vacation and sick leave.”

Now that the company has gotten to the point where it can afford to offer bonuses, it decided to come up with the BF Bank to reward the people who have gotten them where they are today. “We struggled with how to calculate it, and the senior management team decided to pay people out in an equal sum. And you know, cash is always better than direct deposit.”

Sarah Moïse covers technology news for the Business Journal. E-mail her at smoise@crbj.com.

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