Few small businesses have the capability to scale their benefits and HR services to match their ambitious growth plans. By providing such growth-enabling services to this market, HR technology company Namely hopes to make a name for itself.

In fact, the company has most recently become a licensed broker in all 50 states as part of its efforts to become “an end-to-end HR technology platform for small- to mid-size businesses,” according to founder and CEO Matt Straz.

“We want to give them the tools and technologies that Fortune 500 businesses have had for years. We want to provide them with a lightweight configurable product, but give them all the data they need to compete against larger companies,” he says.

The company’s benefits offering launched in March and includes medical, dental, life and some ancillary benefits. Founded in 2012, Straz says Namely didn’t set out to be a brokerage from the get-go, but customer demand has helped shape the company’s product.

HR solution

In fact, it was Straz’s own desire for an easy-to-use HR solution that prompted the idea for Namely.

In the early 2000s, while working at WPP Digital, which acquired his first startup, a digital marketing agency, Straz says the idea for Namely started to crystallize.

“I’m not an HR person. I didn’t come at it from the HR or benefits angle originally. I had been in environments working with small- to mid-size businesses, where as an employee and as a manager I didn’t have access to people data. That data existed in benefits systems. It existed in payroll systems. But mostly, it existed in spreadsheets,” he says. “That always seemed strange to me. I didn’t see why there wasn’t an easy way to do staff allocations and have access to key data.”

In 2010, Straz’s second startup company was acquired by AOL and, he says, he noticed the same thing happening there.

Also see: "Why Zenefits isn't anti-broker."

“Here was another creative business with lots of different subsidiaries or teams and still, no real quick and easy way to access data. This was important to these types of businesses, because they were very creative, they were growing fast, and people had lots of different skill sets. But as an employee, I was still logging in to maybe four or five different systems to enroll in benefits, maybe get a W-2 at the end of the year. It just seemed crazy to me that even in the year 2010 there was still no simple way to do this.”

Straz left AOL in 2011, raised some funding and, he says, gathered three or four creative talents together, including designers and developers.

“We started working on a new type of employee database — one where anybody in the company could access the system. But there were permissions in place where people could see just what they were supposed to see,” he says, adding that he didn’t know at the time that they were creating an HR information system, but  they would soon find that out.

“We learned later on what we were building, but we designed it in a way that was really user-friendly and easy to use and clients really responded to that,” he says. “Almost instantly we had 20 or 30 companies using it and liking it.”

Still, he says, “As we worked with the clients more and more, we realized they actually wanted Namely to do everything. We started getting comments like, ‘It would be great if Namely could do performance reviews.’ ‘It would be great if people could enroll in benefits.’ ‘It would be great if it could do our payroll.’” And lastly, he says, “‘It would be great if Namely had the whole benefits side to the equation.’”

Fast forward a few years and thousands of hours building the platform, he says, and, “We’ve finally gotten there.” Namely has “built a modern, lightweight, easy-to-use system that’s affordable for small- to mid-size businesses.”

The company launched with a platform made up of basic components like the employee database and performance management pieces. In the summer of 2014 they added payroll.

During the benefits enrollment process in 2014, Straz says, Namely started to get requests from clients for a simplified benefits product. “So Namely would not only be their one-stop shop for technology, but it would also interface with the carriers and would partner with other brokers or allows us to create our own benefits offering,” he says.

Birth of the brokerage

In December of 2014, Namely brought in benefit adviser Rob LaHayne to head up the company’s new brokerage services. LaHayne began to put together a solution for the company’s clients to either buy directly from Namely or work with their existing broker to implement the Namely platform.

“We’re developing close partnerships with regional brokers,” Straz says. “Our goal is not to put them out of business, but just to offer a complementary product for clients that are further down market and tie them over until they need the complete services of a broker.”

“We’ve built out a two-pronged approach to handling benefits,” says LaHayne. “This includes both us being able to act as that single point of contact with the client — being able to help them end to end with the procurement, enrollment and servicing process — or working in partnership with their current broker.”

Also see: "Turning the benefits service business upside down."

The process of building out the internal brokerage offering has come with some “pleasant and not so pleasant surprises,” LaHayne says.

For example, the process of getting licensed in each state to sell insurance was cumbersome, he says: “The licensing process definitely takes a while, a lot of organization and a lot of paperwork. It can be kind of confusing and a daunting task.”

“We got through that, and step two was hiring and training sales people with benefits experience that could learn the software and then act as a valuable resource to the client,” he says. That includes “acting as that benefit consultant that works with them on designing the plans, evaluating renewals and finding alternatives, or making them feel good about the choices they may already have made.”

Straz says the company has a handful of licensed brokers on staff now and is “hiring fiercely.”


A lot of Namely’s clients start out in the small market and want to grow into the larger, potentially enterprise market.

LaHayne says, “We feel like we have a lot of options on the benefits side in those situations, starting with helping them out from the beginning in terms of shopping the benefits, installing the benefits, enrolling the benefits through our ben admin system on Namely and then, ultimately, growing with them with great service in place to be able to work with them on their longer-term plans.”

One of those growing companies is the e-mail marketing software company Campaign Monitor. Headquartered in Sydney, Australia, the 10-year-old company is experiencing exponential growth and expects to double in size this year. While the company has had approximately a dozen employees in the U.S. for years, they were for the most part covered by individual health insurance policies reimbursed by the company.

When Campaign Monitor added its San Francisco office recently, including an additional 30-40 employees, Craig Shull, the company’s COO, says they decided it was time to implement a health plan in the U.S.

Campaign Monitor shopped for an HR platform and benefit offerings with approximately five different vendors, according to the company’s business operations leader Salman Kothari. This included a demo of the vendors’ products and quotes for group health, dental and vision benefits.

“We were looking for three things,” says Kraig Swensrud, Campaign Monitor’s chief marketing officer. “The capability of the system, a cutting edge and innovative product and an alignment with our team — a shared set of values.”

They found all three of these with Namely, he says.

Also see: "Technology is the future of benefits, but it's not what will make or break your business."

The company uses Namely as its HR platform globally and the benefit services in the U.S., as well.

“We’re doubling our head count. We’ll be over 100 employees in San Francisco alone and we were looking for somebody to scale with us,” says Shull.

“When you’re onboarding employees at that pace, there are oftentimes issues with making sure people are being paid properly, etc. The link between the organization chart and payroll, etc., is a big potential breaking point with other systems,” adds Kothari. “Namely is going to be our record for all employees and integrate with our payroll.”

Megan Coen, HR technology consulting practice leader of brokerage ABD Insurance & Financial Services, says her firm is working with Namely to service the similar needs of a San Francisco client.

 “We had an emerging tech group that was heavily funded with 150 employees and they needed our expertise on the benefits side,” she says, adding the company had formerly been with a different HR tech vendor, but found their benefits and technology needs underserved.

“A lot of these companies are realizing they’re going to need a combination of technology and benefit expertise,” she adds. “We’re able to work together with Namely and help a pre-IPO company that will scale up to 1,000 employees.”

She says Namely has its own contract with the company and ABD has a separate contract with the client as its broker.

This sort of congenial relationship with brokers is something Namely emphasizes, despite its own foray into the brokerage space. “Our goal is to be the good guys in this current landscape,” says Straz. “We work in partnership with brokers. Obviously, we have our own offering that is geared further down market, but we also have a whole number of broker partners that will use our technology.”

LaHayne says brokers who see the value of the big picture offering Namely has to give have been very receptive to working with the company. “When they bring us cases, we are transparent about the fact that we do have an insurance brokerage offering for our clients. But when they bring us a case as a technology prospect, we sign a non-compete with that broker on that case that we are not going to go after them for the benefits business,” he adds.

“We are primarily a technology company. We don’t want to burn bridges and relationships with our broker partners,” he says.

Straz adds, “I think brokers on the lower end of the market are under pressure from newer entrants, such as Zenefits. Our feeling is that we don’t want to go that route. We feel that brokers have an important role to play, especially as clients and companies get larger. As companies grow over a few hundred employees, there are things they really need a broker for and our intention is not to provide those things. With our benefits offering, our intention is to be a bridge and to help bridge companies that are outgrowing PEOs or services like Zenefits, but are not ready to go sign a deal with a large broker yet.”

Also see: "Fastest growing brokerages with revenue under $10M."

Namely’s agreements enable clients that are using its benefits offering to then transition to a large broker someday if they’d like to do that, he says. “That’s part of what our partnerships are about.”

Coen, of ABD, says the communication between Namely and her firm has been completely transparent.

“There are a lot of other partners in the market that have shown us they don’t have that level of integrity, but we’ve been fortunate with Namely,” she adds.

Market gap

Still, Namely’s broker business is growing fast, says Straz. “We only just launched in April and we’ve signed up a number of clients.”

He says the company doesn’t see itself competing with a lot of other technology vendors, because Namely’s target market is underserved.

“We’ve found such a gap in the market. There’re a lot of solutions for small business, such as PEOs and the newer service companies like Zenefits. Further up market, you’ve got the big enterprise solutions like Workday and Oracle, but in the mid-market it’s really wide open,” he says.

Most of Namely’s business is clients moving off of older payroll systems, such as ADP or Paychex, and those companies transitioning off of PEOs, Straz says. “PEOs can be very convenient for companies of a small size, but as companies get larger, the ability to self-insure becomes more difficult.”

Because Namely’s solution is an end-to-end solution, LaHayne says the company has a wide spectrum of competitors it runs into, but they are typically point solutions.

“You have a combination of two or three different softwares that are trying to accomplish the same thing that our one solution accomplishes and that’s a really powerful story for us to tell,” he says.

Also see: "The discussion brokers should have with PEOs."

One of the reasons Namely’s benefits brokerage has been successful, he adds, is that companies transitioning from PEOs already expect to have a single point of contact for everything related to benefits, HR and payroll. 

“We can be that for them as they come out of the PEO. We have a really great PEO transition story.”

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