Benefitfocus.com Eyes Expansion

Benefitfocus.com Inc., a rapidly growing software business formed five years ago with just 18 employees, said Friday it plans to build a new headquarters and more than double its payroll by adding 200 jobs over the next three years.

The 185-worker technology company, now crammed into a former Wal-Mart in Mount Pleasant, expects to move next year to a new $16 million, 143,000-square-foot office complex proposed for Daniel Island. Benefitfocus will occupy one of two side-by-side buildings that its co-founder and chairman, Mason Holland, is developing in the island's commercial district. The other building will be leased out to other businesses until the company needs it. Holland made the announcement Friday at the Charleston Regional Development Alliance's headquarters in North Charleston.

Benefitfocus makes Internet-based software that replaces the paper forms employers traditionally have had to fill in to administer their worker-benefit plans, such as health coverage. Its 89,000 online customers include insurance carriers and their business clients in all 50 states and in several other countries, including Japan, Mexico, Chile and Poland. The company said sales soared 236 percent in 2004. The trend "is projected to continue," Holland added.

So far this year, the company has hired 35 workers to keep pace with its growth. "We need to put them some place," Holland said. The company looked at properties throughout the Charleston region. It also seriously considered relocating to Raleigh and, to a lesser degree, Atlanta. Not wanting to uproot its employees, the company decided to remain in the Lowcountry, said Holland, who grew up in the area. It picked the Daniel Island site earlier this year for the new headquarters, partly because of its central location. State officials are eager to retain high-tech companies, Holland learned. "They said, 'We definitely want to keep you here,' " he said.

The expansion will qualify Benefitfocus for the standard tax incentives South Carolina offers expanding businesses that invest capital and create new jobs in the state. Also, Berkeley County is expected to let the company pay a predetermined fee instead of property taxes, which can fluctuate year to year. "It's the kind of company any community ... would love to have," said John Scarborough, the county's economic development director.

The move to Daniel Island is a blow to economic development efforts in Mount Pleasant, which has tried to position itself as a destination for high-tech employers. Holland said the town didn't mount a serious bid to keep Benefitfocus until it was too late.

The new jobs will include software engineering, sales, marketing and customer-service positions. The majority of the positions will require a college degree, Holland said. He declined to say what the average wage will be, other than that the company's workers "are pretty well paid."

It was five years ago this month that Holland, Shawn Jenkins and Doug Moreland -- now chief executive officer and chief technology officer, respectively -- formed the company as an offshoot of American Pensions Inc. They moved the business and 15 employees into a renovated 32,000-square-foot Wal-Mart in East Cooper Plaza in October 2000.

The company recently expanded its South Carolina presence by opening an office in Greenville, partly because many of its new hires are Clemson University graduates who want to live in the Upstate. Benefitfocus already is drawing comparisons to two other locally grown high-tech successes, Blackbaud and Automated Trading Desk Inc. "It's an American success story, and it happened right here in the Lowcountry," said Charleston Mayor Joe Riley.

Whether it will someday follow Blackbaud's lead and go public is an open question. "It's obviously an option that's out there," Holland said. "But our position is that we're locally funded, we don't have any institutional investment, and as of right now, we're in charge of our own destiny."

Editors note: Benefitfocus.com is the 70th member of the Charleston Digital Corridor.