Middle Market in Texas: Wortham Insurance
Contributor's Note: The NCMM is hitting the road this year, traveling coast to coast to visit the states with the most mid-market companies, including California, Florida, Illinois, Ohio, New York, and Texas. This special series summarizes dozens of discussions with chambers, associations, policy makers, and business executives to hear about the opportunities, challenges, and growth prospects for mid-sized firms.
The National Center for the Middle Market (NCMM) just returned from a great trip in Texas, where we traveled to Dallas, Austin, San Antonio, and Houston. In our conversations, we noted the impressive feeling of growth the energy boom has created. People are flocking to the state in search of the plentiful jobs. Overall, it's an exciting time to be in the Lone Star State, and our conversations with middle market executives, business organization leaders, and policymakers were enlightening.
In our travels to visit middle market companies, we were lucky enough to chat with Jim Gleaves from Wortham Insurance in Houston. Wortham employs more than 500 people and provides its clients with insurance brokerage, risk management, and employee benefits services. As an insurance broker, Wortham places clients with appropriate carriers that meet their needs. Wortham's primary services are brokerage of commercial property and casualty insurance, professional and management liability, and group health benefits and services.
As we have seen, the state's economy is growing rapidly, thanks in large part to the current energy boom that fracking and directional drilling have delivered. Gleaves said, "While Texas has had a very healthy economy relative to the rest of the country since 2008, in the last two or three years, things have really taken off due to the energy industry. These large profits trickle down to middle market companies."
Nationally, across middle market companies, the NCMM's data indicates increasing wage pressure and a widening skills gap as businesses get back to the business of doing business. Gleaves sees this same issue, "A strong economy, like the one we're experiencing here, will end up resulting in expectations for a workforce that may be hard to meet. On the other hand, those qualified employees will expect higher pay. There are, of course, benefits and drawbacks to this situation."
Due to the state's strong job creation, the state's immigration numbers are increasing rapidly. These new residents not only increase demand for certain industries, but they also add to the already very competitive business environment. Gleaves, speaking to this challenge, explained, "We at Wortham constantly need to differentiate ourselves because of the state's competitive business environment." Furthermore, this growing population is straining the state's infrastructure and water supply, causing leaders to innovate in how they will accommodate their growth.
Regardless of these arising challenges, Gleaves sees economic positivity in the middle market outlook and beyond. "Texas has a great, booming energy," said Gleaves. Truly, the state government's commitment to business and its thriving energy market has made it a state to watch. Its innovative spirit is sure to work in its favor as it overcomes the growing pains described above.
As the state continues to grow, many more companies like Wortham Insurance will call it home, and, like all Texans, they will be proud to do so. Gleaves told us, "It's like we [Wortham Insurance] grew up with Houston and with Texas."