siness
•
Take Itly
Emplo ees,
lease
THE D ETROI T J EWIS H NE WS
F
38
Some
companies
are turning
to employee
leasing in an
effort to cut
costs.
MARTY NIEDBALA
SPECIAL TO THE JEWISH NEWS
ven with the most efficient proce-
dures for saving money, many
business owners are finding that
doing business becomes more
costly each year. Increases in
health care and other benefits and
the resulting paperwork have im-
pacts on the bottom line.
But some companies are find-
ing a way to reduce their costs
without sacrificing productivity
in the long term. Owners "fire"
their entire workforce, including
themselves, and "re-hire" them
for a fee from a firm that special-
izes in administering all facts of
a company's payroll and benefit
work.
The strategy is called employ-
ee leasing, and it's one of the
fastest growing aspects of the em-
ployee service industry. A recent
study conducted by a Michigan
public relations firm found that
five of the 40 quickest-growing pri-
vate companies in the state deal
with employee services.
Nationally, there are approxi-
mately 1 million leased employ-
ees employed by more than 1,300
firms.
Employee leasing organizations
such as the Human Resources
Committee (HRC) of Farmington
Hills and the PCS Group of
Auburn Hills provide a range of
services to a company when the
firm contracts with it.
For example, both HRC and
PCS can offer in-house specialists
in insurance, labor-business law,
salaries, governmental relations
and systems analysis.
"We do a lot of things that a hu-
man resource department of a
major company does," said HRC
president Fred Goldenberg, whose
company has more than 1,500
leased employees across
the country.
Statistics from the
United States Chamber
of Commerce show that
companies spend an
average of 8 percent of
their personnel costs on
administrative work.
Mr. Goldenberg said
employee leasing can
save a company up to
4 percent on personnel
costs.
"Our firm doesn't
eliminate all the ad-
ministrative work.
That's impossible,"
Mr. Goldenberg said.
"But, we take care of
the grunt work. We
also offer safety and
work management
seminars and we conduct work
site inspections."
HRC has saved companies
from $500 to $525,000 per year on
personnel costs, Mr. Goldenberg
said.
Mayer Sherman, senior ac-
count representative for PCS,
agreed that client companies can
save money and time, and they
can gain something, too.
"Companies can save more
than $500 per employee per year,"
Mr. Sherman said. "Our compa-
ny's focus is on morale. We try to
boost morale and keep everyone
happy."
Executives at Miles Fox, an of-
fice supply company in Warren,
are happy with their relationship
with HRC. Miles Fox hired its em-
ployees back from HRC in March.
No savings figures are available,
but Miles Fox president Rick
Beaudin said he noticed the ben-
efits of employee leasing immedi-
ately.
"Now we can offer a fully-paid
health plan to our employees," Mr.
Beaudin said. "We're out of the in-
surance and personnel business
and we can concentrate on selling
office products."
Miles Fox vice president Denise
Gallanis agreed: "We don't know
what we've saved in dollar
amounts yet, but we're saving in
time. How do you put a number
on productivity?" she asked.
Mr. Sherman said his firm's
specialty is offering a Section 125
cafeteria health plan. Client com-
panies can select from several of-
ferings of medical benefits from
the Internal Revenue Code plan.
Another key plan offered by PCS
is a 401K, or retirement pension
plan.
Fred Goldenberg:
Employee leasing is
a revolutionary idea.
"A Gallup poll showed that 46
percent of employers believe of-
fering such plans is the most ef-
fective way of keeping employees
and keeping them happy," Mr.
Sherman said. "It's important to
note, too, that we've never pre-
pared a plan proposal which in-
cludes a reduction in staff."
Both Mr. Goldenberg and Mr.
Sherman say employee leasing,
while an old business tool, is just
beginning to grow because com-
panies are doing more and more
out-sourcing for services.
Employee leasing goes back to
the days of the Revolutionary
War, when King George III hired
30,000 troops from Hessian
princes. Nowadays, even Kelly
Services, the nation's largest tem-
porary employee agency, offers
employee leasing. ❑