October 24, 2014

Business Services

Kyle Parks | 1/1/1996
Sam Schulz, a 53-year-old Miamian with three graduate degrees, is a number-cruncher who prepares corporate budgets and tax returns. But don't mistake him for a company man. Sam's a temp.

"At my age, it might be tough to find full-time work," Schulz says, "but I found that temp agencies could keep me busy."

Among the diverse collection of business services tracked by the state labor department -- including companies that service computers, maintain buildings, provide security and arrange advertising -- personnel supply firms have the largest work force.

Driven by Cuts
Growth in Florida's temp business mirrors a national shift to a more flexible work force, driven by companies looking to cut personnel costs, simplify record-keeping and cope with cyclical labor needs.

These trends also are boosting employee leasing firms, which will take over the administration of a company's personnel, handling everything from payroll to health insurance. Many small-business owners choose employee leasing to get into big pools for cheaper health insurance coverage. And they like handing off responsibility for keeping up with ever-changing laws affecting the workplace.

"We had 43% revenue growth in '95, and we don't see any reason for that to stop," says Celeste Dockery, president of Professional Employee Management, an employee leasing firm based in Bradenton. Its revenues grew from $75 million in 1994 to an estimated $150 million in 1995. "Consolidation is the next big thing coming our way," Dockery says. "I get plenty of calls from venture capitalists looking to buy a percentage of our company."

In addition to Floridians hired by personnel suppliers, the business services industry employs a diverse mix of workers that includes not only temps but also security guards, stenographers, photo-lab technicians and maintenance workers.

More than 22,000 firms in Florida sell business services. Statewide employment now tops half a million. In the 12 months that ended in October, the 16.4% increase in business-services employment in Florida was the fastest of any major job category tracked by the state labor department.

Computer services is one of the fast-growing segments of Florida's business services industry, serving a state dominated by small businesses that can't afford to hire full-time computer technicians. "There's a huge demand for our kind of service," says Fred White, Tampa office manager for Massachusetts-based Oxford & Associates, a computer services company that plans to open offices in Miami, West Palm Beach and Orlando in coming months.

Among the computer-service outfits planning to expand this year in Florida are two New Jersey-based companies: Brandon Systems Inc., with plans to hire more than 200 people in Tampa, and Dataflex Corp., set to add 400 staffers at offices in Clearwater, Tallahassee, Lake Wales, Orlando and Hollywood in the next 18 months.

Advertising is another business service that has benefited from the overall strength of the economy. "When the economy starts cooling off, advertising is one of the first things that is cut," says Carson Eddings, CEO of the William Cook Agency in Jacksonville. "But I see good things ahead. My feeling of optimism about '96, excluding a major dislocation of the stock market, is that it will be a good year across the country."

Low Wages
Despite the industry's employment growth, one of the soft spots on the business-services landscape is low wages. Schulz, the temp in Miami who works on budgets and taxes, says "it would be tough to support a family" on his wages, $13 an hour, if his wife didn't work as a vice president for John Alden Life Insurance in Miami.

From 1990 to 1994, average annual wages in business services grew only from $17,000 to $18,612. With the exception of computer services and advertising, most businesses in this classification pay relatively little.

"Pressure for pay raises in this field tends to be less [than in others]," says Bob Byington, an analyst for the Florida Department of Labor. "There's very little beyond cost-of-living demands."

One reason for the low wages is the low-skilled personnel who tend to dominate the business services work force. For example, the number of workers employed by commercial cleaning companies is growing to keep up with office and home construction in Florida. "Our business is a little like trash removal; businesses just have to have it," says Tom Booth, owner of Clearwater-based Contract Cleaning Specialists. "In 28 years, my business, which is mainly cleaning offices, has had very few slowdowns."

Jane Lewis of Orlando started a house-cleaning service, J&R Cleaning, in 1994. "We have gone from two to six part-time employees in 13 months," says Lewis, who works with three major builders in the Orlando area. "At this point, we foresee that we'll keep getting as much work as we can handle."

That outlook is shared by many fast-growing personnel suppliers; among other reasons for optimism is their growing success with different types of temps. Companies such as Interim Services of Fort Lauderdale and Jacksonville-based AccuStaff are sending more lawyers, nurses and accountants out on temporary jobs, along with more traditional temps such as clerical and blue-collar workers.

In 1996 and the years ahead, if more professionals like Miami's Sam Schulz join personnel supply firms and other business services, the industry's wages may show real improvement.

"Ten years ago, the major part of business services was in office and blue-collar work, and while that is still true, it's changing," says Carol Taylor West, director of forecasting for the University of Florida's Bureau of Economic and Business Research. "Today in Florida, clerical is 40% and blue-collar 35%, leaving 25% for technical and professional workers."

Tags: Florida Small Business, Politics & Law, Business Florida

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