Florida's tight job market makes it tough for Jason Harris to staff his 10-worker Marianna janitorial supply and maintenance company, HCS Supply & Service. The problem in Harris' view is that workers who have the luxury of picking and choosing among employers want more than a paycheck; they want health insurance, 401(k) plans and other employee benefits.
Harris' solution is employee leasing, an increasingly popular way for small businesses to provide employee benefits for workers, manage regulatory and legal issues, and cut costs for workers' compensation insurance and unemployment taxes.
Leasing companies, or professional employer organizations (PEOs) as they prefer to be known, hire all or part of the company's permanent work force in a co-employment arrangement that gives the PEO control over payroll, employee benefits and other administrative matters. The small business retains day-to-day management authority over its workers.
While PEOs traditionally haven't helped small businesses find workers, that's changing. Some now have relationships with temporary staffing companies, and other PEOs have their own staffing divisions, or they may provide informal help to clients. In Delray Beach, Spanish River Resort general manager James Marshall, who leases 30 workers through the Vincam Group, gets employee leads at meetings with other Vincam clients. "They refer applicants to us," he says.
PEOs' core business, though, is managing human-resource functions. Clients pay the leasing company the total sum of payroll, health insurance, workers' comp and other benefits expenses plus an administrative fee of about 2% to 5% of payroll. The PEO in turn makes out the client company's payroll and pays insurance premiums.
For small businesses, the choice of which PEO to hire is often difficult, given the 233 companies licensed in Florida. Harris severed ties with his first leasing company after only eight months. "We got a bad taste the first day," says Harris, noting there were payroll errors and disagreements over AIDS testing.
Florida, which in 1991 became the first state to regulate and license PEOs, also investigates complaints. In fiscal 1997, ended June 30, the Florida Department of Business and Professional Regulation received 205 complaints against licensed PEOs and investigated 164. Two were put on probation, three were suspended and 40 fines totaling $42,113 were handed down. "People need to beware out there," says Harris, "They put all their confidence in those companies."
REGULATIONS
"Virtual" Help
For Small Biz
The U.S. Environmental Protection Agency in partnership with industry and academia will establish four new "virtual" Small Business Compliance Assistance Centers to provide industry-specific information on federal regulatory requirements for the transportation, circuit board and chemical industries as well as local governments. Help will be available through the Internet, by telephone and fax. Four other sectors -- printing, metal finishing, agriculture and automotive services -- already have centers up and running. They provide compliance assistance, online conferences, access to technical databases, articles and "listservs," which allow users to ask questions or discuss a given topic via e-mail. To learn more, check the EPA's Web site (www.epa.gov/oeca/mfcac.html) or call the following toll-free telephone numbers: printing, 888-877-6322; metal finishing, 800-286-6372; automotive services, 888-476-5465; agriculture, 888-663-2155 (fax-back document line) and transportation, 888-459-0656. Telephone numbers are not yet available for the printed circuit board, chemical and local government centers.
COMPLAINTS
Sound Off
The Small Business Administration's Regional Regulatory Fairness Boards provide small business owners with an avenue for voicing concerns about regulatory compliance or enforcement actions by any federal agency. Business owners should file agency appraisal forms, available by calling 888-724-3247 or on the Internet (www.sba.gov/regfair). Forms are reviewed by local fairness board members and the national ombudsman, who may seek agency explanations for actions. Public hearings are possible when comments highlight significant regulatory problems.
SBA
Online Advice for Women Entrepreneurs
"For every woman who is on her way, there are many more out there who need help," says Aida Alvarez, administrator of the U.S. Small Business Administration. In January, Alvarez launched the Online Women's Business Center (www.onlinewbc.org), an interactive Internet site designed to help women entrepreneurs start or expand their businesses.
The Web site complements the workshops, one-on-one counseling and mentor programs offered by the SBA's 63 Women's Business Centers around the country, including the Women's Business Development Center at Florida International University in Miami (305/348-3951). The online version of the Women's Business Center includes extensive information about management, finance, marketing, technology and procurement. Alvarez adds, "We're working on having the entire site translated to Spanish."
Women entrepreneurs also may participate in newsgroups and live chats. In conjunction with the Service Corp of Retired Executives (SCORE), e-mail counseling is available in English and Spanish.
Private sector partners IBM, J.C. Penney, GTE, NationsBank and Avon contributed $315,000 in cash and in-kind support for the site. That's almost half the SBA's $680,000 in start-up costs.
TIPS
Selecting an Employee Leasing Company
1.Check whether the employee leasing company has a Florida license and whether there has been any disciplinary action. Contact the Board of Employee Leasing Companies, Department of Business and Professional Regulation, Northwood Centre, 1940 North Monroe Street, Tallahassee, FL 32399-0767. For license information, call 850/922-2971; for disciplinary actions and complaints, call 850/488-0736.
2.Ask the employee leasing company about its coverage for health and
workers' compensation insurance. Is the company insured by a
third-party insurance carrier or is it self-funded?
3.Find out whether payroll taxes and insurance premiums have been paid
in full. The company should show you a quarterly statement verified by a certified public accountant.
4.Check the company's banking and credit references. Talk to other small
businesses that use the company's services.
5.Get professional references. Find out if the company is accredited by the
Institute of Professional Employer Organizations (301/656-1476 or www.podi.com/iapeo/) or is a member of the Florida chapter of the National Association of Professional Employer Organizations (850/222-6000 or www.podi.com/peo).
6.Check the service agreement to see if it can be canceled on short
notice, say 30 days.
7. Visit the employee leasing company's office. Make sure they have
the experts on staff to meet your needs.
SBDC
New Leadership in Fort Myers
Dan Regelski, 51, was named director of the new Small Business Development Center (SBDC) at Florida Gulf Coast University in Fort Myers. He joined Florida's SBDC network four years ago as a business analyst at Edison Community College, which served the Fort Myers area through an affiliation with the University of South Florida prior to the opening of Florida Gulf Coast University. Regelski, who holds an MBA from Plymouth State University in New Hampshire, worked for 20 years in advertising and marketing for wholesale and retail businesses.
Big Brother?
WinVista's software makes it easy for employers
to keep an eye on employees' computer use.
Alone in their cubicles, employees labor over their high-powered computers, ordering supplies over the Internet, sending e-mail to satellite offices and creating sophisticated customer databases. Or do they? With ready access to games, Web surfing and chat groups, it's easy for workers to squander time.
Boca Raton software maker WinVista is marketing a product that allows employers to track, control and limit how employees use their personal computers -- looking at software opened, Web sites visited and e-mail sent. "We profile how people use their machines," says John H. Wilson, WinVista's vice president of sales.
The software, which operates with a command center and server, allows an employer to monitor which Windows program is running on any PC at any time. It also creates a complete activity log of software opened and closed, noting time spent in each application.
WinVista began a full roll-out of the software last fall, targeting medium and large companies with lots of PCs. In 1998, the company expects to sign up 12 major corporate clients, which could bring in about $2.5 million in revenues if each client averages 1,250 workstations. "The response has been good," says Wilson, adding that the company's first big sale went to investment bankers Donaldson, Lufkin & Jenrette.
WinVista charges $7,500 for the software's command center, $750 for a server and then $150 per PC license. Discounted deals are available, including a $12,500 package for smaller businesses with up to 100 PCs.
Wilson and Steve Tielens, both former executives of Racal Datacom in Sunrise, formed the company in 1996 after meeting the two British programmers who came up with the idea of tracking PC activity. To get up and running, the partners invested $200,000 of their own money and raised $100,000 from another investor. Last year, the British venture capital firm Durlacher Limited invested $2 million in the company. WinVista, which employs 12, recently hired two industry veterans to lead the management team. Michael Fields, former president of Oracle USA, takes over as CEO, and Wayne Leonard was named president and chief operating officer.
Wilson, who is staying on to lead the sales effort, downplays the Big Brother aspect of WinVista. Instead, he focuses on the software's ability to help a business profile how the best workers use their PC. With the results, a company can revise computer procedures for other workers and make smarter software purchases. Says Wilson, "So much in software expenses is useless."
Small-Business Editor Barbara Miracle can be reached by e-mail at: bmiracle@fltrend.com
Small Talk
Inventor's Expo
The University of South Florida's Small Business Development Center will hold its annual Suncoast Inventor's Forum in Tampa on March 31. The program, which will run from 8 a.m. to 4 p.m., includes information on patents and licensing, financing, marketing, sourcing manufacturers and other topics. The cost is $65, including breakfast and lunch. For information or to register, call 813/554-2341.
Florida 100
The University of Florida's Graduate School of Business and Fisher School of Accounting is accepting nominations for its Florida 100 award, presented to the state's 100 fastest growing private companies. To qualify, companies must be Florida-based independent, privately held corporations or proprietorships; have a three-year sales history with an increase over the three-year period; sales of more than $100,000 but less than $25 million in fiscal 1995. Nominated companies must provide sales revenues and number of employees for a three-year period, a range of profitability in 1997 and the name of their independent auditor. UF will publicize the three-year growth rate; all other financial information will remain confidential. For more information, call 352/392-0213.
Teachers and Students
The Small Business Administration's North Florida District Office has set up the Mentor-Protégé Program as an offshoot of the SBA's 8(a) program for companies owned by socially and economically disadvantaged people. The program teams experienced, successful companies with up-and-coming companies that have proven potential. For details, call the SBA at 904/443-1900.