Special To:
Texas Banking Magazine - January 1998

Administaff Helps Banks Focus More on Their Business -- And Less on HR Issues

"... Every move you make, every step you take, I’ll be watching you." -- From the song, "Every Breath You Take"

Aside from depositing a hefty paycheck, it’s doubtful the author of this popular tune thought of the banking industry when composing the lyrics to this No. 1 hit.

Nevertheless, these lyrics may seem all too appropriate to bank managers who feel swamped amid the endless sea of regulatory reporting that characterizes our profession. In addition to managing their business, bank managers must also juggle the multitude of administrative responsibilities associated with being an employer. Payroll taxes, workers’ compensation, employee benefits packages, training and recruitment -- all these and many other obligations can leave managers with much less time to focus on their core business.

However, a growing number of savvy bank executives might view these lyrics as a perfect description of their harmonious relationship with a Professional Employer Organization (PEO) -- a knowledgeable ally carefully guarding their personnel-related interests. A PEO can remove a significant portion of a bank’s administrative burden, allowing it to concentrate on more lucrative areas of business. TBA recently joined and now endorses Administaff -- one of the nation’s largest and most respected PEOs. Administaff, headquartered in Kingwood (a Houston suburb), was recently featured in Forbes magazine and is the only PEO listed on the New York Stock Exchange (under the trading symbol ASF).

What is a PEO?
PEOs were born of the frustration many small-business owners experience when administrative work inhibits their ability to grow their organization. To overcome that challenge, a business and PEO can enter into what is called a "co-employer" relationship, which enables the PEO to serve as the business’ virtual human resources department. However, unlike temporary agencies or employment firms, PEOs do not provide personnel. A PEO manages a business’ human resources function, as well as payroll and tax filings, unemployment and workers’ compensation reports, 401(k) plan and health insurance administration, and regulations compliance. Of course, owners still make all the strategic business decisions and can delegate various human resources projects and responsibilities to their PEO on an as-needed basis.

Administaff also provides other important services such as recruiting and selection, employee handbook and policy development, employee counseling, training, screening and performance appraisal assistance. "Working with Administaff is like having a big brother watch out for you. They help you do the right thing," said David Bubier, president of Main Street Bank in Cleveland, Texas.

Bubier has experienced the value of having a PEO handle his bank’s human resources activities on several occasions. For example, in 1995, Bubier was president of Kingwood Bank when he faced a crisis situation involving the death of an employee. Other employees first learned of the tragedy while Bubier was out of the city, and Administaff responded by immediately dispatching crisis counselors to the scene -- at no charge to Kingwood Bank. "I’m not sure I would have even known where to begin," Bubier said.

Why Companies Choose Administaff
Simply put, Administaff offers business owners a win-win opportunity: enhance productivity and efficiency while reducing stress. By delegating personnel responsibilities to Administaff, business owners can spend more time satisfying customers or growing their business -- comfortably assured they’re in compliance with all workplace regulations. In fact, an independent research firm found that 88 percent of Administaff’s clients agreed that the co-employer relationship allows them more time to concentrate on running their business at higher productivity levels. Moreover, Administaff can act as a bank’s personal workplace-issues consultant, avoiding costly non-compliance penalties by providing up-to-date advice on new or pending labor regulations.

"At TBA, we want to provide the best possible services to our members, " explained Georgia Crawley, TBA’s senior vice president of personnel and administration. "Administaff doesn’t leave a single area of human resources to chance. They provide full regulatory compliance and a comprehensive training program, which relieves a significant burden from our business and allows us to devote more time to our membership."

Relying on Administaff to watch over a business’ every move is especially appealing to small firms like the Bank of San Jacinto County, located in Cold Springs. As an organization’s co-employer, Administaff shares certain legal liabilities in the unlikely event of an employment-related lawsuit -- significantly reducing the expense of hiring legal counsel, the inconvenience of diverting attention from core responsibilities and the general stress associated with the situation. Cindy Manthey, Bank of San Jacinto County’s vice president and cashier over operations, communicates with Administaff representatives several times each week and has seen her workload redirected by at least five hours every month.

"We get immediate responses to any of our concerns," said Manthey, whose bank consists of 12 full-time and two part-time employees. "If there’s an employee-related legal question, Administaff puts an expert on the phone with us immediately. Really, it’s a wonderful service and I enjoy working with them."

While Administaff can offer executives freedom from administrative burdens, it also can help small businesses compete more effectively with larger companies for talent. With nearly 30,000 worksite employees at 2,000 client company locations spanning 47 states, Administaff uses economies of scale to bring larger 401(k) plans, health insurance plans and other employee assistance programs to affordable levels -- thus enabling small companies to present sought-after employees with a more attractive offer.

For the Bank of San Jacinto County, the opportunity to provide a greater variety of employee benefits while reducing personnel-related costs was too valuable to pass up. The bank has been with Administaff for more than two years and is among the first Texas-based banks to join forces with Administaff. "Administaff is wonderful for small institutions like ours because we can pursue avenues such as stronger employee benefits plans that we otherwise might not be able to get our hands on," Manthey said.

Partnering with Administaff also sends a subtle message to employees that their employer is committed to their personal and professional well-being. An independent survey found that most U.S. businesses do not offer a comprehensive employee benefits package.

"In banking, it’s been an employer’s market for the past 10 years, but I believe that will change during the next decade," said Bubier, who noted that Main Street Bank’s Operations Department has reduced its administrative workload by between 25 to 50 percent since joining Administaff. "My hope is that by purchasing strong benefits packages for our employees now, they’ll remember who took care of them later when other banks try whispering in their ears about their enticing offers."

Getting Started
When business owners first learn of the PEO concept, they’re often concerned they’ll lose control over their employees. Some might ask, "In a co-employer relationship, what’s to stop the PEO from ultimately planning a takeover of my side of the business?" Conversely, employees want to know specifically who runs the daily business operations, whom they’ll report to and who presides over performance reviews.

Mark Lovvorn, president of BankDallas, was one such business owner who hadn’t considered joining a PEO until a few months ago. BankDallas opened in June 1997, and Lovvorn was faced with hiring an entire employee base. He explored PEOs for a variety of reasons, including the high costs associated with hiring and training new employees. BankDallas joined Administaff’s team after company executives thoroughly explained the PEO concept and outlined the benefits of entering into a co-employer relationship. Administaff then conducted an extensive "hands-on" orientation to ensure that all employees and other affiliated parties fully understood how the company operates and what it can do for a business.

"Administaff’s orientation was solid, thorough and calmed many people’s concerns," said Lovvorn, who employs seven at BankDallas. "They brought in experts on all facets of human resources management. Once our employees saw that everything was handled in the same manner as a normal employer relationship, their concerns went away."

As senior vice president of BankDallas, Melanie Cathey is responsible for many of the bank’s operations. By working with Administaff, Cathey estimates that her administrative workload has been reduced by 25 percent. "I don’t have to know the intricacies of insurance backwards and forwards now because we can call Administaff with any questions we might have," she said. "Now, we can devote our time to banking and not to personnel issues."

The Bottom Line
"Every move you make, every step you take ... I’ll be watching you." For Administaff clients like TBA, Main Street Bank, BankDallas and the Bank of San Jacinto County, these words are music to their ears.

Rick Wilson is a District Manager for Administaff. For more information, call 800-465-3800.

Reprinted with permission of Texas Banking Magazine.