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NYSE Magazine - May/June 2002
People Skills
Q&A with Paul Sarvadi,
President and CEO, Administaff
By Mark Yarm
Too many companies don't perform up to
their potential because they lack well-defined strategies
for dealing with their most important assets - their employees
- says Paul Sarvadi, president and CEO of Administaff, Inc.
(ASF). The Kingwood, Texas-based Administaff is what is known
as a Professional Employer Organization (PEO), a company that
acts as an off-site human resources department for small to
medium-size businesses. Administaff will take care of a company's
HR needs - such as hiring and termination, benefits and payroll,
training, and regulatory compliance - freeing up a small company
to focus on core business issues.
The size of Sarvadi's company - it has
more than 4,000 clients and 70,000 worksite employees in 20
major markets - allows it to offer customers benefits options
that typically only large businesses could afford. Administaff
also runs an eCommerce portal for its clients, featuring products
and services from American Express Co. (AXP), AT&T Corp.
(T) and IBM Corp. (IBM).
How is Administaff coping with the
current economic climate?
We've had to alter our selling message, because customers
use a human resources department differently in a down economy
than they do in an up time. Instead of recruiting, companies
will use outplacement, for example. We actually grew our sales
staff by 30% last year in the face of the down economy, which
was a pretty aggressive move. It takes about a year to train
our sales staff to our standard sales-efficiency rate, which
is why we are at a powerful inflection point right now.
What does the future of the U.S. workplace
look like?
I see the further blurring of the work-life balance. Because
automation has invaded workers' personal lives - they have
all kinds of devices to stay in touch - employees are at work
all the time. The companies that are giving more flexibility
to their employees are developing better relationships with
their people. Flexibility may translate into something as
simple as the company saying you can leave for the day if
your child's in a school play in the afternoon.
Why should companies strive to be what
you call an "employer of choice"?
It's as valid a goal to be an employer of choice as it is
to target 30% revenue growth, and you might not get one without
the other. It's about what in your workplace keeps your employees
from answering the call from the headhunter. That atmosphere
should not just evolve arbitrarily.
What are the issues most on the minds
of employees?
Employees are obviously concerned about layoffs - that's the
very first issue. After that is raises, which have been very
modest in the past year. Also, employees really want to be
engaged in an enterprise where their talents and capabilities
are acknowledged and utilized, where they can make a contribution
and see the fruits of their labor. I think too often employers
undervalue that aspect of what employees really want - everybody
focuses on compensation or benefits.
How have you incorporated the Web into
your business?
About 65% of what an HR department does is administration
and transactions, and that's what we attempt to drive to the
Web. The Web helps increase value for the customer and reduce
costs. Last year we introduced WebPayroll. All clients have
to do is edit a few items to submit payroll every period.
We also introduced online enrollment for new employees, which
streamlines the process of filling out forms.
What does the future hold for Administaff
and its clients?
Administaff wants to aggregate the best small businesses in
the country on a common platform. When you do that you're
harnessing the third-largest economy in the world [behind
the U.S. large-company and Japanese economies]. Who will lead
us out of this business recession? It has to be the small
to medium-size business that is agile enough and aggressive
enough to take advantage of opportunities now.
Reprinted with permission
from NYSE Magazine, May/June 2002.
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