AKRON-Employees, what a pain. Wouldn't it be nice if you didn't have to worry about salaries, health care, workers' compensation and all that other mumble jumble associated with being the boss?
Of course, you can't just get rid of your employees either. After all, someone has to do the work.
But you might be able to do the next best thing-lease them.
Leasing workers from an employment agency can save a dealership thousands of dollars on personnel costs each year, according to Metro 25 Tire Centers Inc. President Duane Rao.
For the past couple of years, Mr. Rao has been leasing more than 300 employees for his wholesale and retail operations-which consist of 15 outlets in Michigan and Ohio-from Sterling Heights, Ill.-based Simplified Employment Services (SES).
Those employment services are available now to members of the recently formed Metro 25 cooperative, he said.
Here is how employee leasing works. A dealership fires all of its employees, who are then immediately hired by an employment agency that leases them back to the dealership. The employment company then becomes the official ``employer of record'' and takes care of all personnel issues.
``There is a lot of hesitancy from older business owners, they just don't want to change,'' said SES's Michael Colo, who noted his firm's average customer has 75 employees.
Part of that hesitancy might result from a fear that a business looses control of its employees once they are hired away. But Mr. Colo said his employment company only handles payroll and paperwork functions, leaving worker supervision to its clients.
Tim Lake, owner of Joe Lake Tire in Monroe, Mich., agreed.
``There's no interference from them at all,'' said Mr. Lake, who has an 18-month contract with SES that he said has saved him about $3,500 on workers' comp payments for his 18 employees.
``Once we got through a few pay periods, and everyone knew their checks would cash, we haven't had any problems,'' Mr. Lake said.
But firms looking into leasing their employees might encounter employee loyalty problems from workers who are employed by and receive compensation and benefits from another company, according to Paul N. Keaton, an associate professor of management at the University of Wisconsin-La Crosse, and Janine Anderson, a university graduate student, who co-wrote a July 1990 article for HR Magazine.
The two also warned that employers, prior to entering any agreement, should be sure the leasing firm is willing to hire higher-paid staff members at their current pay level once they are fired, instead of opting to replace them with less-expensive workers.
Still, the leasing idea is beginning to catch on in many business segments, according to Barry Lawrence of the Society for Human Resource Management.
Currently, there are about 275 employment companies in the U.S. leasing about 75,000 workers. In 10 years, the society estimates that number could grow as high as 10 million.
Employee leasing simply carries the economies of scale theory to a different playing field, Mr. Lawrence said. Instead of saving money through a buying group on tire purchases, tire dealers can save money on benefits packages because a business like SES is buying for all 8,000 of its employees.
Companies like SES are able to offer 401K and retirement plans to their employees, Mr. Colo added, as well as take care of personnel records and recruiting replacement employees for their clients.
The employees themselves often have the added benefit of being able to move between jobs contracted under the same employment service, Mr. Lawrence said.
Although Metro 25 has used the practice for about five years, C.D. ``Tony'' Hylton, director of communication services for the National Tire Dealers & Retreaders Association, said he knows of few other tire dealers across the country that are leasing their employees. The NTDRA has not been called upon by its members to investigate such a program, he added.
Mr. Lake was surprised few dealers use similar programs.
``I think it fits the tire dealer real well. It's a big burden you can take off your shoulders,'' he said.