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Smaller businesses embracing admin outsourcing options

As outsourcing increases for all sizes of businesses, small business owners are looking for more efficient ways to handle the cumbersome issues of government regulations, taxes, workers‘ compensation and payroll technicalities. Ken Lewis offers a solution.

His company, People Lease, is one of a growing number of entities offering a full range of back-office services. “What we do is ideal for businesses with five to 25 employees, most of the companies in America,” he said. “Small to medium size companies can’t have someone on board to do it all so we’re a good fit.”

The former owner of a real estate company, Lewis started People Lease in 1984, and now the Mississippi business does work for a wide range of companies in many states. “We hear a lot about outsourcing. I saw a need, a niche, for employers who don’t have a human resources department,” he said.

He says his type of service was in its infancy 25 years ago, especially in Mississippi, even though the concept of employee leasing dates back to the Roman Empire. It’s now becoming more prevalent in Mississippi, and he feels it will continue to grow.

“Every day I hear about more employee issues,” Lewis said. “An example is the filing of verification of immigrant status documents (I-9). We’ve seen locally what it can cost an employer to have undocumented workers, and it can be avoided. Going forward, more attention will be given to illegal immigrants.”

He also feels normal growth patterns will accelerate all kinds of paper work that can be confusing and intimidating for small business owners. Surveys he conducts at the end of each year reveal more of a move to outsourcing, particularly with the economy slowing down.

“The biggest trend I see coming, as awareness grows about outsourcing, is the move to a single source rather than spreading services around,” he said. “It becomes a convenience factor. Also, a business can pay someone pennies on the dollar that will put money on the business owner’s bottom line.”

Companies like People Lease keep up with regulations and compliance matters and notify clients of changes. Lewis’ business has 16 internal employees who process 5,000 W-2s every year. They belong to national professional employment and human resources organizations that help them keep up with ever-changing laws and regulations. The associations also give his group training and legal insight.

“There’s no way an individual businessman can keep up with all of it,” he said. “A widget maker needs to be making widgets while we monitor things such as employment laws, tax liabilities and workers’ comp.”

John Broderick, owner of Broderick Advertising in Jackson, has nine employees and finds that outsourcing is good for his company. “The real key is that over the last several years, it takes a lot of people to manage the requirements of maintaining a staff of employees — the tracking and compliance,” he said. “With outsourcing, I’ve found it like night and day for not having to worry about filing state and federal taxes and lots of other tasks.”

He says he would have to add another employee or put the extra duties on his bookkeeper without outsourcing. “Small businesses have so much coming down on them — all this minutiae of what we have to do,” he said. “There are numerous obstacles. I see People Lease as our own back office.”

A lot of small businesses don’t know about this type of outsourcing, Broderick thinks. Lewis says there could be 20 companies like his in the state although the word is not out about many of them.

“It’s a growing thing, particularly in today’s environment,” he said. “As government grows, so do regulations. No one organization has all the answers.”

Contact MBJ contributing writer Lynn Lofton at llofton656@aol.com.

About Lynn Lofton

One comment

  1. a nice piece of information. Outsourcing is really gaining the spotlight these days and i think it is required because it will surely highlight the cons of the outsourcing. however it saves money like Broadrick said but the satisfaction quotient is still a miss in the outsource process.

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