Not literally, of course. What we’re talking about is shifting the administrative burden to a business services provider known as a professional employer organization (PEO).

When a small business enters a co-employment arrangement with a PEO, the PEO becomes the employer of record and, in effect, leases the employees back to the client. The workers—now drawing their paychecks from the PEO—stay where they are and continue to do what they do. The PEO does everything else: payroll processing, insurance and benefits management, tax payments and reporting, regulatory compliance, workers comp, and other workplace functions.

Time regained

Now the owner can concentrate on the company’s core business without the daily deluge of HR-related tasks (which can eat up, says the Small Business Administration, as much as one quarter of an owner’s precious time). What’s more, the PEO often can negotiate better rates for insurance, benefits, workers comp, and payroll services than the client could obtain on its own.

According to NAPEO, a trade group for the PEO industry, about 700 of these organizations currently operate in the U.S., covering between 2 million and 3 million workers. The average client of an NAPEO member has 19 employees—too few, NAPEO says, to qualify the client individually for certain benefits and protections that it can enjoy through its relationship with the PEO.

PEOs typically charge a fee equal to 3% to 15% of payroll for their services, which include payment of taxes, premiums, etc., from the PEO’S account (with these costs later invoiced to the client). A start-up fee also may be charged.

Besides its primary services, a PEO may also offer may offer safety and risk management, background checks, drug testing, development of employee handbooks and safety manuals, and other HR specialties. It also monitors laws and regulations affecting the client’s operation—a godsend for small firms struggling to stay in compliance.

Letting the PEO do the paperwork recovers staff time and may (although not always) help to reduce the co-employer’s (i.e., the client’s) legal liabilities to its employees. The aggregated purchasing power of these organizations enables them offer to their clients packages of benefits that usually are beyond the reach of small firms. As every employer knows, the competitiveness of the benefits package is the key to attracting and keeping high-value employees.

Understand the implications

It should be clear that a PEO isn’t merely a payroll service, a temp agency, an insurance brokerage, or a recruiter. Nor is it the same as an administrative services organization (ASO), which provides outsourced HR functions but does not create a co-employment relationship. Unlike these entities, a PEO shares legal liability for employment-related risks.

Because the co-employment arrangement fundamentally will change the administrative profile of the business, entering into a contract with a PEO is a major decision. Among other things, co-employment means that the PEO now has a right to direct and control the client’s personnel—including leeway to hire, reassign, and fire.

Is a co-employment contract with a PEO the right remedy for administrative headaches at your company? Many small to medium sized businesses lacking the resources and expertise for in-house HR have found the answer to be yes. But caveats apply.

Bear in mind...

NAPEO recommends these guidelines for companies considering a co-employment relationship with a PEO. Other points to address:

• Working with a PEO does not immunize the client from employee claims such as discrimination and wrongful termination, since the law recognizes workers as employees of both.

• The rates that the client pays for health insurance and workers comp coverage through the PEO will be affected by the amount of risk present in the pools from which the PEO is buying. Premium savings, therefore, are not guaranteed.

• You must still have someone on staff who will be responsible for gathering payroll data and reporting it to the PEO.

• Services to be provided by the PEO should be explicitly spelled out in the contract, as should provisions for exiting the co-employment arrangement.

• Because their paychecks will now be issued by the PEO, employees may need to identify the PEO as their employer on tax returns and loan applications.

The bullet point about paychecks goes to the heart of the before-and-after reality of a relationship with a PEO. Once the co-employment agreement is in place, your workers essentially stop being yours. You can direct their day-to-day production activities as always, but they must accept the fact that their pay and benefits are now in the hands of a stranger—an idea will take some getting used to.

For morale’s sake—especially in closely held firms where family members and others may have many years of service—an owner considering an engagement with a PEO should be prepared to sell the plan internally with tact and sensitivity. That way, there’ll be no reason to greet the new arrangement and its conveniences with anything but a deep sigh of relief.

Resources

The following are links to PEOs or to brokers of PEO services:

http://www.peo.com

http://www.thepeopro.com

http://www.netpeo.com/

http://www.staffmarket.com/

http://www.peo7.com

http://www.gnapartners.com/

http://www.administaff.com/

When you are printing first on an offset press then sending through digital equipment, does the paper need to be manufactured different?

Offset printing is considered a wet process, while toner based printing is considered a heat process. Typically, uncoated paper manufacturers produce paper for offset with a higher moisture content while toner grades are made at lower moisture content.  To make the sheet able to perform in a wider range of equipment, some manufacturers will run a mid-moisture level with additives for digital performance.

Is color copy paper to be used on color copy equipment only, or is it guaranteed for all digital equipment?

Color copy paper typically has a very smooth surface for better printability, thus making it a higher end sheet. If the paper is guaranteed to perform on color copy equipment or is laser guaranteed, this usually means it performs on all toner-based equipment, from small office copiers to high-speed production presses, unless otherwise specified.

Regarding the compatibility of paper for digital print, we often get asked whether our Royal grades can be run offset for a shell and then run through a non-impact process afterward.

For pre-print applications there are three pieces of advice. The first two are crucial and the latter is helpful. 1) make sure the paper is guaranteed for preprint applications in the first place 2) always print the piece so that the final piece is grain long i.e. 8.5 x 11” not 11 x 8.5” 3) I would recommend using at least a 60 to 70# basis weight sheet not 50# as the sheet is too thin for this tough application.

When was the last time print and paper production was treated like the bad guy? Five minutes ago? But the reality is, the forest and paper industry is one of the leaders in sustainability.

The American Forest & Paper Association (AF&PA) just released its 2010 report measuring progress by the forest products industry on key sustainability indicators.

Using the latest data available, the new report, “Sustainable Practices: a Foundation of the Forest Products Industry,” shows that despite the severe impact made by the recession, continued investments by AF&PA member companies in more efficient processes and equipment have led to measurable progress on such sustainability indicators as recycling and air emissions.

Among the report’s key findings:

• In 2009, 63.4% of U.S. paper consumed was recovered – surpassing AF&PA’s 60% recovery goal three years ahead of schedule.
• On an absolute basis, both direct and indirect greenhouse gas emissions at member pulp and paper and wood products industry facilities have decreased.
• In 2008, 65% of the energy needed to operate member pulp and paper mills was produced from renewable fuels. At wood products facilities, renewable fuels produced 73.5% of needed energy.
• Compared to 2006, pulp and paper mill sulfur dioxide releases decreased 14.6% and total reduced sulfur releases were reduced 18.6%.

I don’t know about you, but to me, that’s incredible.

After all, consider just how huge the forest and paper industry is. How much of what you use on a daily basis comes from forest products of some kind? Everything from the school supplies in your child’s backpack to the wood fiber in the RTA furniture in your office to the construction materials used to rebuild New Orleans. Not to mention the substrate used in the jobs lined up in your press queue!

Now the news gets even better. When you look at the great strides this massive, powerful industry is making, you the creative, printer, or business owner can take part of the credit for it. That’s because the forest and paper industry wouldn’t focus on sustainability if customers didn’t care about it.

Let’s hear it for customers who care about sustainability! You are the engine that drives this level of change.

Click here to read the entire AF&PA “Sustainability Report” for 2010.

This month, however, another closely watched business mood tracker said that small business owners' economic confidence leveled off in June to halt a two-month rise. The dip, although not large, reflected increased unease about the near-term outlook for smaller firms. What happened?

Cash flow issues led the list of concerns in the June report from the Discover Small Business Watch, a survey conducted monthly by Discover Financial Services. Of 750 small business owners polled, half (51%) reported temporary cash flow issues, up six percentage points from May. Overall, concerns about cash flow were chiefly responsible for driving down the survey’s confidence index to 86.1 in June from 87.4 in May despite some reported improvements in business conditions for the respondents.

For example, although 43% of the owners said they planned to decrease spending on advertising, inventories, and capital expenditures, they were fewer in number than the 46% who said they planned to curtail investment in May. There was a slight increase (from 28% to 30%) in the number of those saying economic conditions for their businesses are improving, and a small decrease (from 56% to 51%) among those who rated the economy as poor.

But these responses were offset by other answers signaling persistent doubt about how small business owners expect to fare as the global economy continues to churn. Sizable percentages of respondents said that their businesses had been negatively affected by the stock market (51%), the Gulf oil spill (30%), and the debt crisis in Europe (40%).

The mid-year slowdown in confidence has provoked plenty of rumination in the online news media and the blogosphere. In a recent interview on CNBC, for example, Alan Greenspan, the former Federal Reserve Chairman, said that the recovery isn’t proceeding the way recoveries typically do—with small businesses leading the way in expanding and hiring more workers.

“People don't want to hire because they’re concerned they may have to let them go,” Greenspan is quoted as saying in this commentary. “Small business is in real, serious trouble.”

This interview with the president of a company that processes payrolls for about 30,000 small companies details the malaise. Among other things, he’s concerned about the fact that whatever job growth we are seeing consists more of contract workers than of full-time employees. Because the “1099s” have less job security and less income than the “W2s,” they also spend less—a behavior that translates into reduced income for small businesses.

And that’s what makes the circle vicious: “Less revenue means no one hiring,” the payroll executive is quoted as saying.

“All of those things create uncertainty for someone running a business because they don’t know what the costs or what the economic climate will be,” he goes on to observe. “And if you’re uncertain, you freeze. You don’t place a big bet. So I expect we’ll see the same sort of level we’re at rather than real growth.”

It will come as no surprise that the speed bump currently frustrating American small businesses is also tripping up their counterparts in the rest of the English-speaking world.

In the U.K., a survey by an online insurance quote comparison service called Constructaquote.com is said to show that 78% of small business owners have not seen any increase in business. Nearly two-thirds were either unsure or not optimistic about their growth prospects over the next 12 to 18 months.

The Toronto Globe and Mail reports a petering-out of optimism among Canadian small businesses similar to that found in the U.S. by the Discover survey. And in Australia, the Sydney Morning Herald has advised that country’s “fragile” small and midsize sector to expect rising interest rates for business loans for the next five years.

It ought to shake the faith of any small business owner in his or her decision to launch the company in the first place—but that’s not what is happening in the U.S.

“The shape of the economy over the past two years apparently hasn't had a huge impact on the American entrepreneurial spirit,” says the Discover survey, adding that “53% of small business owners would not take a job for the same or more money, and fewer owners than last year would make the switch.” Despite the fact that a majority of small business owners see running their businesses as riskier than working for a large company, most wouldn’t trade being their own bosses for whatever security there might be in working for somebody else. 

What trends are you seeing in digital equipment?

Most of the advancements in toner-based equipment in the last few years center on higher speed and improved print quality, rather than a radical change in technology. The recent area of focus in digital printing is inkjet as the print quality closes in on toner. Generally, the inkjet equipment is roll-fed.  However, manufacturers are working on smaller, less expensive sheet-fed models. To date, the uncoated paper stocks usually must be specially formulated to perform on inkjet.

What constitutes a digital substrate, the size or the finish?

It depends upon which paper mill you ask! A sheet does not need to be in a digital size to perform on digital equipment. Many printers prefer to cut down parent sheets to the exact size they need which gives them more choices and flexibility in paper stocks. The finish is an important factor in printability on digital equipment. Typically, the smoother the surface, the better the print. However, we have seen some amazing results on textured stocks as well, such as Wausau Paper’s Royal Resource® Bark Finish. This sheet features a hard surface without much fine detail in the pattern; therefore toner lays down quite well.

What is the advantage of uncoated paper vs. coated paper for digital applications?

Uncoated papers come in a vast array of colors, sizes, and textures.

With the green movement becoming mainstream, the softer and natural look of uncoated papers has increased in popularity. In addition to white, there are many earth-toned uncoated papers available on the market, including muted browns and greens like bamboo, weathered oak and thyme.  If you’re looking for a sheet with a soft tactile finish (vs. the colder, harder surface of a coated sheet), textures such as bark, crepe or felt are the answer.  With the expansion of coating options in digital technology, coating on digital press output is becoming more common, thereby eliminating concerns about durability of the printed piece.

“Hiring Employees is Tedious and a Business Expense,” says a subhead in an article that’s typical of the advice being offered to small companies in recruitment mode. Hiring is also time-consuming, and that’s an added burden for small enterprises without HR departments or relationships with outside search firms.

Probably no part of the recruiting process is as trying as the interview—the face-to-face meeting at which the employer must make an intuitive as well as an objective judgment about the candidate seated on the other side of the desk. Here are some tips from recruitment professionals that can help to sharpen the interviewer’s insights and lead to better judgment calls.

Preliminary telephone interviews can be highly effective tools for prescreening applicants, according to PrintLink, a print industry recruiting firm. Besides saving time, interviewing by telephone “frees the interviewer from prejudices arising from visual first impressions” that are unavoidable in face-to-face meetings. Because candidates on the phone tend to be less guarded than they would be in person, an interviewer who’s good listener can pick up clues that an in-person meeting might not yield. PrintLink recommends listening closely for changes in vocal quality and paying attention to what the sound of the candidate’s voice says about his or her apparent emotional state.

Tardiness on the interviewer’s part is as counterproductive as it would be on the part of the interviewee, in this writer's view. “Do not be late to a candidate interview—just don’t be. As tempting as it may seem to put yourself in a position of power because a candidate wants what you have—just don’t.” Another waste of time is the follow-up interview drill: requiring the candidate to come back multiple times to meet with different members of the company. “Making someone come back repeatedly doesn’t mean that they really want the job,” the writer observes.

Don't oversell. It’s natural for entrepreneurs to speak glowingly of the companies they’ve created and the job opportunities they offer, but according to this article, the owner should dial down the enthusiasm a bit when evaluating candidates for key positions. Why? Because the candidate may not last beyond the “hiring honeymoon” if the position has been characterized as more than it really is. Workforce turnover is difficult enough without the disruption caused by new hires who say “yes,” grow disillusioned, and disappear within a few months or a few weeks.

Watch body language. What the candidate says and what his or her posture, facial expressions, and gestures are conveying could be very different things. Is that general hangdog look a sign of desperation? Inability to make eye contact—what should that say to the interviewer about the applicant’s confidence and candor (or lack thereof)? As for the spoken answers, if they’re rambling, evasive, or unclear, treat them as red flags. There’s more advice along these lines (in the form of do’s and don’ts for applicants that employers can be alert for as well) here and here.

There’s obviously much more to successful hiring than can be covered here, and some aspects of the process have ramifications for business liability and/or compliance with the law. For example, the Southeast Minnesota chapter of SCORE reminds employers to check their insurance coverage when creating and filling new positions—policies may need to be changed even though current employees are protected.

Sometimes employers perform background checks either by doing the research themselves or by hiring outside screening agencies to do it for them. It’s a legitimate business practice, but gathering information about people for employment purposes may be subject to the Federal Fair Credit Reporting Act (FCRA). The law, which applies to companies of all sizes, is meant to assure that background checks are accurate and that the privacy rights of those being investigated are upheld. An organization called the Privacy Rights Clearinghouse (PRC) has detailed information about background checks and many other subjects related to privacy in employment.

Finally, a reminder that immigration laws call for employers to verify eligibility for employment. This requires submission of a form called an Employment Authorization Document (EAD), sometimes referred to as an I-9 check. For more information about complying, visit the web site of the U.S. Citizenship and Immigration Services.

The son-in-law interrupted, “I hate factories. I can’t stand the noise.”

“I see,” replied the father-in-law. “Well, then you'll work in the office and take charge of some of the operations.”

“I hate office work,” said the son-in-law. “I can't stand being stuck behind a desk all day.”

“Wait a minute,” said the father-in-law. “I just made you half-owner of a moneymaking organization, but you don't like factories and won’t work in an office. What am I going to do with you?”

“Easy,” said the young man. “Buy me out.”

Okay, so it’s not exactly a side-splitter. Still, this old joke is a good reminder of why we continue to find the drama and the dynamics of family-owned businesses so fascinating.

But it’s not just the reality-TV aspect of family businesses that makes it urgent to understand what they are and how they work. They’re the bedrock of the American economy. More than one-third of Fortune 500 companies are family-controlled. Family businesses account for half of U.S. gross domestic product, provide six of every ten jobs, and account for more than three-quarters of all new job creation.

Family businesses are much in the news these days as the nation looks to its closely held firms for momentum to lift the economy out of recession. But in good times and bad, the contributions of family businesses often come at a grueling cost. A recent article in Inc. magazine notes that fewer than 30% of family businesses survive to the second generation. Just 10% make it to the third—proof that family solidarity provides no guarantee of business longevity.

Family ties—the very bonds that give these firms their underlying strengths—can impede their progress as profitmaking entities. For instance, says consultant Dominick Celantano, there’s “triangulation”: the sticky situation that arises when two business-owning family members can’t communicate and require the intermediation of a third. Celentano, who teaches the subject at Fairleigh Dickinson University, has posted a helpful online slide presentation that walks through the key concepts of family business management.

Business writers in the general media are sympathetic to the concerns of family firms, but they’re also frank about the difficulties that these companies sometimes make for themselves. Jay Goltz, a small-business owner who blogs for The New York Times, has been following the fortunes of a company he is mentoring, a Chicago printing firm that has become well known in the industry for its green practices. But the family members running it, he writes, have become mired in detail: “The company is stuck in a slow growth mode because the key people are always working on the small picture. This is known as working in the business instead of on the business.”

Goltz says he confronted the family with the proposition that the company might not be the right place for all of them. The reaction: “Everyone sat silently.” He also warned them against enabling counterproductive behavior by employees who happen also to be relatives—a “disservice to the business as well as to other employees,” writes Goltz.

An article in The Wall Street Journal notes that in times like these, a family firm couldn’t afford to enable a weak player even if it wanted to. It advises that family members who can’t pull their weight shouldn’t be hired, just as relatives who are on the payroll shouldn’t be additionally compensated just because their last names are the same as the owner’s. Think twice before creating a job for a family member who asks for one, the writer warns, adding that “if a family member is an underperforming worker the best thing for the business is to get rid of them.”

The always-looming issues of exiting a business and transferring ownership to heirs get equally blunt treatment. As this piece in the mobile edition of the Los Angeles Times points out, “Transitions cost money, and many family firms are less valuable now than just two years ago. That has made it harder for founders to sell for enough money to support themselves in retirement as they had planned.” And for those who are planning not to sell but to hand down, the road can be no less rocky. In fact, writes consultant John Warrilow in a column for The Wall Street Journal, the owner who transfers a family business to his or her children could be putting it into the hands of precisely the wrong people.

“The drive to succeed comes from wanting something you don’t have,” Warrilow says. “Many business owners have done a great job giving their kids everything—except the hunger they need to scratch and claw their way to building a successful business.” The preferable alternative: “Sell your business, and if you still want to give your kids something, give them money in your estate to start a business. Not only will your kids be better adjusted; you won't sabotage your business.”

Faced with obstacles likes these, what can owners of family businesses do? Get help, and take heart.

“If your business is thriving, but members of the family are weighed down by innumerous responsibilities, then it's time to hire outside help,” says Inc. Consider hiring a seasoned manager with real expertise in an area where you are currently lacking.” (Suggestion: Google “family business centers.”)

Even in the worst of times, this article goes on to say, businesses that are run by teams of family members have better odds of survival than those that are not. This also is the theme of a report in The Guardian about new research into small-business issues in the UK.

"The emotional dynamics of a family have a massive impact on the running of the business,” the person conducting the research is quoted as saying. “These firms usually have a close and strong organisational culture—there are shared goals and objectives, making it easier to respond to dramatic changes.

"It is easier for family-owned firms to react to changes in their environment and they react faster—and can be more successful—as a result.”