Employee Professionals

Ask an average Southwest Florida small business owner about employee 401K plans, and you'll probably get a shrug of the shoulders or a shake of the head. For most, such a luxury benefit seems completely out of reach, a distant dream that only big companies can afford to provide for their employees. Still others might scoff at the thought of even providing simple health insurance benefits for their employees -- they are too busy keeping track of their business interests to consider such feats.

But Neapolitans Rick and Kate Kraska and son, John Rousseau, say it's all possible. They in fact make a business of providing such power to even the most over-burdened entrepreneur. "I think that the very small business man has found that he can have the benefits of a Fortune 500 company," says Rick Kraska.

The three head Employee Professionals, a Naples-based professional employer organization, or PEO. The company acts as an outsourcing alternative for the regulatory and human resource functions of a company -- it becomes a co-employer with client companies in order to manage payroll, file taxes, coordinate benefits, and address issues such as worker's compensation and on-the-job safety.

Leasing Labor

Although the PEO business is popularly called "employee leasing," the title is somewhat of a misnomer. The company is not a temporary agency -- the Kraskas and their team don't get involved in the hiring, training or management of the employees. Rather, Employee Professionals frees entrepreneurs from the paperwork of insurance forms and payroll and the headaches of coordinating benefits packages. If there's an address change on a W-2 form, reporting for the new hire laws or a worker's compensation claim to be filed, Employee Professionals will do the job. "We replace the payroll and the human resources department in a company," explains Rick Kraska, "but let the business owner do what he does best, sell his products or services -- in other words, concentrate on his business."

As important -- if not more so -- Employee Professionals does the legwork to arrange comprehensive benefits, including section 125 plans, 401K plans and health insurance, at very competitive rates. With about 3,000 employees, the company has considerably more buying power than a small or medium-sized business trying to go it alone.

Employee Professionals also has the know-how that an individual business owner may not, making for a much more efficient delivery of service. Each of the company's staff members concentrates his or her efforts in a specific area. Some also speak Spanish. Employees who have problems or questions, therefore, have a direct contact person. "They all know if they have a problem with health insurance, they can call Judy," says Kate Kraska. "They know that if there's any kind of problem with payroll, we can solve it in an hour."

Acting like a third party, the PEO can sort out some workplace problems before they erupt into major battles. An employee who feels harassed, for example, may hesitate to tell a direct supervisor but will instead contact a PEO representative trained to deal with workplace conflicts. All employees receive handbooks outlining what is defined as acceptable behavior, and client companies receive workplace inspections to head off potential safety problems.

Kate Kraska says she has become somewhat attached to employees and client companies. If a client isn't doing particularly well, for example, the company will try to drum up enthusiasm by packing coupons into a monthly newsletter that is mailed out to all employees. The health of the client companies, after all, determines the health of Employee Professionals. "What is good for the company is good for the industry," says Rick Kraska.

Furthermore, Employee Professionals keeps abreast of ongoing legislation and new trends within the industry through active participation in statewide and nationwide trade organizations. Rousseau sits upon the board of directors of the Florida Association of Employer Organizations, and both he and Rick Kraska are very active in the National Association of Professional Employee Organizations. Therefore if a new law affects how insurance forms are filled out or the Florida legislature passes new compliance guidelines, Employee Professionals will be among the first to hear about it. "We know when new legislation affecting our companies is proposed on the legislature floor," says Rick Kraska. "We may even know about it a year or two before our companies hear about it."

On the legal end, the PEO business is also becoming a more popular option for dealing with issues like unemployment claims or sexual harassment suits. Through networking contacts and involvement in FAPEO and NAPEO, Employee Professionals has retained a Tampa-based attorney specializing in labor law and government regulatory compliance issues. An employer who has to deal with an unemployment claim, for example, won't have to tie up days or even weeks in personal appearances in court.

Getting to Know All About the Business

The Kraska family, originally from New England, shares the common love of Southwest Florida that drew hundreds of thousands of present-day residents. After coming to visit relatives and vacation in the early 1970s, the Kraskas decided to expand their real estate development business down to the area in 1979. After selling a hotel management business up north in 1987, they concentrated their full efforts on the booming Southwest Florida market. By 1991 they had become full-time residents with a few beachfront condominium projects to their name. Son John Rousseau, formerly with the hotel management business, also moved to the area and became involved in the burgeoning PEO business.

In late 1995, Rousseau asked Rick and Kate Kraska to join forces with him in purchasing Employee Professionals, established in 1990. Rick didn't immediately take to the idea but gradually came around when he was presented with a solid business plan and convincing industry numbers. "We agreed to participate on the condition that all corporate debt would amortize on a fast track basis from after tax cash flow," says Rick.

And so began the family's ownership of Employee Professionals under a newly-formed company, American Business Solutions, Inc. "At the inception there was Kate, John and myself and two employees supervising an annual payroll of approximately $5 million and 480 employees," reflects Rick Kraska. Rousseau is president of the company and is in charge of sales and marketing. Kate Kraska is treasurer and has management and supervision of the office and staff, while Rick Kraska is chairman, running the corporate side functions, including expansion and fiscal planning.

The initial concerns of operating a new business and taking on the learning curve of a new industry were quickly overshadowed by solid success. The acquisition was paid off wit