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Reno-based co-employment

John Seelmeyer

Jim Annis figures there are something like 3,100 companies in northern Nevada with 10 to 100 employees, and he figures his Applied Business

Solutions will be doing just fine if it can sign up even 5 percent of those companies in the next few years.

And he figures the current economic downturn is a good time to get moving.

Applied Business Solutions acts as the employer of record for its clients. The clients keep the hiring and firing decisions and establish the workplace rules, but Applied Business Solutions manages payroll and benefits and provides human relations services.

The fees paid by clients add a few percentage points to their payroll costs, but Annis says clients typically come close to breaking even or sometimes even save money through lower health insurance costs as

Applied Business Solutions buys coverage in bulk.

The company is buying insurance these days for a group of about 700

325 workers, along with dependents.

Important as health-insurance costs may be in opening employers’ doors to Applied Business Solutions, the availability of human relations professionals to handle those uncomfortable conversations with workers tends to be viewed as the most important aspect by long-term clients.

Celeste Peterson, who directly manages Applied Business Solutions, notes that small companies generally don’t have a human resources specialist, but instead leave those duties to a harried business manager who has plenty of other duties.

Applied Business Solutions fills that gap as the co-employer.

Companies in the co-employment industry these days bill themselves as professional employer organizations, and the U.S. Bureau of Labor Statistics predicts that half of American employees will be will employed by a PEO by 2020.

Applied Business Solutions, a four-year-old company, acts as co-employer for about 700 workers today. Annis’ goal: Four thousand workers within four years.

“This is a high-volume, low-margin business,” he says.

He says employers are increasingly willing to listen to the company’s pitch these days as they look for ways to control costs particularly for health care.

At the same time, control of health-care costs is a key factor determining the profitability of Applied Business Solutions itself. But the company, Peterson notes, can provide wellness programs to workers that otherwise would be beyond the capability of its small business clients, and that helps control health costs.

Applied Business Solutions is a sister company to Applied Staffing Solutions, a temporary staffing and recruitment company owned by Annis.