
DATE: Monday, July 21, 1997                 TAG: 9707190620

SECTION: BUSINESS                PAGE: D1   EDITION: FINAL 

SOURCE: BY MICHAEL CLARK, STAFF WRITER 

                                            LENGTH:   84 lines

TEMP AGENCY BRANCHES OUT AAROW TEMPORARY SERVICES INC. OFFERS SMALL-TO MEDIUM-SIZED BUSINESSES HUMAN RESOURCE SERVICES SUCH AS PAYROLL, 401K AND HEALTH CARE ADMINISTRATION.

When a temporary employment agency calls on a business, the pitch must be about placing temporary workers.

Or does it?

If the agency is Aarow Temporary Services Inc., the sales call could include talk of signing the business with a professional employer organization.

Sometimes called employee leasing, the PEO service is simple. A larger firm wraps functions like payroll, insurance and 401K plan administration into one big package for small- to medium-sized businesses. The smaller companies then write one check to the PEO provider.

``It's like having a human resources department without any of the hiring and firing duties,'' said Anne O'Brian, Aarow's clerical manager.

O'Brian made a call last spring to offer that option to Michelle Byrne, owner of the Rudy & Kelly Hairstylists franchise in Virginia Beach's Kemps River Shopping Center.

From O'Brian's first call, Byrne thought it was a great deal. ``It frees me up to concentrate more on growing this business than sitting behind a desk,'' she said. ``I'm not a desk person.''

It may be a great deal, but it's not a very well known concept. Stay tuned, though; it soon could be. That's what Aarow is banking on.

``We can charge an hourly fee for providing temporary employees or we can offer PEO services,'' O'Brian said. The local agency, which has offices in Chesapeake, Norfolk and Newport News, markets the PEO services of Florida-based NovaCare Employee Services Inc. (Temporary placement firms, like Aarow, call their PEO services TemPEO, a trademarked term.)

As a customer received a perm at her salon, Byrne discussed how much she's looking forward to Aug. 1, when she begins using the TemPEO services marketed by Aarow.

``Everything's in place,'' she said.

Byrne took over the franchise in November. She was hoping to implement a 401K plan down the road, but with the TemPEO package, she can start right away.

The employees had health and dental insurance before, and they will still have those benefits.

``But now they're eligible for visual (care), too,'' she said. ``In this business, you need to see.''

Byrne expects to reap more benefits. She'll have lower workers' compensation insurance rates and she'll see a net savings with better benefits.

She estimates that her employees will pay less for their share of the health insurance premium and receive at least the same amount of coverage.

The service works that way because NovaCare absorbs the employees into its own staff, said Loren Hulber, president and CEO.

Hulber calls the service a ``quiet revolution in small- and medium-sized business.'' His company services more than 40,000 employees for more than 1,700 clients in 45 states, he said.

The concept goes to back to the Pony Express and the early days of the Pinkerton detectives, Hulber said.

Firms like Pinkerton provided security services and had workers all over the country. The firm offered to lease the detectives and security guards back to the companies they were protecting.

This type of service has been offered in the U.S. for about 15 years. It started out as employee leasing, but the PEO tag has become more popular over the last decade.

Hulber said his firm will open four new markets in the next 12 months.

It's a snowball NovaCare Inc., the parent company of NovaCare Employee Services, has been building for the last 12 years. Based in King of Prussia, Pa., NovaCare Inc. started out as a network of therapists in nursing centers and assisted living facilities.

Last February - as its network grew to about 17,000 therapists in 40 states - the company bought Florida-based Employee Services Inc., creating NovaCare Employee Services Inc.

Now, Hulber sees himself as a missionary who's redefining business as usual.

Michelle Byrne might agree. Aug. 1 can't come too soon for her.

``I'm looking forward to that day,'' she said. ILLUSTRATION: [Color Photo]

CHARLIE MEADS

The Virginian-Pilot

Anne O'Brian, left, of Aarow Temporary Services Inc., reviews forms

with Michelle Byrne, owner of Rudy & Kelly Hairstylists in Virginia

Beach.