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ERA plans to rev up growth

Rochester Business Journal
February 1, 2013

Employee Relations Associates Inc. plans to nearly double revenue in the next five years by taking advantage of more than 130 national partnerships with similar companies.
 
Over the last several years, ERA has been building relationships with firms in other cities that provide the same kinds of services it does: employee training, staffing, leadership development and human resources consulting.
 
Now ERA is starting a process to deepen relationships with some of the companies and acquiring others through an employee stock ownership program.
 
Thomas Ioele, ERA president and CEO, said the company expects revenue of $40 million for 2013. He projects that ERA will grow 15 to 18 percent annually, putting its revenue close to $75 million within five years.
 
ERA aims to grow because of its personalized style of staffing and employee services.
 
"Staffing has become a commodity for companies, and it's evolved into a call-center function for many of them," said Jill Knittel, chief operating officer. "With us they get a much more personal feel."
 
Knittel also is the owner of ER Select, a recruitment process outsourcing company that partners with ERA. ER Select, housed alongside ERA, does recruiting for all or some of a client's jobs.
 
"We're run separate from ERA, but we can refer clients to it, and they refer to us," Knittel said.
 
ERA has performed well because it works with the entire life cycle of an employee, Ioele said. The company finds and develops talent, helps place these employees with companies and works with companies discharging employees.
 
In the last 10 years, ERA has become more active in seeking out partner companies, which are usually between $3 million and $20 million in annual revenue, Ioele said.
 
"It's a great model, and the cool thing is that in every market we work in, there's a company that looks just like us," Ioele said.
 
The ownership aspect is one of the most important parts of the equation, Ioele said.
 
"We're not a company that makes products, so the only thing people are truly buying from us is us," Ioele said. "So when they call, they talk to someone who has ownership, a real stake in what they're doing. It makes a big difference."
 
ERA certifies the partners it works with that serve similar functions. Working with companies in 145 cities, ERA is beginning to transition many of them into employee stock ownership plans, though the process has not been completed yet.
 
"We've worked well with many of these companies, and the natural progression is that when they're ready to exit, they become part of our ESOP," Ioele said.
 
To make this transition process smoother, ERA has ramped up its work with these companies and their clients. It launched a customer survey program to understand the needs of clients better and has invested in its customer service as well.
 
"Our goal is to be like the Ritz Carlton of consulting firms," Ioele said.
 
For partner companies, the connection to ERA and its growing number of partners means expanded business opportunities. PangeaTwo, a consulting firm in Birmingham, Ala., partnered with ERA about four years ago and saw an immediate boost in its ability to reach clients.
 
"Our relationship with ERA allows us to work remotely in a number of cities," said Sam Stephenson, vice president of client development at PangeaTwo. "This relationship has definitely opened a lot of doors for the firm, taking us to places and to clients we just didn't have access to before."
 
The company will continue to search for new partners, Ioele said, though he did not predict much of an increase in the number of employees for ERA in Rochester. Some of this growth will come from client referrals as the client base increases, he noted.
 
ERA now has 25 employees, with most in Rochester but some spread across the country. More than 80 percent of ERA's clients are outside Rochester.
 
"We've done a very good job with the small number of employees we have," Ioele said. "In the staffing world, it's common to have $1 million in revenue for every five employees, and we're doing much better than that."
 
To accommodate its growth, ERA moved out of its previous location in Linden Oaks to a new building on Linden Park in Brighton. The 7,500-square-foot building has space for employee training and is constructed to foster a positive work atmosphere.
 
Painted on walls throughout the building are three dots, signifying the core beliefs of ERA-trust, transparency and teamwork. The company works hard to recognize its employees and improve customer service, Knittel said.
 
"This year we implemented an award called YOC, for Year of the Client," she said. "It's given to people to recognize the ways they go above and beyond for our clients."
 
The company recognizes winners at a monthly meeting and also holds quarterly culture-building sessions, Ioele said. ERA encourages employees to donate time and money to charity and promotes workplace wellness.
 
"We gave all of our employees $400 to put toward something that would improve their health," Ioele said.
 
The employee recognition goes hand in hand with the company's demanding atmosphere, Ioele noted. While much is expected of employees, the company works hard to make sure their needs are being met.
 
"We've increased our benefits and 401(k) matches," Ioele said. "We also talk to employees to better understand what it is they want from us."
 
Though there will be challenges from the economy and changing government regulations, Knittel predicted that ERA will continue to grow on the strength of its model.
 
"You can never underestimate how important it is to have a face for your customers," she said. "The world is so fast, and most of them are not getting a personal feel from the companies they work with. They're definitely not getting to talk to an owner with a 1-800 call center, but with us they always will."
 
Ioele said that model will ensure that ERA will always be able to bring in new partners, ensuring its ability to grow.
 
"Every time we add a partner, it's like the rising tide that lifts all boats," Ioele said.

2/1/13 (c) 2013 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email service@rbj.net.


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