By JODI SOKOLOWSKI
Buffalo Law Journal

As regional and national economic trends pinch their budgets, company managers are challenged to find creative, cost-saving ways to manage employees and work with clients.

Richard Deitz, a senior economist at the Federal Reserve Bank of New York, said one key first step is to separate labor-intensive tasks from more human-capital-intensive skills such as marketing, research and development, finance and distribution.

"Things are getting more complicated," he said. What's required of business leaders today is "thinking through a whole (new) set of processes."

Get the team invested

Four years ago, President Clark Crook introduced an employee stock-option program at Synergy Global Solutions that essentially promoted everyone to part owner.

While the change was made primarily to keep the company stable and retain employees, the program has had a secondary impact of saving the company money in an economic downturn. Through an employee-elected committee, staff make suggestions on issues ranging from health benefits to productivity enhancements, keeping efficiency in mind.

"Employees have an added vigilance because they care about the company," he said.

A similar way of thinking spreads the wealth among employees at PCA Group. Through attrition, the Cheektowaga technology company's sales department was phased out. All remaining staff then became salespeople, rewarded by peformance-based bonuses.

Clients like the new arrangement because "they want to talk to people who know what they're talking about. They don't want to be schmoozed," said CEO and managing partner Steven Szubinski.

Support coordinator Melissa Devine said while she may not know the technical jargon, she can bring in a lead and earn a bonus even though someone else, like an engineer or programmer, closes the deal. Now feeling "self-motivated" and "empowered," she has also added marketing to her tasks.

Szubinski said the company is more streamlined and efficient through the incentive program that "ultimately has driven more sales and improved morale."

"I'm not a morning person, but I'm ready to go at 7 o'clock," Devine said. "So it's a complete turnaround."

Streamline tasks

Outsourcing, globally or domestically, can enable a company to focus on its core product or service, according to Insyte Consulting president Ben Rand.

Companies like Systems Technology Group, which sells and services cash registers, outsources its human-resources needs to Employer Services Corp. Systems Technology owner Gary Kielich said he recalls a time when an employee sat in his office one day to discuss medical benefits, but he couldn't give good advice.

"It's not something I'm an expert at," he said.

Employer Services gets competitive insurance and investment rates for its clients through bundling.

"We focus on our expertise so they can concentrate on making a better pizza" - or other products and services, said Employer Services co-founder Greg Bauer.

Protective Industries, also known by its product name, Caplugs, uses Synergy's services the same way.

Synergy's remote computer support helped the plastic-cap manufacturer reduce its telecom costs by almost 60 percent, said IT manager Jeffrey Swan.

Because of quickly advancing technology, Caplugs also "rents" Synergy's engineers on a per-project basis instead of having an in-house department.

"Once a project is done, there's not a lot for them to do. It's not prudent for a company our size to develop those technologies internally, so it's a benefit to us to tap into their resources," Swan said.

More, not less, business

In another outside-the-box approach, PCA Group has introduced a new billing option for customers concerned about their bottom lines.

Instead of an hourly fee, PCA may charge a revenue-sharing "success fee." When PCA's work leads to more business for a client, the client will pay a pre-arranged fee, representing a percentage of new revenue.

While it's a risk for the client company, which may pay more than a flat rate, it's also a risk for PCA, which may not recoup expenses. But it can be a benefit for both, and Szubinski said the approach has helped the company to attract and retain business.

"In the past we might have walked away from a client who really needed our help but couldn't afford it. It's a Catch-22," he said. "(Now) we're putting our money where our mouth is. We're confident in the things we can do."

Companies that perform necessary services, like Synergy, or have diverse offerings, like Industrial Support Inc., say those things enable them to keep growing in an economic downturn.

At No. 25 in Business First's 2008 Fast Track 50 list, Industrial Support has grown 25 percent in the last year by offering a diverse array of services: metal fabricating, machinery, woodworking and electronic assembly for the aeronautical, dental, automotive, grocery and power-generation industries, said president David Sullivan.

The Buffalo company hired a purchasing manager and installed a new computerized quoting system to better control its inventory and maximize efficiency. It's also working with a consultant to create a strategic plan for the next five years.

Insyte's Rand said in order for companies to stay alive, they must have a "holistic approach" and a "coherent strategy" to look ahead to what the market later needs. He referenced Henry Ford's successes - and the failures of those who didn't react to the swift growth of the automobile industry.

"A buggy-whip manufacturer may have made the best buggy whip, but in the end they're out of business," he said. "If they thought of themselves as transportation companies, maybe they would have made steering wheels."