Barrett in the business of HR paperwork, finding temps
Barrett Business Services takes over human-resource functions for small and medium-sized businesses and tops annual ranking of public companies based in Northwest.
Seattle Times business reporter
Barrett Business Services at a glance
Headquarters: Vancouver, Wash.
Major operations: California, Oregon, Washington, Idaho, Arizona, Utah, Colorado, Maryland, Delaware and North Carolina
CEO: Michael L. Elich
What they do: Professional services for small and medium-sized businesses, including temporary staffing, payroll, recruitment and human resources.
What sets them apart: Surging stock price has attracted attention of hedge-fund managers.
Michael Schindler, CEO of Baden Sports, is in the midst of selling his company’s new bat called the Axe, engineered from end-to-end with a handle made to fit one’s hands. That’s how he wants to spend his time, selling merchandise.
The independent, family-owned company in Renton manufactures sporting equipment and promotional products. It keeps 25 warehouse employees busy year round fulfilling orders from retailers. But when back-to-school and the holiday seasons hit, it needs help inflating and packaging items, such as soccer balls and basketballs.
“You can’t keep a full-time staff when you only need them half the time,” Schindler says. “You keep a smaller full-time staff and hire more as needed.”
And that’s where Barrett Business Services comes in.
The Vancouver, Wash., company helps businesses around the country big and small with the details of hiring and processing paychecks. Its performance was strong enough to regain the top spot in The Seattle Times’ 22nd annual ranking of public Northwest companies. It also won in 2004.
Started in 1965, Barrett Business Services takes on the intricate details of payroll, recruitment, finding temporary staff members and human resources for businesses. It assists a variety of industries, including electronics manufacturers, agricultural companies, food processing, telecommunications and public utilities.
“We’re able to bring the resources of a large company to small- and medium-sized business,” says Michael Elich, chief executive of Barrett Business since February 2011. “We are able to help companies who are ready to move to the next level, from being an entrepreneurially run company to a professionally managed organization.”
It has 3,000 clients in 23 states and the District of Columbia, with 64,315 employees. A large concentration of its clients are in California and Oregon.
Despite its growth, Barrett got slammed in the global downturn. Its stock hit a low of $7.96 in March 2009 after trading at highs between $18 to $25 per share in previous years. It ended 2012 at $38.09 a share and has since been setting historic highs. In May, its stock hit $62.82 a share. In the last 12 months, its stock is up 210 percent while the Standard & Poor’s 500 is up 20 percent.
This kind of growth for staffing and services companies is typical in times of economic uncertainty, says Jeff Silber, managing director for BMO Capital Markets in New York. He said temp-staffing companies do well as an economy expands, but at this point there should be a shift to more full-time hiring.
“Considering it’s been four years since the recession ended, you would’ve seen a shift by now but you haven’t,” Silber says. “Temp hiring is much stronger in the cycle than it typically is and it’s because of all the uncertainty.”
Barrett also offers “professional employer organization” services where it co-employs some of its clients’ existing workforce, assuming responsibility for payroll, payroll taxes, workers’ compensation coverage and other administration functions.
The company served 2,910 professional employer organization clients in 2012 and represented two-thirds of its revenue last year. It competes against larger, national companies, such as Automatic Data Processing and Manpower.
While its revenue continues to increase, the company faces challenges, particularly because of the uncertainty that comes with estimating workers’ compensation loss reserves.
Barrett strives to help businesses refocus on their mission and leave the rest of the details to them.
“Most business owners want to focus on their core offering — not on the guesswork that comes with being an employer,” Elich says. “We help them to regain that focus.”
Marissa Evans 206-464-3701 or firstname.lastname@example.org