Revolutionizing Human Resources
Erik Vonk wants to revolutionize the American workplace, but he's shy about it.
"I want the workplace to be a kinder place, more inspirational," says Vonk, the CEO of Gevity, one of the nation's largest human resource companies. And he envisions doing that not only through his fast-growing company's work with its clients but with its ambitious new Gevity Institute, which intends to study how management practices of small companies affect their success-and share that information with the world.
When asked if he sees himself as a visionary, Vonk seems embarrassed. Laughs a little. Changes the subject. Modesty is a rare commodity in CEOs, but Vonk is unexpected in many ways.
At 52, he is slightly graying, yet boyish; rumpled but elegant; both serious and quick to laugh. He speaks several languages, including his native Dutch, German, French and a "passable" Arabic. His office is inviting, filled with antiques he's collected from all over the world. Not many CEOs come with their own furniture. And he seems to care about the people who work for him in a very personal way.
When he came to Gevity almost three and a half years ago, the first thing he did was paint. "Everything was sterile! White everywhere you looked!" he says in a lilting accent, then throws up his hands in mock disbelief.
Despite his enthusiasm for pleasant surroundings, Vonk's office sits in a desolate business park near DeSoto Square Mall where "For Sale" signs dot the landscape, as do liquor stores and adult bookshops. For the past two years, he has been searching for new quarters for his 500 local employees. (Gevity employs approximately 1,000 in 13 states.) He's investigated a move to Palmetto or St. Petersburg (a move to Pinellas County would distress Manatee County officials), a campus on Lakewood Ranch and remaining in Bradenton, including in his current offices. A decision is imminent, he says, but it's taken time to evaluate what would be best for the company. "There are economic factors and social factors to consider, he says. "Investment in property is a big capital commitment. In terms of social factors-there are about 500 people working here, and that number will likely grow. We have to ask ourselves, 'Where do we go, what are the commuting patterns, where will they live?'"
THE PRIME MOVER
Gevity takes its name from the word longevity. With a focus on small and mid-sized businesses, the company provides what managers refer to as "true end-to-end outsourced human capital management solutions." Simply stated, Gevity not only provides traditional HR functions, but also creates strategies for employers to maintain and grow a valuable asset-its people.
At least, that's the Gevity that Vonk created. Before he came, Gevity was Staff Leasing, a publicly traded traditional PEO, with insurance arbitrage as its main source of income. It was also on the verge of bankruptcy, hemorrhaging money every quarter. It had lost its CEO, and a member of the board was trying to keep the place afloat.
At the time, the then 47-year-old Vonk had just purchased a farm in South Georgia and was already bored beyond tears. All his life he had worked hard to retire early. But after eight months of rural peace, he woke up one morning and felt a profound sense of loss. He missed the gratification of creating something.
"Retirement was a disappointing deception," he says. "I got there and concluded that the journey was much more fun than the point of arrival. And so I went back into the journey-and this time it probably is without a destination."
He leans back in his chair and laughs. Vonk clearly enjoys the journey, and not just on his tugboat Matilda. Born in Indonesia to Dutch parents, he is the former president and chief executive officer of Randstad North America, a subsidiary of Randstad Holding NV, the third largest staffing service provider in the world. He has held senior management positions at both Chase Manhattan and ABN-AMRO Banks. He has worked all over the world.
He's also an author. While at Randstad, he wrote Don't Get a Job, Get a Life! The book is about flexible employment and encourages businesses to embrace the idea that "the human resource is an economic resource to be applied when and as needed." He advises workers to focus more on creating a constant income flow, not working for a corporation for 20 years.
Under Vonk's leadership, Gevity is growing rapidly. At a presentation in New York this past May, Vonk reported that Gevity has experienced 13 consecutive quarters of increased profits. "Compared to the first quarter of 2004," he told investors, "Gevity has increased gross profit by nearly 22 percent, operating income by over 30 percent, net income by over 28 percent and earnings per share by nearly 21 percent." At the end of the first quarter of 2005, the firm had 8,300 client companies and about 125,000 client employees.
HR outsourcing is booming as small and mid-size companies continue to turn their payroll and benefits administration over to companies like Gevity. Many of these employee management companies, including Gevity, are adding services to deal with the entire life cycle of employment, from recruitment to training to retirement. "Small businesses are America's economic engines-it's where most growth comes from," says Vonk. "But small businesses are sort of between a rock and a hard place. They are too small to have an HR department, but at the same time they are too big to ignore the impact of not having one. There's a large constituency of potential buyers."
Vonk says the huge demand for beginning-to-end HR services and the company's personalized approach have put Gevity in "a first mover position." The company offers clients an HR solution tailored to their particular management style, size and need. Every potential client is given a Human Resources Assessment. The test asks 25 questions in five areas. Some of them are simple, such as, "Does your company have an up-to-date employee handbook?" Some are more thought-provoking: "Does your company have a reputation as a desirable place to work?"
Once the assessment is scored, teams of consultants design a program for the client's needs.
Vonk, however, doesn't think that's quite enough and here's where he wants to revolutionize the way we work.
"Through serving our clients," he says, "we learned that there are direct correlations between certain HR practices and the performance of a business. We want to know why."
SCHOOL FOR SUCCESS
In an effort to find a systemic cause for the relationship, Vonk approached Cornell University's graduate program in Human Resources and discovered that while there have been many studies done on Fortune 500 companies, no one had ever examined the workings of smaller organizations. And so the Gevity Institute was created in 2004.
So far, it's a fledgling education entity with the weighty mandate to figure out the relationship between how a business manages its employees and how well it performs-and then share that information with anyone, including the competition.
So far, there's only one full-time employee, but Vonk hopes the Gevity Institute will eventually have its own campus and become a center for learning and idea exchange where people can study and be inspired to change how America does business.
The Institute has an added plus-enhanced exposure. The more Gevity's name is out there, the more likely it is that small businesses will think of the company when they want HR services.
The first step in creating an academic foundation for the educational venture was to survey a sampling of Gevity's clients to identify management styles. The results, which are available at www.gevityinstitute.com, showed that unlike larger corporations, the entrepreneurial smaller business seems to employ one of three basic styles-Autocracy, High Commitment and Professional Model. (See "What Kind of Manager Are You," below, to learn more about each model.)
"One style is not better than the other," Vonk says, "They are just different, as the needs of each company are different."
Based on these findings, Step Two has begun. Vonk has created a think tank, which includes scientists and physicians, to understand the cause and effect of these styles on the worker. Step Three is to find ways to use this data to make change for Gevity's clients and, later down the road, the American workforce in general.
"I passionately believe that what we are doing is useful. I have a conviction that we can help entrepreneurs improve the quality of their business and create an environment that is more pleasant," he says.
Reluctant visionary, modest CEO, turnaround kid-whatever you want to call him, Vonk is the classic example of an entrepreneurial manager. Since Gevity is, by definition, a medium-sized business, he's also the market share he services, but hasn't taken the Cornell survey himself.
When asked to define his own management style, the question seems to catch him off guard. "I am the steely-eyed autocratic know-it-all," he laughs.
This seems to be more of a joke than the real answer. Before he can clarify, in the next room there's the sound of people shouting at each other. It's a dark rumble of voices, and, perhaps, the sound of furniture being toppled over. Then laughter.
Vonk is amused at the ruckus-hardly the response of a steely-eyed autocratic CEO.
"Happens all the time," he says. "We're passionate around here on lots of levels." Still, one of Gevity's PR managers runs out of the room to check on it, just in case.
Vonk continues. "What I see in myself and my colleagues is a joint effort to perform, a joint passion. And that is how I make it work. It is all about passion. Full steam ahead."
WHAT KIND OF MANAGER ARE YOU?
Gevity Institute and Cornell University have identified three management styles and are studying their impact on employees and company productivity. While the jury's still out on whether one type of manager is better than another, you can take a quiz to help determine your style (the three management styles are defined below.)
Check the statement that most accurately describes your beliefs.
On retaining employees:
_______(1) The best way to retain employees is creating a family-like environment.
_______(2) The best way to retain employees is giving them challenging and interesting work.
_______(3) The best way to retain employees is paying them fairly for their level of skills and effort.
On managing employee performance:
_______(4) Individual employee performance is best managed through peer pressure from other employees or a work environment based on teams.
_______(5) Individual employee performance is best managed by hiring individuals who are committed to excellence based on their professional training.
_______(6) Individual employee performance is best managed through formal processes and procedures.
_______(7) Individual employee performance is best managed by close managerial supervision.
On attracting new employees:
_______(8) The best way to staff a company is to attract and hire people who have the skills and experience to fill current needs or job openings.
_______(9) The best way to staff a company is to attract and hire bright people who have high potential to impact long-term company success.
_______(10) The best way to staff a company is to attract and hire people who fit with the company's culture.
Each number below corresponds to a number in the survey above. If you checked No. 1, for example, you favor a high commitment management style.
- High commitment
- High commitment
- High commitment
Autocracy: You retain tight, hands-on control and are the firm's sole visionary. You hire and keep only employees who have the skills to successful perform a specific job, motivate and retain employees through money, and monitor and control the day-to-day activities of all employees.
High-commitment: You believe performance is best in a family-like environment in which each employee feels valued. You hire based on how well employees fit in with your culture and values, creating a team-oriented environment.
Professional model: You believe employees achieve best when treated like professionals. You hire employees who have the skills to perform a specific job, provide them with interesting work opportunities and the chance to develop new skills and allow them much discretion in how to complete their responsibilities.