On Assignment is built on a “people first” approach. Whether it’s best serving its employees, the professionals it places or the clients it serves, the staffing company builds strong, trusted relationships.
Peter Dameris, president and CEO of the Calabasas, Calif.-based company, leads a team of professionals who are experts in the field they represent. To keep this team fresh, he invests in an extensive health and wellness program at corporate headquarters, complete with a stateof- the-art fitness center. The program incorporates yoga classes, personal training sessions, bootcamp programs, weight loss challenges and lunch seminars on health, wellness and financial topics.
To cater to the custom needs of professionals and client companies, this energized team personally interviews and selects each candidate On Assignment places — assessing their skills and qualifications, as well as their career ambitions. Employees concurrently work with clients to understand job requirements, hiring expectations and corporate culture and then match them with the best-fitting candidate, especially the highly skilled, hard-to-find talent in the growing science, technology and health care sectors.
To further put On Assignment at the top of its industry, Dameris has expanded the company beyond its initial services offerings in life sciences, allied health care and nurse travel since joining the company in 2003.
He’s led acquisitions that added physician, IT and engineering services to diversify the company’s core competencies. Dameris’ actions bolstered the company through the 2008 economic downturn, and On Assignment is now achieving record revenues and earnings while outperforming most of its competition. It currently spans 80 branch offices throughout the United States, Canada, United Kingdom, Netherlands, Ireland and Belgium, and also places physicians in Australia, New Zealand, Bermuda and Canada.
How to reach: On Assignment Inc., www.onassignment.com
As she celebrates her company’s 32nd anniversary this year, Linda Stone is amazed at how far it has come. Starting as a small, independent contractor that provides IT consulting and staffing services for aerospace and utility companies, APR Consulting Inc. is now a national provider of recruiting and contingent work force solutions. And as the company’s president and CEO, Stone has been recognized for her spirit, vision and community contributions.
With the company’s success throughout the years — APR has an average year-over-year growth rate of 22 percent — it’s hard to imagine that the company once was struggling to sustain itself.
When Stone founded APR in 1976, she was inspired to pursue her passion for computers and the innovative frontier of information technology. But as the company’s track record of on-time, under-budget service delivery won more and more customers, Stone realized how desperate the company needed funding if it were to keep up with growth.
Since stagnation wasn’t an option, Stone needed to find a way to keep the company’s payroll covered so APR could meet customer demands. So with faith that her clients would pay their bills, she borrowed from the equity in her home and enlisted the help of her family to take out large loans. At one point, they even maxed out their personal credit cards. While challenges have abounded, from three recessions to a slowdown in market demand, Stone has stayed focused on APR’s growth — not just in size but also in opportunities. When the market for IT and consulting services dropped in the early 2000s, for example, she identified the demand for payroll services and staff augmentation with APR’s clients and was able to make up for lost revenues.
How to reach: APR Consulting Inc., www.aprconsulting.com
As the economy picks up and there is a renewed interest in the sale and acquisition of business interests, buyers and sellers should consider the tax rules regarding sales of S corporation shares.
Some of the most misunderstood transactions involve the sale and transfer of interests in entities taxable as an S corporation. The rules regarding the taxability of S corporations are often rigid and transactions involving transfers of S corporation interests can produce some harsh results.
“As most people are aware, S corporations are ‘flow-through’ entities,” says Walter M. McGrail, JD, CPA, a senior manager at Cendrowski Selecky PC. “S corporation shareholders, not the S corporations, are subject to income tax on S corporation earnings. S corporations also provide a shelter from self-employment tax, as an S corporation shareholder’s allocable share of the S corporation’s earnings are exempt from self-employment taxes.”
Smart Business spoke with McGrail about ways to mitigate S corporation taxation issues.
How rigid are S corporation rules?
Of all the flow-through entities, the rules regarding S corporations are the least flexible. Each shareholder must generally be allocated income on the same basis as every other shareholder, on a per-share per-day basis, regardless of when the distributable cash was generated. Also, to qualify as an S corporation, each shareholder must receive the same distributions, regardless of when the cash was generated from S corporation earnings. However, there is no requirement for an S corporation to distribute its earnings. The combination of these rules has historically resulted in some unanticipated results.
How are transfers of S corporation shares affected by these rules?
While many examples of the pitfalls of transferring S corporation shares exist, transfers can have the same result: a shareholder is allocated income and does not receive a distribution commensurate with the income allocated. For example, S corporation shareholders sell their interest to a third party or have their shares redeemed by the S corporation. The shareholder negotiates the sale price or, in the case of redemption, the sale price may be in accordance with the terms of an existing buy-sell agreement. The S corporation has a history of distributing cash to at least cover the tax liability associated with the allocated earnings. Former shareholders receive their Schedule K-1 reporting a large share of earnings and discover that policy and obligation are two different things. The corporation does not have any obligation to distribute and the former shareholders failed to account for this when negotiating the sale price. This happens even when the selling shareholder receives counsel, but not necessarily tax counsel.
There is another way in which shareholders can get surprised when receiving their schedule K-1 for the year that they sell shares. Perhaps selling shareholders were sophisticated enough to determine a fair price for their shares, which takes into account the taxable income to be allocated on their final S corporation Schedule K-1. But if the S corporation has significant earnings after the sale date of their shares, the selling shareholders’ Schedule K-1 may include such post sale date earnings. If the earnings after the date of sale are disproportionately higher from the pre-sale period, such a shareholder will find himself or herself surprised. They will receive a Schedule K-1 that reports earnings far in excess of what they anticipated or for which they receive cash. Similarly, shareholders paying what they believe to be fair market value may think they have paid the selling shareholder for the tax associated with earnings prior to their acquisition, only to discover on their Schedule K-1 that they are picking up a share of earnings from before they became shareholders. Further, they may find the S corporation has already distributed the earnings attributable to this period prior to the sale date.
Are there remedies to avoid unintended results?
First, make sure that whomever you use to assist with the sale or purchase has a working knowledge of the taxation of S corporations and their shareholders, as there are some things you can do to avoid surprises. The S corporation rules permit an exception to the per-share-per-day rule for transfers and redemptions, which results in the termination of a shareholder’s interest. If properly elected, the S corporation can ‘cut off’ its books and records as of the share transfer date and allocate items among shareholders before and after the sale date. While this typically eliminates surprises, it may require analysis of the income allocated between such pre- and post-transfer dates to ensure that the cut-off is properly made. For example, if the acquiring shareholder has control of the books and records, there is an incentive to defer deductions to the post-sale date or to accelerate income into the pre-sale period.
Secondly, an S corporation is permitted to distribute amounts to former shareholders after the effective date of the transfers. Consideration should be given to post-termination distributions at the time of the share transfer. Likewise, selling shareholders should consider the income to be reported on their final Schedule K-1 in negotiating a fair price.
When acquiring S corporation shares, perform due diligence to find out whether buy-sell agreements apply and, if so, whether they include provisions to handle the tax allocations on a transfer of shares. Likewise, investigate the contractual obligations of the S corporation to distribute earnings or to make post-transfer distributions and not on its historical practices.
With sales of S corporation shares, the old adage of forewarned is forearmed is all too true.
WALTER M. MCGRAIL, JD, CPA, is a senior manager at Cendrowski Selecky PC. Reach him at (248) 540-5760 or firstname.lastname@example.org, or visit www.cendsel.com.
When it comes to prescription drug benefits, most are familiar with the terms “generic” and “brand name.” But do employees understand what a prescription drug formulary is? Do they understand the purpose and how a prescription drug formulary saves money?
A drug formulary is a list of prescription drugs — both generic and brand name — that are preferred by a particular health plan. The purpose of the formulary is to steer subscribers to the least costly medications that are sufficiently effective for treating a specific health condition. Medications on the formulary have been evaluated and researched for effectiveness and are the most cost-effective versions of popular prescribed medications. By using a single set of prescriptions for most routine treatments, health plans can provide quality care and keep costs at a minimum.
“Formularies change as new drugs and research become available,” says Michael Galardini, a sales executive for JRG Advisors, the management company for ChamberChoice. “In most health plans, the formulary is developed by a committee of pharmacists and doctors from various medical specialties. The committee reviews new and existing medications and develops the formulary based on safety and how well certain drugs work. The committee then selects the most cost-effective drugs.”
Smart Business spoke with Galardini about prescription drug formularies, the difference between generic and brand-name drugs and how employers can get employees to take an active role in their prescription treatment plans.
How do drug formularies work?
Health plans frequently ask doctors to prescribe medications included within the formulary whenever possible. Many health plans review whether or not doctors are using the formulary and, if they’re not, encourage them to do so. Most formularies have procedures to limit or restrict certain medications. This is done to encourage the doctor to use medications appropriately as well as to save money by preventing medication overuse.
Common restrictions include:
- Prior authorization, which requires the doctor to obtain approval from the health plan before a subscriber can obtain coverage for a medication on the formulary. These are often medications that may have a safety issue, a high potential for inappropriate use, or lower-priced alternatives on the formulary.
- Quality care dosing, where the health plan checks prescription medications before they are filled to ensure the quantity and dosage are consistent with FDA recommendations.
- Step therapy, where the health plan requires a subscriber to first try a certain medication to treat their health condition before using another (more costly) medication.
What is the difference between generic and brand-name drugs?
People often have the misconception that generic versions of their prescription medications are inferior or weaker than the brand-name product. The fact of the matter is that the FDA requires generic drugs to meet the same standards as a brand-name drug. The difference between generic and brand-name drugs involves the research, development and marketing investment that go into the original brand-name product. The drug manufacturers, when developing an original brand-name product, spend millions of dollars. Once a generic equivalent becomes available, it has the same active ingredients and chemical purity as the brand-name drug. There may be differences in some of the inactive ingredients such as tablet fillers, binders, coatings or flavors, but the active ingredients are identical. It costs substantially less to develop generic drugs, which means the consumer costs are also substantially less in comparison to the brand-name equivalent.
Prescription drugs are one of the most costly elements of employer-sponsored health care plans. As drug costs rise and more prescriptions are dispensed each year, employees must do their part to ease the burden. Educate your employees to ensure they understand the value of a generic equivalent. Employees who understand this important component of their benefits plan will make more informed choices, reducing not only their out-of-pocket costs but, ultimately, their employer’s cost in the long run.
How can someone be a better consumer of prescription drugs?
You can cut costs by up to 90 percent by becoming an informed consumer and using the same buying techniques that you use when shopping for other goods and services. As more individuals begin comparison-shopping for drugs, more retailers will compete to win their business, which will drive prices lower. Other ways to lower costs include buying in bulk, utilizing mail-order pharmacies and/or discount prescription programs and buying generic or over-the-counter drugs whenever possible. Also, many drug companies and states offer drug assistance programs for the elderly, low-income patients and/or people with disabilities.
Does a pharmacist make a difference?
Your pharmacist is an important member of your health care team. He or she can help you understand your medications and how to take them safely and effectively. By keeping accurate and up-to-date records and monitoring your use of medications, he or she can help protect you from taking improper medications, unwanted side effects and dangerous drug interactions.
Here are some points to cover with your pharmacist:
- How and when to take the medication.
- How much to take and for how long.
- What foods, drinks, other medications or activities you should avoid while taking this medication.
- Any potential side effects.
- What to do if you miss a dose.
- Any concerns you have with taking this prescription.
Michael Galardini is a sales executive for JRG Advisors, the management company for ChamberChoice. Reach him at (412) 456-7235 or email@example.com.
Kevin Schnieders makes sure that his employees at Educational Data Systems Inc. (EDSI) don’t just know the company’s core values – “show up, smile and support one another” – but that they live them every day. He believes his company’s success and growth are a direct result of effort EDSI makes to inspire its people by helping them find purpose and value in the work they do every day.
Since becoming CEO four years ago, Schnieders has increased revenue 35 percent, added seven new offices and diversified ESDI’s business offerings even further to broaden the direction for the company and transform it into a top provider of human resources and employment solutions for government and business organizations.
He attributes this growth to a strong bottom-line performance but more so to the company’s focus on creating a high-performance culture where employees feel valued and driven to excel. Internally, Schnieders works to make sure that his employees are using their strengths while finding fulfillment in their responsibilities. His goal is that every employee has a job that is energizing 90 percent of the time.
To realize this culture, ESDI implements strength-based training and assessment tests to evaluate employees’ individual motivators and traits. Instead of firing employees who are struggling, Schnieders makes an effort to determine whether they are just not in the right role and whether they could be a better fit elsewhere in the company. In the last two years, 12 ESDI employees have moved to different positions. By bringing out the strengths of his employees and helping them become fully engaged in their work, Schnieders creates a culture of top performers who drive ESDI every day.
How to reach: Educational Data Systems Inc., (313) 271-2660 or www.edsisolutions.com
Daniel Gizaw founded Danotek Motion Technologies knowing that renewable energy would play a key role in addressing environmental concerns about the world’s depleting natural resources. However, that wasn’t initially his mission for his company.
While Gizaw launched the company to improve energy efficiency in transportation and energy conversion, renewable energy was only a part of the focus. Yet when he saw the value of wind turbine energy in meeting an increasing energy demand, his vision evolved. By expanding on his company’s fuel-efficiency solution, Gizaw innovated the wind turbine industry and transformed Danotek Motion Technologies into the leading developer and manufacturer of permanent magnet generators for wind turbines.
Investing in wind turbine technology was not without risk. As Gizaw and his team approached wind turbine companies with Danotek’s innovative solution for improving the reliability, efficiency and weight of turbines, some initially resisted the change. But Gizaw knew wind turbines were capital intensive and their operation required significant financial sacrifices before there would be progress and stuck with it, even borrowing money from friends to finance Danotek’s payroll.
His determination to see the idea through eventually gained Danotek the support of private equity and venture investors, and he began winning large turbine companies over with his vision and enthusiasm for harnessing the full potential of wind energy in a cost-effective and sustainable way. Before long, Danotek Motion Technologies had secured financing, and the company was well on its way to building a state-of-the-art company, and in 2008, several major wind turbine companies signed a contract to develop up to three of Danotek Motion Technologies’ three megawatt generators.
The market growth, coupled with the profitability of the business, has led Gizaw to focus his business plan on renewable energy and transportation.
How to reach: Danotek Motion Technologies, (734) 426-5976 or www.danotekmotion.com
Each day, Joanne Ducker Ulnick encourages her team at Ducker Worldwide LLC to live the five core values that her father, William Ducker, established when he started the company 50 years ago. The only difference is that she has added a sixth value added to that list: “Ducker’s team members are our key asset which we support, develop and grow.”
With as strong a focus on her people as she has on her clients, Ulnick has continued her father’s legacy of being a pioneer in the business-to-business market research industry. Yet as CEO and managing partner of strategic consulting and research firm, she hasn’t always had an easy road.
Ulnick led the company through challenges including a major loss of senior management, an international expansion strategy, the loss of her father -- and the company’s leader -- and the most recent challenge of a worldwide economic recession. Although many of Ducker’s clients had budgets reduced as much as 90 percent, Ulnick and her team made it their goal to help clients navigate the economic storm by providing them with strategic insights and advice, whether they could pay for it or not. She also maintained a focus on building a culture of mutual support and loyalty to keep her people engaged and motivated.
By investing in clients as partners and demonstrating perseverance and resolve to her team, Ulnick ensured Ducker didn’t lose a single client in this time, and the average client relationship is 15 years.
In 2009, Ulnick saw an opportunity to further expand Ducker’s service offerings, leveraging the firm’s core competencies to become involved in mergers and acquisitions planning. With the new service lines in place, Ducker Worldwide projects annual revenue increases of more than 25 percent over the next five years.
How to reach: Ducker Worldwide LLC, (248) 644-0086 or www.ducker.com
Before research and development was even a department at Duperon Corp., Terry Duperon was already ensuring it played a major role in the vision and direction of his company. From the launch of the company in 1985, Duperon has emphasized that ongoing innovation in ideas and technology would be critical in moving his company forward as a leader in manufacturing mechanically cleaned barscreens and complementary equipment, which is used to manage wastewater, storm water, raw water intakes, beautification and barriers for fish and other aquatic life.
In fact, it’s largely because of Duperon Corp.’s ever-evolving product lines and its patented designs that other vendors are unable to compete. Duperon, who serves as chairman, says the company’s goal is to obsolete itself every seven to 10 years, because if it doesn’t, someone else in the market will. And the result has been impressive, as the company has achieved continued year-over-year growth, with several years of more than 25 percent annual growth.
Duperon’s passion for entrepreneurship is clear to his employees, but it also extends to the community, where he serves as a business mentor and teacher. Duperon teaches a course on entrepreneurship called Duperon Education, which employees and community members attend. Through the course, he teaches others with an entrepreneurial spirit how they, too, can harness the ability to invent and recognize opportunities both in life and in business. Ane he plans to keep spreading his passion for entrepreneurship by leading and motivating his employees to pursue their dreams
Despite the challenges of the recession, Duperon’s ability to inspire his team and be an innovator in engineering, design and manufacturing technology has brought his company continued success, receiving recognition in a variety of publications.
How to reach: Duperon Corp., (989) 754-8800 or www.duperon.com
Everyone is familiar with the Golden Rule, but not everyone uses it to their advantage. That’s not the case for Fred Calero, co-founder, president and COO of EnovateIT, a health care technologies company. Everything Calero does adheres to the Golden Rule, and he and his company are better off because of it.
Calero’s story goes back to the late 1990s when hospitals began to look at making the transition to paperless processes. Calero knew this was inevitable and in 2003, started Enovate with an emphasis on customizing products to meet the needs of individual practitioners and moved to being a manufacturer of carts, wall stations and wall arms. Making that shift was the biggest risk of his life. It was in 2009 when the company decided to shift to manufacturing its own products and it faced a difficult decision. Humanscale, Enovate’s primary vendor at the time, comprised more than 90 percent of its business. Does it tell Humanscale that it is going to compete or spring it on the vendor as it releases new products?
Calero decided to tell Humanscale months in advance that Enovate would become a competitor. Humanscale threatened to cut its product supply but eventually came to an agreement with Calero. He knew it would have been easier to just roll out the new products, but if the tables were turned, he wouldn’t want to be treated that way.
Calero also applies the Golden Rule to employees. Any employee who wants to explore different areas of the company will get a chance to do so. In fact, many of his office employees started on the assembly lines. When you treat people right, it fosters employees who love what they do and look out for the company’s best interests.
HOW TO REACH: EnovateIT, (248) 655-0548 or www.enovateusa.com
Bridget Lemberg, director and toxicologist at Forensic Fluid Laboratories Inc., has been practicing toxicology and pharmacology for more than 20 years. And that experience has led her to develop new methods for oral fluid drug testing and technology.
Lemberg started Forensic Fluid Laboratories in 2005 after a pervious start-up she worked for went bankrupt. She took the technology that she had developed there and used it to start her new company.
In the early stages, Lemberg was on her own, running sales by day and doing lab work by night. Now that the company has grown to 30 employees, she no longer has to run double duty, but that growth hasn’t come without its challenges. Lemberg has worked hard to hire strong employees, develop procedures and policies, and create training and performance measurements.
In its sixth year now, Forensic Fluid Laboratories continues to grow and the testing method developed by Lemberg is gaining traction. Using saliva, according to Lemberg, is more effective than using urine in drug tests. The company’s motto used to be, “Pee for enjoyment, not for employment.” The motto has recently been changed to “Spit on a stick, simple and quick.”
Oral fluid testing is more accurate than urine, it is easily observed, no facilities are needed, it’s virtually impossible to cheat and the test will show what drugs and how much of a drug is in the blood, says Lemberg. Lemberg’s company can also monitor compliance for therapeutic drugs such as Vicodin, Prozac, Ritalin and Xanax, as well.
These practices and methods have helped make Forensic Fluid Laboratories stand out among more conventional labs, and its scientific expertise and state-of-the-art technology save valuable time. As an exclusive industry leader, tests only take five minutes and results come back within 24 hours.
HOW TO REACH: Forensic Fluids Laboratories Inc., (269) 492-7700 or www.forensicfluids.com