As G&A Partner‘s President and CEO, John W. Allen oversees the daily operations of the company and is heavily involved in the strategic outlook and growth of the firm. Before co-founding G&A with Chairman Tony Grijalva in 1995, John was a consulting partner with Grant Thornton, where he worked with emerging-growth companies and cultivated his management consulting and financial expertise.
A PPACA-certified and licensed life and health insurance agent, John is actively involved in the Houston business community and is a member of the American Institute of Certified Public Accountants, the Texas Society of Certified Public Accountants, and the Houston Chapter of the Texas Society of Certified Public Accountants. He earned both his bachelor’s degree in accounting and his master’s degree in management consulting from Brigham Young University.
Connect with John on LinkedIn.
What You’ll Learn In This Episode
- About G&A Partners
- What is a PEO?
- Services offered by a PEO
- Benefits SMBs can get in working with a PEO
- Future plans for the company
This transcript is machine transcribed by Sonix
Lee Kantor: [00:00:15] Lee Kantor here another episode of Houston Business Radio, and this is going to be a good one. Today on the show, we have John Allen, who is the CEO and president of G&A Partners. Welcome, John.
John Allen: [00:00:28] Thank you.
Lee Kantor: [00:00:30] I’m so excited to learn what you’re up to. Tell us a little bit about G&A. How are you serving folks?
John Allen: [00:00:36] Well, G&A Partners is a HR outsourcing firm. We primarily work with smaller emerging growth companies, and we tackle their back office challenges so they can focus on growing their business and doing what they got into business to do in the first place.
Lee Kantor: [00:00:54] So what’s your back story? How did you get involved in this line of work?
John Allen: [00:00:58] Well, that’s a long story. I’ll give you the short version. I came out of public accounting and years ago listen to a presentation on a concept called employee leasing. I was fascinated and when the opportunity came for me to transition from the accounting world into the human resource management space, we decided to become the preeminent, privately held professional employer organization in the state of Texas and kind of follow or implement the strategies that we heard in that employee leasing presentation.
Lee Kantor: [00:01:33] So for those who aren’t familiar, can you share a little bit about what RPO is?
John Allen: [00:01:39] Sure. The acronym stands for Professional Employer Organization. And in essence, we become a service provider or a co employer to small businesses and tackle back office tasks like payroll benefits, human resource management and risk management. So we provide those services again. So a small business owner can focus on other things.
Lee Kantor: [00:02:06] And then what is the typical is there a typical type of industry that this is most beneficial for, or is this something that every company should at least consider?
John Allen: [00:02:18] There are CEOs that service all types of industries. We’re certainly one of those. Some focus on blue collar, some on white collar, some on the entire spectrum. But any business that is looking to outsource HR could benefit from the services of a CEO. They tend to be smaller businesses, so our niche is typically 20 to 200 employee clients, but we’ve got clients that are smaller than that and clients that are larger than that. But that’s kind of the focal point because most of those businesses don’t have the resources to hire HR talent, HR technology and so forth.
Lee Kantor: [00:03:01] So what like if I’m a business owner and maybe I’m approaching that 20 person size, is this something that like share with me like kind of the trade offs? What are kind of the pros and cons of doing this?
John Allen: [00:03:16] Well, obviously, from my perspective.
Lee Kantor: [00:03:17] There’s I know there are all pros, but hypothetically, if there were a con, what would that be?
John Allen: [00:03:23] Well, if there were a con, I think that some small business owners think that they’re somehow giving up control over their employee base to the to the peo. It’s really not the case. We’re providing services, but ultimately the decisions that drive a business forward and that determine whether a person is hired, fired, promoted, etc. all those are decisions made by our clients. We’ll provide advice and counsel recommendations, but ultimately our clients do control what happens in the workplace. But that’s an area that requires us to educate small business owners because they fear that they might be giving up control. The other concern, of course, is cost. And so there’s a process that goes have to go through to justify the investment the small businesses make in our services and the kind of return that they get from those investments.
Lee Kantor: [00:04:26] So what’s what are the returns? So can you share a little bit about what kind of an ROI a client might expect?
John Allen: [00:04:33] Sure. You know, about a year or so ago, our trade association, the National Association of Professional Employer Organizations, actually engaged an outside consulting firm to analyze exactly that. And if memory serves me right, I think the ROI average across a broad array of clients that were part of the survey was a little over 27%. So for every dollar that somebody spent on PEO services, they were getting a dollar 27 in cost savings in return. And those cost savings typically come from not having to invest in HR talent, HR technology, cost savings on employee benefits, cost savings on workers comp insurance premiums. And again, those cost savings typically offset in most cases, the fees that we charge for the services that we provide.
Lee Kantor: [00:05:32] Now, some of the benefits, if I’m a smaller company, you have some economies of scale that I can’t possibly have. So I can offer a more robust benefits package than I could if I was just doing this on my own.
John Allen: [00:05:46] Yes, absolutely. So, I mean, we payroll over 85,000 people across some 3000 plus clients. So that gives us purchasing power that most small businesses just don’t have. And so when it comes to employee benefits, we can put together a Fortune 500 benefit program at cost that small businesses can afford, and so they can get various choices on group medical, dental vision, various ancillary products, access to a 401. K that would be a lot more expensive if they went out on their own. So again, Fortune 500 benefits for affordable small business cost.
Lee Kantor: [00:06:30] And then in today’s time where it’s so difficult to attract and retain quality employees, this having a robust benefit package I would think is now a must have not a nice to have.
John Allen: [00:06:43] Yeah in today’s market it is extremely important. So I mean, there’s a war for talent. And so one way to differentiate yourself from a competitor down the street is through your benefit program. And to be able to get that more affordably is obviously key to most small businesses.
Lee Kantor: [00:07:05] Now, can you share a story? Don’t name the name of the company, but explain the challenge that they were having before they started working with you. And then how working with you took them to a new level.
John Allen: [00:07:18] Sure. Well, I can think of several, but I’ll just focus on one for the time being. I had a relationship with this particular the the owner of this particular firm when I was in public accounting, made several attempts to secure their business and was unsuccessful. And then finally we had the opportunity to do business. He’s since been a client, I think, for 20 plus years. What drove him to us is they were a startup. They had innovative technology, they were manufacturing kind of a neat product and going to market, and they wanted to focus their resources on the engineering and production and then sales of that product. They didn’t want to deal with the hassle of payroll administration and providing or shopping for benefits and mentoring benefits, dealing with HR compliance issues and so forth. So they outsourced that to us so they could focus on growing their business. They now dominate their market. I think they have like over 80% market share. They’ve gone from just a handful of employees to somewhere between 80 and 100 employees working three shifts. They’ve expanded their manufacturing facility, I think, on four separate occasions. They now have a state of the art manufacturing facility on the north side of Houston. And so, again, over that 20 year period, they’ve they’ve grown from being kind of a lifestyle business where they’ve been able to scale the business, and now they’ve become a dominant factor in their in their particular industry.
Lee Kantor: [00:09:05] And in this case, it’s an example of when you’re working with a client, you’re really a partner with that client. You’re trying to help them solve this talent issue as effectively as possible.
John Allen: [00:09:17] We are, and that’s the reason why we’re called GINA Partners. As we search for how to brand what we did, we decided that partnering with our clients and their employees, with our vendors, with our own employees, that that was going to be paramount to our success. And so it became part of our name.
Lee Kantor: [00:09:39] Now, for you personally, do you is this more rewarding work than being a CPA?
John Allen: [00:09:47] Yeah, certainly is. You know, I was a consulting partner with a national CPA firm, so I got to do some some fun and exciting stuff and have an impact. But in this role, the work that I’m doing is far more diverse. Its impact is far more significant. So yeah, I love what I do and I have a lot of fun doing it.
Lee Kantor: [00:10:14] When you made the switch, what were some of the clues that you had that, hey, this thing is going to get some traction and this thing’s really going to blow up?
John Allen: [00:10:24] But you know, initially my partner, my longtime business partner and I started this and it was more of a lifestyle business. It was a way to provide for our families and for our employees. We didn’t have an elaborate business plan that that described how we were going to get from where we were then to where we are now. So we’ve taken advantage of opportunities that had been presented along the way. We’ve been incredibly blessed along the way as well. I’d love to tell you this is all part of a master plan, certainly wasn’t part of our master plan, but we’re delighted to be where we are. And it’s been a wonderful journey.
Lee Kantor: [00:11:10] So what do you if you look into your crystal ball, what are you looking at as we enter the fourth quarter and into 2023?
John Allen: [00:11:20] Well, if my crystal ball was crystal clear, I’d be heavily invested in the marketplace trying to try to make money that way. But it’s hard to forecast the future. I mean, as I look out over the near term, obviously we have a very important election on the horizon and the outcome of that election will certainly have an impact on policy and on the economy. So I’m anxious to see how that turns out, both within the state of Texas and and elsewhere and on the national scene. I do think that if you look at the economic numbers, we meet the definition of a recession, although we do have a number of people that are waiting for additional signs. We’re not seeing a huge downturn in the business that our clients provide. So while the economy while the growth rate is stymied, we still have record employment levels and a war on talent. And so we’re not seeing our clients anyway laying off people. We are seeing larger clients do some of that and firms in the technology space doing some of that. But we’re not seeing that any of that within our client base. As I look out a little bit further. I think the prognosticators would suggest there will be some sort of recession. So there will be a dip. And we as a service provider to small businesses and our small business clients have to be prepared for that and we’ll have to take some corrective action. But it looks like the dip will be small and short in duration, so that’s encouraging. So we’re not losing too much sleep over where we see the economy going over the next 6 to 24 months.
Lee Kantor: [00:13:23] Now, I would imagine a year firm and firms like yours are kind of leading indicators for some of this stuff.
John Allen: [00:13:32] We certainly can be. I know when the pandemic hit, we we lost about 15% of our worksite employees, worksite employees or those that work at our client company. So once we went into quarantine, we had a number of clients that laid people off, terminated people outright, furloughed people temporarily while they try to figure out what was going to happen. For many of those clients, those layoffs lasted for two, three, four, five, six months, a lot longer than anybody anticipated. But once we started to emerge from that chaos, most of those clients hired their people back and employment levels returned to kind of where they were. We actually had a very good 2020, a very good 2021 in spite of those unprecedented times. And it was a moment in time where our clients needed us more than they ever needed us before. And our net promoter scores that kind of assess satisfaction with our services were at all time highs. We were helping clients with PPE, loan applications and just all kinds of HR issues as they dealt with the the the impact of the pandemic and the quarantine. So hopefully we won’t see that again in my lifetime or ever. But we were in a unique position to help our clients through that and most did rebound and are doing well in spite of some of the uncertainty in today’s economy.
Lee Kantor: [00:15:26] So what’s next for Gina partners? What do you need and how can we help?
John Allen: [00:15:33] Well, we made the decision several years ago to scale the organization to transform from being a lifestyle business to being a major player in our industry. And that strategy included scaling our sales organizations. So that has grown dramatically. It included expanding geographically. Most of that we did through a creative acquisitions. And then the last leg to that three legged stool, if you will, was to provide phenomenal customer care and hang on to the clients that we brought on, either through organic sales or through acquisitions. We’ve been very successful in that effort, knock on wood, and the strategy is to continue to do that and constantly tweak how we provide services, how we make a difference in the business lives of our clients and their employees, how we provide value. So our plan has been working and we just want to execute it even better than we have heretofore.
Lee Kantor: [00:16:38] Now, are your clients primarily in Texas or are they all over the place?
John Allen: [00:16:44] Houston is our home and we’ve got four other offices here in Texas, and probably over 50% of our clients and our worksite employees are domiciled in the state of Texas. But we’ve got, I think, 15 other offices. Well, that outside of Texas, we probably have another ten offices, mostly in the Midwest or in the southwestern United States, and and are looking for other opportunities to expand where it makes sense. But Texas is home. And so it will continue to get a great deal of our our focus and consideration.
Lee Kantor: [00:17:25] Well, if somebody wants to learn more, have more substantive conversation with you or somebody on the team, what is the website? What’s the best way to get a hold of you guys?
John Allen: [00:17:33] Well, our website is w w w Gina partners and that Jean, that’s MN is in Nancy. And they can certainly call our our main number as well at 713784 1181. And any of our employees would be happy to answer questions and provide information.
Lee Kantor: [00:17:57] Well, John, thank you so much for sharing your story today. You’re doing important work and we appreciate you.
John Allen: [00:18:03] My pleasure. Thank you so much.
Lee Kantor: [00:18:05] All right. This is Lee Kantor. We’ll see you next time on Houston Business Radio.