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Jill Lerner
David Zell readily admits his
business has been as hard hit by the falloff in IT recruiting
as many of his competitors.
Revenue for his Waltham- based
IT recruiting firm Logix Inc. fell from a peak of about
$10 million in 2000 to around $6 million last year. And
this year, he's "hoping" to do $3 million.
Unlike many of his competitors,
however, Zell has weathered the downturn with a minimum
of staff turnover.
While his staff of 22 recruiters
is down from a high of 35 of a year and a half ago, he says
the shrinkage is the result of attrition and not layoffs,
thanks to a "cost containment" system he implemented last
August.
If recruiters fail to generate
revenue for three months in a row, they are given the option
of becoming "independent contractors" without benefits,
rather than being let go.
As an independent contractor,
employees can choose to pursue one of two options: They
can either pick Plan A, in which the employee maintains
a certain number of hours weekly on site at Logix, or Plan
B, which is more of a part-time job.
Independent contractors can take
advantage of the structure and support of Logix, such as
using the company's offices, computers and phones, but no
longer receive certain perks and must pay for their own
health and dental insurance.
As such, Logix loses very little
on employees who are not generating revenue, and employees
who have contributed in the past but are now struggling
remain on board, can try and recover their status and perks.
Zell said 13 former full-time
employees are currently independent contractors, and five
employees who at one time or another over the past year
were independent contractors, have since been reinstated
to full-time staff status.
"All we are is our people," said
Zell, who described the independent contractor system as
a "matter of survival."
Nonetheless, the system by itself
isn't enough to ensure the viability of the company in these
tough times.
For additional cost containment,
Logix has laid off its administrative assistant, reduced
staff salaries as well as Zell's salary, and has renegotiated
its lease for a savings of approximately $100,000 over the
next couple of years, Zell said.
"We're not doing well, but we'll
survive," he said.
Copyright
2002 American City Business Journals Inc.
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