FrankCrum

A quiet Florida giant begins to make noise

The measured method of FrankCrum may soon change.

Clearwater, FL – April 20, 2007

It seems like FrankCrum should be a household name around here. After all, the $1.2-billion company has morphed into one of the biggest private companies in the state and occupies an impressive, 14-acre campus on a busy corner in downtown Clearwater.

Even so, the business - and the owner who gave his name to it - has kept a low profile since it was founded in Largo 26 years ago.

FrankCrum Jr. thinks that's about to change. The company, FrankCrum, is a PEO, or professional employer organization, which means it does human resources work for other companies. Crum, 57, also owns Crum Staffing, a temporary staffing firm; and Frank Winston Crum Insurance, a workers' compensation insurance carrier.

Up next: FrankCrum is rolling out a service called Frank Advice. Crum hopes that his 3,000 client companies will use the information, available online and by hotline, to make sure they're following the law when hiring, firing, paying and educating employees.

"Typically in the past, clients would get themselves in trouble and call on us then, after the damage was already done," said Elise Lynn, vice president of legal and business affairs. "Instead of troubleshooting, this is more preventive maintenance."

In an interview this week with the St. Petersburg Times, Crum outlined his challenges and goals. Here is an excerpt:

This past year was a big one for you guys. For starters, you turned 25 (in 2006)...
It was a challenging year.

What was challenging about it?
We decided to do a ($4.5-million) computer conversion. We changed our software for payroll and billing and accounting and our CRM (customer relationship management) package, and we did it all at once. It was probably the most challenging thing I've done in my 25 1/2 years (of running the business).

You also launched a new brand. (The company changed its name from Crum Services to FrankCrum in 2006.) Why?
After 25 years, we decided to hire a marketing company, because we had done well, but we were beginning to realize that nobody knew who we were. The first thing that the marketing firm decided was that... if you said "Frank Crum," people would know that was a person, and they thought that was very important in identifying us as a growing national company but at the same time a family owned company.

What do you attribute your growth to?
We had some really unusual and neat events happen, really. One of the events that was pivotal to us was that CNA, which is a large workers' comp carrier, pulled out of the PEO market all at once and left 26 major PEOs around the country without coverage. We were very fortunate around that time to just maintain coverage and start Frank Winston Crum Insurance (in 2003).

So workers' comp was the right thing to get into at the right time?
Yes, it was. And then the other thing was PEO brokers, who bring you business, came into the marketplace, and that has really helped our growth and the growth of many companies. Because even nationwide right now, less than 3 percent of the companies in the United States use a PEO, so the market potential is really great.

What's next?
The Florida Department of Insurance has given us permission to expand Frank Winston Crum Insurance of Florida into other states. We believe that by late 2008, 2009, it will start to really pay huge dividends for our company as far as growth.

You're already one of the largest private companies in Florida. Isn't going public the next, natural step for growth?
I couldn't foresee me ever becoming a public company. I can't imagine having to answer to hundreds or thousands of stockholders about why you did this and why you did that, or why you failed or succeeded or whatever.

Another large PEO, Gevity in Bradenton, just announced a major acquisition. Do you plan to buy other companies?
We may look into that; we may entertain the concept of buying a regional business to give us a regional presence.