Finalist: Virginia Dorris and Dori Rath

Finalist: Virginia Dorris and Dori Rath

CEO and President of Nelco Co.

Is an annual Halloween party a good way to judge a company's success? The creativity that goes into the October shindigs at the NELCO Cos. may provide a clue as to how Virginia A. Dorris has commandeered her 20-year-old Bradenton employee-leasing agency into the nation's 17th-largest professional employer organization with more than $225 million in gross revenue last year.

"It's just been unbelievable," says Dorris. Not the explosive growth of NELCO, which was founded as the National Employee Leasing Co. Inc. She's talking about the Halloween bashes.

"We have a great, great social committee," says Dorris.

NELCO departments each have their own theme. One year, the payroll department had an Egyptian theme, with imported sand. HR had a Key West theme, with a Jimmy Buffett strummer.

"The camaraderie helps them keep enjoying what they're doing," Dorris says. That often entails 80- to 120-hour work weeks.

Dorris, a tax accountant by training, moved to Florida in 1984 from California, where she had handled the financial tasks of groups of attorneys and physicians.

"I liked the idea," says Dorris. "But what I was seeing wasn't exactly kosher.

"What they were doing is screwing the employees and helping the doctors and lawyers sock away as much as they could in the 401(k) plans and doing as little as possible for the employees."

Dorris says she pitched Manatee County professionals on letting her take care of their payroll, pension and other personnel issues in a manner that would reduce the chances of attracting the attention of the Internal Revenue Service. "We're trying to keep 'em legal," she says. "I started with nothing. We were in a little bitty trailer."

As NELCO signed up more clients, the company developed its own software to record additions, subtractions or any alterations made to personnel records. "As somebody who has raised three children, I know about he-said, she-said, how it's always somebody else's fault," says Dorris.

"Everything is tracked," she says. Dorris believes technology is what sets NELCO apart.

In 1990, the state began to regulate employee-leasing firms, which added between $10,000 and $15,000 to the cost of running NELCO. So Dorris handed off the accounting side of the business to her daughter, Dori A. Rath, and focused on signing more PEO contracts.

Dorris relied on accountants and insurance agents to refer her new clients. She concentrated on workers compensation insurance, doing her own underwriting and claims processing. Workers' comp has typically generated about 80% of NELCO's profit.

During the past four years, NELCO has acquired four other PEOs. Dorris weeds out clients of each acquisition that are misclassifying employees, making under-the-table payments or engaging in other questionable conduct. "You can't do that and be a successful business," she says.

Employees at NELCO, besides creating memorable costume parties, are encouraged to be innovative in other ways and come up with new business lines. Dorris and Rath provide startup capital, office space and an equity position in the subsidiary for the employee who comes up with an idea. Every one of the new ventures has been profitable or been sold for a profit.

NELCO now supervises more than 10,000 workers in 41 states and a couple of foreign countries.

Annual revenue increases have averaged 16% in recent years, but could have been higher. "It's fairly controlled growth," Dorris says. Through greater efficiency, NELCO is squeezing more profit out of the carefully managed growth in revenue.

"Our tech department stays one step ahead of our business development department," she says.

Dorris, 62, was hoping to relinquish the chief executive's title and step back into a chairwomanship role this year. But Rath, who became NELCO president in 2004, has lately been consumed by a new enterprise, Teen Arrive Alive LLC, which uses electronic monitoring to discourage reckless driving by teenagers.

"I'm going to be around for a little while longer," says Dorris.

COMPANY STATS

Employees: Internal: 2003: 64; 2004: 70; 2005: 72. All: 2003: 10,902; 2004: 10,421; 2005: 12,000.

Gross Revenue: 2002: $170 million; 2003: $211.5 million; 2004: $227 million.

Net Income: 2002: $503,035; 2003: $1.9 million; 2004: $1.98 million.

Average annual growth: 15.9%