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Title: Message
USIS conducts
investigations from underground base
Ethan Lott
James Bond
pops readily to mind when visiting the home of US
Investigations Services in
Slippery Rock.
And it would take 007 to infiltrate this mountainside complex
situated
behind a guarded gate deep within a former limestone mine. Each
day,
more than 500 of the 2,000 USIS employees go about their
investigative
business within these rock-walled tunnels.
Should he decide
to accept it, the mission for Barry Kingman, vice
president of human
relations at USIS, is to hire another 800 people this
year. Between 100 and
200 of those hires will be in the Butler County
area, making USIS one of the
more active employers in the area.
"We're looking for people who are steady
and reliable," Mr. Kingman
said. "There is so much at stake. You could end up
with a drug addict
with national security clearance."
Mr. Kingman said
prior investigative experience is not necessary. People
with backgrounds in
the humanities, English, sociology and other fields
make good investigators.
He said an exception might be someone looking
for a job to show off his wild,
creative side.
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Competition for these jobs is fierce. Last year, the
company hired 471
people across the country. To fill those slots, it received
21,000
resumes, an average of 45 per hire. The resumes come in from word
of
mouth, from Internet job postings and from the help-wanted ads
USIS
places in about 20 metro daily papers every Sunday.
Always diligent,
the company did 7,500 telephone screenings, conducted
5,200 first interviews,
2,400 second interviews, made 1,600 offers and
did 800 background checks
before landing its 471 new USIS workers.
From a first interview to a first
day of work, it takes two to five
months for USIS to make a hire.
If that
seems like a lot of details and numbers, that's what USIS is
about -- getting
the facts and checking every detail.
A MODEL PRIVATIZATION
USIS
was created to rescue a federal agency from red ink.
Formerly the
Investigations Services arm of the Office of Personnel
Management, the
department handled background investigations for federal
agencies. USIS'
lineage dates back to 1883, when the Civil Service
Commission was established
two years after President James Garfield was
assassinated by a man who did
not receive a political position he
expected. The commission was to guarantee
federal hires were based on
merit and that workers had suitable backgrounds.
In 1978, OPM was
created to oversee about 300,000 background checks annually.
For the
past quarter century, this investigations operation has been housed
in
the former mine where the government stores personnel files.
OPM's
investigations unit was supposed to break even by charging other
government
agencies for its services, but instead it was draining $1.5
million per month
from the tax coffers. James King, now a presidential
fellow at Trinity
College in Hartford, Conn., was director of OPM when
he came up with the idea
to privatize investigations and create USIS.
The alternative was to dissolve
the organization and contract out
background work. But Mr. King felt that
would have been unfair to the
Butler County operation.
"We were talking
about people's careers, people who were doing some of
the best work I've seen
done," he said.
Mr. King's plan called for those workers to become the
owners of the
operation. About 650 of the 721 investigative employees
accepted offers
to move to the newly privatized USIS at the same or better
salary -- and
as owners. Private sector managers were attracted to USIS with
offers of
equity. It took three years of work and political hand-wringing to
get
done, but in July 1996, USIS went private.
The top executives,
including chairman and CEO Phil Harper, a retired
U.S. Army lieutenant
colonel who left a job as president of Wells Fargo
Alarm Services, moved to
northern Butler county and began a strange
daily commute.
USIS workers
park in a multilevel lot along a rural road about five
miles east of Route 8,
16 miles north of Butler. They walk down toward
the mine, enter the guarded
gate and get their ID badge, then head down
the tunnel to USIS' "storefront"
cut into the rock. A few hundred yards
past the doors to USIS is the entrance
to another mine tenant. Most of
the other companies in the mine are
storage-related firms -- MGM stores
some of its valuable movie prints in the
temperature and humidity
constant underground world.
There are more than
30 miles of roads twisting their way through the
inside of the mine --
employees use the caverns for lunch-break
exercise. Employees say that after
a while, they get used to the
lair-like surroundings. But it's impossible to
forget you're
underground. White paint covers jagged rock walls. Open-toed
shoes and
open flames are banned by state mine regulations, so steam-warmed
meals
are brought in daily to feed USIS workers.
For giving up the
ability to wear sandals or have a window, USIS
employees gain shares in the
company's Employee Stock Ownership Plan.
ESOP-companies vary in the way they
reward workers and involve them in
decisions. In 1999, USIS put its money on
the table for workers, taking
$55 million out of the company and distributing
it to employee-owners as
dividends and bonuses. More than 100 employees got
more than $100,000,
with the average worker getting about $30,000.
SAVING
TAX DOLLARS
USIS boasts that on average it completes a 35-day contract
in 24 days.
"We don't lose customers once we gain them," said Owen Seaton,
executive
vice president.
A University of Michigan study predicted
privatization could save the
government $25 million to $30 million over five
years. In reality, it is
projected to end up saving about $125 million over
that period.
The company's growth was aided a year ago when The Carlyle
Group, a
Washington, D.C.-based private investment firm, purchased 25 percent
of
USIS. Adam Palmer, vice president of The Carlyle Group in
Washington,
said its investment in USIS comes as USIS looks to grow its
customer
base and make strategic acquisitions. Carlyle brings M&A
expertise and
financial muscle to USIS.
"They're in a stage where they
are looking to go to the next level," Mr.
Palmer said.
The Carlyle Group
was first attracted to the interesting story of USIS.
"We were curious and
skeptical," Mr. Palmer said. "But we were very
impressed with the tremendous
management and employees."
Mr. Palmer said he doesn't see any reason why
USIS can't grow to be as
large as ChoicePoint Inc. of Alpharetta, Ga., a
public company with 1999
revenue of $517 million. Through it focuses more on
insurance
investigations, ChoicePoint is USIS most identifiable competitor in
the
$4 billion annual investigations market.
"The market is enormous,"
Mr. Palmer said.
Mr. King also expects USIS to continue to grow stronger.
"I don't know if there's a corporation out there that could compete
with
them for speed, confidentiality and value," Mr. King said. "I
think
they're going to be competitive for a long time to come."
MR.
LOTT may be contacted at [EMAIL PROTECTED]
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http://pittsburgh.bizjournals.com/pittsburgh/stories/2000/10/02/story1.html
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