Agency Sees Gains After Shifting to ICs
by Robin Amster /Working exclusively with independent contractors may not make sense for all small agencies but it has proved highly successful for at least one.
Leo Zabinski, owner of Classic Travel in South Carolina, overhauled the staffing model for his brick and mortar agency earlier this year. He transitioned from employing four agents at two locations to working solely with independent contractors.
Zabinski, who is treasurer of ASTA and a member of NACTA, also closed one of his two South Carolina offices, keeping a larger location in Bluffton and shutting down a Hilton Head office.
He now works with about 20 independent contractors, including his former employees and nine new ICs. The ICs have access to the Bluffton office whenever they like for walk-ins, client meetings or other business.
An evolution
“I wish I could say that I sat down and plotted how I could get to this point,” Zabinski said of Classic’s revised staffing model. “But I moved with gradual steps; I think it was an evolution.”
That model has “elements of the traditional [agency business] and elements of the nontraditional,” he said.
And it has already proved a success.
A leisure agency and Vacation.com member, Classic had sales of $1.5 million in 2013. Zabinski expects sales to grow to $2.5 million this year. “We’re experiencing our best year ever,” he said.
Favorable factors
To be sure, the economic recovery has contributed to Classic’s growth.
So too have favorable local conditions, including a growing population of upscale, educated residents who are retired or semi-retired and a strong regional economy.
Beyond those positive business conditions though, are the impossible to quantify but nonetheless real advantages of working with ICs who are essentially in business for themselves.
“It’s a basic premise that those who perceive themselves as self-employed are more highly motivated than those who see themselves as employees,” said Zabinski.
Classic Travel’s ICs manage their own time and their own schedules. “No one has said it to me, but I have the impression that there’s a correlation between the time they [ICs] work and the income they make,” he said.
Office coverage
Zabinski has also found it easier to staff his office.
“There was previously a lot more pressure to schedule people for coverage [of the office],” he said. “Suddenly when you remove the ‘you’ve got to be in the office from A to B,’ it’s a lot easier to get people in. It’s counterintuitive.”
Zabinski said it is still important for an agency to have a bricks and mortar office, because of a lingering notion that “if you don’t work out of an office, you’re not really a professional.”
“I think having that physical office enhances our operations and the perception we project,” he added.
A win-win
Zabinski called Classic’s business model a win-win.
He said it frees small business owners like him from the onerous bookkeeping tasks in connection with having employees.
And it provides frontline agents the freedom, flexibility and control that go with working for oneself, while allowing them to maintain the advantages of being affiliated with an agency.
Zabinski’s independent contractors have Classic Travel’s name on their business cards and use the agency’s letterhead in communications. And they can take advantage of Classic’s status as a Vacation.com agency.
Zabinski hesitates to describe Classic Travel as a host agency. He noted that large hosts like Nexion have thousands of members across the country, in-house staff, and a formal structure that is unlike Classic’s more informal arrangement.
Not for everyone
The business model, however, is not for everyone, he said.
‘It requires a certain demographic to sustain it,” he said. “I don’t think it would work, for example, in a place like New York City.
“The overhead would be too high; the people have a different overall attitude about what a business should look like, and the commercial part of the [travel] business is larger than the leisure end.
“But in selected communities where the demographic is right, I see what I’m doing catching on.”