SI Review: Jan. 8, 2015

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Zoom! Staffing Firm Growth Stories

A combination of processes, people, infrastructure help propel these firms

By Craig Johnson

Companies on this year’s list of fastest-growing staffing and talent engagement firms chalked up some impressive numbers. Take InGenesis, for example. It had a compound annual revenue growth rate (CAGR) of a staggering 132.7 percent since 2009.

Many other firms had notable performances as well.

This year’s list featured 97 firms with compound annual revenue growth of 15 percent or more from 2009 through 2013 — excluding acquisitions. The top 10 posted a median compound annual revenue growth rate of 56.8 percent.

But what are these firms doing to produce such results? To help understand, we interviewed executives at the top three fastest-growing staffing firms on the list. Among the areas of focus these firms cited as factors in their growth were processes, people and infrastructure.

Here are their stories:

#1 InGenesis

CAGR: 132.7 percent
2013 US staffing and talent engagement revenue: $111.7 million

InGenesis, based in San Antonio, Texas, specializes in providing large-scale workforce solutions. These are often long-term deals, in which InGenesis’ external, contingent employees remain for five or seven years, says founder and CEO Veronica Edwards. Establishing effective long-term relationships can take up to two years in some cases. The company has focused in the healthcare space, but it is diversifying.

Edwards began the company in 1998, and she remains the sole owner.

A focus of InGenesis is on infrastructure improvements that enhance customer service and align with the largest firms in the field — enabling a back office to be in place to match the company’s growth. “We haven’t had to stop and build the back office,” Edwards says, “We continuously focus on where we want to be in five years, and work every day to be that company.”

It also centralized its infrastructure at its San Antonio headquarters, she says. “Being all under the same roof and having the opportunity to centrally manage our processes is one of our strengths.”

Edwards was named the US Hispanic Chamber of Commerce’s Businesswoman of the Year in 2011 and Inc. magazine also named her one of the Top 10 Female Entrepreneurs. And Edwards was named in this year’s North American Staffing 100 list of the most influential people in staffing. She is also working on a doctoral degree, and her dissertation is on assessing the willingness of healthcare providers to respond to a chemical, biological, radiological or nuclear (CBRN) disaster event.

“I surround myself with professionals from diverse industries, and encourage creativity and collaboration,” Edwards says. “Often, unusual ideas create the best opportunities for new growth.”

One of the challenges facing all staffing firms will be updating their infrastructures for the Affordable Care Act, she says. “The next 24 months will be defining — you either emerge or you fail.”

#2 EHD Corp.

CAGR: 83.2 percent
2013 US staffing and talent engagement revenue: $24.0 million

Michael Claudio is CEO of EHD Corp., a Brentwood, Tenn.-based staffing firm. The company’s business is about 60 percent industrial and 40 percent technical, engineering and IT.

EHD focuses heavily on the automotive industry, which is part of where the firm’s success has come. The auto industry has fully recovered from the 2008-2009 recession, and there are about 15 auto plants within 500 miles of Nashville.

“We’ve been a part of a recovering sector,” Claudio says. “But we’ve adapted the recruiting process and sales process — and using our engineering history and heritage — established some real methods and processes to deliver and execute.”

EHD supplies workers to many “tier 1 suppliers,” the companies that ship directly into the auto companies themselves.

Claudio says the company’s business is about 90 percent automotive, but it’s working to diversify.

EHD relocated to Nashville about three years ago; it was started in 2002 in Birmingham, Ala. Claudio, who is an electrical engineer by training, began the company with Michael Huffman, who is CFO. Right now, Jeff McKeehan is a partner and president of the company and Aaron Adcock is VP of talent acquisition. McKeehan and Adcock have been pivotal in helping drive the organization as far as putting processes in place, Claudio says.

The company also believes in giving back. EHD purchased gifts for children in 12 hospitals in areas where it conducts its services. Team members and their families came together to bag gifts for the appropriate age groups and sign cards. It delivered more than 3,000 gift bags during September.

#3 ALKU Technologies

CAGR: 77.4 percent
}2013 US staffing and talent engagement revenue: $38.2 million

ALKU Technologies, an Andover, Mass.-based staffing firm, has four main staffing divisions that provide contingent SAP consultants, contingent PeopleSoft consultants, quality assurance contingent personnel to life sciences firms, and a Herndon, Va.-based division that provides security-cleared personnel.

“Although the industries are a little bit different, the concept behind them all is the same,” says Nathan O’Keeffe, a director at ALKU. “It’s consultative-type roles where we are called upon to find specialized technical help.”

ALKU began in 2008, and O’Keeffe has been with the firm since April 2011.

O’Keeffe credits ALKU’s people and process for its phenomenal growth.

“A lot of sales organizations are focused on results,” he says. “We are certainly a very sales-focused company, but instead of making that our priority we focus more on the process and all the steps that go into putting a deal together.”

ALKU concentrates on the process of staffing and getting the deals done and training people to do the job.

“We believe in the process to the point where we’re so good at it — and we focus on it so much — the results take care of themselves,” O’Keeffe says.

The people are also important. In fact, ALKU was named to Staffing Industry Review’s 2014 Best Staffing Firms to Work For list.

“The people are definitely the engine to this whole thing and we’ve managed to assemble a group of extremely hardworking individuals that work day in and day out at getting better at what they do,” he says.

Looking at the list

InGenesis, EHD and ALKU turned in exceptional growth from 2009 through 2013. The other 94 firms on the list of fastest-growing staffing firms also posted stellar growth. And more staffing firms are posting higher growth numbers. This year’s list featured 97 firms, up from 92 in the previous year’s list.

Many of those firms posted IT as one of their top segments, with 40 of the fastest-growing firms doing so out of the 97 firms on this year’s list. Another 30 reported industrial as their top segment served.

Firms on the list also ranged in size from small to the largest staffing and talent engagement firm in the US — Allegis Group.

Corporate members of Staffing Industry Analysts can download the full list at www.staffingindustry.com

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Methodology for the list of fastest-growing staffing firms

Revenue included US staffing and talent engagement revenue. Talent engagement revenue is defined as professional employer organization (PEO) net revenue, recruitment process outsourcing (RPO) revenue, payrolling net revenue, online staffing revenue and managed service provider (MSP) fee revenue. To qualify for the list, staffing firms had to post at least $1 million in revenue in 2009 and have compound annual revenue growth of at least 15 percent between 2009 and 2013. All numbers are self-reported. However, the top 10 fastest-growing firms had to provide audited financial statements to verify the numbers or provide verification of the numbers on company letterhead when audited financial statements were not available. Only organic revenue growth was considered. Revenue was adjusted to remove growth from acquisitions.

Craig Johnson is managing editor. He can be reached at cjohnson@staffingindustry.com