Staffing Industry Report
www.staffingindustry.com
Vol. XVII, No. 18
September 29, 2006
p. 1, 8, 11
FASTEST-GROWING COMPANIES
The 25% club expands
32 make this year’s list of staffing’s hottest private companies
One makes sure its employees are healthy and know how to get to a job on
time. Another conducts drug tests three times a year. And another paid
contractors even though they couldn’t work during last year’s
hurricanes.
Those are among 2006’s best and brightest private staffing firms that
made Staffing Industry Report’s second-annual Fastest-Growing Staffing
Companies list.
The
companies on this year’s list all had growth of 25% or more, averaged
annually over the past five years. The 32 companies that made the cut
this year mark an increase from last year, when the list was 26 names
long (SI Report, Sept. 16, 2005, p.1.) Ten are returning from
the year before.
The companies
averaged 57% growth over the years 2001 through 2005. Median growth was
42.1%.
We asked
companies to submit revenue data starting in 2001 – when, as one
executive told us, “the phones stopped ringing” – to the end of 2005, by
most measures a great year for the industry.
In
fact, three of the companies in the top 10 started in 2001 – Platinum
Select, Insight Global, and FirstTeam Staffing.
The list is a
cross section of the industry, and its members range in size from $4
million in sales to more than $100 million. The largest, Apex Systems
Inc. had 2005 revenue of $183 million. The average company size was $45
million.
All companies
are private and individually owned and operated, although one, S &Gualda,
is a franchise. Two are owned by the same entrepreneur, Mark Elwood, but
are different companies in different states.
In terms of
specialties, temporary commercial staffing was prevalent. Many, however,
place professionals in accounting, information technology and healthcare
jobs. Geographically, Texas claims the most headquarters with five, but
Atlanta has four. Illinois is also home to four,
Massachusetts has three, and California, two.
No one magic
formula emerges from the tales the top 10 on the list told us. But one
theme that did resonate with several of the CEOs was that they paid
strict attention to their business – and measured quality and
production. “We’re intellectually honest with ourselves and
constantly try to improve,” said Jim Humrichhouse, president of Pinnacle
Technical Resources, which grew from $2.7 million in 2001 to $41 million
last year.
Personal service
was also a priority with many of the firms. For example, CEO Glenn
Johnson at Insight Global Inc. also oversees sales.
Our methodology
Staffing’s fastest-growing were selected from a list of more than 70
companies that submitted responses to out questionnaire. To be eligible,
a company must be privately held, U.S. headquartered and independently
owned, and must have had sales of at least $1 million in 2001.
The ranking
is based on an average of the company’s percentage of revenue increase
each year from 2001 through 2005.
We averaged
the annual growth percentage for each year to come up with an average
annual growth rate. To keep things as fair as possible and get a sense
of who is growing fastest
organically, we adjusted revenue to exclude the effect of acquisitions.
America’s Fastest-Growing Private Staffing Companies
(with average revenue growth above 25%)
7 Addison Professional Financial Search
Chicago
2004 revenue: $15.1 million
2005 revenue: $21.5 million
Five-year growth: 62.2%
Founded: 1999
Employees (internal): 75
The recession turned out to be a good thing for Addison Professional
Financial Search, said Joel Katz,
despite the fact that the company launched its information technology
business on Sept. 4, 2001. “I think
that was the worst week in the history of the world for IT staffing,”
said the 38-year-old CEO. “After
September 11 was a very scary time, and we were wondering if any of our
clients would ever hire again.”
But while the economy suffered for the next two years, Katz and his
employees persevered, going
out and trying to find new accounts to replace those that went away. The
Chicago firm did win new
business, and when old accounts started needing temporary help again, it
was on sound footing and
revenue had risen by more than 60% by the end of 2002. “I ended up
giving bonuses in 2001 and we were
profitable,” Katz said.
Katz started out in public accounting with PricewaterhouseCoopers, but
got into staffing with
AccountPros, now part of Vedior. He opened offices in Los Angeles and
Orange counties for
AccountPros, as well as in Chicago, where he went out on his own in
1999.
Today, the firm does about 46% accounting and finance staffing, about
the same in IT and the
remainder in clerical – mostly on a temporary basis. In addition to the
Chicago headquarters, Addison has
offices in Houston and Boston.
The sweet spot is placing senior accountants through controllers on the
F&A side, both temp and
perm. In IT, most of the placements are contractors for a diverse group
of client industries including
manufacturing, real estate, and oil and gas. “We like the middle market
– like divisions of Fortune 500,”
Katz said. Over the past five years, he estimates, the company’s had
more than 700 clients. “We’re very
good at cross-selling our services. Our people are very good about
ferreting out what clients need,” he
said.
Growth has come entirely organically, and while Katz said he’d like to
add more offices, “it’s more
important to be profitable than large.” He wants to keep the hands-on
approach and possibly add
additional lines of business, such as legal.
As for the name Addison, it’s a family name, in a certain way. It’s not
something Katz publicizes,
but Addison is his 10-year-old chocolate Labrador, which is named after
Addison Street in Chicago, near
Wrigley Field.
