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September 16, 2005

For the past year, editors at Staffing Industry Report have been gathering ideas, news releases, e-mail messages and other information about fast-growing staffing companies. The list of 26 companies is the result (see link at end of article to download list). For years we have honored the largest staffing firms in the United States. Now it’s time to honor the fleet and nimble, those who were able to achieve rapid growth from year to year in a time of tough sledding for the industry.

To make the final list, companies had to average at least 25% annual growth, adjusted for acquisitions, for the period between 2000 and 2004. The resulting list is a cross-section of the industry, encompassing all kinds of professional and commercial companies, such as medical, information technology and legal. The growth they achieved averages out to more than 50% per year since 2000, far outpacing the total industry growth in 2004 of 12%. That kind of growth is remarkable, considering that three of the five years – 2001, 2002 and 2003 – were not good ones for an industry hit by the recession, the end of Y2K activity and the dot-com bust, as well as other pressures, such as vendor consolidation.

The top 10 had average growth of a whopping 74%. It’s a diverse lot, consisting of two healthcare staffing companies, an engineering specialist, and – contrary to popular opinion about the depressed IT staffing space – several high-tech contractors. All perfected their staffing expertise in bad years and good.

Several in the top 10 also put a twist on the traditional staffing model. As Simon Billsberry, CEO of No. 1 company Kineticom Inc., put it, “We don’t wait around for RFPs.” Some, like ZeroChaos Inc., are beating the competition when it comes to payrolling and outsourcing. Others started specialty divisions to capitalize on particular needs in their markets or put resources toward permanent placement when it became evident that light industrial staffing demand was waning.

Our methodology
Staffing’s fastest-growing were selected from more than 60 companies that responded to our call for entries. To be eligible, a company must be privately held, have had sales of at least $1 million in 2000 and be willing to have revenue numbers published and verified.

The ranking is based on an average of the company’s percentage of revenue increase each year from 2000 through 2004. 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 get a sense of who is growing fastest organically, we adjusted revenue for acquisitions, counting only growth achieved after firms were acquired.

We verified revenue for the top 10 companies from financial statements or audits or reviews prepared by an outside accountant or auditor. Employment numbers refer to full-time in-house employees in 2004.

We hope that this special report allows our readers to continue to learn from each other and inspires more to send in their nominations when we repeat the list next year. Growth is possible in all sorts of markets. Take a look at these stories of companies who made it happen.

1 Kineticom Inc.
San Diego
2003 revenue: $11.0 million
2004 revenue: $52.4 million
Average annual growth: 172.6%
Founded: 2000
Employees: 50

A company that provides information technology and engineering staff to the wireless industry would not be most people’s first guess for the country’s fastest-growing staffing firm. After all, the wireless industry took a big fall in 2001 and has been rebuilding slowly.

But professional staffing company Kineticom Inc. has capitalized on the slide and subsequent climb back up in wireless, an industry that increasingly relies on contractors rather than permanent hires. Recently Kineticom has received more business than ever before, as wireless carriers are forced to comply with a federal regulation (called E911) that requires them to report the telephone number of any mobile 911 caller and the location of the antenna that received the call.

Last year Kineticom won a large contract with a company that does E911 work for large carriers such as Cingular and AT&T. That accounted for the majority of a big jump in revenue, which put last year’s sales at more than $52 million.

Kineticom, which prefers to call itself a technical talent agency rather than a staffing company, supplies engineers, switching technicians, installers and project managers. The more than 700 contractors are paid anywhere from $20 to $200 an hour and work around the globe – Kineticom has offices in London and clients as far afield as Saudi Arabia. Customers include Cingular, T-Mobile, Sprint, Marconi Corp. and others that need staff for short-term projects like network upgrades – or, in the words of CEO Simon Billsberry, “anything that involves phones and data coverage.”

Billsberry and Steve Orr founded the company five years ago after leaving executive posts at S.Com Group Ltd., a London-based IT staffing firm that supplies contractors and permanent employees to the aerospace, defense and telecommunications industries. S.Com, which is now part of the Carlisle Group, was owned in the late 1990s by Professional Staff PLC, which used to be publicly held.

A desire to get away from the bureaucracy of a publicly traded company lead Billsberry to step out on his own, even though he had successfully turned around the U.S. subsidiary. With funding from Paul Roebuck, who had founded S.Com in 1979, Kineticom was born.

“We worked without salaries, leveraged our houses, to start this company from scratch,” Billsberry said. “We had a lot of passion, a lot of drive.” And then the telecom industry went south following the 9/11 disaster. “It was real high pressure trying to win clients as a new company at the same time as the staffing industry was under pressure from job boards, VMS and in-house recruiters,” he said.

But persevere they did, with faith that “good things happen to good companies,” and Kineticom began to thrive. Today 97% of its revenue is from staffing because it bills out such high-paid contractors, but what it sells is a suite of services. A management consulting/staffing hybrid, Kineticom also does workforce planning, talent sourcing, career and leadership consulting and human resource outsourcing. “The staffing industry traditionally is transaction-based, responding to RFPs,” Billsberry said. “We go in with a consultative approach to the customer.”

One client, for example, was a venture-backed software developer that sells security solutions. To help the company take the next step, Kineticom was hired to take over the HR function and work with top management to identify new products. “We call it a progressive partnership approach,” Billsberry said. “We say, these are things you need to do to be successful.” But, he added, “We don’t go in with a laundry list but with the approach that we want to understand your business objectives.”

To aid in finding such clients, Kineticom maintains a management trainer on board as well as a broad slate of directors. “We don’t advertise – most of our business comes from our network,” Billsberry said. “Our board of directors is like that of a $1 billion company.” It also has in-house talent poached from other staffing companies as well other industries.

The company also is proud of a “Stevie” it won in June from the American Business Awards, a group that honors positive contributions of businesses and people worldwide. The judges recognized Kineticom for its leadership in redefining the staffing agency model amid the global shift to a flexible workforce. After spectacular growth last year, Billsberry said he expects revenue for 2005 to be flat, due to putting new infrastructure in place. “If you go from $10 million to $50 million in one year, you can bet there is a lot of work to do.” But he has high expectations for the future. “We want to blast past $100 million in the next two or three years,” he said.

2 Avail Workforce Management Solutions
Atlanta
2003 revenue: $9.7 million
2004 revenue: $37.5 million
Average annual growth: 96%
Founded: 1993
Employees: 27

Commercial and professional staffing company Avail Workforce Management Solutions is making its second appearance in a Staffing Industry Report feature this year. The company was featured May 13 in a story about how it achieved success.

Much of the 276% leap its sales took in 2004 was attributed to opening a new professional division. “We experienced tremendous growth in professional staffing and perm placement, especially around Sarbanes-Oxley,” said COO David Rocker.

The company supplies a variety of temporary and contract personnel, from production workers paid $7.50 an hour to computer programmers, software engineers, accountants, loan brokers and other white-collar professionals. It also offers payrolling, managed services and a new healthcare staffing arm. “We are positioning ourselves further up the value chain with enhanced service offerings and defined deliverables,” Rocker said.

CEO Katherine Henson is an innovator who is looking at starting programs within the five-office agency to put women and minorities to work. One will pair U.S. corporate employers with women who want to work from home. Another would create call centers in Native American communities.

Rocker said the company is on track to approach $100 million in revenue in fiscal 2005, due to 11 new accounts won at the end of last year. It also expects to do $25 million in commercial staffing alone.

3 Pinnacle Technical Resources Inc.
Dallas 2003 revenue: $10.1 million
2004 revenue: $30.7 million
Average annual growth: 95.4%
Founded: 1996
Employees: 500

Nina Vaca is a woman with many accolades. And she is only 34. The CEO and founder of Dallas-based Pinnacle Technical Resources Inc. received the U.S. Hispanic Chamber of Commerce’s National Hispanic Business Woman of the Year award in both 2003 and 2004. The Women’s Business Enterprise National Council also recognized her as one of 14 outstanding U.S. woman entrepreneurs.

Vaca isn’t alone in her achievements. Her company has received more than 20 awards over the past two years, including the 2005 Entrepreneur of the Year Award in the Southwest Region from Ernst & Young LLP. “You really create your own opportunities,” said Vaca, a third-generation entrepreneur.

Founded as an IT recruiting firm, Pinnacle has evolved into a project-based IT consulting, staffing and outsourcing company. Started in a facility with two telephones, Pinnacle has grown to a 10,000-square-foot headquarters and more than 500 employees nationally. The company has offices in Cincinnati, Dallas, Denver, Los Angeles, New York, St. Louis, Tampa FL and Washington DC, and its clients include AT&T, Citigroup, IBM and Verizon.

Its core areas of expertise now include system design and architecture, storage-area networks, data replication, systems monitoring and application integration. Pinnacle offers contract and temporary staffing, as well as permanent placement. The company also handles administrative needs for human resources departments.

Pinnacle has been on a roll recently. From 2003 to 2004, revenue grew 204%. “The industry was coming out of a recession,” explained Vaca, “and we developed a different line of business.” She is referring to its “statement of work” line, which offers fixed prices for clearly defined deliverables.

In early 2003, the company introduced its own Web-based software, Progata, which streamlines internal operations and communications between IT managers, sourcing managers, third-party staffing providers and candidates. Vaca said that implementing this proprietary software has helped her business increase profitability and growth and rolling it out to customers has added to Pinnacle’s revenue stream.

“Being able to deliver for our customers,” Vaca said, is the key to her company’s success, along with a great team. “As a service organization, we are only as good as our people,” she added.

With projected revenue of about $50 million in 2005, nearly double last year’s revenue, this company is one to watch.

4 Supplemental Health Care Services Inc.
Park City UT
2003 revenue: $83.5 million
2004 revenue: $111.9 million
Average annual growth: 75.1%
Founded: 1984
Employees: 325

“It’s no use finding a nurse or physical therapist, and losing them after 13 weeks or a week or a day,” said Mike Jacoutot, president and CEO of Supplemental Health Care Services Inc. “Once you find the people, you must retain them.”

Jacoutot credits Supplemental’s focus on customers and talent retention as the keys to the company’s success. “You keep your clients happy by retaining the talent,” he said.

Supplemental was founded by Leo Blatz, a psychiatric nurse. Then based in Buffalo NY, the company supplied traveling psychiatric and operating room nurses and technicians. It has since expanded into a full-service healthcare staffing company, providing travel nurses and allied health professionals.

In May 2000, the company was purchased by its current ownership group, and the headquarters was moved to Park City UT. Under the new investors, which include Dauphin Capital Partners and GE Financial Services, Supplemental has expanded rapidly. It now has a national presence with 25 offices and three travel divisions, including a recently launched physical therapy division.

This year alone, Supplemental’s nursing business has grown 39% and its allied business 65%. “We live these core values – integrity, candor, accountability, respect, excellence,” Jacoutot said, referring to the “Supplemental way” detailed on the company’s Web site. “It stands for ‘I care.’ I care about nurses, therapists, clients and patients. We strive for excellence.” For Jacoutot, healthcare runs in the family. His wife and sister are both nurses, and his brother-in-law is a doctor. “I feel like we have a heroic cause,” Jacoutot said. “We do more than just put people to work.”

Supplemental’s clients range from large national therapy chains to hospitals. The company places from 2,300 to 2,400 people each week in contract positions and also does a small amount of permanent placement. “We have a digital sign in our lobby that tells us each day how many people are placed,” Jacoutot said.

“This is an aging society that needs healthcare professionals,” Jacoutot said. “It is a tremendous opportunity.”

5 The Footbridge Companies LLC
Andover MA
2003 revenue: $6.6 million
2004 revenue: $15.6 million
Average annual growth: 70.7%
Founded: 2000
Employees: 180

Rich O’Donnell is two-for-two in the staffing business, working on his second successful company. It wasn’t without struggle – he went without a salary for several years after founding Footbridge Companies in January 2000 – but today his company appears on fast-growing lists.

After selling his first business, IT staffing company Contract Solutions, in 1996, O’Donnell worked in the industry a while before starting Footbridge with some of the proceeds from the sale.

Legally constrained from operating a competing technology staffing firm in Massachusetts, he went into supplying contract recruiters and other personnel for human resource departments. While the niche wasn’t big, it was active and insulated the company from the bursting of the bubble after the Y2K build-up. “It allowed us to have a pretty good first year,” he said. But contrary to the popular opinion that HR is a backwater, O’Donnell found it an interesting vantage point from which to view new opportunities. “It offered us a glimpse into our clients and what their labor trends were,” he said.

One of those trends was the rise of manufacturing. The area north of Boston, where Footbridge is located, was and is a technology hub, full of computer, professional services and other companies such as Raytheon Co. In 2002 Footbridge expanded into engineering services, providing mechanical and electronics engineers as well as IT professionals. “That’s where the beginning of our growth came,” O’Donnell said. He brought in Todd Springer as a partner to help run the new division, which last year was responsible for about 70% of revenue.

Some of the big sales jump in 2004 also was attributable to a niche within the division that supplies white- and blue-collar personnel to the energy industry. “That’s coming up fast; we don’t have enough internal folks to keep up with the demand,” O’Donnell said.

Between 2002 and 2004 Footbridge picked up 50 new clients and at the end of last year was supplying more than 200 contract workers daily in Massachusetts. To keep the orders coming in competitive New England, Footbridge sells its expertise in finding the right contractors. “Our first priority is a strong, deep recruiting team and giving them the tools they need,” O’Donnell said. “Our job is to satisfy our clients; neither of us can afford a bad hire.”

The firm’s sweet spots are electronics and manufacturing firms with 250 to 1,000 employees and contracts with professional services divisions of large computer companies. “We supply people to them that they farm out to customers,” O’Donnell said.

For the future, Footbridge is focused on expanding its engineering services business outside of New England. It also opened up a permanent placement division on Sept. 6. And with the IT staffing business coming back, O’Donnell said there is “great opportunity in our own backyard.” He predicts sales could reach $20 million this year.

6 Hire Dynamics LLC
Suwanee GA
2003 revenue: $9.5 million
2004 revenue: $17.3 million
Average annual growth: 67.1%
Founded: 2001
Employees: 76

When Staffing Industry Report last wrote about Hire Dynamics LLC in May 2004, the commercial and professional staffing company was on track to do $16 million in sales. In fact, the Atlanta-area company exceeded that goal, posting more than $17 million in 2004 sales, an 82% jump over the previous year. It was all organic growth, CEO Dan Campbell said, accomplished by meeting one of the company’s essential goals – keeping customers. “We want to be the loyalty leader in the markets we serve,” Campbell said. “We want 100% client retention and low employee turnover.”

There was zero turnover in existing business last year among clients, which include a mix of Fortune 1,000 companies and small businesses. About 85% of Hire Dynamics’ revenue is derived from light industrial, call center and clerical staffing. Among clients is Starbucks Corp., an account the agency won after about two years of pursuing it. It provides warehouse and forklift personnel for the coffee company’s roasting facility in Reno NV.

Light industrial and call center temps are dispatched out of two offices in northern Nevada, five in the Atlanta area and one in North Carolina. The company has three specialty divisions, two of which opened this year: Hire Direct, which does perm placement in commercial staffing, and Hire Accountability, for temp and perm accountants and finance personnel. Hire Dynamics Rx, which provides pharmacy workers, was opened in 2002 and accounts for about 15% of revenue.

Campbell said 2005 revenue should exceed $30 million this year and he is adding internal staff to handle the growth. “Our goal is to be a $100 million company by 2010.”

7 ZeroChaos Inc.
Orlando FL
2003 revenue: $74.3 million
2004 revenue: $89.9 million
Average annual growth: 63.7%
Founded: 1999
Employees: 50

ZeroChaos Inc. calls itself “a complete solution, “delivering staffing, payrolling and human resource outsourcing for less cost than some competitors. The Orlando FL-based company was profiled in the July 15 issue of Staffing Industry Report and is growing steadily toward a goal of $180 million in revenue this year.

Owned by APC Workforce Solutions LLC, ZeroChaos is one of the top five minority-owned contract labor acquisition and management companies in the country. CEO Harold Mills and his partners Frantz Alphonse and Richard Powell purchased the company from Coadvantage Holdings in 2004.

New clients contributed to much of the growth last year. Ten new ones were added, and 28 have been added so far this year. Among its clients are IBM, Bank of America, Deloitte and EDS.

As for the name ZeroChaos, it stems from the state many corporations find themselves in when it comes to contract labor. “Every company we walked into didn’t know who was buying what,” Mills said. “We want to streamline the back-office process.”

8 CoreMedical Group
Windham NH
2003 revenue: $14.2 million
2004 revenue: $18.8 million
Average annual growth: 53.5%
Founded: 1989
Employees: 60

CoreMedical Group has an unusual approach to retaining travel nurses: five days in the Bahamas. “We take all of our travelers away to the Caribbean after they have completed four 13-week assignments,” explained Monique Ricker, VP and co-owner. “Forty travelers have qualified already this year for the annual trip.”

The staffing company is very focused on retention of both medical professionals and its internal staff. “We have a fabulous team and aggressive recruitment programs,” Ricker said. “We have a constant recruiting effort.”

CoreMedical has been through many changes during its 16 years. Founded by John McLaughlin to supply occupational therapists, physical therapists and speech therapists, the company was purchased by TRS in 1996. Three years later, parent company Fluor Corp. sold the staffing unit to the original founder, now chairman, McLaughlin, along with CEO Armand Circharo and Ricker.

The company has three divisions: permanent placement of nurses, radiologists and pharmacists, contract nurses (LPNs and RNs) and rehab (both contract and permanent). The company added radiology in 2004 and is adding pharmacy in late 2005, but the biggest growth area, according to Ricker, remains contract nursing.

CoreMedical’s clients are wide-ranging: acute care hospitals, rehab hospitals, outpatient hospitals, rehab centers, home health assignments, a large number of school systems and even prisons. The company places 1,000 to 1,300 per year in contract roles and 300 to 350 a year in permanent healthcare jobs.

It made news, and made waves, in August 2000 when it announced the launch of its international nurses program. CoreMedical contracts with overseas providers to bring nurses into the U.S. In return for signing a two-year commitment, the nurses are guaranteed full-time employment, given green-card sponsorship, and provided with benefits, subsidized housing and payment of all exam fees.

Currently, out of 300 or so contractors (nurses and rehab therapists), 30 to 40 are from overseas. “We’re now seeing the fruits of our labor,” Ricker said. “It’s going to be a really big year for international.” The company has experienced 35% to 40% growth in nursing over the past year and, in a sign that rehab is bouncing back, 100% growth in rehab this year. According to Ricker, perm placement also is having a breakthrough year.

“The healthcare space is going to be a growth opportunity for the next five to 10 years,” said Circharo. “We’re looking forward to it.”

9 Dynamic Staffing Inc.
Roseville CA
2003 revenue: $9.6 million
2004 revenue: $15.7 million
Average annual growth: 49.8%
Founded: 1995
Employees: 15

What do you do with a master’s degree in electrical engineering and a background in healthcare staffing? For Mike Reale, the answer was to start a technical staffing company.

Reale had been supplying physical and occupational therapists for five years before starting his new business venture, Dynamic Staffing Inc. (DSI), to capture the then-red-hot information technology market. The charter of the company was then and is now to provide quality executive recruiting and staff augmentation services to meet the ongoing demand for information technology and engineering talent in the United States.

“We’ve always tried to maintain profit with growth,” said Reale of his company’s achievements over the past five years.

He acknowledged that 2002 was “a bit challenging.” WorldCom had been a significant customer, adding about $4 million a year in staff augmentation and performance contracts, to Dynamic’s revenue. At the same time as that key client went into free-fall, the IT staffing market was declining.

“When the market started to drop, we had to switch gears,” explained Reale. The company added a managed vendor service. “That’s how we were able to maintain revenue and profitability.” DSI now has four lines of business: executive search, managed vendor services, on-site staffing (vendor on premises) and staff augmentation (traditional staffing). Although the company has only one office, it is incorporated in 33 states and currently has 450 temps working in the field.

Dynamic’s core business is IT staffing, but it also does some clerical and administrative placement. Its clients range from software vendors to service companies to large resellers, and include such names as AT&T, Broadvision, Hewlett-Packard, Mercy Healthcare, NEC Business Network Solutions and Sutter Healthcare.

For Reale, the formula for success is relationships plus service. “You can walk in the door with a price and a resume, but building a relationship takes time,” he said. “We’ve established very long and powerful relationships.”

10 Resulté Universal
Dallas
2003 revenue: $7.8 million
2004 revenue: $10.5 million
Average annual growth: 46.1%
Founded: 1997
Employees: 250

Resulté Universal, a repeat performer on Inc. magazine’s fastest-growing list, provides information technology staffing to a broad client base across a range of industries, including finance and accounting, retail, manufacturing, healthcare and human resources. It prides itself on a patented process that matches the best candidates to the assignment.

“We’ve invested heavily in back-end systems for more efficient screening of candidates and deployment to the client,” said CEO Rex Kurzius. For example, clients are able to access online reports about consultants’ performance, timeliness, test scores and education. Candidates go through a lengthy process to get into the Resulté system; about 90,000 are profiled there now.

In addition to the standard test and screens, consultants are interviewed face-to-face, and no one makes it into the database without a “certified” stamp of approval. “When a client calls, we have a good idea of what’s available in their marketplace,” Kurzius said.

Currently Resulté serves clients primarily in the Dallas and Houston areas. It hopes to expand its footprint nationwide.

No one piece of business has helped the company grow rapidly, Kurzius said. “Our ability to grow is based on our ability to differentiate ourselves from the competition when we get in front of the client.”

Kurzius, 31, started the company right out of college as a way to marry his business skills and computer knowledge. At Southern Methodist University he built a business plan that used software to automate the hiring process, after interning at a staffing company.

Technology still plays a big role at the firm, whose employees will customize reporting forms for any client who asks. “We completed 320 internal IT projects in the last 18 months,” Kurzius said.

Sales in 2005 are expected to hit $18 million. “We hope to be a fairly significant company, with $100 million in revenue, in the next four to five years,” he said.

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