Execs Reveal What Keeps Them Up at Night: Counting sheep? Reaching for Lunesta? You’re not alone.

Staffing Industry Review Magazine (September 2007)

Mark Holland doesn’t always get a full night’s sleep. The president of Salt Lake City-based Intermountain Staffing, Holland often finds himself lying awake at night worrying about whether he’s going to be able to find good people to work for his company. It’s hard “getting the right people on the bus,” he says, mentioning he can’t find a qualified branch manager for his Las Vegas office.

“Getting key talent in all of our branches is very difficult,” says Holland. “We’re strained because we can’t get enough good talent. We could grow faster if we had a branch manager for new offices.”

Staffing execs such as Holland shared with SI Review some of the many things that keep them up at night. Some, like Holland, lie awake worrying about whether they’re going to be able to find quality people. Others say concerns about such things as the economy, legislation, outsourcing, workers compensation, health insurance and gross margins cause them to lose sleep.

Tossing and Turning Over Talent
“What keeps me up at night (other than three kids under seven and uncomfortable hotel beds on the road) is not knowing if we will continue to be able to attract and retain the high-performing staff we need to achieve our growth and profit goals,” explains Bill Yoh, CEO of Philadelphia-based Yoh, in an email.

“As the market continues to tighten for talent, it is getting more and more difficult to hire experienced, talented producers, so we are forced to hire more and more new entrants to the industry and train them in the Yoh way of doing things. This avenue ultimately produces good results, but it takes longer to get there which slows progress.”

Scott Ragusa, president of Winter, Wyman & Co. in Boston, has also lost sleep over not being able to find the right internal staff for his company. “One of the biggest challenges I have is trying to find the right people who will help develop markets and grow in the markets we’re in,” he says. “We’re always hiring. We’re always looking for good people to contribute to our firm. It’s difficult to do that.”

Another person who worries about finding quality internal staff is Noel Wheeler, president and CEO of Reno NV-headquartered CLP (CLP is profiled beginning on page 72), a wholly owned subsidiary of Labor Ready that provides tradespeople for the construction and facilities industries. Wheeler says he’s especially concerned about finding quality internal staff given his company’s growth. Over the past two years, his company has nearly doubled its number of branches, from 50 to 95. About 25 of the new branches have come from organic growth and the other 20 have come from CLP’s acquisition of Skills Services in Florida at the end of April. “When you’re growing at that rate, it exacerbates the problem [of being able to find quality people] significantly,” says Wheeler. Besides hiring internal staff, others are worried about internal staff not hitting their marks.

The Reserves Network’s Don Stallard worries about how to work with the sub-par performers in his company and what to do with them. “You’re always going to have people problems in business,” he says.

“You’ve got to reconcile them and go on.” He also worries about prioritization, making sure he’s working on his priorities and that he spends the right amount of time on each, he says. Additionally, he worries about internal management issues and development of human resources.

But it’s not just internal – execs say they’re concerned about finding temporary workers as well. “The job pool is probably our biggest concern. How are we going to identify quality candidates for our clients in the short term?” comments Ed Giannattasio, president and CEO of Asset Staffing, which has offices in New York and Miami. “It’s only going to get worse unless the economy tanks. It’s taking a lot longer to find people now. It’s much more expensive. It’s taking longer to research and find quality candidates. It all comes back to recruitment in a tight market, and for us that’s the key challenge. I don’t see any change in the short run.”

JoAnn Wagner, CEO of Salt Lake City-based SOS Staffing, also worries about finding enough temporary workers, and especially qualified temporary workers, to present to clients, given the current labor shortage. “There is still a demand for quality work here, from manufacturing to production to all other kinds of jobs,” says Wagner.

Joe Rozier, VP of development for Farmington MO-based Workforce Employment Solutions, has lost sleep trying to figure out how to recruit in a nontraditional way. “The whole recruiting thing is changing,” he says.“Each market is different, unique. You can’t take a cookie-cutter approach to recruiting.” The challenge, says Rozier, is being able to recruit each generation in nontraditional ways.“We have to know what each generation is.”

Rozier also worries about staying ahead of client needs. “At the client-level, we have to become an industry expert in their business. We have to understand what their business model is, their industry, what’s driving their business.”

For some, the biggest issue is not only finding people, but also retaining and motivating them. Randy Schaefer, president of Fort Lauderdale- and New York-based Segue Search, worries about how to keep both her internal staff and temporary workers satisfied and motivated. “It’s a constant challenge,” she explains. “We’re doing it but it’s always a constant challenge. You have to be creative and come up with new ideas.”

Bob Lopes, president and CEO of Veritude in Boston, says keeping temporary workers is a concern for him as well. “Clients are asking us, what can you do for us (in the area of retention),” he says. “To cost-justify it, you’ve got to keep them for a long time.”

Economic Woes Keep Eyes Wide Open
Tim Farrelly, president of San Francisco-based COIT Staffing, an executive recruiting firm primarily focused on the information technology area, says economic woes keep his eyes wide open. “We’re the marines of the economy. We feel it first,” says Farrelly, who worries about another attack.

“If there’s a terrorist attack, everyone tightens their wallets. People pinch their wallets. They stop spending.”

Farrelly also has stock market performance on his mind, because it’s an indicator of the economy. “I wake up every morning and see what the numbers are and what the bottom line is,” he says. Farrelly says he only gets five or six hours of sleep at night. He goes to bed as late as midnight and gets up as early as 6 or 7 a.m. “I’ll catch up on a Saturday or Sunday,” he says. “Sunday evening, I’ll start to engage in work mode again. Saturday, I’m pretty good about forgetting about work for awhile.”

Lack of Sleep Over Legislation
David Bartholomew, CEO of Little Rock AR-based Staffmark, worries about the proposed Temporary Workers’ Bill of Rights. Backed by labor unions, the legislation would require staffing companies to fully disclose the terms of their business relationship with their clients, such as pay rates and bill rates. The legislation proposes that staffing companies be required to pay the same amount that the current full-time workers at a particular company are being compensated, “which may be more or less than what the staffing firm that has a worker would work there for,” points out Bartholomew.

The Temporary Workers’ Bill of Rights has been introduced in Tennessee and Massachusetts and never passed, according to Bartholomew. Another piece of legislation Bartholomew worries about is a proposed tax on temporary services.

“The legislative issues scare me the most because if we’re not staying in front of them, if we’re not aggressively working as an industry to make sure a piece of legislation doesn’t go through, it could put us out of business,” says Bartholomew. “These two pieces of legislation are the biggest ones that come to mind. Some adverse legislation could put us out of business.”

Jeanne Knutzen, founder and president of Bellevue WA-based Pace Staffing, worries about “some aggressive tax rulings in the state of Washington that have seriously impacted our bottom line.” The state of Washington’s Department of Revenue has changed the way it allows companies such as hers to report earnings, asking for gross sales instead of gross margins and keeping the percentage of taxation at 1.5%, she says. Knutzen worries about ways to recover that money to sustain profitability. “The states (all across the nation) are hungry for income,” she says. “Every governmental agency is trying to expand its tax base. The big picture is what will they do next.”

Concerns About Outsourcing
Intermountain Staffing’s Holland is concerned about outsourcing. In any given year, his company loses one of its top 10 accounts due to outsourcing. “Our biggest clients inevitably end up moving overseas,” he says. “It goes from a major client to a small client.”

Workers Compensation Woes
Segue Search’s Randy Schaefer stays up worrying about the high cost of workers compensation. With one of her offices being in Florida, her light industrial and executive search firm has been hit with extremely high rates. “The cost is so high,” says Schaefer, who brought in an outside consultant to help with workers comp issues. “It’s a very large part of my budget.”

Matt Schubert, CEO of Northbrook IL-based Paramount Staffing, says the potential of workers compensation claims causes him to lose sleep. In 2006, his company switched from a fixed-cost program and began getting workers compensation from TSIL, “a captive program” through which Paramount assumes more of the risk. “We pay a fixed cost to have someone manage the program,” explains Schubert. “We’re responsible for all of our claims. The better year we have, the better we do. We wouldn’t have joined the program if our risk policies and procedures weren’t sound.” Schubert says he’s “banking on the idea that our risk management program will be effective and reduce our number of claims.”

High Cost of Healthcare Robs Some of Sleep
The high price tag on health insurance robs Segue Search’s Schaefer of sleep. “It’s extraordinarily costly,” she says. “That’s a constant challenge.”

Segue Search has offered health insurance since it opened nearly six years ago, according to Schaefer. The company provides its internal staff with full coverage and offers temporary workers coverage at a discounted rate.

Margins on the Mind
Matt Johnston, CEO of Burbank CA Workway, has gross margins on his mind. “Margins are such a fragile thing,” he says. “Even a 1% decrease on your margins has a tremendous effect on the bottom line.”

Human Element on the Candidate Side Keeps Some Up
COIT Staffing’s Farrelly says “the human element” keeps him up. There are people who are qualified, good over the phone and good when they meet with the company, but then have situations come up that affect their ability to work. This, in turn, affects COIT’s relationship with its client. “You can be the best recruiter in the world, but you can’t predict humans or the environment,” says Farrelly. “What you’re selling is a human, and with that human comes a whole bag of variables. Variables we can’t control and that are out of our control. You never know what’s going to happen.”

Jim Essey, president of the New York and San Francisco-headquartered TemPositions Group of Cos., worries about people showing up late or not showing up at all. “You’re selling people and not a product,” he points out, “so you just have to cross your fingers and hope the people you send off to work are responsible. You do your best and hope your service level is such that clients will work with you again.”

Credit Collections Concerns
Paramount’s Schubert says credit collections are a concern for him. If his largest account went under, for example, it could put him out of business. “It hasn’t happened – knock on wood,” he says. “The truth is, it could happen at any time. You could wake up any day, and there it goes.”

Technology Trumps Sleep
The Reserves Network’s Don Stallard lies awake worrying about how he’s going to keep up with new technology; for example, new vendor management systems. Essey, of The TempPositions Group of Cos., says the increased use of vendor management systems concerns him as well. “It takes the relationship out of the interaction between the client and staffing service,” he says. “There’s now an intermediary receiving orders and sending them out.”

Some worry about people using technology inappropriately: Although it hasn’t happened to him yet, Gary Graham, of Greensboro NC-based Graham & Associates, worries about the possibility of people using technology to steal company secrets. “You have got to make sure you’re properly policing your off-site folks and internal folks,” he says.

Unemployment Tax Takes a Toll
Paramount Staffing’s Schubert loses sleep over unemployment tax, which can vary anywhere from 1% to 8%, he says. “You pay into the state a certain percentage of your unemployment claims. Fortunately, we’ve been low. Just like workers comp, that can change.”

Insomnia Over Immigration-Related Issues
SOS Staffing’s Wagner says rules and regulations regarding hiring immigrants keep her up at night. Given the amount of illegal workers in the country today, her company has to devote a lot of time and resources to making sure it’s not placing anyone who is in the country illegally. “It has certainly increased the cost of doing business for a staffing company,” she says.

CLP’s Wheeler also has lost sleep over immigration-related issues. He says he’d like to have a “guest worker” program through which he could obtain more workers from overseas. Europe already has such a program, and it’s working well, says Wheeler. “It provides a source of qualified labor that can work in another country without having to go through the citizenship process,” he says.

Concerns About How To Stand Out
Pace Staffing’s Knutzen worries about how she can differentiate her company from the competition. “You can talk about being a consultative company, but the process of teaching people to be consultative is a different ball game,” she says. “It’s a whole different level of work.”

Weather Is Worrisome
Schaefer, of Segue Search, says the potential of weather-related problems concerns her, since she has an office in hurricane-prone Florida. After one hurricane, her Miami office was shut down for two weeks. “It was a disaster in Miami,” she says. “People couldn’t drive anywhere. The electricity was down. Even if you could get to the office, it was very dangerous.”

Non-Work-Related Issues Keep Some People Up
Sometimes it’s not work or staffing-related things that keep execs up. “The only thing that keeps me up are teenage boys hitting the fridge after I’ve gone to bed,” says Kforce CEO Dave Dunkel.

Cynthia Pasky, CEO of Strategic Staffing in Detroit, says if there’s anything that keeps her up at night, it’s her 90-pound dog Chrissy, who is part Irish Wolfhound and part Shepherd, jumping up on her bed. “When a dog that’s 90 pounds gets onto your bed, it moves,” she says. “You know she’s there. … If we’re really lucky, it will be that way for a long time. She’s a sweetheart.”

Some Aren’t Losing Sleep At All
Wayne Williamson, president of Monroe LA-based WillStaff Worldwide, says he used to lose sleep worrying about cash flow, but ever since he sold his company to GW Premier America, formerly American Crystal, that’s no longer the case. He always gets a full night’s rest. “That can be a message to some people: If you can’t sleep, sell out,” he says.

Williamson sleeps well because not only did he sell to a larger company, but also he has a good staff that he trusts. “You’ll get a good night’s sleep if you trust the people you have working for you,” he says. “Everything out there is temporary. You will overcome it. So, therefore, why lose sleep about it.”

What Keeps Staffing Execs Up at Night?
• Finding the right people
• Retaining people
• The economy
• Legislation
• Outsourcing
• Workers compensation
• Health insurance
• Gross margins
• The human element
• Credit collections
• Technology
• Unemployment tax
• Immigration-related issues
• Concerns about how to stand out
• Worries about how to recruit in nontraditional ways
• Potential of weather-related problems

For additional information on The Reserves Network and its affiliates,  please contact: Brandon Thimke, communications manager, at bthimke@thereservesnetwork.com.