Staffing Agencies Carve
Profitable Niche
Pacific Business
News / August 23, 2002
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It was a month after the Sept. 11 terrorist attacks, and the economic
fallout was at its peak — hardly an ideal time to launch a new
business.
Nevertheless, Kristi Inkinen and Marie Kumabe charged ahead with their
planned venture: Remedy Intelligent Staffing, a local staffing agency.
Even though the Remedy franchise had existed in Hawaii before, Inkinen
and Kumabe were starting from scratch with a new franchise agreement.
At present, there are no other Remedy franchises in Hawaii.
The business grew slowly at first — January sales totaled $2,300.
Then Inkinen and Kumabe saw their venture take off, surpassing the break-even
point and generating $350,000 in sales in less than a year.
Remedy is not alone in the profitable staffing-services industry. Local
businesses, big and small, find it more economical to hire part-time
and full-time employees through a staffing agency than working through
their own human resources departments. And the tougher economic conditions
have only accelerated the trend.
Staffing agencies offer employers help with finding personnel for long-term
temporary positions, temporary-to-permanent-hire posts and direct permanent
hires. Among these, the strongest niche is hiring temporary workers
from an agency on 90-day probation with an option to offer permanent
jobs at the end of the term.
"It's a win-win situation for both parties," said Mary Patte,
president of Staffing Solutions, another local agency. "The concept
was strong before Sept. 11, but after that we've seen more and more
companies going for it. Companies these days are not sure of what the
future is going to bring."
This segment of her business brought Patte's company almost 70 percent
of its $4.6 million revenue in 2001.
The arrangement also benefits the temporary worker, who has a chance
to check out the company's work atmosphere first hand.
"It's more than helping the client company," Patte said.
"Now it's making both clients happy — the company and the
associate [temporary worker]."
Remedy tests applicants in both hard skills and work habits to determine
appropriate fits with work environments. The company uses a proprietary
testing application that detects an applicant's personality traits and
determines suitable work environment.
"Everyone interviews well," Inkinen said. "Only when
you hire someone do you see their true colors. Through our application
we test environmental and cultural fit, determine what their personality
is like — whether they are an independent or a team worker. These
are things you cannot see for yourself from just an interview."
Despite such intensive testing, which usually lasts at least half a
day, if things don't work out both employer and temp can opt out. And
the agency will send a replacement.
All this service comes at no upfront cost to temporary workers registered
with the agency. Once a temporary worker is hired, the company adds
a $6 to $7 per hour service rate for a $10 per hour employee. The service
rate covers health insurance, benefits and payment to the staffing agency.
Technically, the temporary worker remains an employee of the staffing
agency and is on the agency's payroll.
Hawaii's strong military presence offers business opportunities for
staffing agencies as well. Companies doing government or military contracts
find that they need additional staff for the contract period, and staffing
agencies step in to meet their demand. The work might be anywhere from
six months to a year, Patte of Staffing Solutions said.
"This is growing to be quite big," she said. "It's at
10 percent of our business right now and growing."
The past year has brought some changes and losses to staffing agencies.
Staffing Solutions lost nearly $1 million in revenue when it decided
to walk out of the light-industrial segment. The airlines were its primary
client in that segment.
"We made a business decision after Sept. 11 to close that division,"
Patte said. "Overnight, we had 50 temps who were released and more
who were likely to be let off from work. Workers' compensation was the
main reason for the decision; it was too expensive."
However, other agencies are swooping in to try and gain some of those
lost contracts as airlines say they are making up staff numbers to pre-Sept.
11 levels. Remedy, for one, is courting these clients.
Patte, who has run her own staffing agency for more than a decade,
has other strategies up her sleeve.
"I'm going to be working in an area that I've always believed
in — professional placement from clerical to upper management.
Our core business will be permanent hire either directly or as temporary
to permanent hire."
She estimates that her company will recover to reach the $5 million
mark next year.
Recruiter
Champions Work Of Others
Honolulu
Star-Bulletin / Business / July 15, 2002
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Marie Kumabe says the best job is helping people find theirs.
My partner, Kristi Inkinen, and I opened a staffing agency last November.
With two children to raise and a good job at the University of Hawaii's
School of Travel Industry Mangement, I had to ask myself the same question
facing all fledgling small-business owners: Do I want to accept the
challenge, stress, risk, and uncertainty?
Eight months later, I'm glad I took the leap. I have the best job
in the world: I get to help people find the right jobs for themselves.
When I was head of human resources for American Hawaii Cruises some
time ago, I thought I had the best job because I could help people—even
if only within the confines of that company. Now, as a partner in Remedy
Intelligent Staffing, I have access to positions at all types of companies
and can offer them to those who've come to me for assistance.
If job seekers know exactly where they want to work, I can help them
get a foot in the door at that firm. If they're interested in a particular
industry or field, I can be their champion and use my contacts to promote
their backgrounds and credentials to decision-makers. If they simply
want advice, I can counsel them on the most appropriate career paths.
Sometimes I get to be a cheerleader and restore confidence in someone
who may have lost a job through no fault of his or her own. At other
times, I have the opportunity to work with recent graduates who are
brimming with enthusiasm and hope about the future. I'm candid in giving
feedback on interviewing skills or a resume that doesn't do justice
to one's skills. I meet people with all kinds of experience, education
and backgrounds, but who all share the desire to work for an organization
that will value them and offer them a chance to shine. They're willing
to work hard if given this chance.
By working with all types of individuals, I feel I'm able to recognize
a "gem" of an employee. In addition, proficiency tests and
assessments allow me to sharpen my "sixth sense" in perfectly
matching an employer and employee. I also have the chance to help employers
of all sizes and in all industries, who are overwhelmed with resumes
and need assistance in streamlining their hiring process.
A career is one of the most important aspects of one's life, and every
day I help people get to where they want to go.
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