Niche Temp Agencies Take Off

Unemployment may be stuck at record levels, but one part of the job market has already begun to recover: temporary and project-based employment.

After shedding 500,000 positions over the year ended last September, temporary employment began to improve. In November, temporary employment grew by 52,000 hires, and another 47,000 temp workers found jobs in December, the Bureau of Labor Statistics reported.

Women entrepreneurs in the staffing industry have moved aggressively to capitalize on the recovery in temporary work. Here are profiles of three successful women who, with varied business models, have figured out how to grow their staffing businesses despite the downturn.

Helping Professionals Who Temp

Flexperience 
Based: Burlingame, Calif.
Founded: October 2006
Co-owners: Sally Thornton, 38; Michelle Fowler, 38; and Lara McDonald, 40

Flexperience got started after Michelle Fowler, an attorney, began working freelance for better work/life balance and flexibility with her time. Sally Thornton noticed that Fowler was hardly the only professional woman wanting to switch to this lifestyle: A growing pool of top-flight attorneys, MBAs, financial officers and human-resource professionals were looking for better work/life balance. Her idea: form an agency to help them find projects or part-time work.

"We get people who haven't signed up with anyone else," Thornton says, "[such as] Stanford, Harvard and Wharton MBAs who'd never sign up with a traditional staffing firm. They don't want the black-and-white, old way of thinking about work, where you're either working 80 hours a week or staying home with the kids."

The company grew quickly, attracting clients such as Genentech and Levi Strauss & Co. Thornton manages the business, while Lara McDonald heads recruiting. Fowler does the legal work and pursues strategic partnerships.

Flexperience also found a receptive ear in the diversity departments of many major corporations. Anxious to retain women, they were open to hiring "A-team" professionals on a more flexible basis.

One advantage Flexperience has over competitors is that it can provide professionals in legal, human resources, marketing and finance. While some companies specialize in one of those niches, Thornton says no other agency provides highly qualified temp talent in all four.

Unlike many staffing agencies, where the fee is top secret, Flexperience informs all parties of its per-project commission. This helps demystify the process, and reassures both clients and talent.

"It's a fair rate," Thornton says, "so we can share it."

When the downturn hit at the end of 2007, Flexperience was barely a year old. The company took quick action to reduce expenses, eliminating discretionary spending, halting hiring and scaling back hours for some of the company's 10 or so recruiters.

Though new jobs listings plummeted, many of Flexperience's existing contracts kept right on going. In the tough economy, using highly experienced professionals on a project basis was the perfect solution for companies to stay ahead of the curve without overspending.

By the second half of last year, new project assignments began to pick up again, and the company went back into growth mode.

"The fourth quarter was one of our best ever," Thornton says. "Now we're looking to hire more client-development VPs and more recruiters. We're very busy now."

Growing into a franchise

Mom Corps 
Based: Atlanta, Ga.
Founded: 2005
Founder: Allison O'Kelly, 37

Mom Corps founder Allison O'Kelly was moving up the corporate ladder in a district-manager training program for Toys "R" Us in 2003 when she had her first child. She immediately realized she'd never want to go back to that kind of grueling work schedule.

She began doing some contract accounting work, and within 18 months had more than she could handle. She needed to find other part-time accountants to help with the workload. Traditional staffing agencies shunned part-time work contracts, O'Kelly says, leaving few good options for qualified professionals who wanted to work shorter hours.

"It was a lightbulb moment," she says. "Companies are looking for talented professionals; professionals are looking for flexible work. So I started matching up companies and professionals."

Because most of the professionals she found were moms looking for work flexibility, she dubbed her staffing agency Mom Corps, a name that took on even more meaning when she had her second son in 2007. Mom Corps makes most of its revenue from traditional agency commissions, though a small portion comes from paid job listings on its website.

"It's nothing crazy new," she says. "What's new is the type of people we're bringing into our clients' organizations."

Mom Corps grew to 10 employees before the downturn hit. After seeing sales more than double each year until 2008, the drop in work was a shock.

"We had a minimal amount of work orders coming in," she says. "What kept us afloat were contracts we already had going."

As 2009 drew to a close. Mom Corps' business took off again. The company began offering franchises last year, not unusual in the staffing industry, which has many franchises. What is unusual for the times is the speed with which the company found franchisees: O'Kelly says Mom Corps has sold 10 franchises, and she forecasts 25 locations by the end of this year. Franchise fees helped sustain the company during the downturn.

Since launching the franchising effort, Mom Corps has seen sales take off again, O'Kelly says. Six franchises are already active, and their managers have brought their own connections to the company, adding national reach and helping land major new clients.

Make the Web Pay

Flexjobs 
Based: San Francisco, Calif.
Founded: 2007
Founder: Sara Fell, 35

Flexjobs is Sara Fell's second go-round in staffing--she sold her first startup, Job Direct, to recruiting giant Korn/Ferry in 2000. Researching employment trends, she saw that the largest market of untapped, highly educated workers was stay-at-home moms who wanted work flexibility. Fell herself was part of that trend--Flexjobs' startup coincided with the birth of her baby.

Fell experimented with several revenue models before hitting on Flexjobs' current approach: Job-seekers pay a fee to use the website. She says job-seekers like knowing the site isn't being seen by the unemployed masses. For their part, employers like receiving a smaller number of better-quality resumes instead of being overwhelmed.

Roughly 12,000 monthly subscribers pay $14.95 a month or $49.95 a year for access to Flexjobs.com. They can cancel the service at any time.

"We provide a premium service," Fell says. "And we actively promote our money-back guarantee."

A small angel investment round that closed in fall 2008, just before the downturn, helped the company keep growing during the economic slowdown. Flexjobs has seven employees--"at least one in every time zone," Fell says--to keep the company connected to employers nationwide.

Another point of difference at Flexjobs is an 800-number staffed with real people to answer questions. A lot of the temp-help websites Fell found during her research seemed like scams, and there was no one job-seekers could call.

"A lot of our callers are just people calling to see if the line really works," she says.