Temp agencies saturate Northern Colo. market

Northern Colorado has emerged as a battleground for the nation’s fast-growing temporary-employment industry.

In the last few years, the number of temporary-employment agencies locally has increased from just a handful to more than 20, including most of the
national players.

SOS Staffing Services Inc. established a representative in Loveland in June. The company opened its Fort Collins branch about two and a half years
ago, said Steve Randazzo, branch manager.

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“We’ve seen a tremendous amount of growth in Fort Collins and were concerned that we were neglecting Loveland,” he said.

Along with all the national temporary-help agencies, Fort Collins also has several smaller mom-and-pop outfits, he said.

“I think we’re pretty saturated right now,” Randazzo said.

One mom-and-pop operation that has recently expanded is Employment Solutions. The Windsor-based firm started business two years ago and
opened a Fort Collins office July 1.

“We’ve had our eye on Fort Collins for a long time, since we started the business,´ said Kate Wagner, who along with her husband, Rick, owns the
agency.

She said the company has been servicing Fort Collins clients from its Windsor office but decided to expand into the area as its client list grew. The
company also opened a Greeley office last December.

The new 2,000-square-foot office at 119 E. Mountain Ave. in Old Town is housed in an historic building with hardwood floors and 15-foot ceilings.
Half the area will serve as office space, with the remainder as a training center for temporaries.

With the expansion to Fort Collins, Employment Solutions has eight permanent employees.

“Most of our assignments are long-term, and our people can be hired on permanently,” Wagner said. Assignments can last for several months, and
permanent placement with the customer is encouraged.

“Northern Colorado is a large area for industrial work, and we do a lot of electronics assembly,” she said. “Most of our work is in the manufacturing
sector.”

The employment-services market is such a hot industry locally that it has even spawned lawsuits.

In April, Apple One Employment Services of Glendale, Calif., filed a lawsuit in federal court in Denver against a unit of CoreStaff Inc. of Houston
over that company’s acquisition of Apple One’s former Fort Collins affiliate.

The suit alleged that CoreStaff, which bought Richard Keith Enterprises Inc. in February, infringed on Apple One’s trademark, misappropriated trade
secrets and interfered with the agency’s ability to conduct business locally. Apple One recently opened an office in Fort Collins.

U.S. District Court Judge Clarence Brimmer, in a hearing June 6, denied injunctive relief for Apple One, ruling that the company had not incurred any
significant damages by CoreStaff. Meanwhile, a second lawsuit, against Richard Keith Enterprises, continues in Los Angeles Superior Court. The
suit seeks $1.7 million in franchise fees.

Apple One has opened its own offices locally in an attempt to reap the benefits of its name recognition, in direct competition with CoreStaff.

The demand for temporaries has increased as more and more companies discover the benefits of using temporary employees, said Kirsten Hess,
senior staffing specialist with Kelly Temporaries in Fort Collins.

“It gives them the opportunity to check out employees without paying benefits,” she said.

Kelly provides temporaries in secretarial, technical, engineering, light-industrial production and other types of work.

“We also do a lot of permanent placement, too” she said. “It’s a great opportunity for college graduates to get a foot in the door.”

SOS’ Randazzo said competition among temp agencies sparks high demand for good workers. Temps frequently sign up with three or four agencies
and then work primarily for the one that treats them best, he said.

Salt Lake City-based SOS handles all types of temporary work, from light-industrial to technical.

One of the major trends in the industry is for small and mid-size companies to turn over the payroll responsibilities to temporary-employment firms,
Randazzo said.

Companies send their employees to a temporary firm to sign them up as temporaries, and then the agency handles their payroll and any benefits and
other costs related to employment.

“The people get paid every week, and the employer doesn’t have to take on the responsibilities,” Randazzo said.

Construction firms often use temporary agencies this way because the jobs for these types of companies are not long-term. Employers save by
eliminating the cost of recruiting, advertising and benefits, he said.

Betty Becker, executive vice president of OnCall Employment Services, a temporary agency based in Loveland, said her 18-year-old company is
constructing a new building in the north part of town so that it can be closer to its Fort Collins customers.

The 15,000 square foot, two-story building will give OnCall more space to expand, she said.

OnCall merged with Brewer Personnel Services of Arkansas last February. As a division of the larger company, OnCall now has the resources to go
after more national business, Becker said.

Competition has increased in recent years as more temporary agencies open up due to the strong economy in this area, she said.

“Many companies are finding that temporary help is the answer to a need they have and a good way to evaluate potential employees,” she said.

OnCall offers electronic training and provides manufacturing, professional and technical temporaries for businesses.

“We have engineers and accountants and work with high-tech companies,” she said.

Companies are seeking temporaries who are design engineers, controllers, technical writers and technicians, and people who have specialties in the
manufacturing process, she said.

“It keeps growing and changing,” Becker said.

Most of the assignments for OnCall professionals are project-related, she said.

Outsourcing is a new trend in the temporary-help industry, she said. For some companies, OnCall takes over the management of an entire operation so
that the customer company can focus on its core business.

“A company may be phasing out an operation in two years, and they don’t want to put their regular people there but place them in areas with a longer
career path,” she said. For example, OnCall has taken over production operations for companies that planned to close out the unit in a couple of years’
time, she said.

Kathy Egan, owner of Express Personnel Services, a franchise in Greeley that recently opened an office in Fort Morgan, said that overall, the
temporary-help business is very strong in this area.

“The market is not completely saturated,” she said. “More companies are utilizing temps.”

Her office has been in the area since 1971. Egan’s company does permanent placement, but about 95 percent of its business is temporaries.

Assignments can range from four hours to four months to several years, she said.

Egan said her business has enough people to fill the demand for temporaries except in the peak period for manual laborers from mid-July through
September.

“Construction projects finish up before the snow, and then harvest starts. That pulls the general laborer out of the temporary pool,” she said.