Staff Companies Boost Revenues Despite Rate Cuts

This story from Crain's Detroit Business shows how companies find other ways to succeed during difficult times. If your company provides a service and the economy forces a rate cut, what do you do? Reliance One doubled its sales in 2007 and expects to up them by 56 percent this year.

Though the company cut its rates because its automotive clients also has to lower rates, Reliance One finds a way by gaining market share with tier-one automotive suppliers in staffing temp and permanent jobs in engineering, design, and manufacturing. New business also helps fill the gap left from the rate cuts.

The staffing companies enjoying higher revenues have one thing in common: they accommodate several industries instead of sticking with one. Reliance not only works with the automotive industry, but also IT and finance. The economy doesn't stop the company from shooting for a goal of $50 million in revenue by 2010.

Systems often need updating somewhere providing a good outsourcing opportunity. Companies rather outsource updates than do it themselves because updates would most likely take their attention off their core business. Instead, they let an outsourced company with expertise in doing updating take on the task.

Another company, Epitec, staffs across many industries including financial, IT, health care, manufacturing, insurance, retail, and government. The company expects to grow 30 percent in revenue this year and has already seen a revenue increase in 2007 and this year. Epitec pays attention to its processes and customer relationships, which have helped the company win competitor's business.

These two companies aren't the exception to the rule. In fact, 119 staffing companies say they had revenues of $100 million or more in 2007 according to a Staffing Industry Analysts report.

Based on these companies' successes, growth can come through expanding into other industries as well as building strong core processes while maintaining relationships. It costs more to get new customers than to keep current customers. Thanks to building and maintaining strong customer relationships, Epitec's revenue increase doesn't come as a surprise.