Norrell Corporation

views updated

Norrell Corporation

3535 Piedmont Road Northeast
Atlanta, Georgia 30305
U.S.A.
(404) 240-3000
Fax: (404) 240-3312
(800) 765-6342
Web site: http://www.norrell.com

Public Company
Incorporated: 1961 as Southeastern Personnel
Employees: 8,000
Sales: $1.3 billion (1997)
Stock Exchanges: NYSE
Ticker Symbol: NRL
SICs: 7363 Help Supply Services; 6794 Patent Owners & Lessors

Though it is best known as a temporary agency, Norrell Corporation offers a wide variety of services. In 1996, the company began using the term “Strategic Workforce Management” to describe the range of resources available under its corporate umbrella, including staffing, outsourcing, and professional services. Working with more than 19,000 clients in the United States, Canada, and Puerto Rico, Norrell staffs offices, provides outsourcing for functions ranging from accounting to shipping, and—through various corporate divisions—addresses areas such as home health care and call center management. Thus the company is able to offer its clientele—which includes both individuals and large corporations such as IBM and UPS—a large and varied package of services. For its temporary workers, who numbered 236,000 in 1997, Norrell offers competitive benefits and an array of job assignments that can last for one day or many years.

The Early Years as Southeastern Personnel

Born February 16, 1936, Guy Millner came from an entrepreneurial line. His father, Jack, operated a used furniture store and a service station north of Daytona Beach, Florida, and Millner worked at the station pumping gas during his high school years. Yet it was his mother, Nell, who truly inspired his business ambitions with her success selling magazine subscriptions over the telephone.

Millner later described himself as a “skinny, gawky kid,” and in 1996 told a group of minority business people, “I was, in my context, the underdog. I was the skinny kid, never in the clique. Probably that did more to develop me than any influence in my life. I developed an ambitious hunger to succeed because success didn’t come easy to me.” Millner paid his way through Florida State University with a pair of business operations. He sold birthday cakes to classmates’ parents, contacting the parent just prior to their son’s or daughter’s birthday and arranging to deliver the cakes. He also sold cookware door-to-door, using skills he learned from motivational speaker Zig Ziglar. Working thirty hours a week, he still managed to maintain a 2.75 grade point average, and graduated in 1958 with a degree in political science.

After college, Millner attended Navy basic training, and served eight years in the Naval Reserve. In November 1961, having moved to Atlanta, he founded a company called Southeastern Personnel to help college graduates find jobs. His was the first company of its kind in the southeastern United States, and indeed the temporary services industry itself was a new phenomenon. The latter had its roots in World War II, when women went to work filling jobs vacated by men who had gone to war, a phenomenon symbolized by illustrator Norman Rockwell’s character “Rosie the Riveter.” The first major temporary agency was Kelly Services, founded in Detroit, Michigan, in 1946; for many years thereafter, temporary services constituted a small-scale industry devoted to placing clerical workers in short-term jobs such as that of a typist or file clerk.

In time, the industry grew by leaps and bounds, and Millner’s company grew with it. From the beginning, he had a vision for that growth, and developed a number of unusual work habits. He began clipping articles from business magazines, creating an extensive resource library on various companies in order to track their growth and methods. He also began eating two lunches a day—soup at one, salad at the other—because he believed that mealtimes provided one of the best opportunities for meetings. “I’ve sat with him on a couple of Thursday afternoons when he didn’t know whether he’d be able to make the payroll on Friday,” a friend told the Atlanta Journal and Constitution in 1996. “But he didn’t know he was in a start-up business. He was sure he was in the process of building a major corporation.”

Southeastern Becomes Norrell in 1963

In 1963, Millner purchased Norrell Personnel Services, a tiny Atlanta-based clerical employment agency which had only one full-time employee. Soon afterward, he renamed his own company Norrell Southeastern Corporation. At that point, the company had expanded its services to include placement of light industrial workers as well as clerical workers. In 1965, sales reached $1 million.

Norrell Southeastern became the first company in the temporary services industry to franchise its operations, which it did in 1966. Thus it was able to reach new markets, and it began to grow beyond its Atlanta base with eleven company-owned locations and one franchise. Due to its increasing geographic expansion, Millner decided to drop the “Southeastern” from his company’s name, and in 1972 the company became Norrell Corporation.

Sales reached the $10 million mark in 1973, and by 1976—when they hit $15 million—Norrell had thirty-two company-owned locations and ten franchises. Three years later, in 1979, the company created a special franchise division to focus on expansion, and to serve the needs of franchisees.

Growth in the 1980s

In 1980, Norrell opened fourteen offices, bringing its total number of locations to 114. The following year, it created a subsidiary and another line of services through the establishment of Norrell Health Care, Inc. Also in 1981, having expanded throughout the United States, Norrell began operating in Canada, and in 1987 would open its first Canadian franchise, in Vancouver, British Columbia.

The 1980s held much more in store for Norrell, which experienced tremendous growth during the decade. In 1981, Norrell undertook the first in a series of acquisitions that would continue into the 1990s. In that year, it acquired three different health care staffing companies: Medical Team, East Coast Healthcare, and Adana, the last of which was a California-based corporation. Two years later, in 1983, it purchased Accurate Temporary Services.

Norrell was growing rapidly—in part through acquisitions, and in part through expansion from within. By 1983, revenues had reached $100 million, and in 1986 they were close to $230 million. In that year, Norrell purchased Workforce, bringing its total to number of company-owned locations to 293, with an additional 90 plus franchises. Also in 1986, the company celebrated twenty-five years of operations since its foundation as Southeastern Personnel.

The Atlanta Business Chronicle noted the milestone with an article bearing the headline “A Few Clouds on Norrell’s Silver Anniversary.” But the clouds turned out to be small; one of these minor worries was what Millner called a “flat” growth rate of 15 percent. “Flat?” asked Michael Pousner of the Atlanta Business Chronicle. “Most companies brag about 15 percent growth.” Pousner went on to say of Millner, “indeed, if the tall, slim physical fitness buff is worried he doesn’t show it. He feels that his company has kept abreast of some important trends that are going to lead it to renewed success in its next 25 years.” Among those trends were the growth of temporary healthcare services; the use of “facility staffing,” by which a company might replace an entire department with temporary employees; and the increasing numbers of mothers taking temporary jobs rather than incur the difficulties of putting their children in day care while they worked full-time.

By the late 1980s, business was booming at Norrell Corporation. “You can’t miss the bright blue billboard on Peachtree Road,” wrote Judith Schonbak in Business Atlanta. “... The words ‘fast temporary relief accompany a picture of two white marble tablets fizzing in a glass of water. [But] In this case, relief is not an antacid”; rather, the billboard campaign was just one example of Norrell’s advertising. In all, the company spent $2 million on ads in 1986, including a radio spot with former talk show host and announcer Dick Cavett.

In 1987, the year it opened its first Canadian franchise, Norrell acquired London Temporary Services and American Temporaries. The next year it introduced BOSS—its Branch Office Support System—which provided a computerized database for matching up clients with temporary personnel. Also in 1988, Norrell acquired Cosmopolitan Care, and in 1990 it began a new decade by signing an agreement with Sears to provide outsourcing services.

An Expanding Vision in the Early 1990s

According to research by The Omnicorp Group, in the decade between 1986 and 1996 the staffing industry—as the temporary services industry was increasingly called—tripled in size, from annual revenues of $10.4 billion to $36.9 billion. By the year 2005, this research indicated, it would grow to a $75 billion-a-year industry. Therefore, the local, regional, and national staffing companies would have to tailor their services to a changing market. For this reason, Norrell began to broaden the range of services it offered in the 1990s.

Company Perspectives:

As Strategic Workforce Management grows in importance to businesses and organizations worldwide, we expect Norrell to continue its leadership through innovative, client-centered thought and action.

At the core of the company’s business was traditional staffing. The early 1990s, however, saw an economic recession which forced U.S. companies to cut their payroll, and Norrell responded to this by expanding into outsourcing. Under its 1990 agreement with Sears, Norrell took over management of office operations at the retail giant’s Chicago headquarters. The functions covered were non revenue-producing, and included mail-room, photocopying, switchboard, shipping and receiving, and secretarial operations. The result for Sears, Norrell reported, was an annual savings of 30 percent over the cost of those operations under the traditional in-house situation.

In 1991, Norrell introduced a second component (after BOSS) to its quality system for matching clients and temporary employees. This was “Exact Match”, which matched employees and clients just as BOSS did, but also screened temporary employment candidates. In the following year, Norrell established Tascor as a joint venture with IBM Corporation. Tascor, which later became a wholly owned Norrell subsidiary, assumed responsibility for administrative support functions ranging from telephone coverage to desktop publishing.

Also in 1992, Norrell added vendor consolidation to its range of services with the establishment of MVP, or Master Vendor Partnering. MVP helps corporations such as MCI and Equifax—some of the first customers for this service—to consolidate the number of vendors they deal with on a regular basis. Near the end of the 1990s, Norrell had over 100 MVP clients.

Strategic Workforce Management and the Turn of the Century

In 1993, as part of an effort to tighten its bottom line, Norrell divested most of its 55-location Health Care Division, though it retained Norrell Health Care, Inc. The latter provided home health care services ranging from cooking to the monitoring of nursing homes’ compliance with insurance company regulations. Also in that year, the company introduced another component to its employee training and skills-matching system—“Matchware”—a skills assessment and office automation training software system.

Norrell’s revenues reached the $500 million mark in 1993, and in the following year the company announced an initial public offering of its stock at $7 per share. It began listing on NASDAQ under the symbol NORL, and in 1995 switched to the New York Stock Exchange, where it traded under the symbol NRL. The company received the Ford Ql Quality Supplier Award in 1994, and in 1995 earned the Arthur Andersen Enterprise Award for best business practices.

The mid-1990s saw a number of acquisitions and joint ventures, as well as the formation of new divisions. In 1994, Norrell entered a joint venture with Ernst & Young, and in 1995 it bought The Executive Speaker, an Atlanta firm which taught public speaking skills to corporate clients. Also purchased was Liken Temporary Services. Norrell Financial Staffing, specializing in placement of accountants and other financial personnel, was formed. In 1996, Norrell formed NorCross, a call-center management service, as a joint venture with The Cross Country Group, a Boston-based company. It also entered into a joint venture with Harvard Ventures called CallTask, and acquired Valley Staffing and Accounting Resources.

The year 1996 was a big one for Atlanta, which hosted the Centennial Olympic Games, and it was big for Norrell as well. The company’s stock split, and by the end of the year, it had revenues of $1 billion, with 268 company-owned locations and 133 franchises. That year, Norrell became involved in information technology services, offering technology consulting, project management, software development, documentation services, systems planning, and other services. With such a wide array of packages available to the customer, the company sought to offer bundles of services tied to the clients’ needs, and the result was Strategic Workforce Management. Under this system, Norrell diagnosed problems in a company’s workforce, joined company management in planning and/or implementation of services, and took responsibility for results.

For Millner himself, however, 1996 was not a year of triumph, as it marked his second failed bid for elective office. He had long had political aspirations, and to many observers possessed the skills of a politician. Despite these skills, Millner failed to win election to the state governor’s seat in a 1994 race against Democratic incumbent Zell Miller. Had Millner won—it was a very close race—he would have been Georgia’s first Republican governor since Reconstruction. In 1993, he had stepped down as Norrell CEO to campaign full time, but retained the title of chairman.

In 1996, during his campaign to fill the seat vacated by retiring Senator Sam Nunn, Kathey Alexander of the Atlanta Journal and Constitution observed that “underestimating the need to appeal personally to voters” had cost him the earlier election. Therefore Millner began getting out of the office more, in order to meet more voters. Still, he failed to win an election over Democrat Max Cleland, who had been a member of President Jimmy Carter’s administration.

’ This man is portrayed as a high-powered businessperson who doesn’t have a heart,” Mary Ann Schrecengost told the Atlanta paper. Former principal of Cedar Grove High School in financially depressed south DeKalb County, Schrecengost had personally observed Millner’s generosity: he had provided funding for college scholarships, and worked with troubled youth. To ensure that word got out about himself, in October 1997 Millner stepped down as chairman to campaign again for the state governor’s seat in 1998, when Governor Miller would leave office. Nonetheless, Millner retained ownership of about 35 percent of the shares of Norrell.

Just as the 1994 governor’s race had featured a confusing set of names—Millner vs. Miller—the top leadership of Norrell had also included the same tongue-twisting mixture until Millner’s departure in 1997. Norrell’s Miller was C. Douglas Miller, who became CEO and chairman upon Millner’s departure from those two offices. Miller was considering the possibility of expanding Norrell’s operations overseas; but ultimately he would not make significant alterations to the formula that had established Norrell as a company with 50,000 temporary employees on assignment throughout North America on any given workday.

In 1997, Norrell made two more acquisitions, Comtex Information Systems and Houston-based M. David Lowe Staffing Services. Fortune magazine named the Norrell Staffing Services business group as one of the nation’s top ten temporary help companies, to its “Most Admired Companies” list in 1998.