How Jurassic Park Inspired LaborMax to Evolve and Turn around Flat Profit
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May 1, 2019
Credit: Leslie Collins – Staff Writer, Kansas City Business Journal
When Shane Glavin joined Kearney-based LaborMax Staffing as CFO and chief innovation officer in 2018, he faced a challenge: Despite double-digit revenue growth, net operating income remained flat.
One of the biggest factors was a "significant increase in our people costs," which make up 75 percent of expenses, thanks to a tight labor market and the fact that the company went from issuing about 25,000 W-2s in 2014 to nearly 45,000 in 2018, he said.
So to combat the rising costs, Glavin started focusing on increasing efficiencies to drive growth.
The Kearney staffing agency serves industry segments such as warehousing and distribution, construction and skilled trades, hospitality, and manufacturing and logistics. It has grown to 106 branches in 26 states. In 2014, it had 64 branches
Shane Glavin is CFO and chief innovation officer at Kearney-based LaborMax Staffing.
A ROCK and an Evolve place
To drive savings for corporate and the branches, Glavin spearheaded two prime initiatives: implementing a ROCK culture, which stands for "reduce our cost killers," and the Evolve team, which is tasked with identifying and implementing strategic technology.
For the Evolve team concept, Glavin said he became inspired one night while watching "Jurassic Park" with his children.
"Why do these dinosaurs die off? They died off because they couldn't evolve," he said. "So I created the Evolve culture here at LaborMax."
One key with Evolve has been implementing Bullhorn staffing and recruiting software, which provides a platform to integrate a variety of third-party apps and software to drive efficiencies. Once Bullhorn is fully implemented later this summer, Glavin expects it to help LaborMax boost profit by $3.5 million during the following 12 months.
The ROCK program already has identified "well over $1 million" in savings in year one and is focused on diving into every process and asking why and whether there's a better way to do it, he said.
It has led LaborMax to transition away from a paper-based employee training system and implement a centrally based software program that ensures branches have up-to-date materials.
The software tracks which employees completed certain training modules and has another perk: boosting employee retention. When LaborMax had the paper-based system, branches experienced significant turnover because training was subpar and there wasn't a uniform checklist approach for ensuring that new employees were set up for success, he said.
"Individuals were quitting because they felt like they were set up for failure," Glavin said. "There's a lot of positives coming out of having a one-stop shop and updated best-in-class training platform."
Faster Operations
LaborMax also is adopting a new system that enables pay cards of field team members to be filled within about two hours instead of the traditional waiting period of 24 to 48 hours, and being paid faster can give the company a competitive edge in attracting talent, he said.
Later this year, LaborMax plans to roll out an automated process for doing credit checks on companies, which can churn out a suggested credit amount within three to five minutes instead of 24 hours or more.
"How powerful would that be? How much business do we lose today because it takes too long?" he said.
For 2019, Glavin projects that revenue will grow at least 14 percent for the year and that profit will exceed 2O18 by 33 percent.
Founded in 2002, LaborMax has a model similar to franchising. but it gives its business partners more flexibility in running their entity than the typical franchising model. It now has more than 35 business partners and employs about 45 at its headquarters.
- Leslie Collins – Staff Writer, Kansas City Business Journal