by Susan Wright
Companies know that it is becoming increasingly difficult to find good candidates for tough-to-fill positions. These positions are commonly found in
Information Technology, Computer Programming, Engineering, and other highly technical areas.
In the current labor market, candidates have the upper hand over companies. Recruiters are struggling primarily because companies are failing to realize that a shift has occurred in the market. Hiring managers are still asking recruiters for a list of candidates who meet the basic criteria. In addition to
this, the majority of candidates are not close to what the companies want.
One company that is tackling this issue head on is Canon Recruiting Group, a global staffing and recruitment firm founded in 1980. The company utilizes new
technology to help find candidates that no other search firm can find. The firm specializes in ‘hard to find’ and ‘hard to fill’ positions.
I recently sat down with Tim Grayem, president of Canon Recruiting Group, to learn more about his background and how Canon Recruiting Group was started. We
also discussed the company’s operations, the current market, and what is in store for the future.
Tell us about yourself first. Where did you go to school and work in the past?
I earned my BS in Business Management from Long Beach State University in 1976. From 1977 to 1980, I was Regional Vice President of Wells Recruiting
Systems. In 1980, I developed The Canon Group, recognized as one of Los Angeles’ best executive recruiting and consulting firms. As owner and director, I
have been featured in the Los Angeles Business Journal for ten consecutive years as a leader and top CEO in the industry. I often testify as an expert
witness regarding employment related issues.
Tell us how your company started and when. Who was involved and what did each person do?
As Regional Vice President of Wells Recruiting Systems, I helped them open offices in Dallas and Houston. I left after the company started having financial difficulties. Shortly thereafter, I came back to California to start Canon Recruiting Group. Another former employee of Wells Recruiting Group joined me in buying them out.
Tell us an interesting story about your business. Were there any “wow” moments? Anything funny or unusual?
Oddly enough, the old Century City office where Wells Recruiting Systems was based out of was up for sale. We decided to buy the office as our base of operations.
What is your role in the company now?
I am the president and principal at Canon Group of Staffing Companies, which is based in Santa Clarita, California. I am the company’s director of strategic planning and also its CEO. On a national level, I manage litigation matters, target business development, and work in senior level internal recruitment. On a regional level, I oversee the firm’s three regions dividing the U.S. into west, central and east operations.
What does your company sell and how does it make money?
Simply put, we charge our clients for services provided to them. We find jobs for corporate clients, working with a qualified pool of applicants.
Which companies do you consider to be competitors?
Our primary competitors are Alltek, Manpower and Kelly services.
What makes your products and services better than competitors’ offerings?
We take temporary assignments on as search assignments. We hardly do anything in bulk. We require interviews, whether face-to-face or over the phone. We go through more exhaustive steps than our competitors before selecting someone. Recently, we were asked to find a very specific programmer within two days, and they added that they must speak Bangali. And we did. If there is an issue, we go right to the client. We will jump on an airplane and go directly to our clients when necessary.
What were revenues in 2012? What do you project revenues will be for 2013?
We have been listed on the Inc 5000 List of America’s Fastest Growing Companies for three years in a row. I anticipate revenues will go up consistently this year. We generated $14 million in revenues in 2012, and I anticipate we will reach $18 million in 2013. Everyone is asking about the
Affordable Care Act. This will sweep $400,000 off our bottom line, which means less hiring and less growth. We see that as a problem. This will act as a giant wet blanket over the entire industry.
Does the company have any cash flow from financing activities? What is your total debt, if any?
We have a $3.5 million line of credit that we only use when someone calls in with a big project. Our business has been so good that we have rarely have to tap into this credit line.
Where do you see the company in five years in terms of revenue and profitability?
That’s a tough one. Profitability will certainly be harder to maintain due to more state and federal taxes that governments places on employers. Large companies are utilizing temps and passing the burden of employment and the attendant cost for Social Security, disability benefits, and of course healthcare. Canon has been fortunate to experience substantial growth during the great recession of 2007 to date. The biggest concern that all staffing firms face is the burden and regulation of Obamacare. Our initial analysis puts the cost of the affordable care act at an additional $400,000 in expense per annum. When coupled with high tax rates in general and the general litigious nature of the workplace environment, it becomes very difficult to maintain
a profitable bottom line. There is no question that this onerous burden of healthcare will slow down hiring across the nation, because without profits, we can’t expand and therefore hire more people.
What forms of marketing do you use to attract clients?
We are heavily invested in all social media outlets. We have been in social media for five years. We use Facebook and Twitter, along with traditional advertising in small and large newspapers. We also do lots of online advertising as well. One of our best marketing tools is word of mouth.
What are the biggest growth catalysts for you right now?
We just renewed all of our technology through Dell. We are trying to gain a bigger presence in the technology space. We are heavily involved in technology, but it is not the largest part of our business. All of our jobs will be on the new webpage, which we are currently finishing up.
Have you faced any regulatory hurdles, or anticipate any in the future? Explain.
If you count the lopsided nature of the employee/employer relationship, we are under a great deal of pressure legally. Unemployed people go into disability, sue employers, and much more. California is a tough state to do business in. We have the highest tax rate in the country. Litigation is a cost of doing business, and not a pleasant thing to deal with.
Is there any announcement you’d like to make?
Keep an eye out for our new website.