‘In uncertain times, firms are simply more comfortable with deploying talent on a flexible basis.’
— Jody Greenstone Miller, founder and CEO, Business Talent Group
Some of the biggest signs of hope that the fledgling automotive recovery is turning into a rebound of significant proportion may be coming from the contract engineering sector, which typically is a key confidence indicator within the industry.
Locally, GTA Professional Staffing Ltd., a metropolitan Detroit-based company owned by Downriver businessman Burl Adkins, is a contract engineering provider that finds itself in the midst of an encouraging business surge that seems to indicate the potential for significant employment and sales growth into 2010 and perhaps beyond.
“We experienced about a 20 percent increase in new positions during 2009, with much of that growth coming in the final quarter,” Adkins said. “From all indications right now, that trend is going to continue, if not intensify over the next 12 to 24 months.”
Founded by Adkins in Southgate in 1988 and now based in Dearborn, GTA started out as a placement firm for contract automotive design personnel. Today it is a full-service provider of engineering, automotive professionals and top management talent to a customer base that runs the gamut of most of the leading automakers and their key suppliers.
For the past 22 years, officials say, the company successfully has navigated through some noteworthy industry highs and lows while many of its industry counterparts have folded or been sold. They believe that while the past year and a half has provided unprecedented challenges, it has left GTA seemingly more resilient than ever.
“A 20 percent increase in contract placements is very significant in this economic environment,” said Leo Hagan, the company’s president and chief executive officer. He believes the gain was as much the result of GTA’s fundamentally sound business strategy as it was the larger market trends.
“We had a solid foundation that we’ve managed to keep in place, and we continue to maintain a premium benefits package that includes a 401(k), three different kinds of Blue Cross insurance,” Hagan said, “as well as a flexible health-care spending account that helps employees reduce out-of-pocket medical costs.”
He also attributed the company’s success to its diversified customer base for its associates, who are in assignments with nearly 30 original equipment manufacturers and leading suppliers throughout the metro Detroit region and the South, where several European makers have established new U.S. operations.
Adkins and Hagan both are expecting the automotive industry to look even more favorably on contract engineering in the future, because it provides the leading manufacturers and their suppliers a greater ability to control costs, manage change and encourage innovation through the ups and downs of industry business cycles, an opinion shared by other experts in the contract employment field.
In a commentary that appeared in the Wall Street Journal in December, Jody Greenstone Miller, an adviser to President Bill Clinton in the mid-1990s, wrote that the late 2009 spurt in temporary employment was far more than just a bright spot in an otherwise still sluggish economy.
“The truth is that this surge in temporary workers is not only good news for the economy, it’s the future of the 21st century labor market,” said Miller, the founder and CEO of the Business Talent Group. “Today, demand for high-end temporary business talent is not focused on cost-cutting projects, as some might suspect. Instead, firms use temporary executives to drive innovation.
“In uncertain times, firms are simply more comfortable with deploying talent on a flexible basis.”
The U.S. Labor Department’s employment reports for the latter months of 2009 show temporary employment surging by 34,000 in October, 54,000 in November, followed by 47,000 in December, while levels in eight out of nine other jobs categories still showed declines. Since reaching a low point in July, temporary staffing nationwide has added 166,000 jobs to the marketplace.
While GTA has seen a significant jump in its contract placement business, Hagan said, its direct, or “permanent,” placement business has not yet rebounded fully to pre-2009 levels. However, in direct placement, GTA officials believe their company still has an advantage over retained search firms that demand upfront fees.
“GTA conducts all searches at our own expense, as we are confident in finding the right person for the customer’s needs,” Hagan said.
Another advantage of utilizing contract placement firms such as GTA, particularly in difficult economic times, Adkins said, is that they fully can support or even supplant the human resources function of the client firms.
“The staffs in most human resources department have been hard hit, too,” he said. “We manage the benefits, handle all the pre-employment screening and training, as well as payroll — we’re equipped to do everything an HR department can do.”
Also encouraging, company officials say, is that GTA ended 2009 with a net gain of four new clients.
“So we have maintained historical customers and added customers in a year in which the industry saw a record downturn,” Hagan said. “Based on last quarter of 2009, we’re expecting a very robust 2010, as customers ramp back up — and hire primarily contract professionals.”
Additional diversification is part of the success formula going forward as well, as the company is going through the final stages of the lengthy and stringent process of obtaining clearance to become a supplier of contract engineers and other personnel to the U.S. Army.
“Completion of this process should create added opportunities for staffing within the military supply base, which is critical to the success of the U.S. military,” Hagan said.
Hagan said GTA’s Dearborn office also could be the international incubator site for an existing business from Europe that does not yet have a presence in North America. Those plans are expected to firm up early in the year. The company in February also will observe a special milestone as it celebrates its 10-year anniversary as a supplier to a leading Asian automaker.
“This celebration is symbolic of how we have diversified our customer base over the past decade as well,” Hagan said. “We were once heavily geared toward supplying only U.S.-based customers, and now we are supplying OEMs and suppliers from three continents.”