Louis Flory saw an opportunity to remake the staffing industry, and formed Effex Management Solutions

Louis Flory’s life was changed by a haircut.

The future president and CEO at Effex Management Solutions needed a quick trim before an interview for a bartending job, and right next door was a temporary staffing agency.

At the time, he was at a crossroads: Having left college without a degree, Flory was trying to figure out what to do with his life. Encouraged by a friend, he visited the staffing company and landed a job as a sales representative.

Flory quickly saw that the temporary staffing industry had, as he put it, “a very broken business model.”
Agencies make their money via billable hours, so it’s in their best interest to fill open positions on short notice. But some of these prospective temp employees are unreliable, which angers companies that need dependable workers.

On the other hand, if a staffing agency doesn’t have an immediate assignment for a talented temp worker, the worker just goes and applies at another agency. The last-minute nature of the staffing industry also means that sometimes, the cream of the crop simply isn’t available to work.

“At the end of the day, because (these agencies are) all chasing the same clients, offering the same service and, quite honestly, submitting the exact same people, the only difference between you and the other guy is who’s willing to do it the cheapest,” he says. “You’re a vendor. I absolutely hated that.”

Flory realized the solution was simple: From a financial and talent-retention standpoint, companies who need a large amount of temporary (or contingent) employees would benefit greatly from having an exclusive, long-term relationship with a trusted staffing company who could deliver quality workers.

This staffing company in turn would also help clients identify, hire and train a management team with the goal of making business operations more efficient, stable and successful.

“Instead of trying to sell temporary staffing, I was taking over companies’ labor forces and hiring them on as my own,” Flory says of Effex, the company he founded in 2007.

Clients of Effex typically have 250 employees or more, and include entities such as manufacturing plants and distribution or processing facilities. The company currently has 21 clients and 27 locations (many clients have multiple facilities managed by Effex) across nine states with more than 10,000 employees. Over time, this unique business model has paid dividends; in fact, between 2010 and 2013, Effex experienced revenue growth of 164 percent.

Here’s how Flory positioned Effex as a leader in the staffing industry.

Treat your clients as partners

The explosive growth Effex has experienced has created plenty of challenges. Maintaining first-rate service to clients is top of the list.

“Every day I struggle to ensure that I’m giving every one of my clients the same quality of service they got when we were just starting out,” he says.