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.

This rapid scaling has also produced some interesting cultural and organizational challenges. Finding the right management team to run a plant or facility can take time; in the meantime, Effex has to ensure that its most talented workers don’t get burned out.

And then there’s making sure that when the management team is in place in a new market, the company is able to maintain the same high levels of service seen at other sites.
Flory approaches his company’s relationship with clients as a partnership, as eschews micromanagement.

“Though we’re in the staffing industry, we’re not a temporary staffing company by any means,” he says. To that end, when the company enters into a new market, it embeds an on-site implementation team, which is then tasked with assessing needs, hiring management and overseeing training.

“I have a team of people — they’re kind of our best of breed, if you will,” he says. “They’re very, very good at what they do. They go into the new markets (and) they’re actually running that new partnership. The clients get the benefit of the absolute best staff members that Effex has to offer running their facility.”

To ensure quality control as the implementation team helps the facility learn how to refine its workforce, Effex has devised the Strategic Alliance Program. Containing a battery of training programs — from workforce staffing and retention to on-site management protocol — the Strategic Alliance Program ensures that clients have a tangible blueprint and robust toolkit to use after the Effex team departs.

Even after they leave, Flory and his team continue to work closely with clients, tracking progress with weekly reports and visiting quarterly for an on-site review. In this way, they mitigate any disconnect because of distance.

Hire, train and retain the right talent

Flory is mindful that the wrong hire can be devastating to progress. He preaches hiring smarter, not faster.

“Sometimes it takes us longer than we’d like — sometimes we may end up being there three months before we have the right team in place to run that facility, long term,” he says.

Flory designed Effex so that it only has one client company in a given market. In other words, it’s recruiting and training employees only for one client — and not diluting the available talent pool by sending these temporary employees to multiple businesses.

“We are in a proactive position,” Flory says. “We have the best qualified people, and we’re waiting for our client to request them in that market.”

Effex also invests in the workers it recruits — it offers a rigorous training program for promising employees — and has a formal structure of financial perks to reward top achievers.

For example, each of the company’s locations has opportunities for quarterly financial bonuses; each of these on-sites also competes against one another annually in categories such as best overall attendance or lowest turnover rate.

At Effex’s Houston headquarters, Flory applies a similar approach to building a strong team to handle the company’s growth. While he notes that there is no one right answer to hiring talent — “My product is people, the most unpredictable, unreliable thing on the face of the planet,” he laughs — he hits upon some specific advice.

“You really have to know your business, and know what type of aptitude it’s going to take, what type of mindset it’s going to take to be successful and fill in the roles that you’re hiring for in your business,” he says. “It really does come down to your instincts with people.”

Once he finds these employees, Flory aims to retain them by investing in their growth and development; in fact, Effex has paid for graduate degrees so employees could rise up the company ranks from within.

But Flory is also a firm believer that inspiring buy-in — and making workers feel like a valued part of something bigger than themselves — is crucial to long-term success and employee retention. As a result, he holds a yearly companywide Christmas party, with public recognition of award-winning employees.

“The whole point is to bring everyone together, discuss what we’ve achieved that year and where the company’s at, because I want them all to understand what we’re working towards, what they’re a part of,” Flory says. “It’s my opportunity to thank them and remind them how much I appreciate what they’ve done for us, to get us where we’re at.”

Value your employees

In addition to financial and educational perks, Flory also believes in cultivating the kind of company culture that fosters respect and loyalty. He strives to promote this through his own actions.

“As a CEO, you’ve got to be able to motivate and inspire people,” he says. “And then you have to have the ability to win over their respect and their loyalty to you. And respect and loyalty — the only way you get those two things in return is to first give it.”

Flory gains these traits by adopting the same mindset Effex takes toward its clients; specifically, he treats his employees like equal partners.

“I tell people all the time, ‘When we sit down to have a discussion, I don’t care what shape that table is, in your mind it’s a round table,’” he says. “There’s no one above anybody here. We’re all in this together; we’re all trying to do what it takes to first make the company successful, make each other individually successful.”

To reward high-performing employees, Flory says Effex is developing a profit-sharing program. The company also changed its policies so employees are required to take their earned vacation time in a given year.

“One way or the other, I need people to not forget what they’re working for, to not forget that they too have a life and that I care about that,” Flory says. “I want them to enjoy their own lives.”

Despite a number of complex hurdles, Flory is confident in his company’s business model: “At the end of the day, I believe it’s worked.”

Flory isn’t shy about expressing gratitude for Effex employees.

“We all need three basic elements from our jobs: we need to feel valued, recognized and rewarded for the job that we do,” Flory says. “We manage the labor forces for our clients with that mindset, and that’s how I manage the entire company here with my own staff.” ●

Takeaways:

  • Partnerships are crucial to success.
  • Your employees are your most valuable asset.
  • Reward — and don’t burn out — A players.

The Flory File

NAME: Louis Flory
TITLE: President and CEO
COMPANY: Effex Management Solutions

Born: Houston

Education: I actually got kicked out of college with 21 hours left to graduate. I was going to Stephen F. Austin State University in Texas. My major was international business, I minored in Spanish and I double majored in a hell of a lot of fun.

What are the leadership traits that a CEO needs to be successful? A CEO must have two traits — in my mind, these are an absolute must. You must have vision. And then you must have the ability to motivate, lead and inspire others to that vision. If you don’t have that, you’re done.

On how his tough childhood influences him: I always say I’m the result of babies having babies. My mom was 16, and my dad was 18 when they had me, and I was the result of a kind of a “War of the Roses” divorce when I was 4 years old. My mom actually got caught up in drugs and ended up in prison; I lived with my grandparents on a farm and lived on welfare for a long period of time.

I don’t know if that’s a big part of my motivation or my drive; I know that I have a fear of standing still. When I’m not doing something productive, or growing this business, I get a very strong sense of anxiety in my chest.

I value those lessons that I learned growing up like that. You develop a lot of character, I believe. You certainly know what life has to offer if you’re not going to get up and go make something happen — if you’re not going to believe in yourself, if you’re not going to drive yourself and expect things of yourself.