Bull Bear Report Apr 27 2011

Become a CFO for Hire

By jeremy greenfield and shareen pathak

Mike Raffia is a CFO for hire.

Since hanging up his hat as chief financial officer of Tarrytown, N.Y.-based food processing company Kane Miller, Raffia has held more than a dozen senior-level positions in as many years in a variety of industries, jumping from utilities to financial services.

Raffia, 61, who lives in Hartsdale, N.Y., enjoys the job hopping, which comes courtesy of a temporary employment agency. "I've worked with management, mergers," he said. "It's satisfying."

Leery of increasing employment during an uncertain recovery, recession-weary companies have become more willing to take on senior level temporary workers like Raffia who often can make between $90,000 and $200,000 per year, on an hourly basis. As the recovery gathers steam, analysts and executives expect the practice to accelerate.

"There are a lot of projects that are getting restarted -- deferred maintenance," said John LeBlanc, a senior executive for staffing firm Experis, the professional resourcing division of ManpowerGroup. "Compliance and M&A are two environmental factors that drive our business a lot."

Temporary staffing usually bumps up during the early part of an economic recovery. What's different this time is more such jobs are opening up at senior levels than in previous cycles. The evidence shows up in business results of recruiting firms such as Experis and Resources Global which specialize in placing such professionals.

The Irvine, Calif.-based Resources Global reported a 9.8% increase in revenue for its fiscal third quarter ended Feb. 26 to $137.6 million along with a 10.2% increase in temps deployed to clients such as Chevron, Conoco Philips and Starbucks. Experis, which had only 8,000 professionals in the field a year ago, expects that number to grow to more than 12,000 by the end of 2011. Revenue from Experis has also become a greater proportion of Manpower's overall business in the past six months, according to LeBlanc.

"The companies we work with don't want to hire people full-time, even in C-level positions," said Don Murray, chief executive officer of Resources Global. In an uncertain economy, he explained, employers don't want to commit.

Temps at the FDIC, Bausch & Lomb

Bausch & Lomb has been using Resources Global to augment its legal department for just over a year, said Bob Bailey, vice president and general counsel. "We've brought in lawyers to fill gaps that occur as a result of things like job changes, maternity leave, and spot needs as they occur," he said.

In a reversal of its practice during the savings and loan crisis of the late 1980's, the Federal Deposit Insurance Corp. has brought in thousands of senior temporary staff to help deal with the surge in bank closings during the recent financial crisis. Many recruits are casualties of those bank closings. More than one-third of the FDIC's 9,000 employees are temporary.

"Instead of hiring permanent staff to deal with bank failures, the FDIC decided to go and hire people on two-, three- and four-year assignments," said Greg Hernandez, an agency spokesman. "These people know up front that it's temporary and that their assignment will end." During the S&L crisis, FDIC headcount peaked at 23,000. When the crisis ended, the agency had to cut back to 4,500.

Acer America Corp., the computer company, has been using senior level temporary staffing for three years and recently began using more such temps in its legal and finance departments. Using a more flexible labor model helps control its biggest cost: employees.

Acer recently increased its reliance on senior level temps within its legal and finance departments. "Right now we have very lean staffing in the law department and this allows us to expand our staffing needs at a moment's notice when we need it," said Teigue Thomas, vice president and general counsel for the company. "We intend to do more of it."

Pay as High as $200,000

Even high-level temps are paid hourly by the staffing firms when out on the job. Resources Global pays an average of $60 an hour, or about $120,000 a year, based on a 40-hour workweek and two weeks of vacation. Experis pays between $40 and $100 an hour, or $80,000 to $200,000 a year. Robert Half Management Resources temps get up to $300,000 a year.

Some staffing firms also pay benefits including funding 401K plans with additional contributions, training, paid vacation and stock options, all perks not normally associated with temporary jobs.

The demand for temporary staff is expected to keep increasing with revenues for all levels of expertise rising by 10% to 12% in 2011 and 6% to 8% in 2012 said BMO Capital Markets staffing analyst Jeff Silber in a December note to investors. As the economy improves and more professionals return to fulltime positions, companies will have to fight harder to recruit top talent.

"We're optimistic," said LeBlanc of Experis. "But I do expect that the candidate's power will increase. It's been a buyer's market [for talent] in the last two or three years. I imagine that leveling off and transitioning in 2011 to a seller's market." He predicts his business will grow by about 20% in 2011.

How to Find a Job

Senior variable staffing firms find talent much like any other firm: job ads, networking groups, LinkedIn and word-of-mouth.

"The number one way is through referrals," said Huron Consulting Group's Mike Draa who heads the firm's accounting advisory practice that provides professional temporary staffing services.

Huron, like the other firms in the market, is on a constant hunt for talent and maintains a database of executives that can be reached when there is a need.

"We literally have thousands of folks that we use throughout the years," said Draa. "That database can meet those needs that are out there."

Many people who work with one of these firms do so because they prefer the lifestyle: choosing assignments, working on short projects with many different companies and in different industries, and having the flexibility to take time off without losing benefits right away.

"There's nothing better than to be able to walk in, do something different, new and be challenged all the time," said Mindy Meyers, a former public accountant who joined Resources Global nine years ago.

Raffia intends to keep on temping for the foreseeable future. "I've had an opportunity to work with many different kinds of folks -- some contemporaries, some peers," he said. "That's what keeps it fresh."

Write to Jeremy Greenfield and Shareen Pathak

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