Rachel Schall is a highly motivated graduate of Georgetown University. But that never seemed to matter when she worked as a temp. One typical assignment called on her to spend four days in an investment banking company’s utility closet stuffing packets into envelopes.
“I was doing mindless work,” Schall recalls, “and I was doing it in the worst possible environment.”
No more. Today, Schall and her partner, Scott Thomas, run BrainTrust–a staffing agency in a converted warehouse in San Francisco’s South of Market district that specializes in placing bright young college graduates in junior professional jobs paying $15 to $18 an hour. Schall and Thomas, a Harvard graduate, are participants in the fastest-growing niche in the staffing services industry: the temporary placement of “technical” and professional workers.
“We couldn’t find jobs that interested us,” explains Schall, 27, who speaks in staccato bursts. “So we decided to create our own and help smart young people avoid the aggravation we encountered as temps.”
BrainTrust is mushrooming. Founded in June 1996 with a $20,000 investment, it placed 50 people at 10 San Francisco-based companies that year and collected revenues of $250,000. Last year, BrainTrust expanded into Silicon Valley and placed 214 people at 40 companies, collecting revenues of $2 million.
Now the company–which has three employees, graduates of Harvard, Northwestern and the University of Colorado–is on track to post $4 million in revenues in 1998. It plans to open a second office in Palo Alto by year-end and a third in Los Angeles by late 1999.
Expansion in Palo Alto is natural. BrainTrust has Silicon Valley-based clients such as Oracle Corp. of Redwood City and Microsoft subsidiary WebTV Networks of Mountain View. An office in Los Angeles also makes sense, Schall and Thomas say, because Los Angeles, like San Francisco, attracts top college graduates who aren’t sure about their career paths. Then, too, Schall and Thomas know people who work in Hollywood movie studios and acting agencies.
“That’s a good way to start building a base of clients,” Thomas says.
Schall and Thomas, 29, have entered the right business at the right time. The U.S. staffing services industry has doubled to $50 billion in just the last five years, says the National Association of Temporary and Staffing Services, and it’s expected to grow at least a third more by 2005 as companies continue to outsource non-core functions.
People readily recognize the biggest players, such as Manpower Inc., Kelly Services Inc. and Olsten Corp. But overall, small, independent operations like BrainTrust attract the majority of business in a fragmented industry. BrainTrust targets the fastest-growing area of staffing services. Technical- and professional-level placements totaled more than 20 percent of the industry pie in 1997, compared with less than 16 percent in 1991, and the National Association of Temporary and Staffing Services says growth would be greater if not for a worker shortage.
At any one time, BrainTrust has about 65 “associates” working in the Bay Area, mostly San Francisco and Silicon Valley. That’s nearly half of the company’s rotating bank of job candidates. About half of BrainTrust’s people work in high tech, especially in Web development, marketing and research. The rest pitch in at advertising agencies, PR firms, publishing and brand management companies as writers, editors, marketeers and account managers.
In addition to WebTV Networks and Oracle, BrainTrust’s corporate clients include TBWA Chiat-Day, a national advertising giant; DoubleClick, an on-line advertising consultant; and International Data Group, a large publisher of high-tech magazines.
BrainTrust associates frequently wind up with permanent jobs. Consider WebTV Networks, which has used BrainTrust to staff most of its 95-employee customer service department. To make sure employees will fit in well with the company, WebTV prefers hiring people initially as temporaries.
“I knew I could trust BrainTrust,” says Juli Jasmer, a recently departed WebTV manager. “They know what WebTV wants and go out of their way to make a good match.”
On average, BrainTrust associates earn $15 to $18 hourly, nearly double what secretaries and office clerks earn. They’re placed in jobs for about six weeks, three times the industry average–and often within a week or two of applying at BrainTrust. All are college graduates, Schall and Thomas say, and about half of them come from the nation’s top 25 schools, such as Harvard, Yale, Princeton, Duke, Georgetown and the University of Virginia.
BrainTrust interviews candidates for about an hour to ascertain their strongest skills and what jobs interest them. Candidates are also asked to produce writing samples to make sure they can communicate well. Candidates at traditional staffing firms are tested more extensively, Schall and Thomas say, but in simplistic skills such as filing, spelling and arithmetic.
The interviews at those firms lasts only 5 to 10 minutes, Schall adds, “and the emphasis is always on what you can do for us, not on what you want to do.”
Thomas, like Schall, had a negative experience as a temp. When he graduated from Harvard, he briefly considered a legal career, but a stint as a temporary supply room clerk at Ropes & Gray, one of Boston’s biggest law firms, quickly stifled his interest. Thomas also felt bored by his experiences as a warehouse clerk in Philadelphia, a real estate firm file clerk in Los Angeles and an administrative assistant at a windmill power company in San Francisco.
“For the most part, all I learned from temping was what I didn’t want to do,” Thomas says.
The genesis for BrainTrust came in April 1994, when Thomas met Schall at a party in Beverly Hills. The two commiserated about their temping experiences. Later, they decided they could run their own staffing agency better. The pair decided to specialize in placing bright individuals in positions demanding brainpower and placed a priority on treating job candidates with respect.
BrainTrust didn’t blossom without surmounting challenges, and it’s hardly the only staffing firm that appreciates the potential of its market.
In the first two months of the firm’s life, the phones in the office never rang. “We were scared,” recalls Schall. “There were moments we thought we might go under.”
That period is a distant memory, but now lots of big staffing firms, such as Manpower Inc. of Milwaukee, Hall Kinion & Associates of Cupertino, and Adecco Employment Services of Redwood City, are increasingly targeting BrainTrust’s turf. Manpower Technical, for example, had revenues of $542 million last year, up from $452 million in 1996 and $134 million in 1990.
Similarly, Adecco turned to the placement of high-tech professionals last October with the acquisition of Tad Resources International, a Cambridge, Mass., high-tech staffing firm with 140 offices nationwide. To speed job placement, Adecco recently struck an accord with Microsoft Corp. to train temporaries in the use of Microsoft products.
“There is an enormous gap between demand and supply of high-tech professionals,” says Adecco spokeswoman Bonnie Olmsted. “That makes the growth potential for high-tech temps enormous.”
BrainTrust’s lead in the Bay Area still makes it the company to beat, however.
“BrainTrust does a great job making matches,” says alumnus Greg Aaron, a former independent contractor for America Online and now content manager at Preview Travel, a San Francisco on-line travel agency. “I haven’t found another firm that fits their profile.”
Another happy BrainTrust alumna is Leslie Fincke, a network coordinator at FlyCast Communications, a San Francisco-based Web advertising network serving 400 Web sites. Fincke, a Georgetown graduate and former waitress, previously got a similar job at International Data Group in San Francisco with BrainTrust’s help. That was February 1997.
Three months later, she had a permanent position at IDG and was hiring BrainTrust associates for short-term assignments. Fincke got her job at FlyCast in May by browsing BrainTrust’s Web site, reviewing company material and talking with Thomas and Schall.
“It’s definitely a better opportunity,” she says, adding that she has doubled her pay in the past year.
Neither Schall nor Thomas attended business school. Apparently, that has made no difference whatsoever. “We get all the training we need right here everyday,” Thomas says.
