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Company Profile of Spherion
Company Profile of Spherion - May 13th, 2011
SFN Group, Inc (NYSE: SFN) is a North American temporary work agency headquartered in Ft. Lauderdale, Florida, that operates under a variety of brand names.
Spherion was first known as City Car Unloaders, a Chicago company created by Leroy Dettman in 1946.
Initially placed manual laborers in temporary jobs loading cargo, filling temporary clerk jobs was a service the company only later added.
By 1978, the firm was doing business as Personnel Pool of America, Inc, and was acquired by H&R Block. In 1991, H&R Block acquired Interim Systems Corporation and combined it with Personnel Pool, creating a larger staffing services firm.
In 1992, the company changed its name to Interim Services Inc and was spun off by H&R Block in 1994.Interim acquired a number of other companies over the next few years.
The company changed its name to Spherion in 2000.
Spherion Corporation, formerly Interim Services Inc., is a temporary staffing and consulting firm serving more than 33,000 clients, including a substantial number of Fortune 100 corporations. Spherion operates 940 branch offices in eight countries, maintaining a presence in the United States, Australia, Canada, The Netherlands, New Zealand, the United Kingdom, Hong Kong, and Singapore. The company's business is divided into three operating segments: recruitment, technology, and outsourcing. These business segments provide blue-collar and white-collar staff on a temporary and permanent basis. Spherion's outsourcing business provides recruiting, customer support, and administrative support on a long-term basis.
Spherion, a name adopted at the dawn of the 21st century, was the corporate title for a staffing services business whose roots stretched back to 1946. Throughout the course of the 20th century, the company underwent numerous name changes as the range of the services it provided expanded. Originally, however, the company was formed to provide temporary help to businesses involved in industrial and light industrial activities, giving the firm blue-collar roots that would be still evident a half-century later. Service expansion ensued in the decades to follow, highlighted by a signal diversification during the mid-1960s. In 1966, the company began providing temporary workers to nursing and home care clients, marking the beginning of the company's involvement in the healthcare industry. The next defining moment in the company's development occurred roughly 20 years later, its arrival engendered by the intervention of accounting firm H & R Block, Inc.
In August 1978, H & R Block acquired the company, which at the time was operating as Personnel Pool of America, Inc. A little more than a decade later, in January 1991, H & R Block acquired another temporary service business named Interim Systems Corporation. Interim Systems operated in essentially the same business areas as Personnel Pool, providing clerical, secretarial, light industrial, and healthcare personnel. Interim Systems maintained 178 branch offices--a significant measure of a staffing services firm's size--operating its offices in 20 states and three Canadian provinces. On the last day of 1991, H & R Block combined the two companies, creating a large, North American staffing services firm with considerable expertise in supplying blue-collar workers on a contract basis. On June 15, 1992, the new combined company changed its name to Interim Services Inc., the direct predecessor to Spherion.
SFN Group, Inc. (SFN), formerly Spherion Corporation, is a workforce solutions provider. The Company operates in two segments: Professional Services and Staffing Services, which provide temporary staffing and other services and permanent placement under several specialty brands. Within Professional Services SFN operates as Technisource, the Mergis Group, Todays Office Professionals and SourceRight Solutions. Within its Staffing Services segment the Company operates as Spherion. In February 2010, SFN acquired Tatum, LLC (Tatum) an executive services firm focused on the office of the chief financial officer.
SFN’s Temporary staffing service is where the Company’s employees work at customer locations under the supervision of customer personnel. The duration of an assignment can be from a day or less to a period of several months. It provides temporary employees with information technology, finance and accounting, legal, engineering, marketing, light industrial and administrative skill sets. Services are generally billed by the hour for the number of hours worked. Other services include services where the Company manages aspects of the operation of a customer function, such as recruiting, administrative services, help desk and data center services usually under long-term contracts.
The Company’s Permanent Placement is a service where it identifies candidates on behalf of its customers, screens the candidates and assists in the recruitment efforts. If the customer hires the candidate, the Company’s fee is generally determined as a percentage of first year compensation for the candidate placed. The Professional Services operating segment focuses on temporary staffing and placement of professional skill sets in the areas of information technology, finance and accounting, legal, engineering, sales and marketing, human resources and administrative. The Staffing Services operating segment focuses on temporary staffing, other services and placement of individuals with administrative, clerical and light industrial skill sets. The Company’s business is conducted, through a network of locations in the United States and Canada. Its locations are Company-owned, franchised or area-based franchised.
The Company competes with Robert Half International Inc., MPS Group, Inc., Hudson Highland Group, Inc., Allegis Group, Kforce Inc., Manpower Inc. and Kelly Services, Inc.
Problems surfaced at Interim Services at roughly the same time the company adopted Spherion as its new corporate title. In March 2000, Spherion fell short of its earnings estimates for the first time, leading to internal and external scrutiny that sparked dramatic changes. An economic downturn exacerbated the financial burdens wrought by the company's near decade-long acquisition campaign. Between 1989 and 2000, the company's revenues had increased from $593 million to $2.1 billion in large part through acquisitions. The period framed the tenure of Raymond Marcy, who as chief executive officer had orchestrated the acquisition spree. Industry pundits charged that Marcy and his management team had underestimated the costs incurred from absorbing the 35 acquisitions completed during the period, leaving the company hobbled by debt as the economic climate soured.
The search for a solution to Spherion's problems led to divestitures, substantial layoffs, and new management. By the fall of 2000, the company had retained Credit Suisse Boston as an advisor to determine what should be done with the Michael Page division. In the spring of 2001, the company decided to sell Michael Page to the public through an IPO, netting $186 million when the offering was completed. In April 2001, Marcy resigned as chairman, chief executive officer, and president, ushering in a new era for the company, one led by Cinda A. Hallman.
Hallman left her post as vice-president of global systems and processes at Du Pont Co. to join Spherion as its new president and chief executive officer. During Hallman's first months of stewardship, Spherion implemented a series of cost-cutting measures, including laying off 700 employees, reducing administrative expenses, and shuttering 100 of its branch offices. The company divested several consulting companies it had acquired in recent years and, of significance, it exited the healthcare market. In addition, the company officially terminated its acquisition campaign in 2001. Spherion announced that it had no intention to complete any sizable acquisitions in the coming years, except for small purchases in the company's new areas of emphasis, recruitment and outsourcing.
Hallman espoused an altered vision of Spherion's future. To cure the company's ills, she intended to exploit the economic downturn by focusing on outsourcing, that is, handling recruiting, customer support, and administrative tasks, such as secretarial work, for companies. Aside from providing a new source of growth for the company, outsourcing was expected to impart greater financial stability to Spherion, creating long-term customers. Outsourcing contracts typically ran for five years, making Spherion's ability to predict its financial future more acute. Looking ahead, Hallman was attempting to double Spherion's revenues from outsourcing contracts by 2004, hoping to reach the $1 billion mark. "We've got our timing right," Hallman said in a November 26, 2001 interview with Forbes. "We just have to get off our butts and move."
Principal Subsidiaries: Spherion Financial Corporation; Spherion (Europe) Inc.; Spherion Technology (UK) Limited; Spherion Assessment Inc.; Norrell Corporation; Spherion (Europe) Staffing Limited (U.K.); Spherion Limited (Ireland); Spherion Recruitment Group B.V. (Netherlands); Spherion Australia Pty. Ltd.; Spherion (S) Pte. Ltd. (Singapore); Spherion Limited (Hong Kong).
Principal Operating Units: Recruitment; Technology; Outsourcing.
Principal Competitors:Adecco S.A.; Manpower, Inc.; Kelly Services, Inc.
Market Cap (Mil.): $524.77
Shares Outstanding (Mil.): 50.70
Annual Dividend: --
Yield (%): --
SFN Industry Sector
P/E (TTM): 27.22 12.45 18.80
EPS (TTM): 838.68 -- --
ROI: 5.23 6.49 4.19
ROE: 5.80 8.62 7.33
Incorporated: 1992 as Interim Services Inc.
Sales: $2.71 billion (2001)
Stock Exchanges: New York
Ticker Symbol: SFN
NAIC: 561320 Temporary Help Services
1946: Spherion's predecessor is founded.
1966: The healthcare market is entered for the first time.
1978: H & R Block, Inc. acquires Personnel Pool of America.
1991: H & R Block acquires Interim Systems Corporation and merges it with Personnel Pool of America.
1992: Interim Services Inc. is adopted as the new corporate title for the combined companies.
1994: H & R Block sells Interim Services to the public through an initial offering of stock.
1997: Michael Page Group is acquired.
1999: Norrell Corp. is acquired.
2000: Spherion Corporation is adopted as the new name for Interim Services.
2001: Michael Page Group is sold; Cinda Hallman is appointed president and chief executive officer.
Name Age Since Current Position
James Forese 75 2007 Chairman of the Board
Roy Krause 64 2004 President, Chief Executive Officer, Director
Mark Smith 48 2007 Chief Financial Officer, Executive Vice President
William Grubbs 53 2007 Chief Operating Officer, Executive Vice President
John Heins 51 2006 Chief Human Resources Officer, Senior Vice President
Steven Elbaum 63 2007 Independent Director
J. Ian Morrison 58 1993 Independent Director
William Evans 63 1993 Independent Director
David Parker 67 2003 Independent Director
Anne Szostak 60 2005 Independent Director
Barbara Pellow 56 2006 Independent Director
Lawrence Gillespie 67 2010 Independent Director
2050 Spectrum Boulevard
Fort Lauderdale, Florida 33309
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