Reflections of the Founder: PIVOTAL Turns 30

Coming to Canada from England in 1980 was one of the best decisions our family has made. Starting my own company was an even better decision. But there was also a lot of luck involved.

I was introduced to Stan Lewis who wanted to expand his successful search business into the temporary help market. Stan would provide the initial finance and back office administration, but needed an experienced operator. I understood the temporary help business, but did not have the capital to get it started. We formed a partnership that lasted for almost 28 years.

I supplied temporary and contract truck drivers and since I lived in Mississauga, I looked for suitable office space close to home. I rented the first office at Dixie/401 on May 12, 1981. The area west of the airport became the transportation centre of Canada and luckily I was right at the heart of it.

The temporary help industry had been around since the 1950’s, but during the 1980’s and 1990’s the use of temporary workers exploded and every company servicing that need had an incredible opportunity to grow.

There are no real barriers to entry into the temporary help business and consequently there has always been a tremendous number of small companies competing for the business alongside some giant ones. We were successful despite this fierce competition and I quickly realized that we did not have to be twice as good as the competitor to get the business. We only had to be a few percent better for the customer to really love us. We only had to show them that we would go just a little further to give them great service and that we would always put their best interest right up there with ours.

Over the years I hired a number of smart young individuals to start new temporary help companies with Stan and myself and follow the same path that had given me success. Although many of these companies competed with each other, we all used our common back office. It is a testament to the level of trust and integrity between the partners, that genuine competitors were comfortable that their confidential financial information was always held safe and secure.

In 1993 one of the partners suggested that we should diversify and expand into the HR Outsourcing business and I hired our first HR Director in March 1994. Our original model was based on removing the HR red tape and bureaucracy from the lives of small business owners. However, it became obvious that although they liked the idea, they were not willing to pay to remove the headache.

It then became apparent that what small business owners are willing to pay for is strategic HR advice that improves their profitability and helps them achieve their business goals. We have become an attractive alternative to them hiring an internal HR person or department, because we offer a higher return for lower cost. We have a large team of experts at their disposal versus depending on their own mid level person.

We have become experts at assessing our client’s strengths and weaknesses, creating a critical path that will take them where they want to go and then implementing the specific HR tactics that will get them there. We don’t just advise our clients what to do, we hold their hand while teaching them how to do it themselves. Simply put, we teach our clients’ line managers how to manage their business units more effectively.

Since the very start in 1981 our back office payroll has been a key element in our success. Increasing our revenue meant increasing the number of temp workers we employed. At the top of each successive business cycle we have been dispatching upwards of 2,000 temp workers daily throughout the GTA. Accuracy and efficiency are critical elements in payroll and running a weekly payroll and billing for this size of workforce over a 20 year period taught us a lot about both.

In 2003 we decided to leverage that knowledge by providing Outsourced Payroll services to third parties and not just our own companies. We used a similar approach as our HR model and we offer our clients an alternative to hiring their own payroll specialist. Now our clients have a team of experts handling their payroll rather than depending on one individual and now they do not have to worry about vacations, illness or resignations.

In 2004 we merged six separate companies and formed Pivotal Integrated HR Solutions with 3 main operating units – staffing, HR and payroll. The 5 year plan was to grow to $100m, but the economic turmoil derailed that plan in 2008. Pivotal has emerged from the great recession as a smaller, leaner organization that is now focused on profit growth rather than revenue growth.

Lessons Learned

Many times over the last 30 years I have invested time and money into different business ventures which appeared more exciting than the regular day to day grind of staffing, HR and payroll. None of these ventures generated a true return, although many were a lot of fun. My advice to other small business owners is to resist the temptation to try the next new thing and either invest that same money back into your business, or buy the building you currently rent. It might be less exciting, but it will generate a huge return.

I have experienced economic downturns in the early years of the 80’s, 90’s, 00’s and now 10’s. By far the deepest and most difficult recession was the last one and perhaps not unexpectedly, it was the one that taught me the most. Before 2009 I was almost exclusively focused on revenue – now I pay a lot of attention to overhead as well. As our organization grew to 100 employees, some authority to sign contracts and bind the company devolved down the management chain – I have now taken back that authority. Downturns are a lot more fun if you have lots of cash – my goal is to have more cash in the next downturn.

The next 30 years will certainly be very different and I won’t be the one to lead the company through the changes that will occur. However, the GTA is still the best marketplace in Canada and the sectors that we serve are vibrant and growing. Every customer would readily admit that their success is determined in large part by the effectiveness of their people – and we find their people, help them manage their people and pay their people. So the opportunities for growth and success are limitless.