A series looking at the unique challenges facing Canada's midmarket companies and how they innovate, stay competitive and grow. In this piece: The 2008 downturn and sophisticated software made Mindfield able to dominate the little-serviced hourly work force field.
When Cameron Laker and Jade Bourelle launched an outsource recruiting company called Mindfield in Vancouver in 2005, the two focused primarily on the financial and technology sectors. But when Mr. Lube was seeking oil technicians the following year, the startup wasn't about to say no to the auto-maintenance giant. It became Mindfield's first customer in need of hourly workers. The contract opened the pair's eyes to the vastly underserved niche of the hourly work force.
When the recession hit in 2008, it was the best thing that could have happened to Mindfield.
"Technology companies, financial companies, and a lot of the other customers we had were getting hammered because of the market," Mindfield RPO Group Inc.'s CEO Mr. Laker says in an interview in his glass-walled office in a heritage building in Gastown. "Although retail did, too, there was still a need to hire. There was still turnover. At the same time, recruiting firms were dropping like flies because their entire business was predicated on one or two customers in the technology sector.
"A lot of companies in the retail and hourly space got hit through the downturn, and what happened was the HR departments got wiped out," he adds. "That was always the first department to get cut. So now we've got a bunch of retailers and hourly employers with no HR department and still hundreds or thousands of hires to make on an annual basis. It was kind of a unique, perfect storm."
Today, Mindfield is the only company in Canada to focus exclusively on the hourly work force. Its customers include Sport Chek, Canadian Tire Corp. Ltd., Mark's Work Wearhouse Ltd., Cobs Bread, and B.C. grocery chain Overwaitea Foods. Having recently moved into 16,000 square feet of new office space – in a restored 1902 building that used to house the Vancouver Police Department's mounted squad's horses and carriages – the organization has 76 employees and expects to have 100 by year's end.
Mindfield has experienced a 23-per-cent rise in revenue this year over last and is on track to see an increase of at least 25 per cent in 2015 before the calendar even flips to January. Aside from a few bridge loans over the years, Mindfield hasn't had to borrow money or seek venture capital financing. It started out getting customers to pay upfront and is currently debt-free.
While Mindfield may have been uniquely positioned to benefit from the economic downturn, other SMEs in Canada have weathered the storm. Defined as firms with fewer than 500 employees, SMEs employ 8 million Canadians and represent 54 per cent of payrolls. The number of small firms (those with up to 99 employees) and medium-sized ones (employing 100 to 499) both reached a record high in 2012, according to "Canada's Small Business Landscape," a recently released RBC Economics report. Further employment gains last year point to the trend continuing, the paper stated. Startup rates are rebounding as well, particularly in construction; professional, cultural, and technical industries; food and accommodation; and knowledge-based sectors.
Crucial to Mindfield's success has been the use and development of sophisticated technology. When Mr. Laker met Mr. Bourelle, the latter had already founded Talemetry, which develops software to help large companies attract and engage talent. Mindfield has leveraged that tech, which includes custom-built recruiting applications for data-driven hiring.
"We get amazing access to some really cool technology that we use to broadcast jobs and attract and capture talent. We host career sites off that software, distribute jobs to job boards, and the candidates flow in," Mr. Laker says, noting that the company also uses the cloud-computing services of Salesforce and various social media platforms. "It's all tracked and highly measurable. We never wanted to be a technology company, but we needed technology to be a major capability within our business."
Without that advanced software, recruiting everyone from produce clerks to retail salespeople would simply be too labour-intensive, says Marc-David Seidel, associate professor at the University of British Columbia's Sauder School of Business.
"It used to be not a very profitable sector because companies weren't willing to pay so much per employee on very low salaries," Dr. Seidel says. "Lots of organizations had hiring processes in place to handle those types of employees, but the idea of being able to outsource it is now more plausible with technology. Plus now that's optimized [with data-driven hiring]; they can find people who are happier because the workplace is close to home and those types of things."
He adds that Mindfield will likely continue to succeed regardless of whether the economy is healthy or hurting.
"Any shift in the labour market could help them: if there's a glut of workers … it's harder to filter through them [job applicants], and if there's a shortage of workers, a period of low unemployment, they're hard to locate," Dr. Seidel notes. "But if they're able to build up a pool [of workers], then potential employers are going to be happy."
Then there are seasonal periods that businesses always need hourly workers for.
While advanced technology is central to Mindfield's process, what struck Queen's University Industrial Relations Centre director Paul Juniper is the company's human touch.
"They want to treat the candidates like customers, and that's just not done with hourly workers," Mr. Juniper says. "There's an old staying that goes, 'You hire for attitude and train for skills,' and it's still true. Again, this is something that just hasn't really been done with hourly workers. People typically think of them as cattle and treat them like cattle.
"This organization is sending a clear message that they're different," he notes. "Some of what they're doing is not new. Predicting turnover with employee data is something Gallup has been doing with Q12 [employee engagement survey] for many, many years, but just not with hourly people. They're using creativity and analytics … to go after a market people haven't spent a lot of time and effort on before."
For job-seekers, particularly millennials and members of Gen Z coming up behind them, Mindfield aims to deliver a "white-glove executive-level" type service, Mr. Laker says, offering better job opportunities than those they may have found otherwise.
"Where do you go if you're 17 and looking for a job?" Mr. Laker asks. "Do you print out 45 résumés and go to the mall? The local employment centre? No one is helping these guys."
As the company has expanded, it brought on Dean Medwid last year as president and COO. Mr. Laker is well aware that it's likely only a matter of time until Mindfield's business model is copied. However, he's not overly worried. With plans to expand into the United States and possibly Europe, the Philippines, and other parts of the world, he's confident the future looks bright.
"We think we're a $100-million company," he says. "Certainly, the market is big enough and the problem is big enough."
Mindfield fills more than 15,000 hourly jobs each year across Canada, in every province and territory.
– There are more than 700,000 registered job-seekers in Mindfield's database.
– The company is situated in a three-storey heritage building, complete with life-size black-and-white photos of the police horses that used to be housed there.
– Mindfield focuses on retail, grocery, restaurants, warehouse, automotive, and hotel industries, working with SME customers, Enterprise customers (those with 1,000-plus employees) and franchisees.
– Among its other customers are General Paint, Atmosphere, and Dulux.