A Staffing Software Firm Builds Its Resume

TIMES STAFF WRITER

Staffing companies don't get paid until somebody shows up for work.

Filling jobs fast is the goal. And helping some of the nation's biggest staffing companies do this is an upstart Manhattan Beach software firm called PeopleMover Inc.

"These companies are in the just-in-time work force business," said Jim Jonassen, PeopleMover's chief executive. "But they leave open too many job orders."

One PeopleMover client is Modis Professional Services, which supplies technology wizards who can fix year 2000 problems and set up Internet pages. Modis' revenue tripled to $1.7 billion thanks to a three-year acquisition spree in which it absorbed 30 companies.

Its office network now has a dizzying array of files and software to match the right job candidates with clients. Sometimes a Modis recruiter has to call a sister office to ask if it has anyone to fill a certain job, because there's no systemwide sharing of up-to-date staffing information.

"You need to find someone with a particular job skill the best, fastest way," said Blair Smith, Modis' chief information officer.

So Modis is rolling out PeopleMover's software in some of its West Coast offices. "We can get to people faster, and it allows us to eliminate the unnecessary phone calls," Smith said.

PeopleMover exists because of the "free-agent economy," buzzspeak for the growing ranks of self-employed, temporary workers and independent contractors who add up to 17.6 million Americans. It's the aftermath of a decade-long trend of job outsourcing, aided by an increasingly mobile work force created by the diffusion of personal computers.

PeopleMover, which was launched just two years ago, has snagged three of the biggest staffing companies in the country as clients: Modis, Robert Half International and Norrell. It sold $3.4 million worth of goods and services in 1998, and Jonassen expects sales to double this year.

PeopleMover, which has 52 employees, doesn't compete in the field of resume-tracking Web pages. Rather, its software gives companies the tools to consolidate personnel information that's scattered around various databases.

Then, with a couple of mouse clicks, the software tracks who has started on a given job, what that job candidate's employment history is, how many people are on a project, where the project is, the expected revenue and when the worker's assignment is done. It facilitates the goal of reassigning workers to other posts as soon as possible.

PeopleMover's software "is more profound than just a job search. It allows companies to develop internally a reliable way to play the human resource issues," said Rohit Shukla, head of the Los Angeles Regional Technology Alliance.

Peter Yessne, editor of the Staffing Industry Report newsletter, notes that big temporary-help staffing companies are feeling pressure to have more timely information. But instead of developing their own software, they turn to scores of small developers, including PeopleMover, to help manage the flow of workers.

Jonassen, 41, has been in the employment trade since the 1980s, when his other firm, Micro J Systems, developed software for small headhunter firms.

A few years ago, Norrell, a nationwide supplier of light-industrial, accounting and secretarial workers, came to Micro J for help. Norrell's biggest customers, IBM, MCI and UPS, wanted to make sure they were being charged uniform prices for the same jobs all over the country. Given that Norrell had 300 branch offices, both company-owned and franchises, it was a nightmare to assemble the information.

So Micro J developed a software program for Norrell to allow it to keep better records on temp workers and their assignments. Jonassen and others from Micro J later peeled off to turn PeopleMover into a separate business.

In the last year, Jonassen has raised $5 million from three venture capital firms that think they smell a winner. "PeopleMover is at the forefront of the free-agent economy," said Tony Hung, whose venture capital firm, Dynafund in Torrance, invested about $2 million in PeopleMover.

Another person betting on the firm's future is John Simonelli, 35, its new chief financial officer. He quit after four years at Walt Disney's corporate finance department in hopes of hitting a big payday at PeopleMover.

"There's a bunch of people flying out of Disney" to join start-ups, Simonelli said. "The [ultimate] payoff has to be financial freedom. The flexibility to do whatever the heck you want."

Simonelli was flooded with headhunter calls, including offers from Internet start-ups, but he worried that if the market for Internet stocks sinks, those firms "will go away in a heartbeat."

Instead, he latched onto Jonassen's idea of how PeopleMover's software can be expanded to work in the entertainment business.

"Every single movie studio could use this stuff," Simonelli said. "Every movie shoot is a project, and the biggest problem is runaway costs." Given the inevitable downtime during shoots, instead of paying 10 crews to turn out 10 films, perhaps eight crews could produce 10 films simply by juggling assignments more efficiently, he said. The savings could be "mind-boggling."

The change is significant for Simonelli, who went from helping to raise $2.5 billion in Disney corporate bond sales to hitting the road with Jonassen to convince venture capitalists to part with $10 million to launch PeopleMover's next Internet-based software product.

PeopleMover's current software has a relatively limited market--it must be installed in office desktop computers--and is useful primarily to large staffing and consulting companies. It's also expensive, costing between a couple of hundred thousand and several million dollars. So grabbing a new customer, Jonassen concedes, is like "bagging another elephant."

Its next software program, called TalentScout, is designed to run on a Web site and be accessible even by laptop computer. The software is being written in Sun Microsystems' popular Java programming language.

PeopleMover hopes to market the new product to smaller companies that rely on temporary teams working on projects. Jonassen thinks he can rent or lease TalentScout to entertainment production firms, ad agencies and engineering and construction firms, all of which assemble crews of temp workers, disassemble them, then build crews for the next job.

PeopleMover hopes to have the software ready in six months. Jonassen said a small company could lease it for possibly as little as $100 a month.

"These guys have the best of the breed in terms of product strategy and are farthest along . . . by way of the Internet," said Jim Cole, whose Windward Ventures in San Diego has invested $1 million in PeopleMover.

But there are dozens of rival software makers in various areas of the human resources field, and the Internet is also part of their game plan.

One PeopleMover rival is Personic Software in Brisbane, Calif., which says it had sales of $17 million last year. Personic Chief Executive Ankesh Kumar said that within five years, a third of employment-related software will work directly through the Internet.

As for PeopleMover, "I wouldn't say they're a major competitor by any stretch of the imagination," Kumar said.

Analyst Yessne said the staffing software industry "is continuing to grow" but that it's difficult to pick the ultimate winners from the nascent field.

PeopleMover also has to worry about a possible sales slowdown linked to Y2K problems, and if the market for Internet stocks does dry up, PeopleMover's plans for an IPO in a couple of years could be undermined.

Still, Jonassen insists that with its Internet-based product, it's simply a matter of beating his rivals to new customers. "If we can get just a small chunk of that [business] we can . . . build a big, profitable software company," he said.

Meanwhile, the coldblooded history of venture investments shows that 25% turn out to be big winners, 25% are absolute failures and the remaining 50% are what Cole calls "the living dead," firms merely treading water.

Venture capitalists, of course, have portfolios of investments to balance winners and losers.

"I don't have a portfolio," said Simonelli. "I only get to make one bet when I go to work every day."

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