A Glendale-based staffing company is expanding its horizons, and that might be a good sign for the economy as a whole.
Software Management Consultants Inc., with headquarters on Brand Boulevard, acquired Bay Area staffing firm Partners in Business Systems Inc. on Sept. 1 for an undisclosed sum. The move comes as SMCI President Spencer Karpf reports a 25% increase in revenue this year.
Banks, health-care firms and hotels are investing in technology and boosting the need for consultants and IT professionals, he said.
"This year, the staffing industry has come back, and that is a bellwether of the economy," he said. "Every recession I've witnessed — and I've now witnessed three — industry lays off a lot of people, gets rid of a lot of consultants, hunkers down and saves money wherever it can."
As new opportunities surface, or government regulations come down, businesses see the need to reinvest in their systems, he said.
"The temp industry starts to pick up as recession starts to end," Karpf said.
On Friday, the Department of Commerce reported that investment in durable goods, such as communications equipment and computers, rose 4.1% in August after a 5.3% drop in July.
Karpf said the acquisition of Danville-based Partners in Business Inc. expands his company's role in the IT-rich Bay Area market. The Glendale-based firm has 600 employees, with offices in North Carolina, Arizona, Texas and Florida.
Karpf said Partners in Business emphasizes consultants and specialists, while his firm traditionally is stronger in workforce staffing.
"The business mix was different, which was perfect," he said.
Merger talks began in January and were completed at the end of August, he added.
Karpf declined to reveal the names of SMCI clients, but Partners in Business lists employers including the American Bankers Assn. and the Department of Labor.
Even with the temp business up, Karpf said economic uncertainty lingers.
"We are not sure we are out of the recession yet," he said.
Don Nakamoto, a labor market specialist with the Verdugo Workforce Investment Board, said improved profits and stock market results have not translated into permanent hiring.
Many companies, especially smaller businesses, are waiting to assess the financial impact of health-care reform and likely changes to the capital gains tax before they are ready to add jobs, he said.
"On the permanent-hiring end of things, companies are a little uncertain about what is happening at the government level," Nakamoto said.
Meanwhile, Karpf has one piece of advice for IT job seekers: "Java developers are worth their weight in gold.
FOR THE RECORD: This corrects an earlier version that misspelled the name of SMCI on second reference.