Select Group founder and CEO Sheldon Wolitski plots expansion

08/30/2014 6:00 PM

08/30/2014 6:23 PM

RALEIGH Sheldon Wolitski, the founder and CEO of technology staffing company The Select Group, regularly consults with three outside advisers about how best to manage and nurture his business. He meets separately with each of them, setting aside a total of more than a dozen hours each month.

“If Tiger Woods can have five coaches, and he’s the best in the world, I can use all the help I can get,” said Wolitski, 42. “I’m a big believer in surrounding yourself with people who are smarter than you and have gained more experiences.”

It’s proved to be a winning formula for Wolitski, whose company provides contract and temporary IT and engineering workers – and also recruits permanent workers – for clients such as Red Hat, MetLife and Cisco Systems.

Last year Raleigh-based Select generated $64.3 million in revenue, more than three-and-a-half times its 2010 revenue of $17.4 million.

Still, Wolitski’s ambition is unabated. The law of large numbers holds that the bigger you become, the harder it is to maintain your expansion rate, but the company’s latest growth plan nonetheless targets 30-percent-plus growth for each of the next three years.

Today the company employs 180 workers on the recruiting and placement side of the business who operate out of eight cities in the United States and Canada, including about 95 at its Raleigh headquarters. In addition to those “internal” employees, the company employs nearly 750 consultants who work at client sites.

To accommodate future growth, Select Group needs more room than the 25,000 square feet of space it leases near Raleigh’s PNC Arena. So last week, Wolitski paid $3.8 million for a 40,000-square-foot building near Jones-Franklin Road in West Raleigh.

“It’s the biggest purchase I’ve made,” said Wolitski, the sole owner of Select.

He expects to spend more than $2 million to renovate the building to his liking.

“If we’re out there giving advice to our clients on how they need to attract and retain talent, and part of that is creating a nice work environment, then we have to mirror that as well,” he said. “So we’re trying to lead by example.”

Growth brings challenges

Robert Simora, chief information officer and vice president of product development at Cary’s Railinc, which provides software and information services to the freight rail industry, has used Select Group to hire temporary workers for years. Today Railinc has about 20 temporary workers it hired through Select.

“They really do put the customer first,” Simora said. “They know if they do that, (their) business is going to be successful as well.”

Simora said that the Select team distinguishes itself by the amount of effort it takes to understand Railinc’s business and its culture. That’s crucial because, for instance, Railinc wants its IT project managers to have a strong development background, whereas some companies are more focused on scheduling.

One challenge facing Wolitski is that maintaining Select’s service-oriented culture will become more and more difficult as the company becomes much larger, said Frank Plastina, one of Wolitski’s coaches.

But Plastina, whose resume includes a stint as CEO of Tekelec and as the top Triangle executive at Nortel Networks, sees Wolitski as being up to that challenge.

Too many entrepreneurs who build a successful company from scratch believe they know it all and can do it all, said Plastina.

Wolitski, by contrast, “has that self-awareness where he realizes, no, I know what my limitations are. I know what my strengths are. And I’m going to deal with them. That’s very, very mature for a young CEO/founder.”

At the same time, Plastina added, Select is benefiting from macro-economic trends as companies rely more on contract workers “as a way to save on overhead and make their underlying infrastructure more flexible.”

Retaining employees key

Last year, staffing companies nationwide employed an average of 3 million contract and temporary workers every week, up 4 percent from 2012, according to the American Staffing Association. That growth came on the heels of a 4.1 percent increase in 2012, 8.2 percent in 2011 and a whopping 18.4 percent in 2010.

Indeed, Select’s greatest period of growth has come in recent years. Wolitski said the foundation for that expansion was laid when he chose not to lay off any internal employees after the recession struck.

“We took a little bit of a financial punch because of that, but it was worth it,” because the company was poised to ramp up quickly when the economy reversed course, Wolitski said.

Wolitski also cites his company’s flexibility on price – that is, its willingness to lower its profit margins for clients that are facing financial difficulties in order to keep its consultants on the job – as a “differentiator.”

The company’s growth trajectory also has helped it retain employees in an industry where churn is notoriously high.

“When people see we’re growing this fast, they want to stick around,” he said. “There’s a lot of opportunity for promotion.”

Wolitski also has taken steps to keep employees on board. That includes, a few years ago, instituting a deferred compensation plan that lets employees share in the company’s prosperity. And, recently, Wolitski spent about $20,000 to buy everyone in the company a Nike+ FuelBand that monitors how active they are – and instituted a contest that pays cash prizes of up to $1,000 to the most active employees.

“We’re really focused on health and wellness right now,” Wolitski said.

Personal advisers

Wolitski refers to his advisers as “executive coaches,” but only one – Mark Moses, who’s based in California – bills himself as such.

“He’s very selective,” Wolitski said of Moses. “He only works with 26 CEOs.”

Plastina says he’s flattered that Wolitski describes him as an executive coach but goes on to say his work with Wolitski extends beyond that.

“My engagement is more on evolving his business and scaling it, really looking at the strategic plan,” Plastina said. Inevitably, he added, “mentoring is part of the bundle.”

Wolitski’s third adviser is Greg Palmer of GPalmer & Associates, a Newport Beach, Calif., consulting firm. Palmer is a former CEO of a large, publicly traded staffing firm.

Wolitski began working with Moses in 2011. That went so well that he decided last year that adding two more advisers would be even more productive .

“It’s basically like a personal board of advisers, but I don’t meet with them together,” Wolitski said. “I meet with them separately.” With the California advisers, that’s most often by phone, although they’ll usually fly in once a quarter.

Although they all bring different skills and experiences to the table, Wolitski sometimes seeks counsel from each of them on the same problem.

“One person will look at it one way, and one person will look at it another way,” Wolitski said. “It will allow me to make a more educated decision.”

A hockey start

Wolitski was born and raised in Edmonton, Canada, the son of a high school principal and an insurance company executive. His burning desire was to play hockey in the NHL, and he was skilled enough to receive a hockey scholarship from, of all places, the University of Alabama in Huntsville.

When he got a phone call from the school’s coach, Doug Ross, Wolitski turned to his father and asked: “Dad, do they have hockey in Alabama?”

After graduating in 1996, Wolitski fielded an offer to play for a minor league hockey team in Germany. But, figuring it was unlikely that he could parlay that into an NHL gig, he decided it was time to pursue a different dream.

“It was a hard look at the mirror, because my whole life revolved around hockey,” he said.

Wolitski went to work for a large staffing company, then moved to another that promoted him to manager of its Raleigh branch. After working for yet a third staffing company, he became dismayed by the “management by intimidation” he had encountered and decided to go into business for himself.

It turned out that 1999 was a great time to start a staffing company, thanks to a thriving economy and the dot-com boom. But after the bubble burst in 2001, “that’s when I ate humble pie,” Wolitski said.

The most humbling blow of all came in mid-December when his mortgage company notified him it was going to foreclose on his house.

“I hadn’t made a placement in about six months, and I knew money was getting tight, but it’s not until you get a call like that that you realize you’ve hit rock bottom,” he said.

Wolitski managed to avert financial disaster when he stumbled across an unsolicited credit card – the sticker urging “Call to activate” was still attached – that he previously had received in the mail and ignored. Upon learning that he could convert the card’s $12,000 credit limit into $12,000 in cash, he used the money to refinance his mortgage and lower his monthly payment.

He also traded in his 2-year-old BMW for a 10-year-old Camry, got a part-time job, took on a roommate to help with the bills “and lived off noodles for a couple months.”

Adapting to needs

Up to then, Select and its sole employee, Wolitski, had focused exclusively on recruiting candidates for permanent jobs.

But, given the then-shaky economy, clients were telling him, “Sheldon, our needs have changed. We’re really nervous (about hiring) permanent employees. But what we’re hiring right now is temporary and contract staff.”

So Wolitski expanded into the staffing business.

“In eight weeks, and (with) very little sleep, I ended up placing 18 consultants within a small group at AT&T,” he recalled. “That’s what really helped me get my feet on the ground.”

Today, providing contract workers for clients accounts for about 95 percent of Select’s revenue.

“I think companies are benefiting from the flex workforce,” Wolitski said. “What they are enjoying ... is bringing someone on board for specific projects and tasks, and once they’re done, they’re done.”

At the same time, there’s a breed of worker “that prefers to work as a consultant or on contract because they can pick what jobs they want,” Wolitski said.

“A lot of people want to work on the newest, hottest, latest technologies. ... It is only going to add to their resume and their hourly rate, so they can continue to build their value.”

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