CEO David Dourgarian is focusing on local growth this year at Eagan-based TempWorks Software, which offers staffing software and payroll processing and funding services to industrial-temp staffing agencies.
The opportunity to expand in the Twin Cities resulted from the sale of a Bloomington-based staffing company that Dourgarian owned. That company was profitable but represented a conflict of interest that often limited TempWorks’ ability to work with potential staffing agency customers here.
TempWorks, which has hundreds of accounts nationally, added 70 new ones in 2017.
“This unlocked the Minneapolis market,” Dourgarian said of the March sale. “For the first time in more than 10 years we got really active in Minnesota.”
By improving profits, the sale positioned TempWorks to increase local charitable contributions from $14,000 in 2016 to more than $125,000 last year, Dourgarian said.
Dourgarian’s family has been in the light-industrial temporary staffing industry since his grandfather got into the business in 1972. Dourgarian joined TempWorks, which he and his father own, in 2006, becoming president in 2008 and CEO in 2012. TempWorks in 2018 also is pushing its staffing technology to mobile devices, enabling agencies to communicate via text with several hundred employees at a time. That will help agencies facing an “inventory crisis” stemming from low unemployment.
Q: What’s the primary value of your staffing software?
A: If you use these products the way we design them to be used, your business will grow faster than if you use our competitors’ products or if you try to do things yourself with software developers that you hire off the street. Our software allows you to process more volume with a lower amount of overhead.
Q: How is TempWorks’ private ownership an advantage?
A: We’re the only company in our space that’s closely held. We don’t have to worry about maintaining a 20-percent profit margin, a 40-percent growth rate or selling to a venture group every five years. That paradigm does not help you innovate; it does not help you stay focused on the needs of your customers. The focus on the customer, the focus on our product as opposed to our bottom line is more valuable to our customers than any one feature our product has.
Q: Why do you offer payroll funding?
A: The temps get paid the week that they work. The customer gets the bill at the end of the week, which it pays something like six weeks later. This requires a large amount of capital (especially for startup staffing agencies). We buy the accounts receivable that these staffing agencies produce. We worry about making sure the bill gets to the right person and we worry about harassing the customer to pay the bill.