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Q&A with Gary Nelson, Nelson Family of Companies

STAFFING, MANAGEMENT fiRM PLANS INTERNATIONAL EXPANSION

SONOMA – After another record year, the Nelson Family of Companies WorkforceLogic division is at a new milestone with a plan to expand to 30 countries including Europe and Asia in 2008.

For the sixth consecutive year, the employee management software division reported significant revenue growth, going from $61 million in 2002 to more than $280 million last year.

WorkforceLogic software and services are designed to manage risk through assessments and prevention plans, facilitate talent acquisition and create a contingent work-force plan. Some of its clients include Bank of the West and Sony Computer Entertainment America. Previously, WorkforceLogic was national and international in Canada, but two large global customers added late in the last quarter of 2007 extended its reach across the globe.

The Nelson Family of Companies was founded almost 40 years ago in San Rafael as a small, struggling staffing company. Since then, the family has expanded the homegrown company to six divisions and more than 360 employees.

Founder Gary Nelson, 70, was interviewed by the North Bay Business Journal and had this to say about his company, projections for the future, and working with family:

Q. What would you attribute this year’s revenue growth to?

A. We added six major new customers this year, meaning customers using all modules of the offering, but the newest two customers are the largest we’ve had in terms of revenue growth.

Q. What about other divisions?

A. Well, our staffing group is basically just Northern California and we are seeing a slowdown on the demand side, particularly in the administrative, production and manufacturing. But there has been a consistent demand in technology and finance.

Q. Where did the idea for Nelson Technology and WorkforceLogic come from?

A. It was completely based on demand.

Customers said they were making decisions as far as choosing employees for their firm based on personality and not substance and I decided what they needed was information and data that would let them make good solid decisions.

Q. What would you say the biggest mistake employers make when hiring?

A. Not checking references carefully and not looking at history as a precursor for the future. Also, have multiple people interview the candidate.

Q. What was your first job?

A. I had a degree in journalism from San Jose State University and I couldn’t get a job in PR or journalism, so I started working for the state of California on the personnel board hiring highway patrolmen and payroll officers.

Q. Did you always want to start your own business?

A. No, but I quickly came to that conclusion in the mid- to late-‘60s, when the owners of companies were making decisions that affected my livelihood and I had no control. I wanted control. At 32, I felt like I was young enough to make a go at it and if it didn’t work out, I could still go back to corporate America.

Q. What was the most difficult task or event when you started?

A. Let me just say this. I almost went bankrupt two or three times. We invested $10,000 to start. That was all we had. For the first three years, it was certainly up and down.

Q. Did you expect to grow so quickly?

A. I wouldn’t really say it was quickly. We made about $5,000 in the first year and it was like that for a few years. It wasn’t until the early ‘90s where we became really profitable, going from zero to $5,000 to about $15 million a year. Now it’s more like $400 million.

Q. Was it always your goal to be a multi-division, $400-million company?

A. No, I am a very entrepreneurial person. I never had a grand strategic plan. I take it one year at a time. My goal at the beginning was to make $24,000 a year.

Q. If you could only recommend one book what would it be?

A. “Atlas Shrugged,” because it explains in an easy but compelling way the importance of a free market society as compared to socialism.

Q. Is it difficult working with family? Do you plan to keep the business in the family?

A. There are pros and cons. The advantages are I get to work with my children on daily basis, but it can be difficult because of the emotional impact it has when a father is talking to son. It’s different than other senior-subordinate relationships. We have decided as a company that we want to keep it a family business.

Q. Industry surveys have reported fairly stagnant hiring projections for the first quarter of 2008. Do you think this will affect Nelson?

A. I agree it will be flat for the first part of the first quarter. There might be some modest decrease or increase, but nothing dramatic. It will affect our growth rate with not as much demand, particularly on staffing side.

Q. You have been in the business for more than three decades. How has technology and the Internet changed your business?

A. The Internet and technology have certainly changed our business. They have become integral to our business as far as candidate development and recruitment and we will continue to focus on that in the months and years ahead. But that does not offset the need for a human touch and that is one thing I think needs to be reinforced and re-established.

Q. Where do you see yourself in 10 years?

A. Hopefully still doing what I am doing. I don’t have any plans to retire in the near future.

Q. Is there anything else you would like to say about your success or the company?

A. Above all, I think I have made it this far because of perseverance and persistence.  I may not be the smartest or most likable, but I overcome them by being very intensely driven.