Putting IT to work

Apex Systems’ Jeff Veatch knows the finer points of Information Technology staffing

Jeff Veatch
Apex Systems co-founder Jeff Veatch in the company’s Falls Church office

Working his way up at a staffing firm that he joined after graduation, Jeff Veatch (FIN ’93) saw a need for better service in the business. His sentiments were shared by two friends he made at Virginia Tech who also started careers at the same company.

“We recognized gaps in service levels for both job seekers and companies who needed temporary IT services,” says Veatch. “We knew we could create a better company.” He and his fellow Tech alumni, Brian Callaghan (PSYC ’93) and Win (Edwin) Sheridan (PSCI ’94), put up $50,000 each, from personal savings and family loans, to launch Apex Systems in 1995.

Quick ascent to the top

Headquartered in Richmond, Apex grew rapidly, becoming the nation’s sixth largest information technology staffing firm. In 2011, it placed more than 16,000 professionals with 1,250 clients in various industries and earned about $700 million in revenue. The firm has won several industry honors, including being named to the 2012 Best of Staffing Client List.

Apex’s success was noticed by other leaders in the industry as well. Earlier this year, it became a division of On Assignment, a global IT staffing and services provider based in California. The acquisition created the country’s third biggest IT staffing firm. “Joining On Assignment was the right decision for us individually, and, more importantly, for our employees,” says Veatch. “It was the logical next step.”

Filling the gaps

Apex serves two customer groups: individuals seeking contract, contract-to-hire, and direct placement positions; and institutional clients with staffing needs. “Our structure focuses on technology and industry practice groups, which enables us to match the most talented and qualified professionals with clients who have critical gaps in their workforce,” Veatch says. It also offers business development consulting on staffing and partners with clients to develop workforce management strategies and solutions for specialized or long-term projects.

More than 90 percent of the company’s business is generated from temporary IT staffing; the remaining business comprises consulting services and direct placement assistance for job seekers.

From friends to business partners

Veatch, Callaghan, and Sheridan were co-CEOs of the firm. “We operated almost like a very active board,” Veatch says. “We each took on specific areas of focus — operations, recruiting, and national sales.” They set goals and devised strategies, sought to recruit senior managers whom they knew and trusted — and, he notes, did their best “to stay out of their way.”

Three Co-CEOs of Apex Systems
Apex Systems co-founders (left to right): Brian Callaghan, Win Sheridan, and Jeff Veatch

It was an unusual arrangement that did not start out that way, he acknowledges — “we joked that we were the ’three-headed beast’” — but they managed to make it work.

Sure, there were times when they disagreed on a certain strategy or specific decision, he recalls. “There are challenges in any partnership, whether it’s a marriage, a friendship, or a business relationship. I think the keys to our success were that we knew we had the same goals, we all are great friends, and we trusted each other like brothers. Just like brothers, there were many days when we’d fight. But we stayed focused on our goals, and it always worked out.”

Agreeing to the acquisition — “no way we would have done it unless the three of us were on the same page” — was “a very difficult decision” for them, Veatch recalls. Being a business owner, he says, is not a 9-to-5 job but a 24-7 one. “This is our ’baby’ that we've grown for about all of our adult lives; it is all we know. To potentially give it all up was the biggest decision of our lives.”

Looking to the future

Until recently, the three of them had given little thought to external partnerships or acquisition possibilities. They focused on building a sturdy foundation: hiring “only the most motivated, friendly, and capable staff” and establishing core values of “doing the right thing, making others better, finding a better way to get the job done, and setting the professional standard.”

Then, he says, after they were first approached by On Assignment, about two years ago, “we started to talk more about the company’s future and how we wanted to increase the opportunities for internal employees and provide more service offerings for clients and contract employees."

As they pondered the potential of being acquired by another company, Veatch found himself looking back. “I thought about the hard work and determination it took from all of the employees at Apex to reach this level. As with any start-up, we had some long nights and challenges to overcome. We weren’t an overnight success story, and I didn't want to erode the value of our past accomplishments by making an unprepared decision about the future.”

Apex Co-CEOs at NYSE
Jeff Veatch (3rd from left), Brian Callaghan (far right), and Win Sheridan (in red tie) celebrate the ringing of the NYSE opening bell by On Assignment CEO Peter Dameris (center).

Both companies “came to realize that the timing for an acquisition wasn’t right” back then, he recalls, “but we stayed in touch.” When both sides felt ready earlier this year, Veatch sought to learn as much as possible about On Assignment’s leaders, divisions, and business processes. His research quelled any concerns he had and helped him build relationships at the parent company.

Alliance fuels momentum

“On Assignment is an excellent company, with a strong reputation in the staffing industry. It has business goals similar to Apex’s and shares our strong commitment to employees,” he notes. “We likely could have gotten more money from other firms, but we never would have found a better match for us and our employees.”

The acquisition has not changed day-to-day operations at Apex, he says, pointing out that most mergers result in major cuts at the acquired company. “That wasn’t the case here. When we first started our talks with On Assignment, they were very specific that they didn't want to change anything. They even told us, ’we're paying a lot of money for your company, you have somehow found a way to outperform the market year after year, we don't want to do anything to mess up your secret sauce.’”

The acquisition, however, has brought a role transition for the three co-founders, who now serve as members of On Assignment’s board. “I’m excited to learn about how a public company works and continue to grow the company as a member of the board,” Veatch says. “Having only known the IT staffing world, I have a lot to learn about staffing in the healthcare, life sciences, and other industries.”

As the country’s third largest IT staffing firm, “we have some way to go,” Veatch muses, “but we can taste the No. 1 spot.”

Virginia Tech Pamplin College of Business Virginia Tech Pamplin College of Business Magazine Fall 2012

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