First Step Staffing uses acquisition strategy to scale impact

Nov 22, 2016 No Comments by

Last December, First Step Staffing acquired the Atlanta operations of LGS Staffing, a large, commercial staffing company, as a strategy to grow its average daily placements from 150 to 1,000 workers. A year later, through its relationships with some 70 community referral partners, First Step is recruiting ever higher numbers of homeless and other disadvantaged job seekers to fill these positions and achieve its social mission.

During May, over 330 of First Step’s employees were recently homeless individuals and by September the number had risen to over 600. Nearly 40% of First Step’s workers have been previously incarcerated.

Job coaching and other supportive services are key elements of First Step’s “culture of care,” designed to build workers’ confidence and minimize turnover. A rating system assesses new candidates’ job readiness as a guide for matching them with assignments, tracking their professional progress over time, and providing feedback to referral partners.

Transportation is another critical support for First Step’s workers, and the enterprise operates a fleet of 9 vans around the clock, 7 days a week, to meet this need.

Using an acquisition approach to dramatically scale social impact fulfills the long-held vision of First Step Staffing’s founder Greg Block, who began scouting for a suitable company to buy in 2014 and persevered when the original prospect fell through. As negotiations with LGS took shape, Greg recruited Dave Shaffer, former CEO of DePaul Industries, to assist with due diligence and then integrate LGS with First Step as its new CEO. Dave’s priorities during the past year have been to ensure high retention of LGS customers and staff, and oversee the creation of a sophisticated data tracking system to monitor operations, financial and programmatic performance.

Sales have been strong. First Step will generate $21 million in staffing revenues this year, retaining all but two of LGS’ existing accounts and adding 12 new customers. Primary industries served include warehouse/distribution, food processing and hospitality, for which First Step supplies temp-to-hire candidates and short-term employees to meet surges in production and seasonal demands.

Looking ahead, First Step plans to expand to other US cities with significant homeless populations, using the same method of acquiring an existing local “for profit” staffing company and collaborating with local homeless and social services organizations to refer candidates and deliver supports. First Step will replicate its model in a second city in 2017 and expects to operate in four other cities by 2022.


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