Thursday, April 18, 2024

2021 Mid-Market Fast 40 showcases thriving mid-sized businesses

The Mid-Market Fast 40 celebrates the state’s fastest-growing middle-market businesses based on strong gains in revenue and workforce over three consecutive years. Cherry Bekaert LLP analyzes the applications and develops the annual list of companies with annual revenue from $10 million to $500 million.

Business North Carolina gathered four leaders at top-performing Fast 40 companies for a roundtable discussion focusing on the impact of the pandemic and labor relations.

  • Paul Evans is CEO of Durham-based Velocity Clinical Research, which topped the list.
  • Trent Beekman is CEO of ettain group, a Charlotte-based staffing company that was acquired by
    Milwaukee-based Manpower for $925 million in August.
  • David Woodworth is chief financial officer at Raleigh-based insightsoftware, which received a $1 billion
    investment from British private-equity group Hg in July
  • Suzanne Turner is vice president of marketing and client services for Samet Corp., a fast-growing
    Greensboro-based construction firm.

Other panelists included Lee Hodge, a partner at Ward & Smith in New Bern; Thad Walton, N.C. commercial banking leader at Regions Bank in Charlotte; and John Gonella III, Cherry Bekaert’s Carolinas regional market leader in Raleigh. Comments were edited for brevity and clarity.

How did the pandemic affect your business?

Paul Evans: I’ve never seen a business go that flat, that quickly before. And then within six months, with the COVID vaccines that needed to be developed, suddenly the company was booming. I’d never gone so quickly from a company in decline like everybody else, to a company that was having to grow faster than I’ve ever grown a company in my life. Hence the whiplash.

We doubled our workforce, which wasn’t easy in health care. And we added about one Manhattan block of extra space across the whole country. Everything moved super quickly. We also did five deals, acquired five companies, and we got sold ourselves.

David Woodworth: Because we provide software to companies to help them make financial decisions, it was a good year for us in terms of what we can do. For us, it was how do you quickly adapt to the remote space culture. Not that this is an acquisition competition, but we made eight acquisitions since COVID. And the integration trend is just so interesting: How do you get to know the key workforce members, how do you bring them into your mantra, your culture, your rhythm?

Suzanne Turner: Safety is something that in the construction industry is always top of mind. So on our job sites, it was pretty easy to add the essentials needed for practicing a safe COVID environment. So quite honestly, we really didn’t miss a beat. We have most of our accounting team still working remote, and the reason they are is because we’ve grown so much over the last 12 months. We don’t have anywhere to put them. And so we’re now in a position of looking to expand our facilities in the Triad.

Trent Beekman: We kind of eliminated the phrase “this is how we’ve always done it.” We didn’t outwardly say you can’t use that phrase in the company anymore. But we don’t mention it, we don’t talk about it. History is obviously a good indicator, but that’s also how companies die, right?

John Gonella: We were fortunate to talk to companies that have been very successful. It was really interesting to be able to look at and hear how people have addressed and overcome a number of challenges, including resources and how some companies are less constrained by geographic employment and can recruit and find talent on more of a national or global stage. That has been really interesting to witness.

[Companies are] having to change processes on having [staff] get the training they need to get up to speed for interns and new hires. Those types of things have been challenges that we’ve heard kind of across the board for instilling that corporate culture — in some cases, completely remotely.

How do you make acquisitions in a difficult economic environment?

Beekman: The liquidity markets opened up almost immediately. Once they realized you can actually run a business during COVID and pay your interest payment, it’s amazing what they will lend you. So that opened up the ability to go out and talk to people.

[Companies owned by individuals] were concerned about what the new administration might do for capital gains tax. So that probably opened up at least two of the deals that we probably wouldn’t have talked to that early or moved that quickly.

Evans: The driver was that there’s a wall of money out there in the private equity world that’s got to be deployed. By the time we got into the end of 2020, in the beginning of 2021, it was perfectly clear that the business had gotten through the COVID hit. The weaklings had probably fallen by the wayside, so what you were left with, by definition, were strong companies with strong management.

Woodworth: It’s really a continuation of our product strategy and expansion. We have an internal team that just drives deals, drives integrations. It wasn’t unique for us to be opportunistic with our buying. It was a continuation, just a different approach.

What other challenges keep you up at night?

Woodworth: For us, people are probably the number one issue: How do you keep them engaged? How do you keep them moving forward? How do you keep them feeling like they’re part of the mission, when who we are is growing so fast? There’s undoubtedly a lot of employees that are looking at other options, so how do you differentiate yourselves as a company?

Turner: There’s so much work out there, and it is fierce competition. There are construction companies offering $20,000 signing bonuses just to get people in the door. We put in referral programs for current employees, so we pay a $5,000 bonus. About 45% of our hires are referral-based.

Beekman: We see people who have been highly engaged, long-term Ettain employees leave, so then you have to start to really internalize, is it us or is it the market? And the answer is it’s both.

How do you create an environment to get people to want to come back? We did an Olympics, and the final event was they got dressed in blow-up dinosaur [costumes].

Thad Walton: You might have the best culture in the world, but if employees don’t see it and feel it on a regular basis, they’re just going to be just disengaged. It’s easy and they’re more marketable than ever sitting in their homes.

Turner: Our marketing and recruiting efforts have had to change. Just posting an old stodgy job description without a lot of color and excitement to it is not doing it anymore.

What are the state’s economic prospects?

Beekman: It’s already one of the hottest job markets in the country. I would be shocked if it isn’t in the top one or two, very quickly in the next two years.

Woodworth: Gov. Cooper’s team has got a tremendous challenge. Your cost of living, what’s going to happen? Your cost of employees, what’s going to happen? How do you keep the infrastructure up? Mass transportation has been a big gap for this state for a long time. I think there’s a challenge to keep the state ahead so that we don’t become another Silicon Valley.

Evans: I think right now we’re in great shape. It’s how do we stay there that’s going to be really important, because everybody else wants to eat our lunch. There’s a lot more to be done to keep the state moving forward. We’re going to have to attract more talent to the state, we’re going to have to make sure the infrastructure is attractive. There’s a lot of investment that still needs to go into the [Raleigh-Durham] airport, for example.

Lee Hodge: I spend about half my week in New Bern, which is pretty rural, eastern North Carolina, and half my week in Raleigh. They both have very different challenges. Kinston and Goldsboro are not thriving nearly as well as Wilmington, Fayetteville and Greenville. After this Census, 22% of the members of the General Assembly will be from Wake County and Mecklenburg County. It shows the major influx of people into the metropolitan areas.

What’s the future of remote work?

Walton: Is it going to be five days a week 9 to 5? Probably not, I think you might see that three to four days. The big thing is are they going to be in at the same time? What is the company doing to really push them to come in at the same time? We’re going to have to foster a lot of that collaboration at the office and create events.

Beekman: I think hybrid is probably what makes the most sense. I think some jobs you just don’t need to be in the office. But I think sales environments, leadership – you need to be around your folks. But it doesn’t have to be 40 or 50 hours.

Evans: There are still dinosaurs — I’m one of them — that want to go into the office, you have to be able to accommodate that, rather than say we’re all doing away with offices. You have to be able to have the flexibility for the people that want to work remotely, and those that want to come in or do both. And people are going to flip back, we’re a social animal. ■

Click here to view the full Fast 40 article, including company profiles

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