To make a splash, PGA dives deep into labor pool.

• Author: Williams, Christopher C.
• Position: Personnel Group of America

Temp work keeps Personnel Group of America (NYSE-PGA) hopping. "PGA is a very aggressive company, trying to do a lot of things very quickly," says analyst Daniel F.D. McKinley of Nashville-based J.C. Bradford & Co. In the past two years the Charlotte-based temporary-staffing company has gone public, acquired 11 companies and made plans to grow to $1 billion in revenue by 2000.

It takes hustle just to keep pace in this industry. Temporary staffing has grown sixfold in the past 15 years, says analyst Mark Allen of Robinson-Humphrey in Atlanta - from about 400,000, 0.5% of the work force, to 2.4 million, 1.8%. The industry supplying those temps, he says, "is very fragmented. In the last two years there's been a lot of consolidation. It's not just PGA."

Thanks in part to its buying spree, Personnel Group posted hefty growth figures in 1996. Revenue rose 46%, to $366.5 million, and net income 27%, to $1.13 per share. Half its staffing business last year was commercial, such as secretaries, data processors and the like; a third was in health care, primarily home-care workers; and the rest, information technology.

Personnel Group has a short history as a stand-alone. It began eight years ago as a subsidiary of Swiss international staffing company Adia S.A., which recruited Edward P. Drudge Jr. from Milwaukee-based Manpower Inc. to launch and build the business through acquisition. When Adia wouldn't commit the capital to expand aggressively, Drudge urged it to spin the company off, which it did in September 1995, selling its entire stake in the initial public offering.

The company operates 191 offices, under 20 brand names, in 37 states. That is far behind industry leader Manpower, whose 2,000 branches in 36 nations generate more than $5 billion in revenue. But Drudge, Personnel Group's chairman and CEO, intends to add to its burgeoning operations at an even more accelerated pace. It netted more than $90 million from a secondary offering in June and paid down debt. In December, it increased its credit line to $125 million from $100 million.

Still, Drudge's goal of $1 billion by 2000 is a tall order. For one thing, relying heavily on acquisitions for growth is risky. Management must be deft in selecting the right companies, then integrating them smoothly. And there's a bigger worry: an economic slowdown. Temporary-staffing companies ride the economic cycle harder than most businesses. During expansions, companies are quick to add temps, and in...