EMILY C. DOOLEY TIMES-DISPATCH STAFF WRITER
Published: February 27, 2010
When the recession took hold nationwide and in the Richmond area, the technology industry was not immune.
Layoffs and hiring freezes hit the sector.
Many of those cuts had an impact on information-technology departments at large corporations and employers.
That drop in employment was a plus to one segment of the tech industry -- established IT staffing and consulting companies.
They benefited from cuts at companies that then needed to outsource, the ability to offer temporary staffing to firms nervous to hire and the chance to pick up talent put out on the streets.
"We had the equivalent of four Fortune 500 companies go under in the span of 45 days," said Ed Gooding, president of The Merge Computer Group, an IT staffing firm in Henrico County. "The good news is that when I needed candidates for my company, I had no problem filling positions with good candidates."
At the beginning of 2009, Merge had 24 employees. By Dec. 31, there were 44. Gooding had four former clients return to him after cutting IT positions.
"I feel blessed," Gooding said. "We had a very successful year and I feel very, very lucky. I've got some good long-term relationships."
Computer system design and related services, management consulting services, and other scientific and consulting services all saw increases in Virginia and the Richmond region between the second quarter of 2008 and the second quarter of 2009.
In all cases, the increases were not as much as statewide numbers, but the change in employment was between 1.5 and 5.6 percent in a region hit with mass layoffs from Qimonda North America, Circuit City Stores Inc., LandAmerica Financial Group, Reynolds Packaging and others.
It's not unusual that temporary-staffing firms do better at the tail end of a downturn, said Christine Chmura, president and chief economist of Chmura Economics and Analytics.
"When the economy is starting to pick up but businesses aren't yet convinced that it will continue to accelerate, they prefer to hire temporary workers because they don't have a long-term commitment to them," she said.
While some companies lost contracts with big companies like Circuit City because of its bankruptcy, others picked up jobs after firms like Genworth and Altria laid off their IT workers and looked to outsource, Gooding said.
Richmond IT staffing and consulting firm CapTech, for instance, hired 50 people last year and has plans to hire 50 more. Health-care and financial services are two big focus areas for the firm, formerly known as CapTech Ventures.
One reason is the company is able to do the work of IT departments that were slashed during the recession. Another is that the firm is expanding an office in Washington.
"We were very focused last year on Washington," CEO Charles A. "Sandy" Williamson said. "We had to diversify out of Richmond."
Another reason for success? Companies are realizing the power of information.
"There is a lot of information to manage," Williamson said. "If you harness that info, there's a lot of ways to find success."
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Contact Emily C. Dooley at (804) 649-6016 or edooley@timesdispatch.com