» In Gear Throughout her career, Delores Kesler has served on the boards of various groups, including the Florida Council of 100, the Jacksonville Chamber of Commerce and the Horatio Alger Association. Over the past 10 years, she has also volunteered for philanthropies, including Jacksonville’s Alliance for World Class Education. She has contributed millions to charitable organizations in northeast Florida, for example, creating the Kesler Endowment at the University of North Florida that grants scholarships to disadvantaged high school graduates. She is the founder of the Kesler Mentoring Connection, a mentor resource center in Jacksonville. [Photo: Kelly LaDuke]

Delores Kesler says she was “utterly failing” at retirement when her daughter, Deborah Pass Durham, asked her during a drive one day in 2007 to return to the $50-million staffing firm that Kesler had started three decades earlier.

Jacksonville-based ATS Services, run by Durham as president and Doug Anderson as CEO, recruits senior-level executives for other firms, offers consulting services and supplies temporary workers ranging from clerical workers to engineers and accountants. The company was expanding aggressively, growing from 14 offices to 32 and posting 35% revenue growth in 2007 alone.

Durham and Anderson wanted Kesler to help the firm grow even more, and had good reason to think she could help. Kesler had founded ATS in 1977 and led it to prosperity, eventually forming a parent company that merged with three other staffing firms to become AccuStaff. (The mergers that created AccuStaff, now MPS Group, didn’t include ATS.) Kesler took AccuStaff public in 1994, becoming the first woman in Florida, and one of the first in the nation, to lead an IPO.

Kesler, now 68, accepted her daughter’s invitation to chair ATS’ board and forge a new growth strategy. But the recession has altered that assignment: Instead of leading expansion, she’s trying to ensure that the company survives the economic downturn. Nationwide, temporary staffing employment dropped 22.7% last year — the largest decline since the Bureau of Labor Statistics began tracking temp employment in 1990. The professional-employee side of the industry that Kesler helped pioneer saw revenue declines of about 8%, says Jon Osborne, director of research and analysis at California-based Staffing Industry Analysts.

» ATS Services Headquarters: Jacksonville Divisions: ATS Technology, ATS Staffing, ATS Tec, ATS Executive Search, ATS Financial Services, Nimbus Recruiting Locations: Florida, Georgia, New York, Louisiana Annual revenue: $50 million Leadership: CEO: Doug Anderson; President: Deborah Pass Durham; Chairman: Delores Kesler

ATS fared better than the industry as a whole in 2008, but its revenue still fell by about 2%. (The company Kesler took public, MPS Group, now a $2.2 billion staffing giant also headquartered in Jacksonville, saw revenue increase 2% in 2008. )

Now in her job for a year, Kesler has helped ATS shed divisions. She consolidated the company’s offices down to 24, trimmed the firm’s workforce by 15% and oriented ATS toward professions she believes will remain in demand during economic hard times, including professional, technical, engineering and financial. One division, ATS Tec, will be able to provide structural engineers to work on stimulus projects, for example. Another, ATS Executive Search, will provide managers to help companies downsize.

ATS, says Kesler, was “trying to be all things to all people. They really needed to focus.”

The recession, says Osborne, will continue to hammer temp professional services as it clobbers the businesses that hire them. He projects another 8% decline this fiscal year. Many firms will fail, he says. “It’s a tough time to be coming back into the industry. Competition is intensifying for a rapidly shrinking amount of business.”

Survival training

Kesler learned about business survival the hard way — as a child amid the heartache of a failed family venture. She grew up on a poultry farm in the Dinsmore area northeast of Jacksonville. Her father, a Southern Bell employee, tried desperately to succeed as an entrepreneur. He made his daughter his confidant, handing her the checkbook when she was only 13 and asking her to pay the bills so she’d understand why there was no money left to send her to 4-H camp. She was 17 when her father was forced to sell the farm and move his family back to town. He died suddenly of a heart attack a year later. “I don’t think I’ve ever gotten over it,” Kesler says.

Kesler’s daughter, Deborah Pass Durham, is president of ATS Services.“It’s nice to be hunkered down with a very strong leadership team,” Durham says. [Photo: Kelly LaDuke]

During her many hours spent washing eggs on the farm, Kesler had fantasized about owning her own business. She didn’t get to it until she was a 38-year-old mother of two. As a trainer in the sales department at International Harvester, she often had to hire temporary help through firms such as Kelly Services and Manpower. That, along with experience in her aunt’s nursing firm, gave her the idea for a staffing company that focused on professional temps — initially, healthcare professionals.

In 1977, armed with a business plan, Kesler sought a $50,000 startup loan. Almost every bank in Jacksonville turned her down. A high school friend — Buck Harnage, president of Barnett Bank in Orange Park — loaned her $10,000, the maximum he could approve without having to go through his bank’s loan committee, which he knew would turn her down for the same reason his peers had: Gender.

Kesler used the money to start Conval-Aide Medical Staffing, which supplied temporary nurses and aides to nursing homes and other clients. She paid Barnett back within six months. After that, the committee was willing to loan her $50,000. In 1978, she started a second staffing agency, Associated Temporary Staffing, later shortened to ATS, and expanded into supplying other temp professionals.

It was an ideal time to enter the business. Only a handful of temp agencies operated on a national scale, and most focused on clerical help. In 1987, Inc. magazine named ATS one of the 500 fastest-growing companies in the U.S.

The recession of 1990-91, Kesler says, felt a lot like the current downturn: Contractions, layoffs and “enormous uncertainty.” ATS weathered the turmoil, and in 1992, Kesler engineered a merger among three other companies — Abacus, BSI and Metrotech — to form AccuStaff. As part of the deal, the medical staffing division of ATS became its own company and was run by Durham and Kesler’s son, Mark Pass.

AccuStaff went public in 1994, and Kesler retired from the board in 1998 to pursue charitable work.

“If you look around, you’re going to find some pockets of business that aren’t down. You have to seek them out.” — Delores Kesler

Hunkered down

She and her husband, retired Duval County Judge Morton Kesler, joke that she “failed” at retirement because she maintained a huge set of commitmentments, for example, serving on the boards of numerous philanthropies. She also was asked to join corporate boards, including Jacksonville-based PSS/World Medical (Nasdaq-PSSI) in 1993 (she is now lead independent director at PSSI) and St. Joe Co. (NYSE-JOE) in 2004.

Kesler also didn’t retreat completely from the entrepreneurial world. The year she retired, she founded a venture capital firm called Adium that provides angel investments for entrepreneurs who struggle, as she did, to land traditional financing. With a $100,000 investment from Adium, Kesler’s nephew, Derek Mercer, built a software company around a program called RecruitMax, which helps companies sift through job applicants to find the best-qualified. Mercer’s tiny Jacksonville Beach firm became a tech powerhouse called Vurv that was acquired by Taleo last year in a $129-million deal.

As Kesler worked to help other companies, ATS Services had begun looking for help to keep it growing in an increasingly competitive market. Durham and Anderson decided to invite Kesler back and also added to the board Roy Cannon, another staffing industry veteran who co-founded and successfully grew Atlanta-based TRC staffing until he sold it in 1995. “You could say that we are hunkered down,” says Durham. “It’s nice to be hunkered down with a very strong leadership team.”

To survive the downturn, Osborne says, professional staffing firms need to have plenty of capital along with “a solid relationship with the customers that are going to stick with you, rather than an anonymous group of customers who disappear when things are bad.”

Kesler says ATS is well-positioned on both counts. For 30 years, she has reminded colleagues that the staffing business is “all about relationships — above all else, this is a people business.” ATS’ intimate knowledge of its clients means it has been able to avoid doing business with unstable firms, she says — not a single ATS client has gone bankrupt and left ATS with uncollectible bills. “I’m not going to say it’s never going to happen,” she says, “but if you really know your clients, you’re not going to get a huge surprise.”

The company has lined up strong client growth in consulting, training and other areas related to helping businesses navigate the economy. “If you look around, you’re going to find some pockets of business that aren’t down,” Kesler says. “You have to seek them out.”

Kesler’s mantra at ATS, where employees describe her as a “spiritual leader”: “I’ve lived through this before and survived,” she says. “We will be stronger.”