At a time when there are more jobs than there are available workers, there are few businesses more important than the ones connecting those elusive workers to those open jobs. After all, as the nation continues reopening, these crucial staffing agencies are helping to keep doors open, lights on—and the U.S. economy moving.
So how, in turn, do those staffing agencies stay open for business?
One answer can be found not in the canyons of Wall Street but instead in the historic, cobblestoned port city of Portsmouth, New Hampshire. That’s where East West Bank client Madison Resources has helped finance the red-hot industry for nearly 30 years.
Madison Resources didn’t start out that way.
“We started as a staffing agency,” says Rick Chipman, executive vice president and Chief Financial Officer at Madison Resources. “But soon after, our founder heard from some other staffing industry players who were having trouble raising financing. And the idea was born: maybe there’s another business here.”
Indeed, there was. As it turned out, those anecdotal financing woes were just a sampling from a broader, industrywide challenge, where legacy banks’ “one-size-fits-all” lending approaches left hundreds of staffing agencies questioning their banking relationships.
“Smaller staffing companies need to be able to react very quickly when a client tells them on Friday, ‘I need 80 engineers on Monday,’” Chipman says. “A smaller staffing agency might not have the assets or history to make that happen, and traditional banks don’t have that ability to respond quickly enough. Madison Resources can.”
As the business grew, the Madison Resources team also found that a number of their clients needed more than liquidity. “Oftentimes, smaller staffing companies need outside support to provide all of the back-office payroll and tax services that they simply can’t provide but that Madison can,” adds Steve Altneu, senior vice president and relationship manager at East West Bank. “This is the secret sauce in how invaluable Madison is to its clients.”
Today, Madison Resources serves nearly 200 staffing agencies in the United States and Canada. Its extensive day-to-day support and industry knowledge ensure its clients can continue to operate smoothly with seamless backend services like payroll processing, tax withholdings, billing, collections, funding, and financial analytics.
“Trust is important in my business,” Chipman says, and it’s one of the reasons Madison Resources decided to bank with East West. “Over the last four or five months, we've been experiencing incredible growth, and I need to know that my banker can move quickly on some really important decisions. The cash management demands are tremendous. That's when trust really comes into play, and the Bank has done a tremendous job on all our ongoing needs.”
Today’s sizzling labor market will likely keep America’s staffing agencies busy for the foreseeable future. And that, in turn, will keep the phones ringing and the emails and Slack chats pinging at Madison Resources headquarters.
“We’re seeing growth in the first quarter much quicker than in the last three or four years,” Chipman says. “We think that 2022 is going to be a very strong year.”
What’s also strong is a shared understanding of who Madison Resources' ultimate clients are: the thousands of hardworking folks who see East West’s and Madison’s financing collaboration in the paychecks that help them to keep pursuing their dreams.
“It’s not a manufacturer delivering product wholesale to be resold retail,” Altneu says—Madison Resources’ very business supports the staffing firms providing the workforce to keep America’s economy going.
“Steve is right on,” agrees Chipman. “These are human beings who need to be paid to provide for their livelihood. It’s a critical distinction about what we do at Madison Resources.”
Read about Madison Resources and other clients in East West Bank’s 2021 Annual Report.