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Spokane, Washington  Est. May 19, 1883
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Labor Ready Founder Sets Big Goals

Associated Press

It has been 13 years since Glenn A. Welstad made a fortune in fast food and retired.

Now, eight years after entering the day-labor business, his Labor Ready Inc. has grown to 220 hiring halls nationwide, and he hopes to have 750 open and producing $1 billion in sales by late 2001.

“That is why I came out of retirement,” Welstad said. “I love the challenge.”

Labor Ready has its roots in Spokane. The company is the spin-off of a 1985 scheme by Welstad and other partners to franchise Dick’s Hamburgers. After four years of futility in the hamburger business, shareholders approved the conversion of the company’s assets to a day-labor operation.

Welstad’s formula includes state-of-the-art computer hookups to monitor the business at new outlets and run credit checks on prospective customers and bare-bones hiring operations that encourage customers to hire workers for full-time jobs.

The work is mostly muscle labor, unskilled and semi-skilled tasks like digging ditches and cleaning construction sites rather than the generally white-collar clerical workers provided by competitors. At the heart of Labor Ready is the company’s motto: “Work Today, Paid Today.”

Workers get an employment order in the morning as they are dispatched to a job. When they’re done for the day, the business customer signs the order, which the worker can then take back to the hiring hall and exchange for a paycheck.

“It’s appealing for workers to receive payment for work at the end of the day,” said analyst Rob D. Owens of Pacific Crest Securities.

Not only is that attractive to day laborers, assuring the company a ready supply, it increases the burden on competitors, especially those that are able to pay workers only after they collect from their customers.

“That’s a big part of our success,” Welstad said. “It’s tough to finance your receivables when you’re a small company.

“We know. We spent a few sleepless nights worrying about that a few years ago.”

Welstad, 53, grew up as a farm boy in Minot, N.D., and spent 17 years running pizza parlors and Mexican restaurants in the Dakotas, Montana, Idaho and Eastern Washington.

He said he was able to retire in 1984 on the money he made from a number of Hardees franchises. Within five years, though, he was bored.

In 1989 the company opened Labor Ready’s first dispatch hall in Kent. Another was added soon afterward in Lynnwood, and the next year outlets were opened in Seattle and Tacoma, which became the company’s headquarters.

By 1993, with 17 outlets, “I started to understand the benefits of going national,” Welstad said. “That’s when my golf game and my sailing went out the window and I really went to work.”

Forgoing much of his profits, he plowed earnings into expansion. Last summer, Labor Ready paid off its long-term debt with a stock offering that netted $34 million. Total company worth is now estimated at $51 million.

Also critical as the hiring of Ralph E. Peterson 13 months ago as chief financial officer. Peterson is now executive vice president and chief operating officer.

The 200th hiring hall was opened last fall in Charlotte, N.C. Welstad plans to add about 100 a year through 2001.

He and Peterson have adopted a cookie-cutter approach, making each dispatch hall virtually identical to the others. One can be opened for $35,000 and generally break even after another $20,000 in spending.

They also cite the use of sophisticated cost and management controls. Online connections to Dun and Bradstreet allow credit checks of customers within three minutes.

The operation is heavily customer-oriented. Unhappy employers can send a worker back within two hours of the starting time and receive either credit or a replacement worker.

Some employers even send potential hires to the day-labor company so they can be checked out at no risk.

The company does not restrict workers from accepting offers of full-time jobs with their temporary employers, as some companies do. In fact, it encourages the practice.

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