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OPERATIONS

Pulp Addiction

A close-up look at the struggles one job-placement firm endured as it moved toward a paperless workplace.
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Totally ridding your office of paper is a wise and noble goal--but don't expect it to go off smoothly

One morning last June, Dan Caulfield stormed through the headquarters of Hire Quality Inc., his job-placement firm in Chicago, with a large metal waste barrel in tow. Without missing a beat, he snatched yellow stickies from monitors, crumpled up spreadsheets, and rummaged through drawers until he had gathered every shred of paper he could find. Some employees laughed at first, amused by the shenanigans. But the laughing abruptly ended when Caulfield dragged the barrel out to the fire escape. Before an aghast crowd huddled on the narrow metal stairwell, he doused the trash heap with lighter fluid and set it ablaze. For some, a month's worth of work went up in smoke. Others were so desperate to save precious documents that they tried to pull them from the consuming flames.

Caulfield, a former lieutenant in the U.S. Marine Corps, concedes that this was an unorthodox management technique. But he also believes it was the only way to rid his small business of the scourge of paper. When you're in a field that's as driven by speed and high volume as his, he says, paper is nothing but trouble. "I had to do something dramatic," says Caulfield, "or people would have gone on using paper forever."

For years, futurists have extolled the virtues of the paperless office, touting an impressive array of benefits, from improved worker efficiency to forest preservation. With paper abolished, they say, employees will no longer waste hours searching through seemingly endless rows of file cabinets; menial jobs will be eliminated; and the cost of financial transactions will be slashed as companies no longer mail their bills but send, receive, and pay them by wire.

The only trouble is, the old medium has had more staying power than the pundits imagined. For most of us, jotting down phone numbers and scribbling notes in the margins of reports is a natural part of the way we work. And in many ways, paper is everything that the electronic medium is not: familiar, intuitive, and universal. Simply put, we're hooked on paper, and tearing it away from workers is like taking heroin away from an addict.

"There are important power and control issues at stake," explains Jeanette Blomberg, an anthropologist at the Xerox Palo Alto Research Center, in California, who studies work practices. Blomberg says that our proclivity for pulp goes far beyond the fact that paper is easy to use and portable--although both are important. She notes that we have a profound need to create printed documents because they substantiate our work efforts and make us feel we have control over what we produce. "People like to hand physical documents to their superiors or clients so that they can receive an instant reaction--positive or negative," says Blomberg.

It's a sentiment Caulfield's employees couldn't agree with more. Since June 1994, when he launched Hire Quality, a recruitment firm for honorably discharged military personnel, Caulfield has poured hundreds of thousands of dollars and countless hours into building high-tech systems designed to free his 25 full-time and 20 part-time employees from the printed page. The process has been orderly enough--except for one major glitch: his employees haven't been particularly eager to make the break. "No matter what I've said or done, people seem to fall back on using paper," sighs Caulfield.

Without question, the paper-burning incident was one of the most trying at the fledgling company. "People were pissed," says Caulfield. One employee even resigned. Still, the antics had a significant payoff: Now, nine months later, desks are spotless, everyone accepts voice mail and databases, and monitors are no longer framed by yellow Post-It notes. In a symbolic gesture of acquiescence, one worker transformed his double-decker paper tray into a water pan for a thriving fern. "We certainly haven't totally eliminated paper--I'm not sure that we ever will," admits Caulfield, "but we are closer than we were last year."

Caulfield contends that if he'd launched his company using conventional paper-based methods, he probably wouldn't have lasted even a few short months because he'd quickly have been bogged down in the time-consuming and tedious tasks of processing, faxing, and searching for paper résumés (it could take up to 15 minutes to locate a candidate's paper file). Unlike many other placement firms that aim to supply the perfect person for every available position, Hire Quality provides clients with a flood of candidates who match the skill set. That's because the job slots the company fills primarily--blue-collar and service-technician slots--don't need the same degree of screening that, say, executive or management positions require. In fact, it's not uncommon for Hire Quality to send out at least 3,000 candidates' résumés in a month. "I knew that I could do everything I needed to do using computers," says Caulfield. "Once I started automating, I began to see that the possibilities were endless."

For Caulfield, computers and careers have always gone hand-in-hand. He stumbled upon the job-recruitment industry when he was chosen, in December 1993, to launch one of the military's first transition and separation centers, at Twenty-nine Palms, a military base in the Mojave Desert. The centers were set up to examine the Armed Forces' employment record for discharged personnel and to help remedy the situation by editing résumés, honing candidates' interviewing skills, and identifying suitable civilian jobs. No easy task. But Caulfield, who thrives on a challenge, placed more than 400 people in the first six months of the center's existence.

Energized by his success and convinced that he had tapped a hidden source of labor, Caulfield wanted to continue his work in the private sector. So when he was honorably discharged six months later, at age 27, he headed for Chicago, where he initially set up shop in a rented apartment. After having watched résumés quickly stack up at Twenty-nine Palms, he knew that without some sort of electronic system from the start, converting paper files to bits and bytes in the future would be prohibitive. Inspired, he ventured out to his local Best Buy and purchased $4,500 worth of high-tech equipment, including a Pentium computer, a modem, a fax machine, and a printer.

Caulfield quickly learned that the hard part of the business was not locating possible candidates but convincing corporations like Bell Atlantic, Federal Express, and Ikon Office Solutions that his one-man show could be one of their primary suppliers of employees. After months of hounding human resources officers, he finally started getting contracts--big ones. Suddenly, he was under intense pressure to screen candidates and move hundreds of résumés to eager clients. "It was time to make the investment and find the people to build and maintain a companywide system," says Caulfield.

His first priority was to stop the endless flow of hard-copy job applications and résumés that his company received. Assuming that all military personnel had access to computers with modems, he instituted a strict policy of only allowing candidates to register with Hire Quality electronically--either through the company's Web site or via E-mail. For those few without Web access, he had another plan. He developed a separate stand-alone software program called CareerQuest to guide them through a step-by-step registration process and show them how to E-mail the information to Hire Quality, send it through a direct dial-up connection, or simply mail in the CareerQuest disk.

The next step was to build a massive database that could store all the candidates' vital information, such as rank, skills, and job preferences. Even though Caulfield gained a solid understanding of computers while in the military, his knowledge ran thin when it came to the finer points of database management. So he enlisted help from Jim Cummiskey, a technology consultant who had been Caulfield's commanding officer in the Marine Corps. Through a combination of Borland International's Interbase, an off-the-shelf database engine, and a customized interface called HQNet, Cummiskey created a database product that now holds more than 200,000 candidates' files and can be searched by more than 150 possible fields. It's also accessible to anyone, anywhere, on the Web. In addition, résumés can be stored as Microsoft Word documents and can be electronically attached to a candidate's database file. Because searching such a sophisticated database involves learning the arcane structured query language, Caulfield volunteered to become a beta tester for Linguistic Technology's English Wizard, an application that lets users search databases by entering ordinary English sentences. The entire system runs off a Pentium Pro server running Windows NT.

When it's time to locate qualified job candidates, Hire Quality staffers search the database and then call prospective job applicants and ask a number of scripted questions. Enough correct answers and Hire Quality's human resource experts conduct a more in-depth interview with those candidates. The résumés of those who pass the second-interview phase are then electronically sent to the client via the Windows NT fax server, using RightFax software. Caulfield demands that the first interviews take no more than 5 to 10 minutes--the in-depth interviews usually run twice as long. All told, the firm screens about 35,000 candidates a month. To track his employees' productivity, Caulfield installed an automated phone system and electronically connected the phones to the computers. Using the system, Caulfield's employees can initiate phone calls with the click of a mouse.

But there was still another important process that had to be automated if Caulfield wanted to truly eliminate paper. Like most placement firms, Hire Quality posts job descriptions at electronic job banks to extend its net for referrals. Caulfield had Cummiskey design an application that, with a single keystroke, automatically sends job descriptions that the company has received (via E-mail) from the client to a number of the larger job banks.

Finally, Caulfield placed Visioneer's Paperport scanner on practically every employee's desk. In the event that paper somehow infiltrates the small office, it would take merely slipping it through the scanner to transform it into an electronic file. And to phase out paper schedule books and calendars, he issued Hewlett-Packard 200LX Palmtop PCs to employees who had been with the firm for more than six months. "I was confident that they had all the electronic tools needed to work without paper," says Caulfield.

Of course, Caulfield suspected that some naive employee might still resort to paper out of habit. So as a deterrent, he enacted a penalty system: a $1 fine for using the fax machine and 25 cents per page for printing any résumé. Caulfield set a glass collection jar by the printer as a small reminder that payment is due upon execution of the misdeed.

In true military fashion, Caulfield implemented an airtight defensive strategy aimed at sealing off all the potential cracks that paper might slip through. What he hadn't counted on was mutiny by the troops.

For starters, many clients refused to E-mail job descriptions and opted instead to use their fax machines to send copies to Hire Quality. Caulfield then had to try to use optical character recognition (OCR) software to transform the faxed documents into usable text documents--and while OCR technology is fine at most of its translating tasks, it fails miserably when confronted with the low-resolution, disintegrating text that fax machines spit out. That frequently left employees having to reformat and edit the documents. Indeed, many times it was easier just to re-fax the paper faxes to the job banks than to fool with the OCR software. "When you are working your ass off to put butts in seats, you don't have a lot of time to screw around with an imperfect system," says Trevor Darby, a former infantryman in the Australian armed forces, who recently left the company. And he goes on to admit: "Let's just say that I was losing a lot of my paycheck to the jar."

As fast as Caulfield could solve one problem, another would pop up. Employees complained of being uncomfortable reading everything off a computer monitor and would often print out résumés and job descriptions to ease their eyestrain. Soon the beleaguered owner even found it difficult to force candidates to register electronically--partly because he had failed to account for the limitations of his own technology. For example, to enlist more candidates, Caulfield attended military job fairs where he'd set up two computers running CareerQuest so that service members could fill out the electronic applications. The only trouble was, the company's booth was often inundated with applicants waiting in line to register. Eventually, Caulfield had to revert back to handing out paper applications. In his office sits a basket of CareerQuest disks beside a basket of paper applications. He glances at both with a mixture of disappointment and disdain. "I have no idea when we are going to get those into the computer," says Caulfield.

Soon it seemed as if registration breakdowns were hounding him from every direction. A case in point: Even though an enormous number of candidates register directly with Hire Quality, many more come from the Defense Outplacement Referral System (DORS), an automated résumé referral system that the Department of Defense has set up for employers looking to hire military and defense personnel. So when Hire Quality searches its own database to fill an order for, say, 500 truck drivers for Federal Express, the company also queries DORS to find suitable candidates. But DORS files could not be E-mailed to Hire Quality. Instead, they'd be printed out and then mailed to the company. "It was pure craziness," says Caulfield. "We were covered with DORS paper."

Today, thankfully, the situation isn't as dire as it was only a few months ago. After a long negotiation, the Department of Defense has created an electronic delivery system. And, using proprietary technology created by Cummiskey, DORS candidate files are quickly and easily transferred into HQNet and are transformed into searchable components of the database. Caulfield is also working with a vendor to create a voice-recognition system to speed up the process of electronically registering candidates at job fairs and on military bases.

Had Caulfield made only a perfunctory attempt at a paperless office, trying to attain it might not have been so frustrating. But he had spent an inordinate amount of time and money on his systems. He has dropped almost $400,000 on information technology in the past two years. That equals about 39% of his gross revenues. In comparison, the typical placement firm spends about 10% of gross revenues on technology, according to Paul Hawkinson, publisher of the Fordyce Letter, a monthly newsletter for the executive search industry. The bulk of Caulfield's expenditures, nearly 60%, was on customized software.

In the short term, the spending on technology has had a negative impact on profit margins. In 1995, the company ran in the red, at - 8.9% on revenues of $250,000. For 1996, the revenues jumped dramatically, to almost $1 million, but margins still lagged at 18%. This was better than the year before but still low when compared with the 25% to 50% industry average, says Hawkinson. But Caulfield expects margins to improve to industry norms now that the high cost of building systems from scratch is behind him.

That's not to say he hasn't achieved measurable short-term benefits. He has. It now costs the company only $1.50 to register a candidate, compared with the $5 to $7 it cost in the past. There's a time savings, as well. It used to take the typical Hire Quality employee about 25 minutes to fax 10 résumés to a client. Caulfield now says he has the process down to two and a half minutes. It also takes fewer phone calls to find the right candidates. In the past, Caulfield's employees would have to make from 12 to 15 calls to pin down a referral. Now, thanks largely to the automated phone system, the number is down to 7. And then there's the cost of paper. Caulfield used to go through about three reams of paper a month, at a cost of $41 per box; now it's more like one box every three or four months.

As for the jar by the printer, it's been eliminated. There are, he says, larger fish to fry. Right now, he's pushing his big clients to set up an electronic data interchange system, preferably over the Web, to exchange invoices and forecasting information. Clearly, Caulfield still has a burning desire for a totally paperless office. Only now he doesn't act on it literally.

No More Paper
These five steps could lead you to a paperless office. But beware of the pitfalls along the way.

Provide employees with all the information they need through a centralized database.
Caveat: If your system is too hard to learn or not fast enough, your employees will quickly retreat to paper.

Install scanners to convert incoming paper documents.
Caveat: Make sure you have the power to scan documents quickly and easily. Anything but a fast-running Pentium will choke on large documents.

Reward employees who use the least amount of paper and penalize those who use the most.
Caveat: Penalty systems can build resentment. Make sure your punishments are reasonable and try to keep them lighthearted.

Encourage clients to use E-mail, not paper faxes.
Caveat: Many clients may not have E-mail, so you may have to spend a fair amount of time reformatting and editing faxed documents on-screen.

Offer incentives to clients to implement automated delivery systems, accept electronic invoices, and make electronic payments.
Caveat: Plan for these to be a tough sell, especially with larger clients.

Joshua Macht is an associate editor at Inc. Technology.

Last updated: Mar 15, 1997




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