Hispanic-Owned CheckMate Is Temp Phenom
Lou Perez has come home.
Two years ago, he moved the corporate offices of CheckMate Staffing Solutions Inc. from Diamond Bar to Orange.
From his ninth-floor office overlooking Orange, Perez points out the streets where he grew up and the one-bedroom apartment where he and his wife Sara first lived. The town means a lot to this grandson of a Mexican migrant farmer who picked strawberries and son of a woman who immigrated here when he was 2 years old and worked as a maid.
“I felt if I put my corporate office here, I’d be giving back to where I grew up,” says Perez. “This is where it all happened.”
Perez is only 31, but in the 10 years since he started CheckMate Staffing, he’s grown the company to 125 full-time employees and $63 million in annual revenue. In the past year his firm provided 18,000 temps,temporary employees or “associates” as his firm calls them.
CheckMate Staffing is the largest Hispanic-owned firm on the Orange County Business Journal’s list of minority owned firms.
Still, it is not a well-known agency inside Orange County. Its 2,000 temp jobs inside the county are not enough to qualify it for the Orange County Business Journal’s list of the 20 biggest temp agencies in the county.
Most of its business is outside the county. It has branch offices located in Las Vegas, Cerritos and Walnut, among other places, plus onsite offices located at the facilities of its clients like JC Penney Co. and Staples Inc. CheckMate Staffing provides temporary workers, for skilled industrial, light industrial and clerical positions.
Steve Hawley, Fulfillment Center Manager for Staples Southern California, said CheckMate provides about 70 employees daily at its Ontario facility.
“The quality of on-site management has been superior and they use creative recruiting techniques,” said Hawley.
Another client is Monrovia-based Burnett & Sons Meat Co., which touts itself as the largest pastrami maker in the United States. President Don Burnett said he’s been using CheckMate ever since it began 10 years ago and pointed to one recent example as a reason why he’s still a client. Burnett & Sons installed a bonus system for full-time workers, but this created grumbling from the temps, about 30 of who are from CheckMate. Burnett said Perez himself paid the temp workers’ bonuses.
“His own people got to take advantage of the bonus system and I didn’t have to pay twice for it,” Burnett said. “That’s part of what he’s been able to provide us in the ways of service.”
Perez said his business comes mostly from word of mouth. Clients know his home phone number. “There’s not a lot of red tape around here.”
Born in a small town near the Mexican resort of Mazatlan, Perez grew up in Orange. He constantly worked. He remembered detailing cars at Mission Viejo Imports during the day and delivering the Orange County Register in the early morning hours.
“The Sunday newspaper was so heavy that by the time I was done, my shoulder was sore,” he said.
After graduating from Orange High School, Perez joined South Coast Personnel Services. He worked there for three years, learning the industry. Then he joined his father’s company, Able Refrigeration, where he sold air conditioning units for new homes. It taught him that making one-time sales was a tough way to make a living.
“I wanted to get into an industry where you work very hard initially, then once you land an account, it gives you revenue,” he said. “That’s when I started thinking about the personnel industry. It creates revenue like a leaky faucet. It’s slow but sooner or later, you fill up the barrel.”
It would turn out to be good decision since the temp-agency business was a growing industry that benefited from the business trend toward outsourcing. The American Staffing Association estimated that the temp agency business grew from $20 billion in 1990 to $65 billion in 1999. There now are 2.9 million daily temp workers, up from 1.17 million in 1990.
Still, Perez found it tough to break into the industry. He didn’t have any connections, and he wasn’t a college graduate, having only taken a couple of courses from Cypress College. Plus, he was only 21 then. Banks wouldn’t loan him money.
“I was rejected at least 10 times for any type of loan,” he said. “It’s been my experience that banks will loan you money if you have money. That’s fine. I didn’t let that stop me.”
But he knew Fred Gabourie, the owner of an Orange-based insurance company. His mother was a housekeeper for Gabourie. Gabourie at first said no, but Perez continued talking to him for a year. After Gabourie checked out the business, then located in La Puente, he loaned Perez $100,000, with the house of Perez’s parents as collateral.
Perez convinced a childhood friend, Javier Chavollo, to leave his job as a forklift driver and take a 50% pay cut to come work for him. Chavollo, also 31, now is president of CheckMate.
Perez did several things to generate business. He placed his own employees at work sites as managers and monitors. That helped control workers compensation costs, thus reducing premiums and increasing his margins.
As a Spanish speaker, Perez could tap into the Spanish-speaking labor pool that was growing in Southern California.
“Eighty percent of our workers are Hispanic,” he said. “When you can rap with them one-on-one in their language, you develop a rapport with them and you start building loyalty. Whenever you can communicate with someone in their own language, you’re 10 steps ahead.”
There are criticisms that some temp agencies shortchange workers. Perez said he provides full benefits for workers who stay with his agency more than 90 days, including medical care, life insurance and vacation.
In these days of low unemployment, it’s tough to find workers. Perez has job fairs and offers incentives, such as $100 for referring a worker to his agency. He’s also bought cars for his top employees.
Perez uses the word respect, a code word in the Hispanic culture that’s sometimes overlooked in other cultures and by his competitors.
“By us treating our employees with the utmost respect and giving them benefits, they go out and do a hell of job for our clients,” he said.
Perez himself has felt the stigma of a lack of respect. One time, he was paired up with another businessman who refused to golf with him; Perez felt it was because he was Hispanic. Once, a potential client was upset that Perez showed up in a Mercedes.
“He told me that Mercedes belongs to Americans and not Hispanics,” Perez said. “It happens. You get discouraged because you work so hard and we provide a lot of jobs.”
He has goals, such as becoming the biggest privately owned temp agency in the U.S., something he estimates he can do if his agency reaches $150 million in annual revenue. But he said it’s not about the money.
“It’s seeing the expression of people when you give them a paycheck,” he said. “I have people who stop me at malls and I don’t know them, but they know me. They thank me for getting them jobs.” n
