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You’d expect PROFIT’s annual ranking of Canada’s Fastest-Growing Companies to include clusters of new-economy hotshots such as software developers, technology consultants and social media gurus. What you might not expect to find, year after year, are several personnel agencies and search firms. With nine such companies in this year’s PROFIT 200, the message is this: if you want to build a scalable business that’s not high-tech or capital-intensive, the personnel field offers ample opportunity for new entrants armed only with passion, energy and a great Rolodex (or LinkedIn network).

Toronto-based Redwood Global Inc. shows just how fast a company with these attributes can grow. Co-founded by partners Ryan Atkinson and Randy Clemens in 2006, Redwood specializes in finding savvy technology talent for telecom firms such as Shaw, banks such as Scotiabank, insurers such as Intact Insurance, the Ontario government and other economy size clients. Since Redwood’s founding, annual sales have grown from $306,388 to a lofty $22.8 million, good for 7,329% growth and fourth spot on the 2012 PROFIT 200.

As Redwood’s co-managing director, Atkinson says the company owes its red-hot success to cold-calling. But Redwood’s telemarketers don’t just ask for work; they open doors by calling senior technology executives and asking about their pain points. They try to steer the discussion toward how new talent might help—and then persuade these executives to ask their HR colleagues to include Redwood in their next talent hunt. The company’s slogan: “The search ends here.”

Redwood specializes in technology positions, such as programmers, systems analysts and data architects, for three good reasons: the tech sector is still growing fast; the jobs pay well (agencies pocket a percentage of the starting salary of each position); and both Clemens and Atkinson had worked in that field for 10 years. When their previous employer began to stress short-term results by investing more in business development than in recruiting, the duo started their own business to get it right. “Without having quality elements on both sides,” says Atkinson, “it becomes challenging to do a good job and earn repeat business.”

This is a cutthroat industry, after all. Most employers contract out recruiting assignments to multiple agencies, and whichever produces the best candidate first wins the commission. Sales staff may create opportunities, but it’s the recruiters’ talent and speed that corrals the cash.

Now boasting 26 employees and a database of 200,000 candidates, Redwood continues to build its sales and headhunting groups in parallel. “This industry has a lot of folks who jump in to make a lot of money quickly,” says Atkinson. “We don’t have other shareholders, so we don’t have to take millions a year out of the company to be happy. We’re investing heavily for the long term.” That includes paying staff about 25% better than the industry average as part of the company’s goal of making Redwood Canada’s leading IT recruiting firm.

But the two co-founders have always thought big. Instead of saving money by starting in a spare bedroom, they leased a downtown office. That did more than just put them within walking distance of their financial-district clients, says Atkinson: “It motivated us to keep making the calls—we had to pay the rent.” With both partners doing both sales and recruiting, Atkinson remembers it as a stressful time: “We were building a company no one had heard of and calling people we didn’t know. I think I lost 15 pounds.”

But here’s the magic in the recruiting sector’s winner-take-all economics: since employers pay only for results, they faced no risk in hiring Redwood. “We started by getting the hard searches, the ones other people failed to fill,” notes Atkinson. Redwood outworked the competition and got a Mountie-like reputation for always getting its man (or woman).

Or so says Adis Tucakovic, director of the Microsoft Solutions practice at outsourced IT-services firm CGI Group Inc. in Markham, Ont. He had met Clemens in a previous job, and reached out to Redwood when CGI needed some scarce talent with experience in CRM systems. “They asked the right questions about what we were looking for,” Tucakovic says. “Not only did they come through with some really outstanding candidates, but they did it in two or three days.”

Tucakovic says Redwood excels at finding candidates who are currently employed and convincing them to consider a new position: “It’s one of the few companies out there that is not simply cruising the job boards and LinkedIn.” Redwood has since come through on five other searches for CGI. “Hands down,” says Tucakovic, “these guys are the best and the quickest.”

Atkinson says the secret of luring great candidates away from good jobs is hard work. Redwood’s headhunters call likely companies and leverage the help of receptionists and automated switchboards to track down potential candidates. They tirelessly monitor talent through LinkedIn and Facebook, and do their own social networking by calling people in Redwood’s database (100,000 workers in Ontario) to solicit suggestions and referrals. Atkinson says most companies take it with good grace when they lose talent; they understand it’s part of the game. Redwood never “poaches” candidates from client companies, although it has, on occasion, been hired to find replacements for the people it has lured away.

Service like this helped Redwood double its sales in 2011. But the company has discovered hypergrowth brings challenges, such as weakening the corporate culture and accelerating staff turnover. Clemens and Atkinson have fought back on multiple fronts: hiring a new operations director to meet weekly with staff members and bring their ideas to the managing directors; creating a social committee to plan fun staff events and rewards programs; and implementing a “commission accelerator” plan that offers staff clearer goals and year round motivation.

For 2012, Redwood expects to achieve 20% growth by expanding further into government and financial services markets. It also expects to open offices in Ottawa, Calgary and Montreal within two years. With this kind of growth, Atkinson has now shed his business-development role in order to work full-time on the business.

“We need to be more process-driven,” says Atkinson. “In any company that grows, you have to fine-tune your methods and set minimum standards for what you expect. The brand stands for something now, and we need to respect it.”

View the complete 2012 PROFIT 200 rankings.

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