CDI Corporation supplies engineering, information technology and staffing services to customers in the United States, Canada and the United Kingdom. The company has four divisions, Anders, Engineering Services, Information Technology Services and Management Recruiters International.
The field of technical services is largely a post-World War II phenomenon. In the prosperous three decades following 1945, several economic developments made possible the growth of the technical services industry. Primary among these was the increasing importance of technology itself, which required manufacturers in nearly every field to stay in touch with the latest innovations across a spectrum of engineering and scientific disciplines. Particularly for companies in highly technical, capital intensive industries such as automobiles, avionics, and defense, it became imperative to develop new products from design to assembly line in the shortest possible amount of time. This meant carrying a staff of engineers larger and more diverse than was actually needed at any one juncture. At the same time, increasingly competitive markets tended to penalize those companies that were "top heavy" with excessive overhead costs, prompting employers to seek methods of reducing the number of their full-time employees receiving full benefits and high wages. One means of reconciling these opposing needs was to hire extra engineers on a temporary, limited-benefits basis, and it was to provide such a service that CDI was founded in Philadelphia in 1950.
Known originally as Comprehensive Designers, Inc., CDI was among the first to offer temporary technical services to the manufacturing industries, or what would later be called "outsourcing." As the provider of an entirely new service, CDI grew slowly during its first decade, its revenues never rising above $2 million. The company's future prospects were excellent, however--the automobile industry was at full throttle and the Cold War had created a permanent defense industry--and in 1956 CDI hired a young aeronautics engineer, Walter R. Garrison, who would eventually help the company capitalize on its advantageous position. Garrison was born in 1926 in St Louis, earned bachelor's and master's degrees in engineering from the University of Kansas, and started his career as a structural engineer with Boeing Airplane Company. When Garrison learned of the higher pay offered by technical services companies he joined CDI as its chief engineer in 1956, and two years later he was made vice-president and a director.
Diversification and Expansion: 1960s-70s
In 1961 Garrison--who, along with his family, controlled about 45 percent of the company stock--and two colleagues bought out the languishing CDI and set about spreading the gospel of technical services. Their timing could not have been better. With a war brewing in Vietnam and the arms race roaring, government defense expenditures would soon reach levels unmatched since World War II. In turn, the defense industries would develop more sophisticated products at ever more rapid rates, requiring the sort of temporary technical labor pool CDI could supply. Garrison expanded his base of operations, opening recruitment and business offices around the country to accommodate the automotive, space, and petrochemical industries, as well as defense. The concept of technical services was solid and business grew for CDI and for the industry as a whole. In 1967, industry sales were estimated by Barron's at $500 million and CDI was already ranked number one or two with revenues of $40 million, about 80 percent of which was related to defense spending.
Because CDI was in the temporary services business, however, its revenue was subject to severe fluctuations as major contracts came and went. For example, its 1967 sales of $40 million were up more than 100 percent over the previous year thanks to a single contract for work on the Lockheed C-5A aircraft; when that ended in 1968, revenue dropped accordingly. On the other hand, CDI was uniquely well adapted for such cycles, as most of its costs were tied to a labor force that could be laid off and rehired with complete flexibility and without the rancor usually incurred in doing so. CDI paid its employees a higher salary than they would otherwise receive, but with limited benefits and no assurance of future work. In practice, since the company was growing and jobs were plentiful throughout the 1970s and beyond, most CDI employees had all the work they wanted.
CDI's defense-related contracts declined sharply in the early 1970s with the end of the Vietnam War. Impressively, the company did not suffer any overall lapse in sales, having established its presence well enough to build new business in other industries. As early as 1971, CDI's defense customers comprised only 33 percent of sales, with the remainder supplied by such all-star clients as Coca-Cola, Philip Morris, Mellon National Bank, Shell Oil, Magnavox, and about 145 other manufacturing firms in the United States, Europe, and the Middle East. The company employed some 3,000 technical specialists at any one time, shifting them from city to city as needed by individual contracts.
A new wrinkle in CDI's service was the gradual creation of its own engineering facilities, where small projects could be handled from start to finish by CDI's employees and then delivered to the customer. This method was substantially more efficient than the usual policy of sending technicians to the customer's plant, where a lack of familiarity tended to slow the initial stages of work. Over the years, CDI continued to expand its in-house capability, and by 1990 as much as 40 percent of its revenue was generated by work done on its own premises.
In 1972 Garrison began to diversify his business by acquiring--for about $1.3 million in stock--a headhunting firm called Management Recruiters International (MRI). Unprofitable at the time of its purchase, MRI picked up steam and was soon adding offices from coast to coast, the bulk of them franchised. The recruitment business had been very good for CDI, consistently returning higher rates of profit than the Technical Services division or the more recent division of Temporary Services. MRI focused on the recruitment of middle managers--those earning between $25,000 and $125,000--the largest segment of the managerial ranks and those most likely to make a number of career changes before settling on a permanent employer. The baby boom generation ensured that the middle management niche would remain crowded for years to come, and MRI had little trouble establishing itself as the leading American job search agency. Though never more than a fraction of CDI's total business, MRI often made heavy contributions to the corporate bottom line; in 1982, for example, recruitment provided only 8 percent of overall revenue but 35 percent of operating income.
A number of Garrison's other attempts at diversification were less successful. In 1970 CDI bought PMI Corporation, a California construction firm that never yielded satisfactory returns and was sold off in 1981. In 1978 Garrison no doubt raised some eyebrows around the directors' table when he announced that CDI had invested $7 million in a partnership formed to develop a casino in Atlantic City, New Jersey, where gambling had recently been legalized, with plans including a 16-story hotel to be built on three acres of boardwalk property. However, the complexities of gaming laws proved too much for the prospective developers and the deal fell through--probably for the good of CDI, which could have had little hope of surviving in a business that has seen many more experienced players lose everything they wagered.
MRINetwork search professionals help their clients build the kind of organization that creates success – building the heart of business through Accelerated Recruitment™. This means that we deliver the right talent that arrives faster, fits better and stays longer. The Accelerated Recruitment approach is based upon the collective power of three pillars:
. Our methodology – the MRINetwork Way®, the way we train our people to find, evaluate and match clients and candidates is unique.
. Our industry knowledge – The MRINetwork business model is built around offices and recruiters who have subject matter expertise in specific areas. As niche specialists, our recruiters possess a higher level of understanding and a sharper perspective about their industries, enabling them to provide experienced and targeted advice on their clients’ recruitment needs.
. Big network – We have one of the world’s largest talent pools. By combining our size and scope with an IT infrastructure with real-time access to candidates, information and training, MRINetwork offices are uniquely capable of finding the best candidates, regardless of their location.
The field of technical services is largely a post-World War II phenomenon. In the prosperous three decades following 1945, several economic developments made possible the growth of the technical services industry. Primary among these was the increasing importance of technology itself, which required manufacturers in nearly every field to stay in touch with the latest innovations across a spectrum of engineering and scientific disciplines. Particularly for companies in highly technical, capital intensive industries such as automobiles, avionics, and defense, it became imperative to develop new products from design to assembly line in the shortest possible amount of time. This meant carrying a staff of engineers larger and more diverse than was actually needed at any one juncture. At the same time, increasingly competitive markets tended to penalize those companies that were "top heavy" with excessive overhead costs, prompting employers to seek methods of reducing the number of their full-time employees receiving full benefits and high wages. One means of reconciling these opposing needs was to hire extra engineers on a temporary, limited-benefits basis, and it was to provide such a service that CDI was founded in Philadelphia in 1950.
Known originally as Comprehensive Designers, Inc., CDI was among the first to offer temporary technical services to the manufacturing industries, or what would later be called "outsourcing." As the provider of an entirely new service, CDI grew slowly during its first decade, its revenues never rising above $2 million. The company's future prospects were excellent, however--the automobile industry was at full throttle and the Cold War had created a permanent defense industry--and in 1956 CDI hired a young aeronautics engineer, Walter R. Garrison, who would eventually help the company capitalize on its advantageous position. Garrison was born in 1926 in St Louis, earned bachelor's and master's degrees in engineering from the University of Kansas, and started his career as a structural engineer with Boeing Airplane Company. When Garrison learned of the higher pay offered by technical services companies he joined CDI as its chief engineer in 1956, and two years later he was made vice-president and a director.
Diversification and Expansion: 1960s-70s
In 1961 Garrison--who, along with his family, controlled about 45 percent of the company stock--and two colleagues bought out the languishing CDI and set about spreading the gospel of technical services. Their timing could not have been better. With a war brewing in Vietnam and the arms race roaring, government defense expenditures would soon reach levels unmatched since World War II. In turn, the defense industries would develop more sophisticated products at ever more rapid rates, requiring the sort of temporary technical labor pool CDI could supply. Garrison expanded his base of operations, opening recruitment and business offices around the country to accommodate the automotive, space, and petrochemical industries, as well as defense. The concept of technical services was solid and business grew for CDI and for the industry as a whole. In 1967, industry sales were estimated by Barron's at $500 million and CDI was already ranked number one or two with revenues of $40 million, about 80 percent of which was related to defense spending.
Because CDI was in the temporary services business, however, its revenue was subject to severe fluctuations as major contracts came and went. For example, its 1967 sales of $40 million were up more than 100 percent over the previous year thanks to a single contract for work on the Lockheed C-5A aircraft; when that ended in 1968, revenue dropped accordingly. On the other hand, CDI was uniquely well adapted for such cycles, as most of its costs were tied to a labor force that could be laid off and rehired with complete flexibility and without the rancor usually incurred in doing so. CDI paid its employees a higher salary than they would otherwise receive, but with limited benefits and no assurance of future work. In practice, since the company was growing and jobs were plentiful throughout the 1970s and beyond, most CDI employees had all the work they wanted.
CDI's defense-related contracts declined sharply in the early 1970s with the end of the Vietnam War. Impressively, the company did not suffer any overall lapse in sales, having established its presence well enough to build new business in other industries. As early as 1971, CDI's defense customers comprised only 33 percent of sales, with the remainder supplied by such all-star clients as Coca-Cola, Philip Morris, Mellon National Bank, Shell Oil, Magnavox, and about 145 other manufacturing firms in the United States, Europe, and the Middle East. The company employed some 3,000 technical specialists at any one time, shifting them from city to city as needed by individual contracts.
A new wrinkle in CDI's service was the gradual creation of its own engineering facilities, where small projects could be handled from start to finish by CDI's employees and then delivered to the customer. This method was substantially more efficient than the usual policy of sending technicians to the customer's plant, where a lack of familiarity tended to slow the initial stages of work. Over the years, CDI continued to expand its in-house capability, and by 1990 as much as 40 percent of its revenue was generated by work done on its own premises.
In 1972 Garrison began to diversify his business by acquiring--for about $1.3 million in stock--a headhunting firm called Management Recruiters International (MRI). Unprofitable at the time of its purchase, MRI picked up steam and was soon adding offices from coast to coast, the bulk of them franchised. The recruitment business had been very good for CDI, consistently returning higher rates of profit than the Technical Services division or the more recent division of Temporary Services. MRI focused on the recruitment of middle managers--those earning between $25,000 and $125,000--the largest segment of the managerial ranks and those most likely to make a number of career changes before settling on a permanent employer. The baby boom generation ensured that the middle management niche would remain crowded for years to come, and MRI had little trouble establishing itself as the leading American job search agency. Though never more than a fraction of CDI's total business, MRI often made heavy contributions to the corporate bottom line; in 1982, for example, recruitment provided only 8 percent of overall revenue but 35 percent of operating income.
A number of Garrison's other attempts at diversification were less successful. In 1970 CDI bought PMI Corporation, a California construction firm that never yielded satisfactory returns and was sold off in 1981. In 1978 Garrison no doubt raised some eyebrows around the directors' table when he announced that CDI had invested $7 million in a partnership formed to develop a casino in Atlantic City, New Jersey, where gambling had recently been legalized, with plans including a 16-story hotel to be built on three acres of boardwalk property. However, the complexities of gaming laws proved too much for the prospective developers and the deal fell through--probably for the good of CDI, which could have had little hope of surviving in a business that has seen many more experienced players lose everything they wagered.
MRINetwork search professionals help their clients build the kind of organization that creates success – building the heart of business through Accelerated Recruitment™. This means that we deliver the right talent that arrives faster, fits better and stays longer. The Accelerated Recruitment approach is based upon the collective power of three pillars:
. Our methodology – the MRINetwork Way®, the way we train our people to find, evaluate and match clients and candidates is unique.
. Our industry knowledge – The MRINetwork business model is built around offices and recruiters who have subject matter expertise in specific areas. As niche specialists, our recruiters possess a higher level of understanding and a sharper perspective about their industries, enabling them to provide experienced and targeted advice on their clients’ recruitment needs.
. Big network – We have one of the world’s largest talent pools. By combining our size and scope with an IT infrastructure with real-time access to candidates, information and training, MRINetwork offices are uniquely capable of finding the best candidates, regardless of their location.
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