Need to Meet: Timothy van den Broek, CFO, Emsi

Economic-software firm Emsi was founded in 2001 “to help community colleges struggling [to] defend their funding,” CFO Timothy van den Broek said. The firm now has entered the private equity space, using data to illuminate decisions about regional expansion, moving into new markets and dealing with high employee turnover.

Emsi specializes in labor-market analysis; its economic-impact studies show the value added by colleges and universities and suggest how to raise this return on investment by targeting high-paying, in-demand occupations. Having widened its offerings to workforce developers and enterprise companies, Emsi is applying its hiring insights to the mission of growing portfolio companies.

“What we can do is tell you, ‘Look, if you raise your wages by $3.75, you have access to this much more of the labor market.’ And that’s exactly how granular and precise the data can be,” van den Broek said. “And we can do that by Zip Code.”

Emsi’s data sets cover “everything from industries to occupations to demographics to education levels.” They come from two basic sources: the government (mainly the Bureau of Labor Statistics) and CareerBuilder, Emsi’s parent. (Emsi was previously owned by a PE firm that “cared about growth”— Tregaron Capital of Palo Alto, California —so “we have some sense of the opportunities and challenges that that presents,” van den Broek said.)

Emsi works on that raw information, balancing, combining and using it to forecast: “Where’s the labor market heading for different occupations, industries [and] wage rates?”

John Ahern, a data specialist at Emsi, said compensation and labor availability can be opaque to managers and owners. “For a lot of people that I’ve talked to, the question of why a given company has so much trouble attracting or retaining talent is just kind of a mystery, a black box. And it’s a very unscientific thing that’s based on the gut of whoever’s in charge of operations for HR,” Ahern said. But firms investing in diverse industries across the country, in sectors and geographies with which partners may be unfamiliar, can’t afford to rely on instinct.

Emsi’s tools are most useful for longer-term investments, especially lower-to-middle-market companies held by medium-size private equity firms with an operational focus. Van den Broek gave the example of a firm that was looking to buy and grow an HVAC business: “If the deal closed and they had funds, would they be able to keep pace with labor-market needs?” Emsi provided information on the availability of technicians, their typical rate of compensation, and the hiring habits of competitors.

“We were even able to go in and look at the typical churn rate in that region for that industry,” Ahern said. The conclusion: a distance of just one county “made all the difference in the world.”

Phone: +1 208-596-5699

Email: timothy@economicmodeling.com

Website: http://www.economicmodeling.com/

Timothy van den Broek, CFO, Emsi. Photo courtesy of the firm.