Micro Tech Staffing flourishes under Waltham native

By Carrie Simmons/ Daily News Staff

Thursday, January 12, 2006

WALTHAM -- A local entrepreneur who started his business in his mother's basement recently celebrated the 20th anniversary of his multi-million company

Joseph Donahue started Microtech Staffing Group in December 1985 and ran the fledgling business out of Peg Donahue's basement for a year-and-a-half before opening an office on Weston Street

Faced with competition from established firms like Manpower and Kelly Services Inc, Donahue carved out a niche in the then untapped high-tech industry, placing temporary workers in engineering, manufacturing and distribution jobs

He ended his first year of business with a net profit of only $600 but continued to acquire clients like EMC and generated $500,000 in sales within two years By 1992, he hit the $1 million mark

Microtech grew steadily through the dot-com boom during the late-1990s and diversified to other markets like the medical devices sector after the dot-com bust in 2000

Still, requests for temporary help declined sharply with the 2001 recession

"Temporaries are always first to go so we dried up for a period of time," Donahue said "Just as we were about to turn the corner, 9/11 happened"

Microtech survived by providing good customer service and expanding its base of customers, Donahue said And, while other businesses were closing its doors or were bought out -- including clients like Data General, Wang and Digital -- he doubled his account base and added a few offices to try to grow through the recession

"A good defense is a good offense," he said

A Waltham native, Donahue attended Waltham public schools until the ninth grade He graduated from Boston College High School in 1974 and went on to earn a degree from Boston College

Donahue worked as an operations manager at Honeywell, eventually pursuing an MBA at Babson College, and stepped out on his own in 1985

Microtech was headquartered on Weston Street for 18 years Donahue's mother, Peg, took care of accounting and billing right up until her death in April 2004

"She was the big boss," Donahue said

After her death, he moved Microtech's headquarters to Quincy Donahue and his wife, Elizabeth, moved from Waltham to Hingham 10 years ago

With offices in Medway, Woburn, Danvers, Londonderry, New Hampshire and Miami, Fla, Microtech now places about 1,200 temporary employees a day, generates $35 million a year in sales and is the second-largest privately owned temporary employment agency in New England

After growing through the "anemic" recovery from the 2001 recession and the exodus of high-tech jobs in Massachusetts, Donahue is diversifying again and placing temporary employees in accounting, education, health care and financial services

"He is a brilliant businessman and a natural leader who possesses an innate business sense that goes beyond our specific industry," said James Fennessy, a longtime employee of Donahue's "I have learned more from him than from all of my undergrad and MBA studies"

Donahue is planning to add more offices in Worcester, Rhode Island, the Boston-Cambridge area and Florida, where 300,000 jobs were created in 2004, he said, compared to 4,000 jobs in Massachusetts

The market for temporary employees is only growing, Donahue said

"The jobs are becoming more permanently temporary," he said "Because of health care costs companies are embracing that as a work strategy"

Donahue is proud that one-third of Microtech's temporary employees land permanent employment Four of his former temps who he placed permanently at EMC 20 years ago are now millionaires

Donahue jokes that they don't always pay for lunch when he visits the Hopkinton company

"They forget about when they were temporaries," he said