Drug-testing firm latest specimen of tough times
GlobalLab Solutions of Charlotte is handing out far fewer test cups these days, thanks to the hiring drought.
By Kirsten Valle
kvalle@charlotteobserver.com
Posted: Saturday, Aug. 15, 2009
Mike Sullivan’s business has changed dramatically since October. He’s closed offices, slashed expenses and ramped up marketing, waiting for hiring to return. As GlobalLab Solutions searched for a new office a few years ago, when the economy was thriving and jobs were easier to find, one of the big questions on owner Mike Sullivan’s mind was whether the space had two bathrooms.
“Just proves that drug testing is not a big issue when times are bad. But when times are good then we start to hear all the misinformation about employees are not productive and thus need to be drug tested. The drug testing companies start to spew out all kinds of misinformation when times are good. “
His company’s waiting room was often full. Dozens of job candidates lined up for the plastic cups and quick instructions – don’t flush and don’t wash your hands – that come with pre-employment drug tests.
“When you opened the doors at 8:30, you’d have five or 10 people waiting,” said Sullivan, who runs the nine-employee company with his wife. “And then, a steady flow all day long.”
“HR people will commonly tell potential employees that their appointment is in the morning. Labs don’t set appointments. Just because the lab opens at 8:30 doesn’t mean that you have to be there at 8:30. These collection companies take samples throughout the day and you don’t have to be first in line.”
These days, it’s more like a trickle.
“I like the writer’s pun throughout the article”
Surging unemployment and little new hiring means emptier waiting rooms and lighter pockets for drug-testing companies like GlobalLab Solutions. When hiring picks up, Sullivan and his crew will be among the first to notice.
He says business has been in the toilet since October, and he’s seen no recent signs of an uptick.
Nationally, the unemployment rate fell last month to 9.4 percent, but there are still a record number of people looking for work. The local jobless rate has been higher – 12.4 percent for the Charlotte area in June, the latest numbers available. New state and local figures are set to come out later this month.
At its peak a couple of years ago, GlobalLab Solutions ran 50 drug tests a day for more than 1,200 clients, from local businesses to national chains, such as Books-A-Million. Sullivan, a silver-haired former banker, spent his days collecting lab results, maintaining the company’s records, manning the phones to answer clients’ questions and scrambling to keep up with the rush of orders.
These days, Sullivan, 61, has shifted his focus, slashing the waste from his business and ramping up marketing. He spends more time chatting with the test-takers. He’s learned how to perform tests and how to detect cheaters, who have become more frequent as job-hunters turn increasingly desperate. Some have offered bribes or smuggled in other people’s urine samples in their pockets.
The drug-testing business wasn’t always Sullivan’s calling. His wife, Marilyn, who had sold drug tests for another company, started the business 13 years ago out of their home off Providence Road, hoping to capitalize on a new instant-read test that had just hit the market.
“Looks like his wife learned the business from a previous employer and decided to compete against her previous employer. Too bad that the previous employer did not make her sign a non-compete agreement. Now she is going to decide people’s careers from her home.”
Sullivan, who worked in commercial financing at a bank, stayed on the sidelines, watching as his wife made sales calls from the back patio. The company grew quickly.
“So he went from handling money to handling piss. I am sure he told all his friends and family about his career advancement.”
In 2004, it moved to its current space in an office park off South Mint Street. From 2006 through 2008, the company opened offices in Rock Hill, University City, Gastonia and southwest Charlotte, and Sullivan left his banking job to help run the company full-time. The instant test had become prevalent, used mostly for pre-employment drug screening because it was cheaper than lab tests, as low as $18. The tests involve dipping testing sticks into a urine sample, with faint pink lines showing up minutes later if the person passes.
“No special skill needed to dip a stick in urine.”
Once a booming business
In better times, pre-employment screening was a lucrative field in Charlotte – a city long known for its booming population and thriving economy. Of 133 Charlotte-area companies surveyed last fall by The Employers Association, a local human resources consulting firm, 72 percent said they did pre-employment drug testing or both pre-employment and current testing.
GlobalLab Solutions was growing so fast that Sullivan tried to curb the growth, telling his coworkers – many of them family members, including his son and two stepsons – to limit the company to 35 percent growth last year.
“Why not get the family involved in collecting piss? Looks like his sons bypassed college to collect piss.”
Sullivan had done strategic planning at the bank, and he thought he’d anticipated everything that could go wrong: if the company couldn’t handle its growth, for instance, or if its biggest customer left.
The business continued to thrive through last September. But as Charlotte reeled from the banking meltdown, companies quickly stopped hiring. Pre-employment screenings, which accounted for 30 percent of the company’s business, evaporated.
“Oct. 1 was D-Day,” Sullivan said. The company’s overall revenues are off 25 percent since then.
“Of all the things I planned,” he said, “I had no plan that employment would collapse like this.”
“Again when the economy is bad drug testing is not very prevalent. First companies use drug testing as a means to eliminate people. If not enough people are eliminated that way then layoffs will begin. Since you have your most productive employees working now you don’t have to do drug testing any longer.”
Nationally, drug-testing companies have seen a similar drop-off, reporting minimal hiring, even as some parts of the economy begin to show signs of improvement, said Laura Shelton, executive director of the Drug and Alcohol Testing Industry Association.
Pre-employment drug screening, often the biggest part of testing companies’ business, is all but dead, and companies are beginning to cut other testing programs, such as random and post-accident tests, she said.
With his business changing, Sullivan had to make some tough choices.
He shuttered all but two of the company’s offices. He laid off nine of 18 full-time employees. He boosted Internet marketing and hired a part-time salesman, instead of relying strictly on referrals.
“By offices he is speaking of collection stations. Now people have to driver further to a collection station.”
As the company’s waiting room emptied and job-seekers across the region began to grasp more desperately for jobs, the number of people trying to cheat on their tests grew, too.
Fewer jobs, more cheaters
One job candidate, for instance, came in with a urine sample he’d brought from the outside and reheated. It tested at 131 degrees, far above the typical 90 to 100 degrees, Sullivan said.
“131 degrees? There might be some exaggeration to that. Medical thermometers do not nearly go that high. Maybe Sullivan had a meat thermometer near by?”
The man told the technician he was feeling a little sick that day. She told him he’d be dead if the sample were his.
Another day, someone offered Sullivan’s son $500 to give him a passing grade.
“Another exaggeration. If the person doesn’t have money to buy a product to help them pass with they surely are not going to pony up 500 dollars. (Possible Monopoly money) Makes a very interesting story but most likely an exaggeration.”
Now, Sullivan and his employees have learned to listen for the sound of a balloon popping – one method for smuggling in samples – in the bathroom. They’ve learned what fresh urine smells like, versus an older sample. And when to ask people to wait and try again. Sullivan himself, who previously had no medical or drug-testing background, has learned to perform and read the tests.
“Mr. Sullivan has no formal medical or drug testing experience but yet decides the fate of people’s jobs and careers based on reading an instant test. To top it off a 61 year old man takes pride in listening to people use the bathroom and has the necessary olfactory skills needed to differentiate between old and new piss. Another reason why this industry is so screwed up.”
Many testing companies are small, family-run businesses, though there are some “mega companies,” Sullivan said. There are about four testing companies in the Charlotte area and 40 statewide.
“The profits are so ungodly and since you don’t need any special license or certification to do the collection you can hire family members. In addition you can only trust family members with confidential business information. Or else you might be training a potential competitor if you hire outside the family.”
Companies can perform saliva, hair and blood tests, but urine testing is by far the most popular – the “gold standard” in drug testing, Sullivan said. As the economy crumbled, some local companies cut drug-testing from their budgets, opting instead for cheaper in-house saliva tests, he said.
“Sullivan implies that urine testing is the best way to test thus attaches the ‘gold standard’ label. Nothing can be further from the truth because urine testing is a bad indicator of impairment. The reason why Sullivan says its the ‘gold standard’ is because it’s the method that brings in the most income. Other methods are much better and more accurate but without urine collection companies such as GlobalLab would simply cease to exist. The gold standard in this case is what method brings in the most gold to him and his family.”
Others have simply frozen hiring, meaning fewer new candidates arriving at GlobalLab Solutions.
At GlobalLab Solutions, clients include the department of social services in Gaston and Cleveland counties, the YMCA and the Department of Transportation. The company performs court-ordered tests and tests for individuals – sometimes before their pre-employment tests, to be sure they’re clean, he said.
The company relies on orders from companies, averaging about $25 per drug test, depending on the volume of the order, Sullivan said.
Waiting for the turnaround
In his office, surrounded by photos of his family and hanging lab coats, Sullivan says he loves the work, despite its hurdles. GlobalLab Solutions will come out of the recession leaner and stronger, and its steady business will return, he says.
“A Family of Piss Collectors?”
“This is a challenge,” he says. “But one thing I’ve learned is when you’re challenged, you grow. We’re very dedicated to keeping this business alive.”
“Of course he wants to keep the business alive – high profits, employs family members, and appears to be proud of what he does. I doubt if he even tests family members that work for him which is typical of this hypocritical business.”
