CDI Corporation - NYSE:CDI - Problems and Ethics

CDI Corporation www.cdicorp.com is an American Corporation based in Philadelphia. They have revenues in excess of $1 billion Dollars. They are a public company trading on the New York Stock Exchange, NYSE:CDI. They provide 'professional services' to Fortune 1000 clients. In addition they offer business solutions through their subsidiaries. They are headed by Roger H Ballou, CEO.

CDI Corporation's Subsidiaries include:

  • Management Recruiters International, commonly referred to as 'MRI Network' or 'MRINetwork' www.mrinetwork.com
  • CDI Anders Elite www.anderselite.com
    Anders have recently been fined around $12 million US Dollars by the Office of Fair Trading for anti-competitive behaviour. Read the facts about CDI AnderElite fine.
  • Todays Staffing Sold to Spherion Corporation on 20th September 2007)

CDI Corporation revenue stream - Management Recruiters International - Franchise Problems

The main discussion is focused on the ethical problems in CDI Corporation and Management Recruiters International (MRI Network). Those problems are raised in letters to Roger H Ballou of CDI Corporation the owners of Management Recruiters International franchise. MRI Network is a very important part of their revenue and it makes a significant contribution to their yearly profit. It is equally important to its shareholders.

For example in 2005

CDI Corp business solutions' revenue was $737.8m and produced an operating profit of $14.7m

Anders Elite's revenue was $184.4m and produced an operating profit of $6.1m

Todays Staffing's revenue $149.1m and produced an operating profit of $3.5m

Management Recruiters International's, known as MRI Network revenue was $62.3m and produced an operating profit of $14.1m

Source: CDICorp.com

2005 CDI Corporations (CDI Corp) and its subsidiaries produced a gross revenue just over 1.1 billion Dollars. It produced a collective operating profit of $38.4m. Management Recruiters International produced almost 37% of that total group profit. It is easy to see the importance of this to CDI Corporation's bottom line and profitability and to its shareholders.

CDI Corporation - Franchise Problems

CDI Corporation own Management Recruiters International. Whilst they have owned the USA part of recruitment franchise for many years, they expanded internationally by acquisition. In April 1999 they purchased The Humana International Group (a recruitment franchise) and renamed it to Management Recruiters International. They also integrated it into their USA operations and it appears to the outside world as one single entity. In fact their literature that they produce shows that the global MRI Network franchise operates from 1,100 offices in over 35 countries. This international expansion was built on the purchase of the Humana International Group. More recently this number of franchisees has been reduced to 1000. This dwindling of franchised offices is reflected in a number of ways. There is a remarkably poor franchisee satisfaction level in this global recruitment franchise. This is shown in the recent survey conducted by MRIFA in 2008. It alarmingly showed that only 20% of MRI Network franchisees would renew their franchise agreements today. Or put another way, 80% of franchisees would not renew their franchise agreements if asked to do so today. Also, CDI Corporation stock has consistently under performed against the average NYSE average since Roger H Ballou has been CEO. See both of this issues in more detail CDI Corporation Stock / Management Recruiters International Dissatisfaction.

Roger H Ballou is the Chief Executive Officer of CDI Corporation and has been since October 2001. He had personal knowledge and involvement in some of the issues relation to the events discussed in this web site. Some of these issues are discussed at top level in Roger H Ballou's Response. His general approach has been to stick his head in the sand. He attempts to ignore these issues as if they had not happened and hope that they will go away. Roger H Ballou has a track record of not answering these issues. Read the facts and form your own opinion on their ethics and actual business practices. That is, for both CDI Corporation, Management Recruiters International and their management.

More detail is covered in the following: