CH2M Hill also aims to grow its transportation business, with an emphasis on transit and high-speed rail. Despite the recession, so far, the company is on the right track, winning the program management contract for the 73-mile expansion of London’s rail lines. The work is scheduled for completion in 2017 and will be conducted in a joint venture with Los Angeles-based AECOM and London-based The Nichols Group.
Regionally, transportation remains strong as well, with the firm’s ongoing work on several highway projects, including the $1-billion, six-year “Connecting Idaho-GARVEE” project that involves six corridors covering more than 70 miles of highways throughout Idaho.
The firm is also developing the engineering and construction guidelines to be used for the roughly $20 billion of proposed improvements along the 144-mile Interstate 70 mountain corridor, which stretches from Golden to Glenwood Springs in Colorado.
In addition, the firm was appointed by the U.S. Federal Highway Administration to lead a team developing a first-of-its-kind program that would be used to make highways and their construction more sustainable.
Stable Performance
When new hires begin working at CH2M Hill, they are told to follow the governing values outlined in Jim’s Little Yellow Book—a 15-page illustrated pamphlet in which co-founder James Howland doles out straight-forward guidance on everything from employee perks to communication etiquette and client relations.
Nearly four decades after being first published, the book remains the “heart and soul” of how the company conducts business, according to Jim Schwing, a vice president in the company’s Salt Lake City office, who started with the company in 1968 and still keeps his original copy on his desk.
“We take care of our employees so that they’ll take care of our clients,” Schwing says. “As an employee-owned company, everyone at CH2M Hill has a direct stake in the company’s success, and it shows in our strong relationships with our clients.”
Strong client relationships have enabled CH2M Hill to maintain relatively stable revenue performance since the onset of the recession in late 2007, hovering around $6 billion. The firm does not carry the kind of crushing debt burden that has led other firms to default or file for bankruptcy, and it has fared better than most of its peers in boosting profits.
The company implemented cost-cutting measures, including modest layoffs due to diminished demand in some markets, to maintain a strong balance sheet. The tactic proved so successful that the company showed 224% growth in profits between 2008 and 2009 amid relatively stable revenue performance.
Consequently, the company rose from to No. 436 from No. 381 in the latest list of Fortune magazine’s largest companies, showing $103.7 million in profits for 2009, up from $32.1 million in 2008. The company also ranked No. 1 in profit margin by Engineering News Record for the past six years.
“We are fortunate to be in the business that we’re in,” says Tom Searle, president and group chief executive of the firm’s international business. “The things that we do—water, power, infrastructure and facilities—are the things that people need even in the hard times.”
Business is looking up in the mountain region, where CH2M Hill is working on several water and transportation projects. This year alone, 350 people were hired or transferred into the region for new and ongoing projects.
“It is because of our diverse workload of municipal, federal and commercial clients that we have been able to survive the ebbs and flows,” says Amy Lange, the firm’s Denver-area manager.
“Demand for our services diminished at the local level with budget cuts in municipal environments, but we were able to offset some of those losses with federal and stimulus work.”
