Headquarters: Edina
Inception: 1993
Family name: Arnold
What the company does: Staffing, recruiting, and HR consulting
Type of ownership: S corp.
Principal owners: John Arnold, Robert Arnold
Employees: 157
Family members in the business: 2
Family members on the board: 4

Six months after brothers John and Robert Arnold took full ownership of Celarity, the Edina-based staffing, recruiting, and HR consulting firm, the Covid lockdown hit.

“That was terrifying,” Robert Arnold recalls. “I remember having a conversation with John and saying, ‘What the heck did we do? We just bought a company . . . ’ ”

“ ‘. . .  and now it may not be worth anything,” John says, finishing his sentence. The brothers worried about closed offices and mass layoffs in the firm founded by their mother and stepfather, Marlene and Doug Phipps. Instead, “it quickly developed from a concern to a big opportunity,” Robert says. Their business model “changed significantly overnight.”

It wasn’t the first time Celarity had transformed itself. The Phippses launched the company in 1993 as Freelance Creative, supplying on-site graphic designers and marketing copywriters to businesses for short-term projects. Robert describes his mother, who’d been a graphic designer before launching her firm, as “a pioneer. There was nobody doing marketing-creative staffing in the Twin Cities in the ’90s.”

Over time, those clients, which include Minnesota-based Fortune 500s, asked the Phippses to help them find short-term and even full-time help not only in creative and marketing but also HR, finance, and operations. In 2004, the company changed its name to Celarity, combining the words “clarity” and “celerity” (speed), to reflect its broader business model.

“Marlene has told us, ‘Every five to 10 years, you have to reinvent the business,’ ” John says. Indeed, “it seems like every five to 10 years, we’re in a completely different environment business-wise.”

Though the Phippses’ sons have been involved in the business for two decades, there were no formal succession plans. “Marlene never pushed the business on us,” John says. “She wanted us to be interested.” His mother knew her sons needed to be truly passionate about the business if they were to be involved because it “supports a lot more families than just ours.”

Marlene’s approach apparently worked, however; the sons were hooked early in their careers. John held recruiting and marketing positions in other companies, joining Celarity in 2010 when his mother told him about an internal marketing role. Robert, who’d joined four years earlier, found that he enjoyed the challenges of finding qualified employees for clients as well as “helping people progress in their careers.”

The Arnolds purchased half of the company from their stepfather in 2017 and the remainder from their mother two years later. Covid happened—but the brothers soon realized that their fears were groundless. As clients shifted to remote work, John recalls, “they told us, ‘We don’t care where people are located. We just need to find the skill sets for our projects and for our growth.’ ”

As a result, Celarity expanded its operations from two states (Minnesota and Wisconsin) to 26. Meanwhile, its client base has grown from 500 companies in 2020 to more than 700 today. “We were able to quickly adapt to what was a significant challenge early on into a growth opportunity,” Robert says.

Currently, most of Celarity’s contract consultant placement work is for Fortune 500s, while most of its permanent recruiting and executive search is conducted for small to midsize companies. In the past few years, Celarity began offering talent advisory services to businesses with fewer than 100 employees.

As co-CEOs, the brothers share management chores. When there’s a particularly complicated decision to make, “there might be initial disagreement . . . [But] we’re usually able to understand where each of us is coming from,” Robert says.

“I think it helped going through succession planning together when we were purchasing the company,” John says. The brothers came to realize that “we have very different work styles, but we have very similar values.” John says that he is “drawn to the visionary role,” and he focuses on sales and marketing; his brother is “more inclined toward the integrator role,” directing Celarity’s recruiting, finance, and operations.

The Arnolds believe that listening closely to the needs of both clients and the employees whom it places has been key to its continued success. It provides full medical benefits, PTO, and a 401(k) plan to its employees.

Sauk Rapids-based scrapbooking supply company Creative Memories has been a client for about 10 years. In fact, current CEO Alison Dutton was one of the first employees Celarity placed there. “They’ve been an integral part of building out our marketing and product design teams,” Dutton says. “John understands our creative, fast-moving culture.”

The Arnold brothers plan to maintain their own company’s rapid pace. “With all of the technology changes and the economic changes out there,” John says, “we are focused on leaning harder into relationships and how we can show up for our clients and go in deeper with them.”

“It seems like every five to 10 years, we’re in a completely different environment business-wise.”

—John Arnold

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