Parsons is going through a period of accelerated, unprecedented growth. After a first quarter that exceeded financial expectations, Parsons has raised its prediction for full-year 2023 revenue to $4.6 billion.
Executive Mosaic spoke with Parsons Chairwoman, President and CEO Carey Smith, a five-time Wash100 Award winner, to learn more about the key factors driving the company’s expansion, the core values that drive Parsons’ culture and financial success, and the unique approaches that have helped bolster Parsons’ workforce in a competitive market.
Read Smith’s full Executive Spotlight interview below.
Tell me about Parsons’ culture and core values. What aspects of the company do you think are contributing most to its success?
Parsons differentiates itself as an organization who is mission focused and has a unique culture. It’s those two elements that allow us to be established as what we call a destination employer, which is a place where people want to come and work, and a place where they stay, develop and have a successful career.
Our culture and core values have been integrated since Parsons’ founding in 1944. Those values of safety, quality, integrity, diversity, innovation and sustainability guide our decisions, define our culture and inspire our employees to do their best. We strive to ‘Imagine Next’ and that is key to our culture. Imagine Next means that we’re focused on creating the future of national security and global infrastructure. It’s where we start with a clean sheet of paper and envision the way that things could be rather than trying to evolve them from where they are today.
Our culture is also one that’s people first, and we’re focused on the success of our workforce and making sure that they have maximum flexibility to perform their job well. We offer programs for workplace and schedule flexibility, opportunities to pursue technical career paths and our Technical Fellows program, and a thriving Diversity, Equity and Inclusion organization with six business resource groups as small examples of the type of programs we have to deliver a people first culture.
We’re also focused, most importantly, on our customers’ missions and supporting their toughest challenges. We try to solve challenges that are emerging or upcoming, again, that’s tied in with the Imagine Next theme. As a company that has a lot of breadth and depth, but still retains the agility, innovation and entrepreneurism of a small business, we’re able to move quickly to get operationally-relevant solutions to our customers.
Since we’re talking about culture and our core values, which are incredibly important to who we are and how we operate, I’d close by citing how we learned this March that for the 14th consecutive year, we were recognized by Ethisphere as one of the world’s most ethical companies. This certification is one I’m very proud of because it reflects our entire team’s commitment to our core values. Making the list is not an easy task — it’s an in-depth review of our operating principles, culture, workforce and ethics practices, and global programs. We’re proud to be on that list year after year and recognize what that certification says about our culture and core values.
Where are you seeing opportunities for expansion in Parsons’ portfolio? What new capabilities or markets are you eyeing?
We report results in our two end business segments: Federal Solutions and Critical Infrastructure. Within those two segments, we have six core markets: cyber and intelligence, space and missile defense, transportation, critical infrastructure protection, environmental remediation, and urban development. One of the reasons why it’s very exciting to be at Parsons right now is that all six of our end markets are growing at compound annual growth rates that range between five and 12 percent. These areas are all enduring and they’re profitable, so they’re markets that are going to be around for a long time, if not forever, and good business for the company.
On the national security side, through both organic investment and inorganic acquisitions, we’ve positioned the company with an exquisite portfolio to outpace near peer threats. We’re aligned with our customer’s most pressing needs, and also aligned with the RDT&E budgets, which are the highest ever for the last two years.
On the infrastructure side of the house, we’re able to capitalize on unprecedented global spending, including the three geographies where we work: Canada, which passed its spending bill back in 2016 — $140 billion, 50 percent of which was new dollars; the Middle East, where we’re anticipating about $1.5 trillion of spend with about 60 to 70 percent of that being new dollars; and the United States, the infrastructure bill passed November 2021 for $1.2 trillion of spend and $550 billion of new spend.
The U.S. Infrastructure Investment and Jobs Act is exceptionally well-aligned with our portfolio in areas including transportation, electrification, broadband, environmental remediation, water and wastewater treatment, as well as electrification.
Another exciting thing about Parsons is the way these two segments — the Federal Solutions and the Critical Infrastructure — fit together. There’s an important nexus where you need to have domain knowledge of how critical infrastructure works, like for an aviation or a rail and transit program, but also have the technologies to be able to protect it from a cyber and electronic security systems perspective. I think Parsons is one of the few companies in the world today that can do both of those. We just bought our ninth company in the last six years, a company called IPKeys Power and Cyber Partners, who also lives at the intersection between federal and critical infrastructure, with a focus on cyber monitoring and compliance for utility and water companies as well as energy solutions such as demand resource planning.
How do you set your priorities around limited capture dollars? What goes into the decision-making process of what contracts you want to go after?
It starts with our company strategy. I took over as CEO in July 2021, and established a strategy of being a solutions integrator that differentiates with advanced technology. Our investments and priorities are vetted through that viewpoint, making sure that we were positioned as a company in top markets where we could be differentiated, and that’s where we came up with our six market focus areas. We look at capture, pursuits, opportunities and technology investments that align with our core competencies and within those six markets where we have a strong position and are technologically differentiated.
We’re very successful in competitive winning. For example, over the last two years, we’ve secured 100 percent of our major recompetes; these are programs around $2 billion each. We’ve locked those in for the next seven to 20 years. We’re proud of that — we have overall strong book-to-bill and strong competitive wins.
What is your strategy for attracting and retaining top-level talent during ongoing talent shortages in today’s highly competitive market?
It’s about people first, and we emphasize that continually. If you come to Parsons, we want you to stay at Parsons for your career. So, the questions we ask when looking at the talent market are: how can we attract, retain and develop the top employees in the industry? A lot of the proof is in our results. We’ve had a 42 percent increase year-over-year in hiring from 2022 over 2021. Then if you look at the first quarter of 2023, we increased 27 percent over the first quarter of 2022. At the same time, our retention has been improving and remains below industry benchmarks.
It goes back to making sure we offer flexible programs that focus on people, maintain a genuine commitment to diversity, equity and inclusion, and ensure we have competitive salary and benefits packages. Parsons also offers a dual technical career path where employees who are happy at the technical level get to maintain that track throughout their career, rather than hitting a ceiling and being forced into management. They can go all the way up and remain as a technical employee throughout their career if that’s what they prefer to do. That program, like so many that we have across Parsons, is focused on employee success and truly making a people first mentality the foundation of everything we do.