Keynote Session Why Everything You Thought You Knew About Staffing is Wrong. Barry Asin, President, Staffing Industry Analysts

Transcription

1 TUESDAY 8:30 AM PACIFICA 7 Keynote Session Why Everything You Thought You Knew About Staffing is Wrong Speaker: Barry Asin, President, Staffing Industry Analysts Sponsored by:

2 Why Everything a Surprising Number of a Dozen Things You Thought You Knew Used to Know About Staffing is are Wrong Barry Asin President, Staffing Industry Analysts March 17, 2015

3 Agenda A Dozen Things You Used to Know About Staffing The Near Term Outlook Questions

4 1. The Staffing Industry is Just About Staffing Not

5 SIA Market Definitions Tier 1: Staffing Temporary Staffing Place & Search Tier 2: Talent Engagement MSP RPO Payrolling Online Staffing PEO Tier 3: Outsourced Talent Solutions Job Board/Social Media Outplacement Business Process Outsourcing Consulting/Solutions Independent Contracting HR Consulting VMS Training IC Compliance Crowdsourcing Online Services ATS HR Outsourcing

6 The Contingent Work Market Dwarfs Staffing with an Estimated $3.2 Trillion in Global Spend Global Contingent Work Annual Spend 2013 ($Billion) SOW ICs Other Temps Temp Staffing TAW Total Global Contingent Spend = $3.2 Trillion ,000 1,200 Global United States Source: Staffing Industry Analysts 2015 Global Contingent Work Estimate

7 Not 2. The Industry is All About Flexible Work

8 Total Talent Management Integrates Flex Work, Non Employee Labor and Traditional Employees Talent Acquisition Modes Traditional employees Managed By: HR Recruiters, Direct Hire, RPO Talent strategy and business alignment Metrics and Analytics Workforce Planning Compensation/Benefits Learning and Development Career and performance management Contingent Temps, IC, SOW & Internal stretch Agencies, MSP/VMS, Direct IC Outsourced services Consulting & Outsourcing Firms Managed By: HR and Procurement Managed By: Procurement

9 The Opportunity: Few Companies Manage Their Total Talent Holistically Source: 2015 SIA/ERE Total Talent Management Survey Preliminary Results

10 3. Staffing is a High Growth Industry Not

11 US Temp Penetration Near 2000 Peak 2.01% Feb % Dec % Apr 2000 Source: Bureau of Labor Statistics and Staffing Industry Analysts

12 Staffing Remains Highly Cyclical Source: Staffing Industry Analysts US Staffing Forecast and Market Estimates

13 4. Professional Staffing is Better Not Than Commercial Staffing

14 U.S. Temporary Staffing Revenue by Skill Segment, 2014 Clinical/ Scientific 2% Finance/ Accounting 6% Engineering/ Design 7% Marketing/ Creative 1% Legal 1% Healthcare 9% Education 1% Industrial 29% Other Professional 3% Professional Staffing is a Majority of the US Market IT Staffing 24% Office/Clerical 17% Source: Staffing Industry Analysts US Staffing Forecast and Market Estimates 2014

15 But Industrial Staffing Has Outperformed Professional Staffing 3 of the Past 5 Years U.S. Temporary Staffing Year over year Revenue Growth, Source: Staffing Industry Analysts Forecast and Market Estimates

16 As Many Industrial Staffing Firms as IT Staffing Firms Among SIA s Fastest Growing Rank Source: Staffing Industry Analysts 2014 Market Share Landscape and Book of Lists Company Top Staffing Segment(s) Served 2013 U.S. staffing & TE revenue ($million) Compound Annual Growth Rate 1 InGenesis Healthcare % 2 EHD Corporation Industrial % 3 ALKU IT % 4 Flexicrew Staffing Inc. Industrial % 5 Beacon Hill Staffing Group LLC IT % 6 Proven IT, F&A % 7 Magellan Search & Staffing F&A % 8 Associate Staffing Industrial, IT, F&A % 9 The Select Group IT % 10 A Line Staffing Solutions LLC Healthcare % 11 Premier Staffing Inc. Office/clerical % 12 ChaseSource LP Office/clerical % 13 Elwood Staffing Industrial % 14 Malone Workforce Solutions Industrial % 15 Set and Service Resources Retail staffing %

17 5. VMS Has Ruined the Staffing Industry Not VMS Usage Contingent Penetration Source: Staffing Industry Analysts Contingent Buyer Surveys

18 Market Capitalization of Top Staffing Firms Has Grown Substantially AMN Healthcare True Blue On Assignment Manpower Robert Half Source: Yahoo Finance and Staffing Industry Analysts

19 A Majority of North American Staffing Revenue Transacted via VMS 2013/2012 VMS Spend Under Mgmt Up 23% MSP Spend Under Mgmt Up 19% Source: Staffing Industry Analysts 2013 VMS/MSP Competitive Landscape

20 6. Technology Driven Change for the Industry is Largely Over Not

21 Henri the

22 Micro Chip Picture

23 Human Cloud Landscape A Crowd Online Staffing CrowdFlower LionBridge Amazon Turk Chaordix Crowdsourcing Innocentive 99Design WikiStrat How the Work is Organized freelancer.com Elance odesk Peopleperhour Task Rabbit Uber FieldNation Work Market OnForce LiveOps Rev Gigwalk Online Services Specific Worker(s) Source: Staffing Industry Analysts Labor Relationship What the Client Gets Service Output

24 Now Beginning to See Integration of VMS and Freelancer Management Systems (FMS) Enterprise Source: Staffing Industry Analysts IC s Temps SOW s 24

25 IBM Watson

26 AI and Robotics Likely to Have Significant Impact on Jobs Pew Research Center Study Will AI and robotics displace more jobs than they create by 2025? 48% Yes 52% No Frey/Osborne Oxford Study 47% of all US jobs at high risk of automation in the next 10 to 20 years SIA Analysis 72% of US temp jobs at risk of automation based on Frey/Osborne Source: Pew Research Center, Aug 2014 AI, Robotics and the Future of Jobs, SIA Assessment of AI and Robotics on the Staffing Industry, July 2014 and Frey and Osborne The Future of Employment, How Susceptible are Jobs to Computerization, September 2013

27 Likely Impact on the Industry Short term - Growth in jobs as companies use temps and flex work in advance of coming changes in technology Longer term - Slow to negative overall labor market growth - Staffing firms partnering their workforce with Artificial Intelligence technology - Artificial Intelligence and Robotic staffing - New job creation vs. old job destruction

28 7. Staffing Firms Need to Have Recruiters Do Not

29 Heads or Tails? 46% of All New Hires Fail Within the First 18 Months Source: Leadership IQ, 2012 Survey of 20,000 hires

30 8. Relationships Trump Data, Evidence and Best Practices Do Not

31 Delivering Doughnuts no longer enough

32 The Industry is Becoming Increasingly Professional and Data Driven Staffing Industry Benchmarking Consortium (SIBC) Talent Data Exchange Internal Compensation Estimator

33 Internal Employee Compensation Estimator Data to help answer the question, What should we pay? N=6,647 Source: SIA US Internal Employee Compensation Estimator, February 2015

34 9. Staffing Success is all About Sales Not

35 Skills Shortages Reemerge Jan % 4.6% 2.8%

36 Median Staffing Firm Marketing Spend:.46 % of Revenue Median Marketing Spend Across all Industries: 3.0 % of Revenue Source: Staffing Industry Benchmarking Consortium, Frist Half 2014, CMO Survey Report, February 2015

37 Staffing Margins and VMS Models Require Focus on Process and Efficiency Source: Staffing Industry Benchmarking Consortium 1H 2014, October 2014

38 One Caveat: The Death of Cold Calling is Greatly Exaggerated 45% of buyers report that they first learned about their suppliers via a personal sales call Source: SIA 2014 Staffing Firm Survey and SIA 2010 Buyers Survey

39 10. All the Staffing Niches are Already Taken Not

40 And Market Opportunities Exist on a Geographic Basis Office/ Clerical 2013 Market Size by Skill Segment ($ Million) Industrial IT Healthcare Finance/ Accounting Engineering/ Design Total Segment Size 18,500 29,500 24,500 9,700 6,400 7,900 Alabama Alaska Arizona Arkansas California 1,910 2,897 3, ,139 Colorado Connecticut Delaware District of Columbia Florida 933 1,318 1, Georgia 805 1, Source: SIA 2014 US Geographic Opportunities Atlas

41 11. Buyers Only Care About Price Do Not

42 What Staffing Firms are Selling Percent of Staffing Firms Most Emphasizing in their Sales & Marketing Source: SIA 2014 Staffing Firm Survey

43 What Buyers are Buying Percent of Buyers Selecting as Top Criteria for Buying Worker Quality Source: SIA 2014 Contingent Buyers Survey

44 12. The Affordable Care Act is a Negative for the Entire Staffing Industry Not Incremental revenue growth in 2015 from ACA demand particularly in: - Healthcare: 2+ percentage points - Industrial: 1 percentage point Public company earnings reports: - Healthcare firms reporting strong demand in 2H14 on rising admissions and decreasing charity care for hospitals - Increase in healthcare expenditures not hurting margins Struggle for insurance options for smaller firms Potential driver of consolidation

45 Larger Staffing Firms Looking to Add Full Benefits ACA Compliance Strategies by Staffing Firm Size ($M) And More Firms Looking to Self Insure 2014 SIA Staffing Firm Survey

46 New Regulation a Potential Negative for Staffing Emerging markets Legislator driven Social dialogue based Market driven Turkey India Russia Bulgaria China Hungary Czech R Greece Romania Regulation Portugal Spain Italy Brazil France Japan Denmark Austria Sweden Germany Poland Lifting restrictions Argentina Belgium Netherlands Switzerland Australia New restrictions in CLAs UK 111 Self regulation Canada USA Level of social acceptance Illegality grey zone Legal recognition Social tolerance Normative acceptance Social acceptance Full recognition Regulatory development No regulation Coercive regulation CLA s in addition to existing law Lifting restrictions Social partners to define regulation Appropriate regulation Source: CIETT

47 The US Staffing Market Represents Less Than One Third of Global Revenue Major Staffing Markets by Annual Sales 2013 Total Global Revenue = $ 400 Billion Other 22% USA 29% Source: Staffing Industry Analysts 2013 Global Staffing Market Estimates Brazil 3% Netherlands 4% Australia 5% Germany 7% France 7% UK 9% Japan 14%

48 13. Only the Largest Firms Can Be Successful Not Global Staffing Leaders Rank Company HQ Country 2013 Revenue ($million) Market Share % (USD) Rank in prior year 1 Adecco CH 25, % 1 2 Randstad NL 21, % 2 3 ManpowerGroup US 19, % 3 4 Allegis Group US 10, % 4 5 Recruit JP 6, % 5 6 Hays UK 5, % 6 7 Kelly Services US 5, % 7 8 Robert Half US 3, % 9 9 USG People NL 2, % 8 10 Tempstaff JP 2, % 10 Source: Staffing Industry Analysts 2014 Market Share Landscape and Book of Lists The Bakers Dozen Total 24.9%

49 Agenda A Dozen Things You Used to Know About Staffing The Near Term Outlook Questions

50 US Employment Growth Improving 450 Monthly Change in US Total Nonfarm Employment Feb = + 295K Thousands Feb 2013 May 2013 Aug 2013 Nov 2013 Feb 2014 May 2014 Aug 2014 Nov 2014 Feb 2015 Source: Bureau of Labor Statistics & Staffing Industry Analysts 2014 by Crain Communications Inc. All rights reserved.

51 US Temp Employment Now at a Record 2.86 M 7% Year over Year Change in US Temporary Help Employment 6% 5% Feb + 5.2% 4% 3% 2% 1% 0% Feb 2013 May 2013 Aug 2013 Nov 2013 Feb 2014 May 2014 Aug 2014 Nov 2014 Feb 2015 Source: Bureau of Labor Statistics and Staffing Industry Analysts

52 Pulse Survey Shows Temp Staffing Growth Ongoing Pulse Survey U.S. Temp Staffing Year over year Median Revenue Growth 18% 16% 14% In January % median revenue growth 79% seeing positive Y/Y growth 12% 10% 8% 6% 4% 2% 0% JFMAMJJASONDJFMAMJJASODJFMAMJJASONDJ Source: Staffing Industry Analysts

53 SIA Preliminary Forecast Forecast Annual Growth Rate 2015 Market Size ($Billion) Total Temporary Staffing 5% 6% $114.9 Office/Clerical 2% 2% $18.7 Industrial 6% 6% $33.2 IT Staffing 7% 7% $27.8 Healthcare 6% 7% $ Finance & Accounting 5% 5% $ Engineering/Design 3% 4% $8.3 Legal 3% 5% $1.0 Clinical/Scientific 5% 6% $2.3 Marketing/Creative 10% 10% $1.2 Education Place & Search 7% 10% Source: Staffing Industry Analysts September 2014 Forecast and March 2015 Preliminary Forecast 20% 18% $1.0 $17.1

54 Global Forecast Suggests Near Term Improvement in Most Major Staffing Markets Country 2015 GDP 2015 Forecast Australia 2.9% 2% Belgium 1.4% 6% Brazil 1.4% 2% Canada 2.4% 5% France 1.0% 4% Germany 1.5% 9% Italy 0.9% 9% Japan 0.8% 9% Netherlands 1.4% 5% South Africa 2.3% 17% UK 2.7% 7% USA 3.1% 6% Global 3.8% 8% Source: Staffing Industry Analysts Global Forecasts 2015

55 Agenda A Dozen Things You Used to Know About Staffing The Near Term Outlook Questions

56 Why a Dozen Things You Used to Know About Staffing are Wrong Barry Asin President, Staffing Industry Analysts March 17, 2015

57 DIGITAL SURVEYS Don t forget to provide feedback Why Everything You Thought You Knew About Staffing is Wrong Rate this session by accessing the evaluation from your Conference Mobile Community OR tap the ipad screen as you exit.