beyond savings – measuring what matters
DESCRIPTION
Bryan PeñaVP, Contingent Workforce Strategies and Research Staffing Industry AnalystsDuring this session we will be reviewing what strategies and techniques you can use to maximize program success and ensure long term hiring manager satisfaction. In addition to savings strategies and performance ratios we will provide some up to the moment insight from our latest research initiatives.TRANSCRIPT
©2011 by Crain Communica1ons Inc. All rights reserved.
Beeline User Conference 2011 Tuesday, May 24th, 2011
Bryan Peña, Vice President, Con1ngent Workforce Strategies and Research [email protected]
©2011 by Crain Communica1ons Inc. All rights reserved.
Agenda/what we are going to cover: • Who is this guy? • State of the buyer community
– MSP/VMS Evolu1on
• Review of NPS survey from 2010 – What is important with buyers
• Future? • Q&A
©2011 by Crain Communica1ons Inc. All rights reserved.
Who is this guy?
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About Us
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Products/Services
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Services Categories
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CWS COUNCIL
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North American CWS Council Members (parQal list)
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Western Europe/Global CWS Council Members
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State of the Buyer Community
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©2011 by Crain Communica1ons Inc. All rights reserved.
DefiniQon: • Con$ngent Work -‐ Used to describe work arrangements that differ from regular/
permanent, direct wage and salary employment. Con?ngent workers most o@en include temporary employees provided by an outside staffing agency and independent contractors/consultants. Con?ngent workers may also include temporary workers from an internal pool, and others (such as summer interns) employed directly by an organiza?on for an inten?onally limited ?me period. They do not include work done by consul?ng firms or by part-‐?me regular employees, and are primarily dis?nguished by an explicitly defined tenure. Self-‐employed individuals should only be defined as con?ngent workers if they provide themselves as contract labor to other organiza?ons. Otherwise, they should not be included in the con?ngent workforce, because they may have stable occupa?ons or careers that are clearly not condi?onal. Workers in Professional Employer Organiza?on (see defini?on) arrangements are not con?ngent workers, because the rela?onship is by defini?on ongoing. Outsourcing also falls outside of the con?ngent work defini?on, because it defines a vendor-‐supplier rela?onship, not an employer-‐worker rela?onship
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2011 Defini$on
Con$ngent Work: Anyone who is not an employee……
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How do Companies Manage?
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EvoluQon of ConQngent Labor Management
LOW
HIGH
IV
MANAGED SERVICE
PROVIDER (MSP)
æ Contingent Labor æ One point of
contact for suppliers, contractors and hiring managers
æ VMS Technology æ System &
Program SLAs
V
EXPANSION INTO
ADDITIONAL SPEND
CATEGORIES
æ SOW Management
æ IC/1099 æ Consultants æ Legal æ Marketing æ Targeting
reporting, compliance and cost
æ Global spend centralized and controlled
æ Global workforce visibility
æ Customized SLAs and process
æ Country Specific Suppliers
æ Localized VMS Configuration
GLOBAL EXPANSION
VI MATURITY STAGES
LEVE
L OF VA
LUE AD
DED
I
DECENTRALIZED
æ Multiple suppliers æ Procurement done on
an ad-hoc basis æ Hiring Manager
Driven
1980s – Level I
2000s – Level IV
II
MASTER VENDOR
æ A Prime Supplier æ One point of
contact æ Limited
Automation æ Limited SLAs
III
CLIENT MANAGED PREFERRED
SUPPLIER LIST æ Select set of
suppliers æ Standardized
Contract æ Procurement
Led æ Some
automation æ Limited SLAs
1990s – Level II & III
2010s – Level V & VI
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How ya like me……. More Sophisticated Buyers Primarily
Manage CW Programs Using MSP & VMS
60%
42%
26%
9% 9%
8%
13%
7%13%
17%26%
28% 19%
40%33% 34%
56% 59%
Just gettingstarted
Belowaverage
Average Aboveaverage
Cuttingedge/best in
class
Percent o
f Buyers P
rimarily Usin
g Selected Program
Manage Internally Without VMS Master Staffing Supplier
Manage Internally Using VMS Managed Service Provider (MSP)
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Trends in various management strategies over 1me
Percent of large buyers using this strategy
0%
20%
40%
60%
80%
100%
2005 2006 2007 2008 2009 2010Master Supplier VMSApproved Suppliers MSPTiered Suppliers RPOHRO
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2010 VMS/MSP LANDSCAPE HIGHLIGHTS
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• Approx $66 billion spend under management – 20% of global temporary staffing market – Over 50% of USA temporary staffing market – 5-‐10% of European temporary staffing market
VMS/MSP Market Size 2009
* Source: Staffing Industry Analysts – VMS/MSP Landscape Report 2010
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2009 Total MSP vs VMS Spend Under Management Comparison
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VMS Spend under Management
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MSP Spend under Management
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Staying in
Getting out
Likely to offer
w/in 2 years
Not likely to offer Total
Implied two year change in number of
firms*Provider of VMS 17% 0% 19% 64% 100% 110%HRO 17% 0% 18% 64% 100% 107%RPO 24% 0% 23% 53% 100% 96%MSP 26% 0% 21% 52% 100% 78%HR consulting 25% 0% 18% 56% 100% 73%VOP 40% 0% 25% 36% 100% 63%Master supplier 32% 0% 20% 48% 100% 60%SOW consulting 32% 0% 15% 53% 100% 47%IC compliance/ payroll processing 38% 0% 9% 52% 100% 23%*Calculation based on (percent of firms likely to offer w/in 2 years -‐ firms getting out)/firms staying in. This calculation should be treated as of ordinal value, not as a projection, as it may be assumed that not all firms will follow through with plans to add services.
The field is going to get crowded
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Culture counts…
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BY PERCENTAGE WHICH TARGET GROUP DOES YOUR COMPANIES CORE VALUE PROPOSITION MOST APPEAL TO?
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Some new trends…..
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Key Metric Areas • Quality • Efficiency • Cost • Risk
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1,000 monkeys typing for 1,000 years……..
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Savings are real……..at first….
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Discounts are great…..
Results are based on findings of our 2009 Contingent Buyer Survey, conducted in September 2009, and reflect the opinions of buyer respondents from 171 large (1000+ employee) companies.
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What makes the “perfect metric”
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But lets get serious…..
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What separates the good from the bad?
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The UlQmate QuesQon
• How likely is it that you would recommend this VMS firm to a friend or colleague?
Detractors Passives Promoters
0 1 2 3 5 4 6 7 8 9 10
Not at all Likely
Extremely Likely
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How will data be analyzed? Survey Scoring • SIA will do analysis • Promoters minus Detractors = Net Promoter Score • NPS = One simple, easy to understand number
Percentage of Promoters
Percentage of Detractors
Net Promoter Score
42% 28% NPS= 14
9% 16% NPS= -‐7
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NPS survey from 2010
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©2011 by Crain Communica1ons Inc. All rights reserved.
©2011 by Crain Communica1ons Inc. All rights reserved.
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
0 1 2 3 4 5 6 7 8 9 10
VMS NPS RaQng DistribuQon by Number and Audience
Buyer Staffing Firm
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Net Promoter Score by Industry
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VMS –Internally Developed vs. Commercially available
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Buyer Experience by Program Type
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Provider Experience by Line of Business
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NPS Buyers vs. Suppliers
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Which is more important?
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MSP Company do have some successes
MSP CompanyBuyer NPS
Staffing NPS
Vendor A 86% -‐11%Vendor B 58% -‐74%Vendor D 47% -‐37%Vendor E 46% -‐42%Vendor F 42% -‐18%Vendor G 38% -‐57%Vendor H 36% -‐57%Vendor I 31% -‐58%Vendor J 17% -‐64%Vendor K 16% -‐73%Vendor L 15% 14%Vendor M 0% 9%Vendor N 0% -‐35%Vendor O -‐5% 11%Vendor P -‐38% -‐68% 2010 NPS Study -‐ SIA
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VMS……eh….
2010 NPS Study -‐ SIA
VMSBuyer NPS
Staffing NPS
Vendor A 45% -‐52%Vendor B 40% -‐52%Vendor D 31% -‐42%Vendor E 26% -‐56%Vendor F 26% -‐39%Vendor G 17% -‐16%Vendor H 10% -‐32%Vendor I 9% -‐63%Vendor J 0% -‐15%Vendor K -‐5% -‐72%None of the Above/Don't Know -‐26% -‐76%Internally Developed VMS Application -‐29%Vendor N -‐67% -‐43%
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Scajer Plots of Provider Scores
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NPS scores for all VMS Providers with more than 5 Buyer responses
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NPS scores for all MSP Providers with more than 10 Buyer responses
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NPS scores for all VMS Providers with more than 10 responses as provided by Staffing Firms
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NPS scores for all MSP Providers with more than 10 Staffing Firm responses
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Comments Overall
Dislike • Slow Payment • Lack of Transparency • “Black Hole” • Arrogant Work • Flexibility
Like • Direct Contact • Easy to use • They invest in System • “students of the industry”
• Proac1ve
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“It is the worst MSP I have encountered in my 10+ years in the field. My peers in the industry echo my assessments. I would do everything possible to steer a client away from them.”
This is NOT Beeline…….
©2011 by Crain Communica1ons Inc. All rights reserved.
EvoluQon of ConQngent Labor Management
LOW
HIGH
IV
MANAGED SERVICE
PROVIDER (MSP)
æ Contingent Labor æ One point of
contact for suppliers, contractors and hiring managers
æ VMS Technology æ System &
Program SLAs
V
EXPANSION INTO
ADDITIONAL SPEND
CATEGORIES
æ SOW Management
æ IC/1099 æ Consultants æ Legal æ Marketing æ Targeting
reporting, compliance and cost
æ Global spend centralized and controlled
æ Global workforce visibility
æ Customized SLAs and process
æ Country Specific Suppliers
æ Localized VMS Configuration
GLOBAL EXPANSION
VI
Most MNCs are now Level III or IV
MATURITY STAGES
LEVE
L OF VA
LUE AD
DED
I
DECENTRALIZED
æ Multiple suppliers æ Procurement done on
an ad-hoc basis æ Hiring Manager
Driven
1980s – Level I
2000s – Level IV
II
MASTER VENDOR
æ A Prime Supplier æ One point of
contact æ Limited
Automation æ Limited SLAs
III
CLIENT MANAGED PREFERRED
SUPPLIER LIST æ Select set of
suppliers æ Standardized
Contract æ Procurement
Led æ Some
automation æ Limited SLAs
1990s – Level II & III
2010s – Level V & VI
VII
ITM or ?
æ CW and Perm managed in on Cohesive Strategy
æ Source of labor dependant on client defined rules
æ contractors and hiring managers
æ VMS Technology æ Strategic
Integration of suppliers and FTE’s
? – Level VII
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Percent of Buyers Primarily Using Selected Supplier Management, as a Function of Buyer CW Spend
Manage internally not using a VMS
Master staffing supplier
Managed services provider
Manage internally using
a VMS.
0%
20%
40%
60%
80%
100%
<$10MM $10-$49.9MM $50-$99.9MM $100-$149.9MM
$150-$499.9MM
$500MM+
Buyer Annual Contingent Workforce Spend
<$10MM$10-
$49.9MM$50-
$99.9MM$100-
$149.9MM$150-
$499.9MM $500MM+Manage internally not using a VMS 47% 21% 19% 0% 13% 0%Master staffing supplier 21% 10% 7% 6% 7% 7%Managed services provider 11% 50% 67% 69% 47% 43%Manage internally using a VMS. 21% 19% 7% 25% 33% 50%Total 100% 100% 100% 100% 100% 100%
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Not Necessarily
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In closing
• The field of CW management is ever evolving
• CW managers are coming to expect more from their CW partnerships
• Beyond savings, there is tremendous opportunity to increase adop1on – Pay ajen1on to your supply chain…..
©2011 by Crain Communica1ons Inc. All rights reserved.
2011 Risk Forum & WE CWS Summit
• June 20-‐21, 2011 • Hotel Okura, The Netherlands
• October 5-‐6, 2011 • Red Rock Resort, Las Vegas
©2011 by Crain Communica1ons Inc. All rights reserved.
2011 CWS Summit
• October 4-‐5, 2011 • Red Rock Resort, Las Vegas
Today you will learn how CW Program Managers improve the performance of their programs by using the right measurement tools. In addiQon, we’ll discuss why CW process performance is important. You can further your knowledge on this topic and more this fall at the CWS Summit.
Learn more and sign up for the best rates at www.CWSSummit.com
©2011 by Crain Communica1ons Inc. All rights reserved.
Ques1ons & Remarks? Bryan Pena VP, Con1ngent Workforce Strategies and Research 650-‐390-‐6188 [email protected]