crafting a pricing strategy that works

Crafting a Pricing Strategy That Works

.

Thursday June 22, 2017

10 am PT 1 pm ET

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©2017 by Crain Communications Inc. All rights reserved.

Presented by:

Bryan T. Peña, Senior Vice President, Contingent

Workforce Strategies, CCWP

Jason Ezratty, President & Founder, Brightfield

Strategies

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This webinar is broadcast through your computer speakers via the audio broadcasting icon on your screen. You may adjust the sound

volume by using the slide bar on the audio broadcasting icon. You may dial into the call by dialing EUROPEAN NUMBER:44-203-478-5287

or US +1 650-479-3208 and using access code 660 391 720. Need other assistance? Please contact SIA customer service at

[email protected]. The presentation will be available 48 hours after the webinar.


Who We AreStaffing Industry Analysts is the global advisor on staffing and

workforce solutions

• Our members comprise many of the largest regional, U.S. and global

staffing firms in addition to representatives from all parts of the

workforce industry.

• Our CWS Council membership represents over $100 billion in annual

workforce spend.

• We are a trusted advisor providing objective research within the

workforce ecosystem.

Founded in 1989

• Acquired by Crain Communications ($200M media conglomerate) in

2008, headquarters in Mountain View, California and offices in London,

England

• Comprehensive and vast industry and advisory service experience

among executive, advisory and research team


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Invest in your future. Today.The CCWP accreditation program is rigorously

designed to elevate the status of HR, procurement,

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others who manage contingent workforce programs.


Todays Webinar Brought to You by:

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+


Jason Ezratty,

President & Founder,

Brightfield Strategies

Today’s speakers…


Bryan T. Peña, CCWP

Sr. VP, Contingent Workforce Strategies,

Staffing Industry Analysts

What Goes into the Bill Rate?

Confidential and Proprietary. ©2015 by Crain Communications Inc. All rights reserved.

Markup

Pay Rate

Statutory Expenses

Gross Margin

Markup

Operating Expenses + Profit

Statutory Expenses

Direct Pay to Worker

Framework


Sourcing Model Framework


Rate ElasticityDegree to which CW demand affects rates



Evaluating Rate Elasticity


CompetitivenessDegree to which agencies are invited

to bid against each other with respect

to submission time, candidate quality,

and price



Evaluating Competitiveness


Vendor IntegrationDegree of external resource

integration with your CW program



Evaluating Vendor Integration


What Defines Quality?

• Talent Quality

– Right fit, right price

• Supplier Quality

– Speed and accuracy

• Program Operation Quality

– Delight internal customers and meet CW

resource demand requirements

– No Noise


How Do You Define Cost Management?

• Cost savings

– Lowering costs by negotiating deals, incentives, and discounts

• Cost correction

– Getting the right value for your money


Staffing Partner Considerations

• Client risk

• Cost to deliver

• Availability of candidates

• Brand and industry

• Strategic vs tactical

• Competitive advantage

• Revenue/Gross Margin


Incentives and Discounts

• Conversion discount

• Spend volume discount

• Early payment discount

• Overtime discount

• Tenure discounts

• Fees at risk

• Gain share

• Revenue share


Incentives and Discounts (cont’d.)

Confidential and Proprietary. ©2015 by Crain Communications Inc. All rights reserved.

0% 10% 20% 30% 40% 50% 60% 70% 80%

Revenue Share

Gain Share

Statutory Discounts

Fees at Risk

Tenure Discounts

Overtime Discount

Early Payment Discount

Volume Discount

Conversion Discount

Percent of Buyers Reporting Use of Selected

Discounts/Incentives with Suppliers/MSPs

Source: SIA, Buyers Survey.


Don’t Be Greedy

SIA data shows that most buyers only apply 2-4 discounts per contract.

Average Number of Discounts/Incentives as a

Function of Buyer Annual Spend

1.9

3.0

4.0

<$10 million $10-$499.9 million $500MM+

Source: SIA, Contingent Buyers Survey.


Pricing Strategies Drive Behavior


Theory vs Application

How are rates effected by:

– Geography

– Tenure

– Sourcing Channel

– Title/Job Description

Confidential – Please do not distribute.

Jason Ezratty, President, Brightfield

Strategies

Proprietary & Confidential

It All Looks So Logical on Paper…

Job Title X

Location “Buckets”

Low Cost Mid Cost High Cost “Premium”

Level 1 34 37 41 46

Level 2 38 41 45 50

Level 3 42 45 50 55

Level 4 46 49 54 59

29


Rate Cards Set Parameters Across Multiple Dimensions

� Job Title

� Job Level

� Work Location (country, state/province, city)

� Supplier or Supplier Type

� Candidate Source (recruited, pre-identified)

� Assignment Duration (very short vs very long)

� Volume Discount Thresholds

� Other Embedded Costs (insurance, equipment, per diem)

30

100

4

20

10

3

3

NA

NA

720,000 Combinations!


The 4-step Analytics Journey…

1. Are my rates where I want them?

2. If no, what are the underlying causal factors?

3. And, what rates should I be expecting to pay?

4. How can I get there?

31


Taxonomy Issues:

Isolating Segments Within Job Titles

32

Non-IT Project Manager


Granular Details Drive Machine Learning Nuances to Better Reflect the Many Realities

33


Comparing Distributions Can Be Done with Statistics (e.g. t-test)

34

H0: A = B, H1: A < B

Group A Group B


Each Dimension of Rate Card has its Own Associated Distribution: e.g. Source Type

35

RFQ Master Direct-sourceSelf-sourced

Sparsity becomes an issue the more you slice and dice


Comparison of PAYE & Ltd Company

36


Location is Important, to Some Degree,

Sometimes

37


Granularity & Conformity of Data is Key to Successful Analysis

38

Level 1

Level 2

Level 3

Level 4

High Cost Location

Low Cost Location

Time for your questions…..


18-19 July 2017

Grand Hyatt | Singapore

Join us in Singapore for two power-packed days of networking, knowledge sharing and learning with Asia’s global enterprise executives.

Featuring a Keynote Presentation on Creating the Future Workforce: Leading your Organisation Through Rapid Changewith Futurist, Author and Entrepreneur, Ross Dawson.

@CWSSummit #CWSSummit

www.cwssummitap.com

Join hundreds of your peers at the annual CWS Summit followed by the game-changing Collaboration in the Gig Economy event.

Collaboration in the Gig Economy delegates include:• Staffing Firms • RPO providers• Workforce solution buyers • Suppliers to Staffing• Gig economy/Human cloud companies • VMS/MSP

www.cwssummit.com | www.collaborationgigeconomy.com

18-19 July 2017Grand Hyatt | Singapore


Industry Insights from the Comfort of Your Own Office!

Register for the complimentary webinars at:www.staffingindustry.com/webinars

42

Upcoming Global Webinars:

Managing SOW Around the World: July 6

The Gig Economy and Changing Work: August 5

Increasing Value in CW Programs: August 31

VMS/MSP Landscape: November 9

2017, Future Shock, The State of Workforce Solutions: December 7

Lessons for CW Managers: December 14


Thank you!

Jason Ezratty, Co-Founder & President, Brightfield Strategies

Email: [email protected]

Bryan Peña, SVP, Contingent Workforce Strategies, CCWP

Email: [email protected]

© 2015 Crain Communications Inc. All rights reserved.

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