keynote session why you thought you knew staffing is wrong · source: staffing industry...

March 16‐19, 2015Orlando, FL

TUESDAY 8:30 AM PACIFICA 7

Keynote SessionWhy Everything You Thought You Knew About Staffing is Wrong

Speaker: Barry Asin, President, Staffing Industry Analysts

Sponsored by:


©2015 by Crain Communications Inc. All rights reserved.©2015 by Crain Communications Inc. All rights reserved.

Why Everything a Surprising Number of a Dozen Things You Thought You Knew Used to Know About Staffing is are Wrong

Barry AsinPresident, Staffing Industry AnalystsMarch 17, 2015


©2015 by Crain Communications Inc. All rights reserved.

Agenda

A Dozen Things You Used to Know About StaffingThe Near Term OutlookQuestions



1. The Staffing Industry is Just About StaffingNot

SIA Market Definitions

Tier 1: Staffing Temporary Staffing Place & Search

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

Tier 2: Talent Engagement MSP RPO Payrolling Online Staffing PEO



The Contingent Work Market Dwarfs Staffing with an Estimated $3.2 Trillion in Global Spend

0 200 400 600 800 1,000 1,200

TAW

Other Temps

ICs

SOW

Global United States

Source: Staffing Industry Analysts 2015 Global Contingent Work Estimate

Global Contingent Work Annual Spend 2013 ($Billion)

Total GlobalContingentSpend = $3.2 TrillionTemp Staffing



2. The Industry is All About Flexible Work

Not

Talent strategy and business alignment

Metrics and Analytics

Workforce Planning

• Learning and Development• Career and performance management

Compensation/Benefits

Total Talent Management Integrates Flex Work, Non Employee Labor and Traditional Employees

Traditional employees

Talent Acquisition Modes

Recruiters, Direct Hire, RPO

Managed By: HR

Outsourced services

ContingentTemps, IC, SOW & Internal stretch

Agencies, MSP/VMS, Direct IC

Consulting & Outsourcing Firms

Managed By: HR and Procurement Managed By: Procurement



The Opportunity: Few Companies Manage Their Total Talent Holistically

Source: 2015 SIA/ERE Total Talent Management Survey – Preliminary Results



3. Staffing is a High Growth IndustryNot



US Temp Penetration Near 2000 Peak

Source: Bureau of Labor Statistics and Staffing Industry Analysts

2.01% Feb 2015

2.04% Dec 20142.03% Apr 2000



Staffing Remains Highly Cyclical

Source: Staffing Industry Analysts US Staffing Forecast and Market Estimates – 1996‐2014



4. Professional

Staffing is “Better”

Than Commercial

Staffing

Not



Industrial29%

Office/Clerical17%

IT Staffing24%

Healthcare9%

Engineering/Design7%

Finance/Accounting

6%

Clinical/Scientific

2%

Marketing/Creative

1% Legal1%

Education1%

Other Professional

3%

Professional Staffing is a Majority of the US Market…

U.S. Temporary Staffing Revenue by Skill Segment, 2014

Source: Staffing Industry Analysts US Staffing Forecast and Market Estimates 2014



…But Industrial Staffing Has Outperformed Professional Staffing 3 of the Past 5 Years

U.S. Temporary Staffing Year‐over‐year Revenue Growth, 2010‐2014

Source: Staffing Industry Analysts Forecast and Market Estimates 2010‐2014



As Many Industrial Staffing Firms as IT Staffing Firms Among SIA’s Fastest Growing

Source: Staffing Industry Analysts 2014 Market Share Landscape and Book of Lists

Rank Company Top Staffing

Segment(s) Served

2013 U.S. staffing & TE revenue ($million)

Compound Annual

Growth Rate

1 InGenesis Healthcare 111.7 132.7%2 EHD Corporation Industrial 24.0 83.2%3 ALKU IT 38.2 77.4%4 Flexicrew Staffing Inc. Industrial 20.3 58.5%5 Beacon Hill Staffing Group LLC IT 221.9 57.6%6 Proven IT, F&A 18.1 56.1%7 Magellan Search & Staffing F&A 8.1 54.1%8 Associate Staffing Industrial, IT, F&A 11.3 52.4%9 The Select Group IT 64.1 50.8%10 A‐Line Staffing Solutions LLC Healthcare 18.8 50.0%11 Premier Staffing Inc. Office/clerical 19.0 49.5%12 ChaseSource LP Office/clerical 28.2 49.5%13 Elwood Staffing Industrial 808.2 48.4%14 Malone Workforce Solutions Industrial 103.5 46.8%15 Set and Service Resources Retail staffing 16.5 46.3%



5. VMS Has Ruined the Staffing Industry

Source: Staffing Industry Analysts Contingent Buyer Surveys 2005‐2014

Not

VMS Usage

Contingent Penetration



Source: Yahoo Finance and Staffing Industry Analysts

Robert Half

Manpower

On AssignmentTrue BlueAMN Healthcare

Market Capitalization of Top Staffing Firms Has Grown Substantially



Source: Staffing Industry Analysts 2013 VMS/MSP Competitive Landscape

A Majority of North American Staffing Revenue Transacted via VMS

2013/2012

VMS SpendUnder Mgmt

Up 23%

MSP Spend Under Mgmt

Up 19%

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



Henri the Cat @HenriLeChatNoir



Micro‐Chip Picture

“Human Cloud” Landscape –

How the Work is

Organized

Specific Worker(s)

“A Crowd”

What the Client Gets

Labor Relationship

Service Output

Crowdsourcing

Online Staffing

Online Services

• freelancer.com

• Elance‐oDesk

• Task Rabbit• FieldNation

• Work Market

• CrowdFlower• LionBridge

• Innocentive• 99Design

• LiveOps• Rev

• OnForce

• Peopleperhour

• Gigwalk

• Amazon Turk• Chaordix

• WikiStrat

Source: Staffing Industry Analysts

• Uber


©2015 by Crain Communications Inc. All rights reserved. 2424

Now Beginning to See Integration of VMS and Freelancer Management Systems (FMS)

Enterprise

Temps SOW’sIC’s




IBM Watson



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

AI and Robotics Likely to Have Significant Impact on Jobs

Frey/Osborne Oxford Study47% of all US jobs at high risk of automation in the

next 10 to 20 yearsPew Research Center Study

Will AI and robotics displace more jobs than they create by 2025?

48% Yes52% No

SIA Analysis72% of US temp jobs at risk of automation based on

Frey/Osborne



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



7. Staffing Firms Need to Have Recruiters Do Not



Heads or Tails?

46% of All New Hires Fail Within the First 18 Months

Source: Leadership IQ, 2012 Survey of 20,000 hires



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



Delivering Doughnuts no longer enough



The Industry is Becoming Increasingly Professional and Data Driven

Talent DataExchange

Staffing Industry Benchmarking

Consortium (SIBC)

Internal Compensation Estimator



Internal Employee Compensation Estimator

N=6,647

Data to help answer the question,

“What should we pay?”

Source: SIA US Internal Employee Compensation Estimator, February 2015



9. Staffing Success is all About Sales Not



Skills Shortages Reemerge

2.8%

6.2%4.6%

Jan 2015



Median Staffing Firm Marketing Spend:.46 % of Revenue

Source: Staffing Industry Benchmarking Consortium , Frist Half 2014, CMO Survey Report, February 2015

Median Marketing Spend Across all Industries: 3.0 % of Revenue



Staffing Margins and VMS Models Require Focus on Process and Efficiency

Source: Staffing Industry Benchmarking Consortium – 1H 2014, October 2014



One Caveat: The Death of Cold Calling is Greatly Exaggerated

Source: SIA 2014 Staffing Firm Survey and SIA 2010 Buyers Survey

45% of buyers report that they first learned about their suppliers via a personal sales call



10. All the Staffing Niches are Already TakenNot



And Market Opportunities Exist on aGeographic Basis

Office/ Clerical

Industrial IT HealthcareFinance/ Accounting

Engineering/ Design

Total Segment Size 18,500 29,500 24,500 9,700 6,400 7,900Alabama 270 505 228 134 59 118Alaska 30 50 27 17 10 23Arizona 292 408 458 142 103 149Arkansas 126 225 95 82 33 25California 1,910 2,897 3,474 926 854 1,139Colorado 269 406 572 139 144 155Connecticut 197 282 270 119 80 84Delaware 52 79 71 37 20 18District of Columbia 25 37 238 25 42 36Florida 933 1,318 1,021 525 352 289Georgia 805 1,279 912 285 235 208

Source: SIA 2014 US Geographic Opportunities Atlas

2013 Market Size by Skill Segment ($ Million)



11. Buyers Only Care About PriceDo Not



What Staffing Firms are Selling

Source: SIA 2014 Staffing Firm Survey

Percent of Staffing Firms Most Emphasizing in their Sales & Marketing



What Buyers are Buying

Source: SIA 2014 Contingent Buyers Survey

Percent of Buyers Selecting as Top Criteria for Buying

Worker Quality



12. The Affordable Care Act is a Negative for the Entire Staffing Industry 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

Not



Larger Staffing Firms Looking to Add Full Benefits

2014 SIA Staffing Firm Survey

…And More Firms Looking to Self Insure

ACA Compliance Strategies by Staffing Firm Size ($M)

Emerging markets

Legislator driven

Social dialoguebased

Market driven

111

Level of social acceptance

Illegality grey zone

Legal recognition

Social tolerance

Normative acceptance

Social acceptance

Full recognition

Regulatorydevelopment

No regulation Coercive regulation

CLA’s in addition to existing law

Lifting restrictions

Social partners to define regulation

Appropriate regulation

France

Sweden

Netherlands

Japan

TurkeyIndia

Czech RHungary

PortugalSpain

Italy

Argentina

Denmark

Switzerland

AustraliaCanada

UK USA

Regulation

Lifting restrictions

New restrictions in CLAs

Self‐regulationAustria

Poland

Greece

Romania

Bulgaria

Russia

Brazil

Germany

Source: CIETT

China

Belgium

New Regulation a Potential Negative for Staffing



The US Staffing Market Represents Less Than One Third of Global Revenue

Source: Staffing Industry Analysts 2013 Global Staffing Market Estimates

USA29%

Japan14%

UK9%France

7%

Germany7%

Australia5%

Netherlands4%

Other22%

Major Staffing Markets by Annual Sales 2013

Brazil 3%

Total Global Revenue= $ 400 Billion



13. Only the Largest Firms Can Be Successful

Rank Company HQ Country

2013 Revenue ($million)

Market Share % (USD)

Rank in prior year

1 Adecco CH 25,902 6.1% 12 Randstad NL 21,997 5.2% 23 ManpowerGroup US 19,934 4.7% 34 Allegis Group US 10,443 2.5% 45 Recruit JP 6,155 1.5% 56 Hays UK 5,770 1.4% 67 Kelly Services US 5,413 1.3% 78 Robert Half US 3,717 0.9% 99 USG People NL 2,993 0.7% 810 Tempstaff JP 2,694 0.6% 10

Source: Staffing Industry Analysts 2014 Market Share Landscape and Book of Lists

Total 24.9%

Global Staffing LeadersNot

The Bakers Dozen



Agenda




©2014 by Crain Communications Inc. All rights reserved.Source: Bureau of Labor Statistics & Staffing Industry Analysts

US Employment Growth Improving

0

50

100

150

200

250

300

350

400

450

Feb‐2013 May‐2013 Aug‐2013 Nov‐2013 Feb‐2014 May‐2014 Aug‐2014 Nov‐2014 Feb‐2015

Thou

sand

s

Monthly Change in US Total Nonfarm Employment

Feb = + 295K



Source: Bureau of Labor Statistics and Staffing Industry Analysts

US Temp Employment Now at a Record 2.86 M

0%

1%

2%

3%

4%

5%

6%

7%

Feb‐2013 May‐2013 Aug‐2013 Nov‐2013 Feb‐2014 May‐2014 Aug‐2014 Nov‐2014 Feb‐2015

Year‐over‐Year Change in US Temporary Help Employment

Feb + 5.2%



0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

J F MAM J J A S O N D J F MAM J J A S O D J F MAM J J A S O N D J

2012 2013 2014 2015

Pulse Survey Shows Temp Staffing Growth Ongoing

In January 201510% median revenue growth79% seeing positive Y/Y growth

Pulse Survey U.S. Temp Staffing Year‐over‐year Median Revenue Growth




10%

18%

10%

6%

5%

4%

5%

7%

7%

6%

2%

6%

7%

20%

10%

5%

3%

3%

5%

6%

7%

6%

2%

5%

Place & Search

Education

Marketing/Creative

Clinical/Scientific

Legal

Engineering/Design

Finance & Accounting

Healthcare

IT Staffing

Industrial

Office/Clerical

Total Temporary Staffing

2014

2015

Source: Staffing Industry Analysts September 2014 Forecast and March 2015 Preliminary Forecast

$114.9

$18.7

2015 Market Size ($Billion)

$33.2

$27.8

$11.1

$7.0

$8.3

$1.0

$2.3

$1.2

$1.0

$17.1

Forecast Annual Growth Rate

SIA Preliminary Forecast



Global ForecastSuggests Near Term Improvement in Most Major Staffing Markets

Country 2015 GDP2015 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



Agenda




Why a Dozen Things You Used to Know About Staffing are Wrong

Barry AsinPresident, Staffing Industry AnalystsMarch 17, 2015


Why Everything You Thought You Knew About Staffing is Wrong

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keynote session why you thought you knew staffing is wrong · source: staffing industry...

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