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© 2012 Crain Communications Inc
KeynoteStaffing Communities and theFuture of the Industry
• Barry Asin, President, Staffing Industry Analysts
Wednesday, March 14 | 8:30 am | Summerlin Ballroom
Sponsored by:
© 2012 Crain Communications Inc
Agenda• Critical trends• Opportunities and threats• Near term outlook
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Turbulence
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Critical Trends
• Revolutionary change in information technology• A secular shift in usage• The rise of Total Talent Management• Globalization 2.0• Increasingly complex legal environment• Continued talent and work mismatches
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• ART: INSERT A PHOTO/GRAPHIC THAT ILLUSTRATES CHANGE AND REVOLUTION IN TECHNOLOGY
Revolutionary Change in Information Technology
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Information Technology Change Indicators
• Massive increase in bandwidth/speed
• Cloud computing/SaaS• Social networking/social
media• Increasing penetration of
technology connection points
• Natural language processing• “Big data”• And, and, and…
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Key Attributes of the DevelopingInformation Technology Infrastructure
Anyone, Anyplace, Anytime
PC’s, Phones, Tablets, etc.
Freemium ModelContinually Declining
Technology Costs
Rapid Growth of Connection Points
Extreme Interconnection!
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The Result
• More and more powerful information technology in the hands of more and more people
• Radical change in human, behavioral and economic patterns
• Rapid shifts, disruptions and innovations• Cost not the gating factor• Constraints now
~ Ability to develop value adding solutions~ Capacity of people and organizations to
adapt
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The View From Staffing
Automating existing processes
First WaveEmail, ATS, Front Office Automation
Second WaveJob Boards, VMS
Affecting all relationships among staffing communities
Connecting buyers and candidates
Third WaveSocial, Video, New Breed ATS, Massive Data and more…
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The Old Interaction With Staffing Communities
Business and Legal Environment
Staffing Firms
Buyers
Temps
Perms
IC’s
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Temps
Perms IC’s
Staffing Firms
Buyers
Business and Legal Environment
The New Interaction With Staffing Communities
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What Will This Mean for Staffing Firms?
• Lots more technology to navigate• More information and data centric
~ Example: supply chain and logistics at WalMart
• A new world of recruiter skills• Shifting strategies for firms to adapt
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Secular Shift in Usage
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Buyers Now Positively Biased Towards Contingent Work
-21%
-25%
-20% -19%
-12%
-1%3%
18%
2004 2005 2006 2007 2008 2009 2010 2011
Trends in respondent net bias
Source: 2011 Contingent Workforce Buyers Survey
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Buyers Using More Contingent Work
8%9%
10%
7%
10% 10% 10%11%
13%12%
13%12%
14%15%
2005 2006 2007 2008 2009 2010 2011Median Mean
Reported contingent share of workforce, 2005-2011
Source: 2011 Contingent Workforce Buyers Survey
Projected medianshare in 2013=15% up from 10%
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Recent Temp Help Growth Above the Historic Regression Line
Source: Bureau of Labor Statistics and Staffing Industry Analysts
2010
2011
2009
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Rapid increase in Temp Help Penetration
Source: Bureau of Labor Statistics & Staffing Industry Analysts
1.86% = 1999
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CEO Attitudes Suggest A Receptive Market for Staffing Offering
• 80% of CEO’s are concerned about uncertain or volatile economic growth
• 47% of CEO’s are confident of growing over 3 years, but only 30% think they will have the talent they need
Q: How concerned are you about the following potential threats to your business growth prospects?
Top Ranked Concerns1. Uncertain or volatile
economic growth2. Public deficits3. Over-regulation4. Unstable capital markets5. Availability of key skills
Note: Rank of top threats by % somewhat or extremely concernedSource: PwC Global CEO Survey 2012
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Shifting Attitudes on Use of Independent Contractors Likely to Benefit Temp Staffing
Source: 2011 Contingent Workforce Buyers Survey
Net proportion: is defined as the percent planning to increase usage, minus the percent planning to decrease usage over the next two years
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The Rise of Total Talent Management
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CEOs See Talent Management as a Top Priority for Change
Source: PwC Global CEO Survey 2012
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Some Components of Talent Management
• Talent strategy/business alignment• Workforce planning• Capability and competency
management• Talent acquisition
~ Sourcing~ Candidate pools~ Assessment~ Employer brand~ Recruiting~ Selection~ Onboarding ~ Talent mobility
• Employee engagement• Performance
management• Leadership
development• Succession
management• Career management• Talent infrastructure
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Buyers Have a Broad Range of Solutions to Their Contingent Talent Problems
Source: 2011 Contingent Workforce Buyers Survey
Question: Which solution is best in terms of (cost, legal liability, speed, etc.)
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VMS and MSP Adoption Leveling Out With Large US Buyers
* Reported use among core buyers = spending a majority of their time on CW managementSource: 2011 Contingent Workforce Buyers Survey
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Is Mid Market Next for VMS?
Source: 2007 U.S. Economic Census
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Growth of RPO and HRO
Source: 2011 Contingent Workforce Buyers Survey
Early Talent Management
Talent strategy and business alignment
Workforce planning
Traditional employees
Metrics and Analytics
- Learning and Development- Career and performance management
Talent Acquisition Modes
- Compensation/Benefits
RecruitersDirect HireRPO
“Outsiders:” Contingent Work/Outsourcing
Outsourced services
Contingent- Temps- IC- SOW- Internal stretch
AgenciesMSP/VMSDirect IC
Consulting &OutsourcingFirms
HR and Procurement
Talent strategy and business alignment
Workforce planning
Traditional employees
Metrics and Analytics
- Learning and Development- Career and performance management
Talent Acquisition Modes
- Compensation/Benefits
RecruitersDirect HireRPO
Outsourced services
Contingent- Temps- IC- SOW- Internal stretch
AgenciesMSP/VMSDirect IC
Consulting &OutsourcingFirms
Evolving processes/practices to manage all forms of talent
Talent strategy and business alignment
Workforce planning
Traditional employees
Metrics and Analytics
- Learning and Development- Career and performance management
Talent Acquisition Modes
- Compensation/Benefits
RecruitersDirect HireRPO
Total Talent Management
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Globalization 2.0
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Largest Global Staffing Firms
Rank Company HQ country
2010 global staffing revenue
(US$ millions)
1 Adecco Switzerland $24,0002 ManpowerGroup USA $18,8673 Randstad Holding Netherlands $18,7704 Allegis Group USA $6,4065 Kelly Services USA $4,9506 Recruit Staffing and Staff Service Japan $4,5007 USG People Netherlands $4,1158 Hays UK $4,1659 Robert Half International USA $2,789
10 Temp Holdings Japan $2,38411 Advantage Resourcing Japan,USA,UK $2,20012 Pasona Group Japan $2,19913 SFN Group USA $2,10014 Capgemini France $1,86215 Express Employment Prof. USA $1,76216 The Select Family USA $1,74817 Volt Information Sciences USA $1,72918 Insperity USA $1,72019 Impellam Group UK $1,71820 Synergie France $1,637
Largest staffing firms in the worldRanked by estimated 2010 global staffing revenue in U.S. dollars
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Buyers Ongoing Interest in Global
Source: 2011 Contingent Workforce Buyers Survey
75% of Firms are global or consideringIt within 2 years
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Higher Potential
Lower Potential
Not Recorded
Global Staffing Market Hot Spots
Note: Countries in Green not included due to small market size or lack of data (for instance Columbia and South Korea)Source: Staffing Industry Analysts: Most Attractive Staffing Markets Globally Report – October 2011
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Staffing Industry Analysts Goes Global
• In North America since 1989• Launched Europe in 2009• Adding Global coverage
during 2012
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Increasingly Complex Legal Environment
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Healthcare Reform Definitely on the Way…
…or Not!
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Staffing Firms Still Largely in “Wait and See” Mode
Question:How do you plan to comply with rules associated with Healthcare Reform Legislation?(Select up to 3)
Source: 2011 Contingent Workforce Buyers Survey
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Firms Uncertain About Ability to Pass Costs on to Buyers
Source: 2011 Contingent Workforce Buyers Survey
Question: What percent of the increased cost associated with Healthcare Reform do you expect to successfully pass on to your buyers?
100%
50%
0%
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Many Significant Legal, Legislative and Regulatory Issues Around the World
• Healthcare reform• Immigration reform • Immigration enforcement: e-verify• Misclassification
~ Independent contractors~ Exempt vs. non-exempt ~ Other wage and hours issues
• Agency workers regulations – UK• Increased scrutiny of temporary work globally
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Talent and Work Mismatches
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While Overall Unemployment Remains Over 8%, Lower Skilled Occupations are Even Higher
Source: Bureau of Labor Statistics and Staffing Industry Analysts
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High Skilled Occupations Still in Short Supply
Source: Bureau of Labor Statistics and Staffing Industry Analysts
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Metro Market Hot Spots by Skill
US Temp Help by Market and Skill ($M)Office/ Clerical Industrial IT Healthcare
Finance/ Accounting
Engineering/ Design Total
Total US Market Size $15,600 $22,600 $17,900 $7,600 $5,100 $6,400 $78,700New York-White Plains-Wayne, NY-NJ $803 $898 $924 $253 $351 $135 $3,643Los Angeles-Long Beach-Glendale, CA $457 $521 $410 $690 $148 $187 $2,566Washington-Arlington-Alexandria, DC-VA-MD-WV $277 $315 $1,100 $237 $228 $175 $2,527Chicago-Naperville-Joliet, IL $450 $701 $510 $209 $196 $142 $2,316Atlanta-Sandy Springs-Marietta, GA $421 $732 $603 $112 $176 $130 $2,250Houston-Sugar Land-Baytown, TX $360 $598 $403 $184 $112 $326 $2,074Boston-Cambridge-Quincy, MA NECTA Division $251 $256 $585 $81 $122 $139 $1,530Dallas-Plano-Irving, TX $279 $307 $487 $121 $100 $123 $1,471Seattle-Bellevue-Everett, WA $173 $265 $561 $45 $84 $152 $1,337Minneapolis-St. Paul-Bloomington, MN-WI $223 $380 $390 $53 $101 $100 $1,303Philadelphia, PA $277 $324 $347 $57 $104 $92 $1,278San Jose-Sunnyvale-Santa Clara, CA $101 $131 $594 $172 $54 $166 $1,258Phoenix-Mesa-Scottsdale, AZ $239 $288 $246 $74 $72 $104 $1,060
Source: Top US Temporary Staffing Markets Report, Jan 2012,Based on Bureau of Labor Statistics and Staffing Industry Analysts for 2010/2011
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Agenda• Critical trends• Opportunities and threats• Near term outlook
© 2012 Crain Communications Inc
Opportunities Abound for Staffing Firms…
• Riding secular and cyclical growth wave• Mastering the technology opportunities• Leveraging talent management and outsourcing trends• Capturing the independent workforce• Expanding categories – MSP, RPO, HRO, etc.• Solving skills shortages• Showing some self esteem• And more…
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…And There are Plenty of Threats
• Increasing competition with traditional competitors• Regulatory environment changes• Disruptive technology change and new competitors• Quality of service – reality and perception• Global economic volatility• And more…
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Agenda• Critical trends• Opportunities and threats• Near term outlook
© 2012 Crain Communications Inc
Job Creation Happening
Source: Bureau of Labor Statistics and Staffing Industry Analysts
+227,000
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Economic Growth Forecast Ahead
Forecast Source Forecast Date 2012 2013The Conference Board 2/15/2012 2.00% 2.20%Philadelphia Fed Survey 2/10/2012 2.30% 2.70%IMF 1/24/2012 1.80% 2.20%WSJ Economic Survey Jan-12 2.40% 2.80%
U.S. GDP Growth Forecasts
Source: Conference Board, Philadelphia Fed Survey of Economic Forecasters, IMF, Wall Street Journal survey of economists
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ECRI Sounds a Note of Caution
Source: Economic Cycle Research Institute
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Pulse Survey Shows Temp Staffing Growth Ongoing
Source: Staffing Industry Pulse Survey, February 2012
In January 201214% weighted average growth61% seeing positive Y/Y growth50% see improving M/M growth
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Direct Hire Growth Outpacing Temp Staffing
Source: Staffing Industry Pulse Survey, February 2012
In January 201238% weighted average growth80% seeing positive Y/Y growth65% see improving M/M growth
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Our Forecast by Sector
Source: Staffing Industry Analysts Preliminary Forecast March 2012
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Forecast by Segment
Source: Staffing Industry Analysts Preliminary Forecast March 2012
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"The greatest danger in times of turbulence is not the turbulence; it is to act with yesterday’s logic.“
— Peter Drucker
© 2012 Crain Communications Inc
Keynote: Staffing Communities and The Future of the Industry
Barry AsinPresident, Staffing Industry AnalystsMarch 14, [email protected]