keynote session why you thought you knew staffing is wrong · source: staffing industry...
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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:
March 16‐19, 2015Orlando, FL
©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
March 16‐19, 2015Orlando, FL
©2015 by Crain Communications Inc. All rights reserved.
Agenda
A Dozen Things You Used to Know About StaffingThe Near Term OutlookQuestions
March 16‐19, 2015Orlando, FL
©2015 by Crain Communications Inc. All rights reserved.
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
March 16‐19, 2015Orlando, FL
©2015 by Crain Communications Inc. All rights reserved.
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
March 16‐19, 2015Orlando, FL
©2015 by Crain Communications Inc. All rights reserved.
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
March 16‐19, 2015Orlando, FL
©2015 by Crain Communications Inc. All rights reserved.
The Opportunity: Few Companies Manage Their Total Talent Holistically
Source: 2015 SIA/ERE Total Talent Management Survey – Preliminary Results
March 16‐19, 2015Orlando, FL
©2015 by Crain Communications Inc. All rights reserved.
3. Staffing is a High Growth IndustryNot
March 16‐19, 2015Orlando, FL
©2015 by Crain Communications Inc. All rights reserved.
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
March 16‐19, 2015Orlando, FL
©2015 by Crain Communications Inc. All rights reserved.
Staffing Remains Highly Cyclical
Source: Staffing Industry Analysts US Staffing Forecast and Market Estimates – 1996‐2014
March 16‐19, 2015Orlando, FL
©2015 by Crain Communications Inc. All rights reserved.
4. Professional
Staffing is “Better”
Than Commercial
Staffing
Not
March 16‐19, 2015Orlando, FL
©2015 by Crain Communications Inc. All rights reserved.
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
March 16‐19, 2015Orlando, FL
©2015 by Crain Communications Inc. All rights reserved.
…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
March 16‐19, 2015Orlando, FL
©2015 by Crain Communications Inc. All rights reserved.
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%
March 16‐19, 2015Orlando, FL
©2015 by Crain Communications Inc. All rights reserved.
5. VMS Has Ruined the Staffing Industry
Source: Staffing Industry Analysts Contingent Buyer Surveys 2005‐2014
Not
VMS Usage
Contingent Penetration
March 16‐19, 2015Orlando, FL
©2015 by Crain Communications Inc. All rights reserved.
Source: Yahoo Finance and Staffing Industry Analysts
Robert Half
Manpower
On AssignmentTrue BlueAMN Healthcare
Market Capitalization of Top Staffing Firms Has Grown Substantially
March 16‐19, 2015Orlando, FL
©2015 by Crain Communications Inc. All rights reserved.
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
March 16‐19, 2015Orlando, FL
©2015 by Crain Communications Inc. All rights reserved.
Henri the Cat @HenriLeChatNoir
March 16‐19, 2015Orlando, FL
©2015 by Crain Communications Inc. All rights reserved.©2015 by Crain Communications Inc. All rights reserved.
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
March 16‐19, 2015Orlando, FL
©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
Source: Staffing Industry Analysts
March 16‐19, 2015Orlando, FL
©2015 by Crain Communications Inc. All rights reserved.
IBM Watson
March 16‐19, 2015Orlando, FL
©2015 by Crain Communications Inc. All rights reserved.
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
March 16‐19, 2015Orlando, FL
©2015 by Crain Communications Inc. All rights reserved.
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
March 16‐19, 2015Orlando, FL
©2015 by Crain Communications Inc. All rights reserved.
7. Staffing Firms Need to Have Recruiters Do Not
March 16‐19, 2015Orlando, FL
©2015 by Crain Communications Inc. All rights reserved.©2015 by Crain Communications Inc. All rights reserved.
Heads or Tails?
46% of All New Hires Fail Within the First 18 Months
Source: Leadership IQ, 2012 Survey of 20,000 hires
March 16‐19, 2015Orlando, FL
©2015 by Crain Communications Inc. All rights reserved.
8. Relationships Trump Data, Evidence and Best Practices Do Not
March 16‐19, 2015Orlando, FL
©2015 by Crain Communications Inc. All rights reserved.©2015 by Crain Communications Inc. All rights reserved.
Delivering Doughnuts no longer enough
March 16‐19, 2015Orlando, FL
©2015 by Crain Communications Inc. All rights reserved.
The Industry is Becoming Increasingly Professional and Data Driven
Talent DataExchange
Staffing Industry Benchmarking
Consortium (SIBC)
Internal Compensation Estimator
March 16‐19, 2015Orlando, FL
©2015 by Crain Communications Inc. All rights reserved.
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
March 16‐19, 2015Orlando, FL
©2015 by Crain Communications Inc. All rights reserved.
9. Staffing Success is all About Sales Not
March 16‐19, 2015Orlando, FL
©2015 by Crain Communications Inc. All rights reserved.
Skills Shortages Reemerge
2.8%
6.2%4.6%
Jan 2015
March 16‐19, 2015Orlando, FL
©2015 by Crain Communications Inc. All rights reserved.
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
March 16‐19, 2015Orlando, FL
©2015 by Crain Communications Inc. All rights reserved.
Staffing Margins and VMS Models Require Focus on Process and Efficiency
Source: Staffing Industry Benchmarking Consortium – 1H 2014, October 2014
March 16‐19, 2015Orlando, FL
©2015 by Crain Communications Inc. All rights reserved.
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
March 16‐19, 2015Orlando, FL
©2015 by Crain Communications Inc. All rights reserved.
10. All the Staffing Niches are Already TakenNot
March 16‐19, 2015Orlando, FL
©2015 by Crain Communications Inc. All rights reserved.
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)
March 16‐19, 2015Orlando, FL
©2015 by Crain Communications Inc. All rights reserved.
11. Buyers Only Care About PriceDo Not
March 16‐19, 2015Orlando, FL
©2015 by Crain Communications Inc. All rights reserved.©2015 by Crain Communications Inc. All rights reserved.
What Staffing Firms are Selling
Source: SIA 2014 Staffing Firm Survey
Percent of Staffing Firms Most Emphasizing in their Sales & Marketing
March 16‐19, 2015Orlando, FL
©2015 by Crain Communications Inc. All rights reserved.
What Buyers are Buying
Source: SIA 2014 Contingent Buyers Survey
Percent of Buyers Selecting as Top Criteria for Buying
Worker Quality
March 16‐19, 2015Orlando, FL
©2015 by Crain Communications Inc. All rights reserved.
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
March 16‐19, 2015Orlando, FL
©2015 by Crain Communications Inc. All rights reserved.
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
March 16‐19, 2015Orlando, FL
©2015 by Crain Communications Inc. All rights reserved.
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
March 16‐19, 2015Orlando, FL
©2015 by Crain Communications Inc. All rights reserved.
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
March 16‐19, 2015Orlando, FL
©2015 by Crain Communications Inc. All rights reserved.
Agenda
A Dozen Things You Used to Know About StaffingThe Near Term OutlookQuestions
March 16‐19, 2015Orlando, FL
©2015 by Crain Communications Inc. All rights reserved.
©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
March 16‐19, 2015Orlando, FL
©2015 by Crain Communications Inc. All rights reserved.
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%
March 16‐19, 2015Orlando, FL
©2015 by Crain Communications Inc. All rights reserved.
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
Source: Staffing Industry Analysts
March 16‐19, 2015Orlando, FL
©2015 by Crain Communications Inc. All rights reserved.
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
March 16‐19, 2015Orlando, FL
©2015 by Crain Communications Inc. All rights reserved.
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
March 16‐19, 2015Orlando, FL
©2015 by Crain Communications Inc. All rights reserved.
Agenda
A Dozen Things You Used to Know About StaffingThe Near Term OutlookQuestions
March 16‐19, 2015Orlando, FL
©2015 by Crain Communications Inc. All rights reserved.©2015 by Crain Communications Inc. All rights reserved.
Why a Dozen Things You Used to Know About Staffing are Wrong
Barry AsinPresident, Staffing Industry AnalystsMarch 17, 2015
March 16‐19, 2015Orlando, FL
Why Everything You Thought You Knew About Staffing is Wrong
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