beyond savings – measuring what matters

©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]


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


Who is this guy?


About Us

©2011 by Crain Communica1ons Inc. All rights reserved. ©2010 by Crain Communica1ons Inc. All rights reserved.

Products/Services


Services Categories


CWS COUNCIL


North American CWS Council Members (parQal list)


Western Europe/Global CWS Council Members


State of the Buyer Community


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


2011 Defini$on

Con$ngent Work: Anyone who is not an employee……


How do Companies Manage?


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


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)


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


2010 VMS/MSP LANDSCAPE HIGHLIGHTS


•  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


2009 Total MSP vs VMS Spend Under Management Comparison


VMS Spend under Management


MSP Spend under Management


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


Culture counts…


BY PERCENTAGE WHICH TARGET GROUP DOES YOUR COMPANIES CORE VALUE PROPOSITION MOST APPEAL TO?


Some new trends…..


Key Metric Areas •  Quality •  Efficiency •  Cost •  Risk


1,000 monkeys typing for 1,000 years……..


Savings are real……..at first….


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.


What makes the “perfect metric”



But lets get serious…..


What separates the good from the bad?


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


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


NPS survey from 2010


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


Net Promoter Score by Industry


VMS –Internally Developed vs. Commercially available


Buyer Experience by Program Type


Provider Experience by Line of Business


NPS Buyers vs. Suppliers


Which is more important?


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


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%


Scajer Plots of Provider Scores



NPS scores for all VMS Providers with more than 5 Buyer responses


NPS scores for all MSP Providers with more than 10 Buyer responses


NPS scores for all VMS Providers with more than 10 responses as provided by Staffing Firms


NPS scores for all MSP Providers with more than 10 Staffing Firm responses


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


“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…….


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


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%


Not Necessarily


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 Risk Forum & WE CWS Summit

•  June 20-‐21, 2011 •  Hotel Okura, The Netherlands

•  October 5-‐6, 2011 •  Red Rock Resort, Las Vegas


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


Ques1ons & Remarks? Bryan Pena VP, Con1ngent Workforce Strategies and Research 650-‐390-‐6188 [email protected]

beyond savings – measuring what matters

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con ngent work

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