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The Emergence of VMS and MSP outside North America
Speaker: John Nurthen, Executive Director, International DevelopmentMatt Norton, Research Analyst
©2013 by Crain Communications Inc. All rights reserved.
*Staffing Market regions are to scale
Global Research Regions
JAPAN
CWS Council Members (partial list)
©2013 by Crain Communications Inc. All rights reserved.
Contents
• Definitions
• Trends
• What is available?
– VMS Providers by region
– MSP Providers by region
– MSP spend by mix and by skill
• Legal context
– Alternative models
©2013 by Crain Communications Inc. All rights reserved.
MSP/VMS Definition
• Managed Service Provider (MSP) — A company that takes on primary responsibility for managing an organisation’s contingent workforce program. Typical responsibilities of an MSP include overall program management, reporting and tracking, supplier selection and management, order distribution and often consolidated billing.
• Vendor Management System (VMS) - An Internet-enabled, often Web-based application that acts as a mechanism for business to manage and procure staffing services (temporary help as well as, in some cases, permanent placement services) as well as outside contract or contingent labour. Typical features of a VMS include order distribution, consolidated billing and significant enhancements in reporting.
©2013 by Crain Communications Inc. All rights reserved.
RPO Definition
• Recruitment Process Outsourcing (RPO) — Partial or full outsourcing of the internal recruitment function to a third-party specialist provider, which serves to provide the necessary skills, activities, tools, technologies, related recruitment supply chain partners and process methodologies to assume the role of the client’s recruiting department by owning and managing its recruitment process and related recruitment supply chain partner relationships. RPO is more commonly used as a method for employers to recruit direct-hire personnel, particularly in the U.S. In Europe, contingent workers will
also be included within the scope in some instances.
©2013 by Crain Communications Inc. All rights reserved.
Where are Buyers expanding their CW programmes?
©2013 by Crain Communications Inc. All rights reserved.
Source: Staffing Industry Analysts’ Contingent Buyers Survey 2013
Buying Intentions of North American Firms with 1,000+ employees
©2013 by Crain Communications Inc. All rights reserved.
Known VMS/MSP Organisations
©2013 by Crain Communications Inc. All rights reserved.
CompanyHome
Market
Accolo US
Acro Service Corp. US
Adecco Pontoon CH
Aditi US
Advantage xPO JP
Aerotek US
Agile•1 US
Alexander Mann UK
Allegis Group Services US
AMN Healthcare US
Ariba US
Bartech US
Beeline US
Capita Resourcing UK
CDI US
Clover US
Collabrus US
Consul (powered by ProcureStaff Technologies) US
Contingent Workforce Solutions US
Contract-Central US
Cross Country Staffing US
DCR Workforce US
de Poel UK
dotStaff US
Elevated Resources US
Emptoris US
esize NL
Fieldglass US
Gonzalez US
Hays UK
HireGenics US
Impellam Group UK
CompanyHome
Market
IQNavigator US
iSymphony US
KellyOCG US
Lumesse UK
MedAssets Workforce Solutions US
Medefis US
Morson UK
MSX International US
myflex US
Nétive VMS NL
nextSource US
Peoplefluent US
PIXID FR
Populus Group US
PRO Unlimited US
Provade US
Randstad Sourceright NL
Resource Solutions Group UK
RGBSI US
RINGO US
Rullion Solutions UK
S3 US
Shiftwise US
Skillstream UK
Staff Management US
Superior Group/Work Nexus US
TAPFIN/Econometrix US
USG People NL
Volt Consulting Group US
Yoh US
Yurcor US
ZeroChaos US
While all of the these companies were invited to participate in the VMS/MSP Landscape report, not all provided sufficient information to be included in our analysis. Those that did participate are in bold/yellow.
©2013 by Crain Communications Inc. All rights reserved.
CompanyHome
Market
Accolo US
Acro Service Corp. US
Adecco Pontoon CH
Aditi US
Advantage xPO JP
Aerotek US
Agile•1 US
Alexander Mann UK
Allegis Group Services US
AMN Healthcare US
Ariba US
Bartech US
Beeline US
Capita Resourcing UK
CDI US
Clover US
Collabrus US
Consul (powered by ProcureStaff Technologies) US
Contingent Workforce Solutions US
Contract-Central US
Cross Country Staffing US
DCR Workforce US
de Poel UK
dotStaff US
Elevated Resources US
Emptoris US
esize NL
Fieldglass US
Gonzalez US
Hays UK
HireGenics US
Impellam Group UK
CompanyHome
Market
IQNavigator US
iSymphony US
KellyOCG US
Lumesse UK
MedAssets Workforce Solutions US
Medefis US
Morson UK
MSX International US
myflex US
Nétive VMS NL
nextSource US
Peoplefluent US
PIXID FR
Populus Group US
PRO Unlimited US
Provade US
Randstad Sourceright NL
Resource Solutions Group UK
RGBSI US
RINGO US
Rullion Solutions UK
S3 US
Shiftwise US
Skillstream UK
Staff Management US
Superior Group/Work Nexus US
TAPFIN/Econometrix US
USG People NL
Volt Consulting Group US
Yoh US
Yurcor US
ZeroChaos US
Known VMS/MSP Organisations
Source: Staffing Industry Analysts: MSP/VMS Global Landscape Report, 2013
2012 Spend Under Management
Contract Staffing/Outsourcing
Temporary Staffing
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0
20
40
60
80
100
120
VMS MSP VMS/MSP
$ B
illio
n
Own 3rd Party Other Total Spend
Source: Staffing Industry Analysts: MSP/VMS Global Landscape Report, 2013
VMS/MSP Spend by Geography
Contract Staffing/Outsourcing
Temporary Staffing
©2013 by Crain Communications Inc. All rights reserved.
US
70%
Outside US
30%
US
67%
Outside US
33%
US Outside US
VMS Spend MSP Spend
VMS Providers by Region – Europe
©2013 by Crain Communications Inc. All rights reserved.
Rank Country
1 PIXID*
2 Fieldglass
3 Impellam Group
4 IQNavigator
5 ZeroChaos
6 Netive VMS
7 Beeline
8 USG People
9 Hays
10 Provade
Source: Staffing Industry Analysts: MSP/VMS Global Landscape Report, 2013
*PIXID are solely based in France and account for over 80% of the French market
Recently launched antitrust investigation in
France focused on Adecco, ManpowerGroup
and Randstad relating to “the commonly
used vendor neutral platforms in the
industry and whether these platforms
adversely impact the competitive dynamics
of the industry”.
VMS Providers by Region – Asia/Pacific
©2013 by Crain Communications Inc. All rights reserved.
Rank Country
1 Fieldglass
2 IQNavigator
3 Beeline
4 PRO Unlimited
5 Provade
6 ZeroChaos
7 Consol
8 DCR Workforce
9 Hays
10 Agile-1
Source: Staffing Industry Analysts: MSP/VMS Global Landscape Report, 2013
VMS Providers by Region – South America
©2013 by Crain Communications Inc. All rights reserved.
Rank Country
1 Fieldglass
2 Beeline
3 IQNavigator
4 Agile-1
5 PRO Unlimited
Source: Staffing Industry Analysts: MSP/VMS Global Landscape Report, 2013
©2013 by Crain Communications Inc. All rights reserved.
Source: VMS/MSP Landscape Report 2013, Staffing Industry Analysts
Recorded Incidence of MSP Contracts
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Less than 10 MSPs
10 to 50 MSPs
51 to 100 MSPs
101 to 500 MSPs
Over 501 MSPs
No MSP Recorded
Recorded Incidence of MSP Contracts
MSP Spend Inside and Outside the US
©2013 by Crain Communications Inc. All rights reserved.
CW Solutions
iSymphony
USG People
Yoh
AMN Healthcare
Capita Resourcing
CDI
Superior Group
DCR Workforce
Aerotek
MSX International
Hays
Bartech
ZeroChaos
Volt Consulting Group
Impellam Group
PRO Unlimited
IQNavigator
KellyOCG
Randstad Sourceright
Adecco Pontoon
TAPFIN
Allegis Group Services
US
Oustide US
Largest MSP Providers by Region - Europe
©2013 by Crain Communications Inc. All rights reserved.
Rank Country
1 Randstad Sourceright
2 Adecco Pontoon
3 Impellam Group
4 TAPFIN
5 Kelly OCG
6 ZeroChaos
7 Hays
8 Allegis Group Services
9 PRO Unlimited
10 IQNavigator
Source: Staffing Industry Analysts: MSP/VMS Global Landscape Report, 2013
Largest MSP Providers by Region – Asia/Pacific
©2013 by Crain Communications Inc. All rights reserved.
Rank Country
1 Kelly OCG
2 TAPFIN
3 Adecco Pontoon
4 Randstad Sourceright
5 PRO Unlimited
6 Allegis Group Services
7 IQNavigator
8 ZeroChaos
9 Volt Consulting Group
10 Hays
Source: Staffing Industry Analysts: MSP/VMS Global Landscape Report, 2013
Source: Staffing Industry Analysts: MSP/VMS Global Landscape Report, 2013
Largest MSP Providers by Region-South America
©2013 by Crain Communications Inc. All rights reserved.
Rank Country
1 Adecco Pontoon
2 TAPFIN
3 PRO Unlimited
4 ZeroChaos
5 Kelly OCG
Source: Staffing Industry Analysts: MSP/VMS Global Landscape Report, 2013
MSP Spend by Country
Permanent
Recruitment
35%
Contract Staffing/
Outsourcing
44%
Exec
Recruitment
11%
©2013 by Crain Communications Inc. All rights reserved.
-
1,000,000,000
2,000,000,000
3,000,000,000
4,000,000,000
5,000,000,000
6,000,000,000
7,000,000,000
8,000,000,000
Source: Staffing Industry Analysts: MSP/VMS Global Landscape Report, 2013
Mix of MSP Spend by Country
Permanent
Recruitment
35%
Contract Staffing/
Outsourcing
44%
Exec
Recruitment
11%
©2013 by Crain Communications Inc. All rights reserved.
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Switzerland
China
India
Belgium
Sweden
Australia
France
Germany
The Netherlands
United Kingdom
Temp/Contract
SOW
Outsourced
Source: Staffing Industry Analysts: MSP/VMS Global Landscape Report, 2013
2012 MSP Spend by Skill
Permanent
Recruitment
35%
Contract Staffing/
Outsourcing
44%
Exec
Recruitment
11%
©2013 by Crain Communications Inc. All rights reserved.
21%
16%
31%
32%
MSP Spend by Skill – Outside US
15%
12%
37%
36%
MSP Spend by Skill – US
Country Licensing
Argentina N
Australia Y
Austria Y
Belgium Y
Brazil N
Bulgaria Y
Canada Y
China Y
Czech Republic Y
Denmark*
Egypt Y
Finland N
France Y
Germany Y
Greece Y
Hong Kong China Y
Hungary Y
India Y
Ireland Y
Italy Y
Japan Y
Country Licensing
Kuwait N
Mexico Y
Netherlands N
New Zealan N
Norway Y
Poland Y
Portugal Y
Qatar Y
Romania Y
Russia N
Saudi Arabia Y
Serbia Y
Singapre Y
South Africa Y
Spain Y
Sweden N
Switzerland Y
Turkey Y
United Arab Emirates Y
United Kingdom N
United States N
Y/N
The Issue of Staffing Agency Licensing
•Most countries require that staffing agencies are legally licenced before being allowed to supply temporary workers
•Licensing is fundamental to whether an MSP is allowed to operate as a Principal intermediary– An indication that programme
managers should look more carefully at implications for MSP delivery
– In some markets, any staffing agency supplying staff through an MSP would be in breach of licensing requirements
*Licensing required for provision of healthcare staffing only
Alternative MSP Models
• Principal Model
– Standard model as used in liberal staffing markets such as the US, UK and Netherlands
• Agency Model
– MSP manages local staffing companies on behalf of the end user (and perhaps fills some vacancies itself)
– Second tier staffing companies still have contracts directly with the hirer, but MSP administers those contracts on behalf of end user
• The Margin only Model
– MSP appoints local staffing agencies to source contingent workers– MSP has contracts with individual agencies, but once candidates are
identified, MSP contracts directly with the contingent workers and supplies them to the end user acting as the contractual intermediary
©2013 by Crain Communications Inc. All rights reserved.
©2013 by Crain Communications Inc. All rights reserved.
UK Customer
MSP
Staffing Company
Temporary Worker
Independent Contractor
Umbrella Company
Principal MSP Contractual Relationship - UK
Fixed Term Contract (subject to Fixed-term Employees Prevention of Less Favourable Treatment Regulation (2002). PAYE tax and other statutory payment obligations for Customer.
Managed Service Contract.
Sub-contractor Agreement between MSP and Staffing Company
Contract for Services as defined under the Employment Agencies Act (1973) and Conduct of Employment Agencies & Employment Business Regulations (2003) (amended). Agency Workers Regulations (2010) will be applicable from 1 October 2011. PAYE tax and other statutory payment obligations for Staffing Company.
Services supplied under Services Agreement by Limited Company, Sole Supplier or Partnership.
Contract of Employment (subject to the Employment Rights Act (1996). PAYE tax and other statutory payment obligations for Umbrella Company.
Services Contract between Staffing Company and Umbrella Company. Independent Contractors supplied via an Umbrella Company to a Staffing Company will be captured by the Agency Workers Regulations (2010) from 1 October 2011.
Principal MSP Contractual Relationship -
Netherlands
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Principal Australian MSP Contractual Relationship
Adapted German MSP Contractual Relationship
Agency
Worker
AÜG Licence
Holder
End User
Business
Non- AÜG
Licence Holder
MSP
Freiberufler
Free Professional
Freiberufler
Free Professional
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Adapted French MSP Contractual Relationship
End User
Business
EPS
MSP
Temporary
Work Agency
Agency
WorkerIndependent
Contractor
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Adapted Chinese MSP Contractual Relationship
End User
Business
Dispatch
Worker
Dispatch
Company
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MSP
MSP providing workforce management consulting and compliance services to the End User under an
‘Agency model’.
Dispatch workers supplied by Dispatch company
Contractual Structures for Multinational
Programmes
• Many international MSPs are governed by global master services agreement with all-pervasive terms and conditions which will apply no matter where the service is provided
– General pricing policy, general services, term/termination, intellectual property, confidentiality and some boilerplate legal clauses
– Within the global master services agreement will be a template for local country agreements setting out what can be agreed locally country by country together with a timetable for roll out
– The global master services agreement will then be supplemented by local country agreements which are each governed by the global agreement
Global Master
Services Agreement
Local Country
Agreement
Local Country
Agreement
Local Country
Agreement
Summary
• There are a number of reasons why MSP and VMS are less prevalent outside the US
– Legal prohibitions
» Agency licensing requirements
» Undue tax and/or employment law risk
– Market structures (consolidation v fragmentation)
– Market maturity/cultural issues
– Relatively low margins (compared to the US)
• But use of MSP and VMS is a global phenomenon and, with appropriate adaptation, solutions can be deployed anywhere
– Growth of these solutions outside the US is significant
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