to win in the short term and the long term · march 18‐21, 2014 | hilton san diego bayfront...
TRANSCRIPT
March 18‐21, 2014 | Hilton San Diego Bayfront
Competing to Win in the Short Term …and the Long Term
Barry Asin, President, Staffing Industry Analysts
Sponsored by:
WED, MAR 19 8:30 AM SAPPHIRE M
March 18‐21, 2014 | Hilton San Diego Bayfront
Agenda
The Industry Today Success in the Near Term Scenarios for the Long TermQuestions and Answers
March 18‐21, 2014 | Hilton San Diego Bayfront©2014 by Crain Communications Inc. All rights reserved.
Source: Bureau of Labor Statistics & Staffing Industry Analysts
+175K
US Employment Growth Remains Moderate
March 18‐21, 2014 | Hilton San Diego Bayfront
Source: Bureau of Labor Statistics and Staffing Industry Analysts
US Temp Employment Now at 2.8 M
+8.9%
March 18‐21, 2014 | Hilton San Diego Bayfront
Temp Penetration at Record Levels
Source: Bureau of Labor Statistics and Staffing Industry Analysts
2.03%April 2000 and February 2014
March 18‐21, 2014 | Hilton San Diego Bayfront
Economic Growth Expectations Improving
Source: Conference Board, Philadelphia Fed Survey of Professional Forecasters, IMF,US Department of Commerce
March 18‐21, 2014 | Hilton San Diego Bayfront
Pulse Survey Shows Temp StaffingGrowth Ongoing
Source: Staffing Industry Pulse Survey, February 2014
In January 201412% weighted average growth72% seeing positive Y/Y growth
0%
5%
10%
15%
20%
25%
D J F MAM J J A S O N D J F MAM J J A S O N D J F MAM J J A S O D J
2011 2012 2013 2014
Pulse Survey US Temp Staffing Revenue Y/Y Weighted Average Growth
March 18‐21, 2014 | Hilton San Diego Bayfront
Direct Hire Growth Outpacing Temp Staffing
Source: Staffing Industry Pulse Survey, February 2014
In January 201216% weighted average growth58% seeing positive Y/Y growth
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
D J F MAM J J A S O N D J F MAM J J A S O N D J F MAM J J A S O D J
2011 2012 2013 2014
Pulse Survey US Direct Hire Revenue Y/Y Weighted Average Growth
March 18‐21, 2014 | Hilton San Diego Bayfront
Q4 Public Company Revenue Growth
Source: Company reports and Staffing Industry Analysts1. Includes revenue from ShiftWise (acquired on November 20, 2013). 2. Includes acquisitions of CyberCoders (12/5/2013), Whitaker (12/2/2013), and Apex (5/15/2012).
4Q13 % Chg vs 2012 FY13 % Chg vs 2012
AMN Healthcare Services1 248,700$ 0% 1,011,858$ 6%Barrett Business Services 144,500$ 27% 532,844$ 32%CDI 277,114$ 2% 1,087,859$ ‐2%Computer Task Group 102,735$ ‐5% 419,036$ ‐1%Heidrick & Struggles Intl. 122,853$ 13% 480,993$ 3%Hudson Global 159,504$ ‐13% 660,129$ ‐15%Kelly Services 1,385,800$ 1% 5,413,100$ ‐1%Kforce 302,919$ 12% 1,151,887$ 6%ManpowerGroup 5,252,100$ 1% 20,250,500$ ‐2%Mastech Holdings 28,483$ 8% 106,901$ 18%On Assignment2 423,598$ 15% 1,631,997$ 43%RCM Technologies 45,849$ 24% 170,778$ 17%Robert Half Intl. 1,083,864$ 5% 4,245,895$ 3%TrueBlue Inc. 448,952$ 30% 1,668,929$ 20%
Average 9% 9%
US Public Company Revenue ($000)
March 18‐21, 2014 | Hilton San Diego Bayfront
Largest Global Staffing Firms
Rank CompanyHQ
Country
2012 Revenue
$MMarket Share %
1 Adecco CH 26,407 6.51%2 Randstad NL 21,972 5.42%3 ManpowerGroup US 20,678 4.97%4 Allegis US 9,548 2.29%5 Recruit JP 6,265 1.50%6 Hays UK 5,829 1.44%7 Kelly Services US 5,451 1.31%8 USG People NL 3,699 0.91%9 Robert Half US 3,658 0.88%10 Tempstaff JP 2,521 0.60%11 Pasona JP 2,495 0.60%12 Express Services US 2,358 0.57%
Source: Staffing Industry Analysts Market Share Report, 2013
March 18‐21, 2014 | Hilton San Diego Bayfront
Staffing Stocks Performing on Par With the Market
Source: Staffing Industry Analysts Staffing Stock Index, Thomson Reuters
March 18‐21, 2014 | Hilton San Diego Bayfront
Agenda
The Industry Today Success in the Near Term Scenarios for the Long TermQuestions and Answers
March 18‐21, 2014 | Hilton San Diego Bayfront
Leveraging Near Term Trends
Professionalization Technology penetration and adoption GlobalizationOutsourced Services Regulation and legislative change
March 18‐21, 2014 | Hilton San Diego Bayfront
Professional Staffing at 54% of the US Market
2013 US Temp Staffing Revenue by Skill
Source: Staffing Industry Analysts 2013 US Staffing Forecast
March 18‐21, 2014 | Hilton San Diego Bayfront
Source: Staffing Industry Analysts, 2013 Buyer Survey
Percent of Buyers Using a VMS (3 yr avg) Percent of Buyers Using an MSP (3 yr avg)
16%24%
38%
51%
64% 67% 65% 66%
0%
20%
40%
60%
80%
2006 2007 2008 2009 2010 2011 2012 2013
42%
53%59% 60% 60%
0%
20%
40%
60%
80%
2009 2010 2011 2012 2013
VMS and MSP Reaching Large Buyer Usage Plateau…
March 18‐21, 2014 | Hilton San Diego Bayfront
$0
$20
$40
$60
$80
$100
$120
$140
$160
Europe AsiaPac, LATAM & Africa North America
Staffing Market VMS spend under management MSP spend under management
Source: Staffing Industry Analysts 2013 VMS/MSP Competitive Landscape
MSP &VMS as a Proportion of Regional Staffing Revenue2012 Revenue (USD Billion)
55%
39%
18%14%
9% 4%
…But Managed Spend is Growing Quickly
2012/2011
VMS SpendUnder Mgmt
Up 21%
MSP Spend Under Mgmt
Up 18%
March 18‐21, 2014 | Hilton San Diego Bayfront
Ongoing Innovation and Investment in Human Cloud and Online Staffing
+ = ?
March 18‐21, 2014 | Hilton San Diego Bayfront
Forecasts of Online Staffing Platform Global Market Size/Spend: (2012‐13 Est. and 2014‐20 Forecast)CAGR ~ 40% CAGR ~ 50% CAGR ~ 60%
Source: Staffing Industry Analysts 2014 Online Staffing Forecast to 2020
2013 MarketEst = $1.6B
2020 Mid ForecastEst = $23B
2020 High ForecastEst = $47B
2020 Low ForecastEst = $16B
Online Staffing Forecast to Exceed $16B by 2020
March 18‐21, 2014 | Hilton San Diego Bayfront
The US Staffing Market Represents Only 30% of Global Revenue
Source: Staffing Industry Analysts 2013 Global Staffing Market Estimates
March 18‐21, 2014 | Hilton San Diego Bayfront
Even Greater Growth Potential for Professional Staffing Use Globally
2012 Global Temporary Staffing Marketsby Staffing Segment
ProfessionalStaffing40%
CommercialStaffing 60%
0%10%20%30%40%50%60%70%80%90%100%
Africa &Middle East
Asia Pacific Europe LatinAmerica
NorthAmerica
54%
The US market Is 54% Professional, while Europe is only 34% Professional
Global Markets by % Professional/Commercial
% Commercial
% Professional
Source: Staffing Industry Analysts 2013 Global Staffing Market Estimates
March 18‐21, 2014 | Hilton San Diego Bayfront
US Buyers Globalizing Their Programs
Source: Staffing Industry Analysts, 2013 Buyer Survey
March 18‐21, 2014 | Hilton San Diego Bayfront
Source: Staffing Industry Analysts, 2013 Buyer Survey *Numbers displayed are three‐year moving averages
Percent of Buyers Using RPO
9%
13%
17%20%
23%
30%32%
0%
20%
40%
2007 2008 2009 2010 2011 2012 2013
Strong Growth in Buyer Use of RPO
March 18‐21, 2014 | Hilton San Diego Bayfront
RPO and MSP Convergence?
RPO: OutsourcingOf Perm Hiring
MSP: OutsourcingOf Temporary Hiring
Total Talent Management
March 18‐21, 2014 | Hilton San Diego Bayfront
Other Outsourced Services
Independent Contractor Compliance Payroll services HR Outsourcing Business Process Outsourcing Solutions Business
March 18‐21, 2014 | Hilton San Diego Bayfront
Source: 2014 Contingent Workforce Buyers Survey – Preliminary Data
35%
33%
15%
9%
23%
15%
‐11%
38%
Net Percent Increase
SOW/Project Workers Forecast to Lead Growth in Share of Workforce
March 18‐21, 2014 | Hilton San Diego Bayfront
Buyers are Getting the Message on ACA Compliance Costs
Source: 2012 and 2014 Contingent Workforce Buyers Survey – Preliminary Results
2012 2014
Percent of buyers who plan to pay no share of ACA costs
62% 33%
Median bill rate increaseexpected
$0.00 $0.80
March 18‐21, 2014 | Hilton San Diego Bayfront
Large Buyers are Split on Preference for How Staffing Firms Comply With ACA
Source: 2014 Contingent Workforce Buyers Survey – Preliminary Results
Question: Buyers: how would you prefer the agencies you work with to comply with ACA?
March 18‐21, 2014 | Hilton San Diego Bayfront
Keys to Success Remain Consistent in the Near Term
Strategy People
Process and Technology
Leadershipand
Culture
March 18‐21, 2014 | Hilton San Diego Bayfront
Agenda
The Industry Today Success in the Near Term Scenarios for the Long TermQuestions and Answers
March 18‐21, 2014 | Hilton San Diego Bayfront
Possible Long Term Industry Futures
Potential Scenarios
1. Direct Connection2. VMS Everywhere3. The Triumph of Talent4. Steady As She Goes5. The Good Old Days Again
March 18‐21, 2014 | Hilton San Diego Bayfront
Scenario 1: Direct Connection
Online staffing platforms and other human cloud intermediaries increasingly connect hiring managers directly with workers Visibility to all work history and work opportunities Complete transparency on rates, skills and quality of workers
March 18‐21, 2014 | Hilton San Diego Bayfront
Which Direction for Staffing?Travel Agents Real Estate Agents
VS.
March 18‐21, 2014 | Hilton San Diego Bayfront
Travel Agent Employment
Source: Bureau of Labor Statistics, Occupational Employment Estimates
‐38%
March 18‐21, 2014 | Hilton San Diego Bayfront
Real Estate Agent Employment
Source: Bureau of Labor Statistics, Occupational Employment Estimates
+29%
March 18‐21, 2014 | Hilton San Diego Bayfront
WHY?
March 18‐21, 2014 | Hilton San Diego Bayfront
Scenario 1 Implications
Potential Roles for Staffing Firms Compliance/Employer of record Concierge/Guide Niche Expert Insurance/Risk manager Value chain specialist
March 18‐21, 2014 | Hilton San Diego Bayfront
The Temporary Staffing Value Chain
MarketingMarketing SalesSales OrdersOrders
MatchingMatching
Testing and Screening
Testing and Screening
SourcingSourcingAdvertisingAdvertising
Pay andBenefitsPay andBenefitsOfferOffer
Client Value Chain
Candidate Value Chain
Onboarding
Assignment
Onboardingand
AssignmentMgmt
Risk andComplianceRisk and
ComplianceMgmt
March 18‐21, 2014 | Hilton San Diego Bayfront
Scenario 2: VMS Everywhere VMS penetration essentially at 100% among large corporations “VMS lite” highly penetrated in small and mid sized businesses Multiple platforms and models Significant transparency on pricing, orders and staffing firm performance
VMSEVERYWHERE
March 18‐21, 2014 | Hilton San Diego Bayfront
Scenario 2 Implications Lower margins, but higher volumesMany new models for staffing players Some options for staffing firms
- Low cost provider – maximize efficiency- Niche recruiters and specialist- Coach and guide- MSP or Master supplier model “lite”- Innovative MSP variations
March 18‐21, 2014 | Hilton San Diego Bayfront
Scenario 3: The Triumph of Talent
Unemployment below 5% Significant skills shortages ‐particularly for skilled laborNo significant increase in technology penetration/use
March 18‐21, 2014 | Hilton San Diego Bayfront
Scenario 3 Implications
HR and hiring managers driving the process, procurement less so Less focus on price, more on value Total Talent Management gains traction Integration of MSP/RPO services and VMS/ATS Talent agent role for many firms Higher margins Steady growth Happy staffing executives!
March 18‐21, 2014 | Hilton San Diego Bayfront
Scenario 4: Steady as She Goes
BLS long term labor forecast largely correctNo recessions or major economic calamitiesNo disruptive technology change Growth in the mid single digits
March 18‐21, 2014 | Hilton San Diego Bayfront
Long Term Forecasts Suggests $150 B in Temp Revenue by 2022
March 18‐21, 2014 | Hilton San Diego Bayfront
Near Term Growth Forecast Improving
Source: Staffing Industry Analysts September 2013 Forecast and March 2014 Preliminary Forecast
March 18‐21, 2014 | Hilton San Diego Bayfront
Scenario 5: The Good Old Days Again End of the internet as we know it Massive unplugging and disconnecting How?
- Significant cyber terrorism and cyber warfare
- Critical mass of privacy concerns
March 18‐21, 2014 | Hilton San Diego Bayfront
“Here's to the crazy ones, the misfits, the rebels, the troublemakers, the round pegs in the square holes... the ones who see things differently ‐‐they're not fond of rules... You can quote them, disagree with them, glorify or vilify them, but the only thing you can't do is ignore them, because they change things…”
‐ Steve Jobs
March 18‐21, 2014 | Hilton San Diego Bayfront
Agenda
The Industry Today Success in the Near Term Scenarios for the Long TermQuestions and Answers
March 18‐21, 2014 | Hilton San Diego Bayfront
“If the rate of change on the outside is
greater than the rate of change on the inside,
the end is near.”
‐ Jack Welch