Competing to Win in the Short Term

Transcription

1 WED, MAR 19 8:30 AM SAPPHIRE M Competing to Win in the Short Term and the Long Term Barry Asin, President, Staffing Industry Analysts Sponsored by:

2 Agenda The Industry Today Success in the Near Term Scenarios for the Long Term Questions and Answers

3 US Employment Growth Remains Moderate +175K Source: Bureau of Labor Statistics & Staffing Industry Analysts 2014 by Crain Communications Inc. All rights reserved.

4 US Temp Employment Now at 2.8 M +8.9% Source: Bureau of Labor Statistics and Staffing Industry Analysts

5 Temp Penetration at Record Levels 2.03% April 2000 and February 2014 Source: Bureau of Labor Statistics and Staffing Industry Analysts

6 Economic Growth Expectations Improving Source: Conference Board, Philadelphia Fed Survey of Professional Forecasters, IMF, US Department of Commerce

7 Pulse Survey Shows Temp Staffing Growth Ongoing 25% 20% 15% Pulse Survey US Temp Staffing Revenue Y/Y Weighted Average Growth In January % weighted average growth 72% seeing positive Y/Y growth 10% 5% 0% D J FMAMJ J ASOND J FMAMJ J A SOND J FMAMJ J A SOD J Source: Staffing Industry Pulse Survey, February

8 Direct Hire Growth Outpacing Temp Staffing 45% 40% 35% 30% 25% Pulse Survey US Direct Hire Revenue Y/Y Weighted Average Growth In January % weighted average growth 58% seeing positive Y/Y growth 20% 15% 10% 5% 0% DJFMAMJ JASONDJFMAMJ JASONDJFMAMJ JASODJ Source: Staffing Industry Pulse Survey, February

9 Q4 Public Company Revenue Growth US Public Company Revenue ($000) Source: Company reports and Staffing Industry Analysts 1. 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 Services 1 $ 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 Assignment 2 $ 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%

10 Largest Global Staffing Firms Source: Staffing Industry Analysts Market Share Report, 2013 Rank Company HQ Country 2012 Revenue $M Market Share % 1 Adecco CH 26, % 2 Randstad NL 21, % 3 ManpowerGroup US 20, % 4Allegis US 9, % 5 Recruit JP 6, % 6 Hays UK 5, % 7Kelly Services US 5, % 8USG People NL 3, % 9Robert Half US 3, % 10 Tempstaff JP 2, % 11 Pasona JP 2, % 12 Express Services US 2, %

11 Staffing Stocks Performing on Par With the Market Source: Staffing Industry Analysts Staffing Stock Index, Thomson Reuters

12 Agenda The Industry Today Success in the Near Term Scenarios for the Long Term Questions and Answers

13 Leveraging Near Term Trends Professionalization Technology penetration and adoption Globalization Outsourced Services Regulation and legislative change

14 Professional Staffing at 54% of the US Market 2013 US Temp Staffing Revenue by Skill Source: Staffing Industry Analysts 2013 US Staffing Forecast

15 VMS and MSP Reaching Large Buyer Usage Plateau Percent of Buyers Using a VMS (3 yr avg) Percent of Buyers Using an MSP (3 yr avg) 80% 60% 51% 64% 67% 65% 66% 80% 60% 53% 59% 60% 60% 40% 20% 16% 24% 38% 40% 20% 42% 0% % Source: Staffing Industry Analysts, 2013 Buyer Survey

16 But Managed Spend is Growing Quickly MSP &VMS as a Proportion of Regional Staffing Revenue 2012 Revenue (USD Billion) Staffing Market VMS spend under management MSP spend under management $ /2011 VMS Spend Under Mgmt Up 21% MSP Spend Under Mgmt Up 18% $140 $120 $100 $80 $60 $40 $20 $0 55% 39% 18% 14% 9% 4% Europe AsiaPac, LATAM & Africa North America Source: Staffing Industry Analysts 2013 VMS/MSP Competitive Landscape

17 Ongoing Innovation and Investment in Human Cloud and Online Staffing + =?

18 Online Staffing Forecast to Exceed $16B by High Forecast Est = $47B 2020 Mid Forecast Est = $23B 2013 Market Est = $1.6B 2020 Low Forecast Est = $16B CAGR ~ 40% CAGR ~ 50% CAGR ~ 60% Source: Staffing Industry Analysts 2014 Online Staffing Forecast to 2020 Forecasts of Online Staffing Platform Global Market Size/Spend: ( Est. and Forecast)

19 The US Staffing Market Represents Only 30% of Global Revenue Source: Staffing Industry Analysts 2013 Global Staffing Market Estimates

20 Even Greater Growth Potential for Professional Staffing Use Globally 2012 Global Temporary Staffing Markets by Staffing Segment 100% Global Markets by % Professional/Commercial 90% 80% % Professional 70% 60% Commercial Staffing 60% Professional Staffing 40% 50% 40% 30% 20% 10% % Commercial 54% 0% Africa & Middle East Asia Pacific Europe Latin America North America Source: Staffing Industry Analysts 2013 Global Staffing Market Estimates The US market Is 54% Professional, while Europe is only 34% Professional

21 US Buyers Globalizing Their Programs Source: Staffing Industry Analysts, 2013 Buyer Survey

22 Strong Growth in Buyer Use of RPO 40% Percent of Buyers Using RPO 30% 32% 20% 17% 20% 23% 13% 9% 0% Source: Staffing Industry Analysts, 2013 Buyer Survey *Numbers displayed are three year moving averages

23 RPO and MSP Convergence? RPO: Outsourcing Of Perm Hiring MSP: Outsourcing Of Temporary Hiring Total Talent Management

24 Other Outsourced Services Independent Contractor Compliance Payroll services HR Outsourcing Business Process Outsourcing Solutions Business

25 SOW/Project Workers Forecast to Lead Growth in Share of Workforce Net Percent Increase 38% 35% 33% 15% 9% 23% 15% 11% Source: 2014 Contingent Workforce Buyers Survey Preliminary Data

26 Buyers are Getting the Message on ACA Compliance Costs Percent of buyers who plan to pay no share of ACA costs Median bill rate increase expected 62% 33% $0.00 $0.80 Source: 2012 and 2014 Contingent Workforce Buyers Survey Preliminary Results

27 Large Buyers are Split on Preference for How Staffing Firms Comply With ACA Question: Buyers: how would you prefer the agencies you work with to comply with ACA? Source: 2014 Contingent Workforce Buyers Survey Preliminary Results

28 Keys to Success Remain Consistent in the Near Term Strategy People Leadership and Culture Process and Technology

29 Agenda The Industry Today Success in the Near Term Scenarios for the Long Term Questions and Answers

30 Possible Long Term Industry Futures Potential Scenarios 1. Direct Connection 2. VMS Everywhere 3. The Triumph of Talent 4. Steady As She Goes 5. The Good Old Days Again

31 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

32 Which Direction for Staffing? Travel Agents Real Estate Agents VS.

33 Travel Agent Employment 38% Source: Bureau of Labor Statistics, Occupational Employment Estimates

34 Real Estate Agent Employment +29% Source: Bureau of Labor Statistics, Occupational Employment Estimates

35 WHY?

36 Scenario 1 Implications Potential Roles for Staffing Firms Compliance/Employer of record Concierge/Guide Niche Expert Insurance/Risk manager Value chain specialist

37 The Temporary Staffing Value Chain Client Value Chain Marketing Sales Orders Matching Offer Onboarding and Assignment Mgmt Risk and Compliance Mgmt Pay and Benefits Advertising Sourcing Testing and Screening Candidate Value Chain

38 Scenario 2: VMS Everywhere 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

39 Scenario 2 Implications Lower margins, but higher volumes Many 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

40 Scenario 3: The Triumph of Talent Unemployment below 5% Significant skills shortages particularly for skilled labor No significant increase in technology penetration/use

41 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!

42 Scenario 4: Steady as She Goes BLS long term labor forecast largely correct No recessions or major economic calamities No disruptive technology change Growth in the mid single digits

43 Long Term Forecasts Suggests $150 B in Temp Revenue by 2022

44 Near Term Growth Forecast Improving Source: Staffing Industry Analysts September 2013 Forecast and March 2014 Preliminary Forecast

45 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

46 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

47 Agenda The Industry Today Success in the Near Term Scenarios for the Long Term Questions and Answers

48 If the rate of change on the outside is greater than the rate of change on the inside, the end is near. Jack Welch