Research The 2016 VMS & MSP Landscape Series

TUES 2:45 PM PAVILION Research The 2016 VMS & MSP Landscape Series Speaker: Elizabeth Rennie, Global Workforce Solutions, Research Director, CCWP, Staffing Industry Analysts

Revised Report Structure 2015 FROM: VMS & MSP Landscape 2016 TO: VMS Market Developments Part 1: Drivers, Innovations & Geographical Capability Q1 Covering 23 VMS vendors Covering 28 MSP vendors Part 2: Market Sizing Part 3: Market Differentiators Q2 Q4 VMS Differentiators Report MSP Market Development Covering 15 VMS vendors Part 1: Drivers, Innovations & Geographical Capability Q2 MSP Differentiators Report Part 2: Market Sizing Part 3: Market Differentiators Q3 Q4 Covering 15 MSP vendors Total Talent Acquisition Market Landscape NEW RPO Landscape and Service Developments NEW

Part 1: Drivers, Innovations & Geographical Capability AGENDA 1. Executive Summary 2. Definitions & Research Methodology 4. Drivers and Benefits 5. Vendor Landscape and M&A Activity 6. Developments: New Offerings 7. Geographical Capability and Targeting 8. Vendor Profiles Part 2: Market Sizing AGENDA 1. Executive Summary 2. Research Methodology 4. Market Overview Global Market Size and Growth Size by Region Size Spend by Sourcing Model Size by Program Type Technology Adoption Funding & Pricing Models Size by Buyer Market Size & Spend Size Size by Industry Size by Occupational Classification 5. Vendor Landscape 6. Definitions

Report High Level Findings VMS Market Developments Part 1: Drivers, Innovations & Geographical Capability Part 2: Market Sizing Part 3: Market Differentiators Q1 Q2 Q4 MSP Market Development Part 1: Drivers, Innovations & Geographical Capability Part 2: Market Sizing Part 3: Market Differentiators Q2 Q3 Q4 Total Talent Acquisition Market Landscape NEW RPO Landscape and Service Developments NEW

VMS Part 1: Drivers, Innovations & Geographical Capability Evolution: FOCUS: Supplier Centric Talent Centric Marketplace Centric 1990-2006 2006 2010 2008-2016 2014- and beyond Supplier scorecards Preferred Supplier Lists (PSL) Rate cards Emergence of SOW On/off boarding processes Increasing global capability Beginning analytics Worker tracking introduced Talent pooling Onboarding processes for direct sourcing More benchmarking across workforce segments Open architecture with API s Market wide benchmarks Better decision making with focus on analytics Increased functionality to decision tree sourcing FMS integrations Total Talent Management delivered with improved integration with or adoption of ATS type functionality 5

VMS Part 1: Drivers, Innovations & Geographical Capability Organizational Challenges VMS Focus 6

VMS Part 1: Drivers, Innovations & Geographical Capability Supplier Landscape: 7

VMS Part 1: Drivers, Innovations & Geographical Capability Geographical Capability: Vendor Number Serviced Countries Extensive (>50) No. Countries with Full Invoicing Expanding (10-50) Emerging (<10) Lang- uages Americas Regions Targeting Europe Middle East/ Africa Asia Pacific

VMS Part 1: Drivers, Innovations & Geographical Capability Predictions: 1. Availability of analytics across different worker types (Temp vs perm vs IC etc.) with greater data aggregation across multiple client bases for benchmarking 2. Greater integration across different platforms to better support sourcing decisions across worker types 3. Supply and demand being embedded in workforce planning programs for proactive forecasting 4. Marketplaces developed across SaaS platforms to streamline processes 5. Direct sourcing functionality alongside the supply management 6. Talent pools for contingent workers to increase with improved marketing 7. Functionality to support employee referrals and recommendations. 8. Mobile apps for workers and managers to support entry of data and approvals as well as increased use of automated invoices and electronic invoices 9. Program growth in existing clients 10. RFX capability

VMS Part 2: Market Sizing VMS Global Market Spend by Region 2015 (billions) Annual Growth +20% +15% +30% +59% $120 $120 $120 $120 $100 $100 $100 $100 $80 $80 $80 $80 $60 $60 $60 $60 $40 $40 $40 $40 $20 $20 $20 $20 $0 $0 $0 $0 Global North America Europe Rest of the World 2014 2015

VMS Part 2: Market Sizing VMS Global Market Spend Work Arrangement 2015 (billions) Temporary Employees & Independent Contractors $83.26 Statement of Work $36.80 $0 $10 $20 $30 $40 $50 $60 $70 $80 $90 $100

VMS Part 2: Market Sizing VMS Spend by Buyer FTE Headcount Size and Buyer Spend Size (%) 24% 22% 17% 10% 10% 63% 30% 15% 9% Less than $50m $50- $100m $100- $300m $300- $1,000m > $1,000m Less than 2,000 Employees (FTE) 2,000-4,999 Employees (FTE) 5,000-9,000 Employees (FTE) 10,000+ Employees (FTE)

VMS Part 2: Market Sizing VMS Market by MSP Service Model (%) 41% 17% 42% Vendor's Own MSP Internal Service Program Third Party MSP

VMS Part 2: Market Sizing Estimated VMS Functional Adoption and Technical Integrations across Buyers Adoption Rate of VMS Functionality Adoption Rate of VMS Integrations Agency Supply & Management of Workers including Payrolling Contingent Talent Pools Statement of Work (Administration only) - Emerging Statement of Work (Sourcing & Administration) - Emerging ü ü ü ü ü ü ü ü ü ü Single Sign On Integration with External Analytics Tools Integration with SAP SuccessFactors Integration with PeopleSoft (Oracle) Integration with Workday ü ü ü ü ü ü ü ü ü ü Worker Tracking - Emerging ü Integration with Taleo (Oracle) ü Integrated workforce planning (Contingent & Permanent) - Emerging ü FMS Integration* ü

VMS Part 2: Market Sizing VMS Market by Program Funding and Pricing Model N.America 88% 1% 11% EMEA 66% 4% 30% APAC LATAM 87% 4% 9% 95% 5% 0% 20% 40% 60% 80% 100% Supplier Funded Combination Client Funded 8% 11% Percentage of Spend Fixed Monthly Fee Other 81%

VMS Part 2: Market Sizing VMS Market Size by Industry (billions) $25 $20 $15 $10 $5 $0 $22.14 $18.59 $16.35 $14.72 $10.73 $8.15 $6.25 $6.11 $6.00 $5.27 $4.53 $1.26

VMS Part 2: Market Sizing VMS Market by Occupational Skill Category (%) 4% 11% 6% 27% 34% 66% 8% Information Technology Industrial Office/clerical Finance & Accounting 9% Other Professional 11% 23% Engineering & Design Clinical/Scientific Professional Commercial

MSP Part 1: Drivers, Innovations & Geographical Capability Evolution: Sourcing Leveraging Scale Sourcing through Neutral Models Sourcing for Work FOCUS: 1990-1999 2000 2008 2008-2016 2014- and beyond Maximizing scale and volume discounts through Master Vendor approaches Emergence of SOW On/off boarding processes Risk mitigation through automation Growing globally Emerging analytics Worker tracking introduced Rise of Vendor Neutral MSP enabled by VMS technology Levelling the playing field for strategic suppliers Increasing supplier visibility of performance More benchmarking across suppliers Emergence of centers of excellence and training programs to support MSP program managers in contingent workforce solutions Market wide benchmarks across all worker types (SOW, FMS, direct hire) Better decision making with focus on analytics Candidate pooling Incorporation of digital sourcing solutions that include FMS offerings Direct sourcing for work to, where possible, squeeze out margins Increasing MSP value through offering more strategic TTA Supplier partnership and success strategies over vendor neutrality

MSP Part 1: Drivers, Innovations & Geographical Capability Organizational Challenges MSP Focus

MSP Part 1: Drivers, Innovations & Geographical Capability Supplier Landscape:

MSP Part 1: Drivers, Innovations & Geographical Capability Geographical Capability: Vendor Number Serviced Countries Extensive (>30) No. Countries with Full Billing Expanding (10-30) Emerging (<10) Lang- uages Americas Regions Targeting Europe Middle East/ Africa Asia Pacific

MSP Part 2: Market Sizing MSP Global Market Spend by Region 2015 (billions) Annual Growth +13% +11% +14% +20% Global North America Europe Rest of the World

MSP Part 1: Drivers, Innovations & Geographical Capability New Definitions Contingent RPO is a type of Managed Service Provision (See Managed Service Provision) whereby the supplier sources contingent labor through client- dedicated recruiters in an outsourcing mode. These recruiters are trained on the company business and employer brand to attract candidates and any candidate data derived as part of the sourcing process are owned by the client. As such, the candidate database is the IP of the client which is returned at the end of a contract. Also, unlike traditional Master Vendor MSP models, the candidate databases are not shared with other clients and candidates are not offered roles in other companies. The majority of activity for the Contingent RPO supplier relates to performing services that deliver a high percentage of direct sourcing through this model, rather managing and sourcing suppliers which strongly features in a Vendor Neutral MSP model. Further, unlike other MSP models, Contingent RPO pricing is typically volume based, with a price per candidate placed, rather than being based on spend. This model is closer to a Direct Sourcing model (See Direct Sourcing) except that the service is outsourced to a third party. Worker Tracking is where contingent workers are logged and tracked (location, time) in the VMS, but invoicing is not in scope. The rationale is to increase visibility of contingent workers and support compliance to onboarding/off boarding processes but invoicing may not be practical to include in scope because of other factors such as volumes, system capability or local regulations.

MSP Part 2: Market Sizing MSP Global Market Spend Work Arrangement and Sourcing Model 2015 (billions) Vendor Neutral $48.28 Temporary Employee or Independent Contractor Master Supplier MSP Hybrid Contingent RPO $0.19 $10.18 $20.36 Statement of Work $19.90 Outsourced Service Management $1.14 $0 $10 $20 $30 $40 $50

MSP Part 2: Market Sizing MSP Service Adoption across Buyers (measured by % share of workers) Supplier Management including billing 67% Contingent Talent Pool Mgmt 11% Stategic Workforce Planning SOW project - administration SOW project - sourcing & admin Worker tracking with timesheet process only Worker tracking only (no timesheet) 6% 6% 4% 6% 5% 0% 20% 40% 60% 80% 100% N=15

MSP Part 2: Market Sizing MSP Spend by Buyer FTE Headcount Size and Buyer Spend Size (%) 4% 6% 19% 40% 11% 15% 25% 12% Less than $50m $50- $100m $100- $300m $300- $1,000m Over $1,000m 68% Over 10,000 Employees (FTE) 5,000-9,000 Employees (FTE)

MSP Part 2: Market Sizing MSP Share of Clients which blend with RPO services and Share which blend with Proprietary VMS (weighted by size of vendor) (%) 3% 97% 34% 66% MSP with No RPO Blending MSP Blended with RPO MSP with No VMS Blending MSP Blending with Provider Proprietary VMS

MSP Part 2: Market Sizing MSP Providers supporting different VMS Systems (%) SAP Fieldglass 85% Proprietary 70% Peoplefluent VMS IQNavigator 60% 60% Beeline 45% Lumesse TalentLink 20% Other 70% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

MSP Part 2: Market Sizing VMS System Utilization by MSP Worker Headcount Volume (%) 14% 14% 1% 3% 7% 40% SAP Fieldglass IQNavigator Beeline Proprietary Lumesse TalentLink Peoplefluent VMS Other 20%

MSP Part 2: Market Sizing MSP Market by Program Funding and Pricing Model APAC 81% 15% 3% N.America EMEA LATAM 59% 78% 71% 10% 6% 15% 21% 7% 31% 13% 2% 4% 0% 20% 40% 60% 80% 100% Supplier Funded Other Client Funded Percentage of Spend Per Worker Monthly Fee Other / Combination 81%

$4.99 $4.33 $4.29 $4.45 $4.41 $3.64 $3.00 $2.96 $1.55 MSP Part 2: Market Sizing MSP Market Size by Industry (billions) $21.95 $20 $17.08 $10 $10.49 $7.57 $7.60 $0 $0.68 $0.61

MSP Part 2: Market Sizing MSP Market by Occupational Skill Category (%) 11% 12% 7% 6% 13% 5% 29% 18% Information Technology Industrial Other Professional Office/clerical Engineering & Design Finance & Accounting Healthcare Clinical/Scientific 42% 58% Professional Commercial

MSP Part 2: Market Sizing MSP Market Delivery Models (%) 4% 43% 57% 12% 44% Employees working offsite Employees based on client site N=15 40% Onshore - Client site or Remote Onshore - service center Nearshore Offshore N=16

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Coming up Next at 3:45 General Session Summerlin Ballroom 51 in 50 RELAX at Workforce Solutions Industry Party Poolside at 5:00