Temporary Staffing Trends, Development and Forecasts

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Europe

19 February 2013

3pm GMT/ 4pm CET

7am PST/ 10am EST

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Temporary Staffing Trends, Development and ForecastsPresenters:

John Nurthen, Executive Director, Global Research

Adam Pode, Director Research International

David Papapostolou, Research Analyst

Matt Norton, Research Analyst

Agenda

©2014 by Crain Communications Inc. All rights reserved.

• 2014 Forecast Update John Nurthen

• Key Insights from Staffing Firm Survey Matt Norton

• Key Insights from Contingent Buyer David Papapostolou

Survey

• European IT Staffing Market David Papapostolou

• Online Staffing John Nurthen

• 2014 European Research Agenda Adam Pode

• Any Questions

Global Trend

Average Organic Revenue Trend: Adecco, ManpowerGroup, Randstad (unweighted)

-35

-25

-15

-5

5

15

25

Min a b c d Max Midline



Country 2013 GDP

Forecast*

2013 Staffing

Market Growth

Forecast

UK 1.5% 2%

Germany 0.5% 3%

France 0.2% -4%

Netherlands -1.2% -7%

Europe -0.1% -2%

Japan 1.8% -2%

Australia 2.5% 1%

Brazil 2.5% 4%

South Africa 2.0% 0%

USA 1.6% 5%

Global 2.1% 1%

*GDP as per SIA estimate based on IMF/Economist or EU/Economist, November 2013

Staffing Market Forecasts

2014 GDP

Forecast*

2014 Staffing

Market Growth

Forecast

1.9% 7%

1.4% 5%

0.9% 2%

0.4% 0%

1.4% 4%

1.7% 5%

2.8% 1%

2.6% 4%

3.1% 1%

2.6% 5%

2.9% 4%

2013 Staffing Company Survey

Priorities, attitudes and expansion plans


Service with highest projected percentage-wise growth: HRO

What services do you offer?


With regard to the following services, what is your company’s current status?

Source: Staffing Industry Analysts Staffing Company Survey 2013

Currently

Offer

Don't Currently

Offer, But Likely to

w/i 2 yrs

Implied 2 yr %

increase

Human Resources Outsourcing

(HRO) 37% 22% 58%

Vendor Management System

(VMS) 32% 17% 54%

Managed Service Provider (MSP) 42% 22% 51%

Independent Contractor

Compliance Services 35% 14% 41%

Human Resources Consulting

Services 51% 17% 33%

Recruitment Process

Outsourcing (RPO) 53% 14% 27%

Master Supplier 60% 14% 24%

Payroll Processing 65% 6% 9%

Staffing firms: With regard to the following services

what is your company's status?

*Calculation based on percent of firms ("Implied 2 yr increase")/("Likely to offer

w/I 2 years"). This calculation should be treated as an ordinal value, not as a

projection, as it may be assumed that not all firms will follow through with

plans to add services.

1%

1%

2%

2%

2%

4%

4%

8%

15%

24%

36%

Advertise your firm

E-newsletter to existing candidate list

Invest in look/usability of company

web site

Outsourced/offshore

sourcing/recruiting

University recruiting

List jobs on company web site

Pay referral bonuses

Other, please specify

Recruit from existing candidate list

Job boards

LinkedIn

What are the most effective recruiting tactics?

©2014 by Crain Communications Inc. All rights reserved.Source: Staffing Industry Analysts Staffing Company Survey 2013

Of the following direct hire recruiting tactics, which one would

you say has the highest bang-to-buck return on spend/effort?

1%

1%

1%

2%

2%

5%

5%

12%

13%

27%

29%

E-newsletter to existing candidate list

Facebook

University recruiting

List jobs on company web site

Outsourced/offshore

sourcing/recruiting

Invest in look/usability of company

web site

Pay referral bonuses

Other, please specify

LinkedIn

Job boards

Recruit from existing candidate list

What are the most effective recruiting tactics?



Of the following temporary worker recruiting tactics, which one

would you say has the highest bang-to-buck return on spend/effort?

Growth is top priority— growing revenue, growing market share, expanding clients

1%

1%

1%

6%

9%

9%

9%

10%

16%

17%

21%

Dealing with regulatory issues

Retaining existing clients

Training internal employees

Reducing/controlling costs

Providing excellent customer service

Recruiting quality candidates to place

Recruiting quality internal staff

Expanding number of clients

Growing market share

Improving gross margins

Growing revenue

What is your company’s single top priority?



Top priorities in 2013

Staffing firms’ top priorities– breadth versus intensity

Retaining

existing clients

Training

internal

employees

Reduce costs

Provide

excellent

customer

service

Recruit quality

candidates

Recruit quality

internal staff

Expand clients

Growing

market share

Improving

gross margins

Growing

revenue

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

0% 5% 10% 15% 20% 25%

Sta

ffin

g f

irm

pri

ori

tie

s (m

ult

iple

ch

oic

e)

Staffing firms' single top priority

What is your company’s single top priority?



Breadth vs intensity: Staffing firms’ top priorities

Legal Environment 2012 2013

Net positive 8% 9%

Neutral 58% 53%

Net negative 35% 38%

Net (Positive-Negative) -27% -29%

Immigration issues/visas 2012 2013

Net positive 9% 17%

Neutral 61% 48%



Government regulation 2012 2013

Net positive 6% 6%

Neutral 38% 39%



Net positive, net negative, or neutral?

Attitudes towards legal regulatory/environment


VMS 2012 2013

Net positive 5% 22%

Neutral 64% 53%



Recruitment process outsourcing (RPO) 2012 2013

Net positive 25% 32%

Neutral 42% 55%


Net (Positive-Negative) -8% 18%

HR outsourcing (HRO) 2012 2013

Net positive 20% 32%

Neutral 58% 55%


Net (Positive-Negative) -3% 20%

Influence of procurement departments 2012 2013

Net positive 8% 9%

Neutral 32% 38%



Gross margin trends 2012 2013

Net positive 5% 16%

Neutral 49% 33%



Net positive, net negative, or neutral?

Attitudes toward selected staffing-related issues


Trends in staffing firm

attitudes toward wider

issues


What are the best and worst decisions a staffing firm

can make?

• Staffing execs cited as their best decisions:

– staying segment/niche focused,

– adopting more efficient technology,

– focusing on a growing industry,

– and focusing on VMS/MSP

• The worst decisions cited were:

– hiring and appointing the wrong people

– bad acquisition and expansion attempts,

– adding too much complexity to the organization,

– and not re-investing, acquiring, and growing.


European Contingent Buyer Survey 2013


Introducing the respondents


Technology/Telecom, 27%

Manufacturing (non-

automotive), 14%

Pharma/Biotech, 11%

Finance/Insurance, 15%

Manufacturing,

automotive, 4%

Oil & Gas, 4%

Business services

Public sector (excl. Edu.)

Logistics, transports

Utilities

Other, 17%

What is your company's primary industry?

Source: Staffing Industry Analysts European Contingent Buyers Survey 2013

Introducing the respondents


What is your approximate total annual spend for your organisation's contingent workforce?

8%10%

6%

23%25%

23%

4%

< €10

million

€10 -

€49.9

million

€50 -

€149.9

million

€150 -

€449.9

million

€450 -

€749.9

million

€750 -

€999.9

million

> €1 billion


IT skills on top of wish list


What is the skill set for which your organization spends the most amount of money on contingent workers

"Other" includes:

Healthcare, Education/Training/Library,

Finance/Accounting, Marketing/Creative

and Legal

49%

17%

15%

8%

5%

4%

1%

1%

Information Technology

Engineering/Design

Industrial/Logistics/ Transportation

Other

Office/Clerical

Clinical/scientific

Legal

Don't know/not sure


Supplier Management Models & Strategies

Primary model used to manage your CW programme

©2014 by Crain Communications Inc. All rights reserved.Source: Staffing Industry Analysts European Contingent Buyers Survey 2013

MSP, 49%

Master supplier, 23%

Internally

with a VMS, 14%

Internally

no VMS, 14%

Supplier Management Models & Strategies

Percent of buyers primarily using selected primary model, as a function of buyer CW spend


Internally, VMS

< €150

million

€150-

€349.9

million

> €350

million

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

MSP

Master supplier

Internally, no VMS

Controlling Costs still tops Buyers’ priorities


MSP

Globally

CW

IC compliance

CW in strategic planning

Controlling costs

Consolidating suppliers

VMS

Diversify suppliers

0%

10%

20%

30%

40%

50%

60%

70%

80%

0% 5% 10% 15% 20% 25%

Buyers' single top priority

Bu

ye

rs' p

rio

riti

es

(mu

ltip

le c

ho

ice

)

integrating

Service to stakeholders

Supplier management strategies


Which of the following are in place in your organisation?

36%

36%

43%

46%

63%

67%

60%

77%

59%

71%

48%

50%

39%

69%

92%

79%

17%

22%

21%

33%

18%

13%

24%

7%

30%

19%

43%

43%

56%

26%

6%

21%

Human resource outsourcing

Recruitment process outsourcing

Master supplier

Trying out new staffing suppliers

Offshoring

Use vendor for IC screening/compliance

Managed service provider

Domestic outsourcing

Encourage diversity suppliers

Supplier tiering

Global management of CW program

SOW incorporated into CW program

CW in corporate strategic planning

Vendor management system

Approved list of staffing suppliers


In Place Today Likely to be Seriously Explored within 2 years


Supplier management strategies


Which of the following are Likely to be Seriously Explored within 2 years?

36%

36%

43%

46%

63%

67%

60%

77%

59%

71%

48%

50%

39%

69%

92%

79%

17%

22%

21%

33%

18%

13%

24%

7%

30%

19%

43%

43%

56%

26%

6%

21%

Human resource outsourcing

Recruitment process outsourcing

Master supplier

Trying out new staffing suppliers

Offshoring

Use vendor for IC screening/compliance

Managed service provider

Domestic outsourcing

Encourage diversity suppliers

Supplier tiering

Global management of CW program

SOW incorporated into CW program

CW in corporate strategic planning

Vendor management system

Approved list of staffing suppliers


In Place Today Likely to be Seriously Explored within 2 years


Most buyers plan to increase their workforce over next

two years


72%62%62%

10%11%9%

17%27%29%

201320122011

Increase Stay the same Decrease

Increase, 72%Decrease,

17%

Stay the same, 10%

How will your total workforce change over the next two years?


Employment expectations over next 2 years?


Proportion of companies using more or less

European IT Staffing Market in 2012


IT Staffing Market in Europe


• Total annual revenue of

€13.8 billion • 14% of the total European

staffing market

• This compares with the

IT segment in the US which

represents 23% of the total

Source: Staffing Industry Analysts European IT Staffing Market in 2012

IT Staffing in Europe by Country

UK

37%

DE

21%

NL

12%

Rest of

Europe

19%

FR 5%

CH 3%

IT 3%

IT Staffing Growth drivers

©2014 by Crain Communications Inc. All rights reserved.Source: Staffing Industry Analysts European IT Staffing Market in 2012

• e- and m-commerce, expansion of the IT services industry

and related skills shortages

• New technologies + new markets = demand for new skill

sets

• Need for senior IT professionals with business/sales

awareness

• Other skill sets trending up: social media architects, IT

security, cloud computing experts,

Largest IT Staffing Suppliers in Europe 2012

©2014 by Crain Communications Inc. All rights reserved.Source: Staffing Industry Analysts European IT Staffing Market in 2012

No Company Country HQ

1 Adecco CH

2 Hays UK

3 Experis (ManpowerGroup) USA

4 Randstad NL

5 Allegis USA

6 SThree UK

7 IT-Staffing NL

8 Lorien Resourcing UK

9 Alexander Mann UK

10 Resource Solutions Group UK

11 Reutax DE

12 Allgeier DE

13 Interquest UK

14 Rullion UK

15 Steria Recruitment UK

No Company Country HQ

16 Harvey Nash UK

17 Emagine DE

18 Matchtech UK

19 Parity Resources UK

20 Networkers International UK

21 Square One Resources UK

22 Jenrick UK

23 Red Commerce UK

24 ReThink Group UK

25 PageGroup UK

26 Volt USA

27 Solcom DE

28 Proffice SE

29 Quest DE

30 Cititec UK

IT Workforce by Job Category


Region / Country

Total IT workers

(thousands)

Soft. and app.

developers and

analysts (%)

Database and

network

professionals (%)

ICT support

technicians (%)

EU-27 4,187 62% 11% 27%

UK 786 52% 17% 31%

Germany 756 77% 14% 9%

France 417 71% 3% 26%

Italy 330 23% 5% 71%

Netherlands 210 45% 50% 5%

Spain 180 35% 8% 56%

Poland 171 63% 22% 16%

Sweden 161 64% 12% 24%

Belgium 88 65% 16% 19%

Denmark 85 58% 10% 32%

Austria 73 51% 21% 28%

Switzerland 70 89% 3% 8%

Turkey 68 52% 6% 42%

Czech Rep. 62 37% 11% 52%

Source: Staffing Industry Analysts European IT Staffing Market in 2012


Online Staffing

A Specific Segment of Online Platform-

intermediated Work Arrangements

An online platform model that

enables specific hirers and specific

(typically contingent) workers to

enter into, complete, and transact

work arrangements, is the oldest

“human cloud” model (arising in the

early 2000s). There is a direct,

specific relationship between hirer

and worker, which the platform

enables.

What is Online Staffing?

Source: Staffing Industry Analysts Online Staffing Forecast Through 2020

Online Staffing Drivers


• Cross-border labour arbitrage

• Demand from both small and large business

• Demand outside the US

• Ongoing platform innovation

• Staffing firm hybridization


Regulation/Compliance Issues


• Legislation is still catching up in areas where commercial

transactions have been altered by new digital methods

– Labour is a heavily regulated form of commerce and contingent

labour, in particular, faces quite burdensome legislation in many

countries

• Responsibility for employment taxes and social insurances?

– Labour intermediaries (such as traditional staffing companies) are

strictly regulated and held accountable in this regard

– If online staffing is perceived as a vehicle through which individuals

can avoid paying their correct taxes and social charges, it is an area

that may well come under increasing scrutiny from legislators



Online Staffing Platform Worldwide Market Size/Spend

(2012 Estimated and 2013-20 Forecasted in USD B)

40%

40%

40%

50% 60%

75%

CAGR ~ 40% CAGR ~ 50% CAGR ~ 60%

Online Staffing Forecast

• Conservative Forecast

(very likely to be met or

exceeded by 2020)

= +40% CAGR

• Quite Plausible Forecast

(well within reach by 2020)

= +50% CAGR

• Aggressive Forecast (a

stretch, but cannot be

ruled out)

= +60% CAGR


The Future

of Work

Staffing and

Recruiting

Technology

Core Skill

Sectors and

Industry

Segments

Operational

Best

Practices for

Providers

and Buyers

Legal and

Legislative

Information

SIAResearch Pillars

Surveys, Focus groups, interviews and other primary research sources

Government and industry data, published studies and other secondary research sources

Reports, Webinars, Presentations, Podcasts, Blogs, and other modes

Topics

Sources

Delivery

Channels

MethodsQuantitative analysis, qualitative analysis, survey findings, rankings, forecasts, best practices,

landscape findings, benchmark studies, SIA quadrant analysis, and more

Market

Information

and

Forecasts


• Largest Staffing Company Lists– By Region: Global, Europe, Eastern Europe, Scandinavia

– By Country: France, Germany, UK

• Surveys– Contingent Workforce Buyer Survey

– Staffing Company Survey

– Contingent Worker/Best Places to Work Survey

• Staffing Forecasts 2015

• M&A Report

• Listed Staffing Company Analysis (SISI)

• Monthly News Roundup

• UK Monthly Trends Report©2014 by Crain Communications Inc. All rights reserved.

Market Information and Forecasts

The Future of Work

• Introduction to Labour Arbitrage

• The Future of Workforce Flexibility

• Total Talent Management


Total Talent Management (aka Total Workforce Management) — An emerging

model of talent or workforce management that includes an organization’s

management of “permanently hired” workers as well as “contingent” workers.

Staffing and Recruiting Technology

• CIO Survey

• Technology and RPO (ATS)

• List of Suppliers to Staffing Firms


Core Skill Sectors & Industry Segments

• Largest Staffing Companies in Europe by sector

– Engineering, Finance & Accounting, Legal, Office/Clerical,

Marketing, Light Industrial, Healthcare, Clinical Scientific and IT

• Independent Contractors by country

– France, Germany, the Netherlands and UK

• 2014 Online Staffing Landscape (plus other reports)

• Payrolling/Compliance Report

• VMS/MSP Landscape

• RPO Landscape


Operational Best Practices

• Contingent Workforce Programme

– Business Case Template

– Sourcing Models

– Draft CW Policy

– Cost Savings Methodologies

– Best practices in internally run MSP/VMS programmes

• SOW

– Incorporating SOW consulting into

your programme

– Pricing Strategies & Tactics


Operational Best Practices (continued)

• A Look At the Norwegian Staffing Market

• IC Qualification & Compliance Best Practices

• Alumni Retiree Programmes

• RPO

– Engagement Governance Strategies

– Pricing Models, Strategies and

Tactics


Legal and Legislative Information

• Legs & Regs Europe

• The Global Legal Landscape

• Summary of Changes to UK

Staffing Legislation

• Agency Licenses

• National Minimum Wage

• Legal Risk Framework


Next Webinar

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Monday 31 March 2014

7am PST/ 10am EST/ 3pm GMT/ 4pm CET

Sponsored by

Contingent Workforce Strategies Summit

13-14 May 2014 | Lancaster Hotel | London

www.cwssummitwe.eu

Documents

Temporary Staffing Trends, Development and Forecasts