to Win in the Short Term and the Long Term · March 18‐21, 2014 | Hilton San Diego Bayfront Competing to Win in the Short Term … and the Long Term Barry Asin, President, Staffing

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


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


Source: Bureau of Labor Statistics and Staffing Industry Analysts

US Temp Employment Now at 2.8 M

+8.9%


Temp Penetration at Record Levels

Source: Bureau of Labor Statistics and Staffing Industry Analysts

2.03%April 2000 and February 2014


Economic Growth Expectations Improving

Source: Conference Board, Philadelphia Fed Survey of Professional Forecasters, IMF,US Department of Commerce


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


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


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)


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


Staffing Stocks Performing on Par With the Market

Source: Staffing Industry Analysts Staffing Stock Index, Thomson Reuters


Agenda



Leveraging Near Term Trends

Professionalization Technology penetration and adoption GlobalizationOutsourced Services Regulation and legislative change


Professional Staffing at 54% of the US Market

2013 US Temp Staffing Revenue by Skill

Source: Staffing Industry Analysts 2013 US Staffing Forecast


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…


$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%


Ongoing Innovation and Investment in Human Cloud and Online Staffing

+ = ?


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


The US Staffing Market Represents Only 30% of Global Revenue

Source: Staffing Industry Analysts 2013 Global Staffing Market Estimates


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


US Buyers Globalizing Their Programs

Source: Staffing Industry Analysts, 2013 Buyer Survey


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


RPO and MSP Convergence?

RPO: OutsourcingOf Perm Hiring

MSP: OutsourcingOf Temporary Hiring

Total Talent Management


Other Outsourced Services

Independent Contractor Compliance Payroll services HR Outsourcing Business Process Outsourcing Solutions Business


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


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


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?


Keys to Success Remain Consistent in the Near Term

Strategy People

Process and Technology

Leadershipand

Culture


Agenda



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


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


Which Direction for Staffing?Travel Agents Real Estate Agents

VS.


Travel Agent Employment

Source: Bureau of Labor Statistics, Occupational Employment Estimates

‐38%


Real Estate Agent Employment

Source: Bureau of Labor Statistics, Occupational Employment Estimates

+29%


WHY?


Scenario 1 Implications

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


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


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


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


Scenario 3: The Triumph of Talent

Unemployment below 5% Significant skills shortages ‐particularly for skilled laborNo significant increase in technology penetration/use


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!


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


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


Near Term Growth Forecast Improving

Source: Staffing Industry Analysts September 2013 Forecast and March 2014 Preliminary Forecast


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


“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


Agenda



“If the rate of change on the outside is

greater than the rate of change on the inside,

the end is near.”

‐ Jack Welch

Documents

to Win in the Short Term and the Long Term · March 18‐21, 2014 | Hilton San Diego Bayfront Competing to Win in the Short Term … and the Long Term Barry Asin, President, Staffing