Beyond Savings – Measuring What Matters
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Bryan Peña VP, Contingent Workforce Strategies and Research Staffing Industry Analysts During this session we will be reviewing what strategies and techniques you can use to maximize program success and ensure long term hiring manager satisfaction. In addition to savings strategies and performance ratios we will provide some up to the moment insight from our latest research initiatives.
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Beyond Savings – Measuring What Matters
- 1. Beeline User Conference 2011 Tuesday, May 24th, 2011 Bryan Peña, Vice President, Con1ngent Workforce Strategies and Research bpena@staffingindustry.com ©2011 by Crain Communica1ons Inc. All rights reserved.
- 2. Agenda/what we are going to cover: • Who is this guy? • State of the buyer community – MSP/VMS Evolu1on • Review of NPS survey from 2010 – What is important with buyers • Future? • Q&A ©2011 by Crain Communica1ons Inc. All rights reserved.
- 3. Who is this guy? ©2011 by Crain Communica1ons Inc. All rights reserved.
- 4. About Us ©2011 by Crain Communica1ons Inc. All rights reserved.
- 5. Products/Services ©2011 by Crain Communica1ons Inc. All Irights ights reserved. ©2010 by Crain Communica1ons nc. All r reserved.
- 6. Services Categories ©2011 by Crain Communica1ons Inc. All rights reserved.
- 7. CWS COUNCIL ©2011 by Crain Communica1ons Inc. All rights reserved.
- 8. North American CWS Council Members (parQal list) ©2011 by Crain Communica1ons Inc. All rights reserved.
- 9. Western Europe/Global CWS Council Members ©2011 by Crain Communica1ons Inc. All rights reserved.
- 10. ©2011 by Crain Communica1ons Inc. All rights reserved.
- 11. State of the Buyer Community ©2011 by Crain Communica1ons Inc. All rights reserved.
- 12. ©2011 by Crain Communica1ons Inc. All rights reserved.
- 13. DefiniQon: • Con$ngent Work -‐ Used to describe work arrangements that differ from regular/ permanent, direct wage and salary employment. Con?ngent workers most o@en include temporary employees provided by an outside staffing agency and independent contractors/consultants. Con?ngent workers may also include temporary workers from an internal pool, and others (such as summer interns) employed directly by an organiza?on for an inten?onally limited ?me period. They do not include work done by consul?ng firms or by part-‐?me regular employees, and are primarily dis?nguished by an explicitly defined tenure. Self-‐employed individuals should only be defined as con?ngent workers if they provide themselves as contract labor to other organiza?ons. Otherwise, they should not be included in the con?ngent workforce, because they may have stable occupa?ons or careers that are clearly not condi?onal. Workers in Professional Employer Organiza?on (see defini?on) arrangements are not con?ngent workers, because the rela?onship is by defini?on ongoing. Outsourcing also falls outside of the con?ngent work defini?on, because it defines a vendor-‐supplier rela?onship, not an employer-‐worker rela?onship ©2011 by Crain Communica1ons Inc. All rights reserved.
- 14. 2011 Defini$on Con$ngent Work: Anyone who is not an employee…… ©2011 by Crain Communica1ons Inc. All rights reserved.
- 15. How do Companies Manage? ©2011 by Crain Communica1ons Inc. All rights reserved.
- 16. EvoluQon of ConQngent Labor Management HIGH 1980s – Level I 1990s – Level II & III 2000s – Level IV GLOBAL EXPANSION 2010s – Level V & VI EXPANSION INTO MANAGED ADDITIONAL SERVICE SPEND LEVEL OF VALUE ADDED PROVIDER (MSP) CATEGORIES æ Global spend CLIENT MANAGED LOW PREFERRED SUPPLIER LIST æ SOW centralized and controlled MASTER æ Select set of æ Contingent Labor Management æ Global workforce VENDOR suppliers æ One point of æ IC/1099 visibility DECENTRALIZED æ Standardized contact for æ Consultants æ Customized SLAs æ A Prime Supplier Contract suppliers, and process æ Legal æ Multiple suppliers æ One point of æ Procurement contractors and æ Country Specific æ Procurement done on contact Led hiring managers æ Marketing Suppliers an ad-hoc basis æ Limited æ Some æ VMS Technology æ Targeting æ Localized VMS æ Hiring Manager Automation automation reporting, æ System & Configuration Driven æ Limited SLAs æ Limited SLAs compliance and Program SLAs cost I II III IV V VI MATURITY STAGES ©2011 by Crain Communica1ons Inc. All rights reserved.
- 17. More Sophisticated Buyers Primarily How ya like me……. Manage CW Programs Using MSP & VMS Percent of Buyers Primarily Using Selected Program 33% 34% 40% 56% 59% 17% 26% 8% 13% 19% 60% 28% 42% 13% 26% 7% 9% 9% Just getting Below Average Above Cutting started average average edge/best i n class Manage I nternally W ithout VMS Master Staffing Supplier Manage I nternally Using VMS Managed Service Provider (MSP) ©2011 by Crain Communica1ons Inc. All rights reserved.
- 18. Trends in various management strategies over 1me Percent of large buyers using this strategy 100% 80% 60% 40% 20% 0% 2005 2006 2007 2008 2009 2010 Master Supplier VMS Approved Suppliers MSP Tiered S uppliers RPO HRO ©2011 by Crain Communica1ons Inc. All Irights ights reserved. ©2011 by Crain Communica1ons nc. All r reserved.
- 19. 2010 VMS/MSP LANDSCAPE HIGHLIGHTS ©2011 by Crain Communica1ons Inc. All rights reserved.
- 20. VMS/MSP Market Size 2009 • Approx $66 billion spend under management – 20% of global temporary staffing market – Over 50% of USA temporary staffing market – 5-‐10% of European temporary staffing market * Source: Staffing Industry Analysts – VMS/MSP Landscape Report 2010 ©2011 by Crain Communica1ons Inc. All rights reserved.
- 21. 2009 Total MSP vs VMS Spend Under Management Comparison ©2011 by Crain Communica1ons Inc. All rights reserved.
- 22. VMS Spend under Management ©2011 by Crain Communica1ons Inc. All Irights ights reserved. ©2010 by Crain Communica1ons nc. All r reserved.
- 23. ©2011 by Crain Communica1ons Inc. All rights reserved.
- 24. MSP Spend under Management ©2011 by Crain Communica1ons Inc. All rights reserved.
- 25. ©2011 by Crain Communica1ons Inc. All rights reserved.
- 26. The field is going to get crowded Implied Likely to two year offer change in Staying Getting w/in 2 Not likely number of in out years to offer Total firms* Provider of VMS 17% 0% 19% 64% 100% 110% HRO 17% 0% 18% 64% 100% 107% RPO 24% 0% 23% 53% 100% 96% MSP 26% 0% 21% 52% 100% 78% HR consulting 25% 0% 18% 56% 100% 73% VOP 40% 0% 25% 36% 100% 63% Master supplier 32% 0% 20% 48% 100% 60% SOW consulting 32% 0% 15% 53% 100% 47% IC compliance/ payroll processing 38% 0% 9% 52% 100% 23% *Calculation based on (percent of firms likely to offer w/in 2 years -‐ firms getting out)/firms staying in. This calculation should be treated as of ordinal value, not as a projection, as it may be assumed that not all firms will follow through with plans to add services. ©2011 by Crain Communica1ons Inc. All rights reserved.
- 27. Culture counts… ©2011 by Crain Communica1ons Inc. All rights reserved.
- 28. BY PERCENTAGE WHICH TARGET GROUP DOES YOUR COMPANIES CORE VALUE PROPOSITION MOST APPEAL TO? ©2011 by Crain Communica1ons Inc. All rights reserved.
- 29. Some new trends….. ©2011 by Crain Communica1ons Inc. All rights reserved.
- 30. Key Metric Areas • Quality • Efficiency • Cost • Risk ©2011 by Crain Communica1ons Inc. All rights reserved.
- 31. 1,000 monkeys typing for 1,000 years…….. ©2011 by Crain Communica1ons Inc. All rights reserved.
- 32. Savings are real……..at first…. ©2011 by Crain Communica1ons Inc. All rights reserved.
- 33. Discounts are great….. Results are based on findings of our 2009 Contingent Buyer Survey, conducted in September 2009, and reflect the opinions of buyer respondents from 171 large (1000+ employee) companies. ©2011 by Crain Communica1ons Inc. All rights reserved.
- 34. What makes the “perfect metric” ©2011 by Crain Communica1ons Inc. All Irights ights reserved. ©2011 by Crain Communica1ons nc. All r reserved.
- 35. But lets get serious….. ©2011 by Crain Communica1ons Inc. All rights reserved.
- 36. What separates the good from the bad? ©2011 by Crain Communica1ons Inc. All rights reserved.
- 37. The UlQmate QuesQon • How likely is it that you would recommend this VMS firm to a friend or colleague? Not at all Extremely Likely Likely 0 1 2 3 4 5 6 7 8 9 10 Detractors Passives Promoters ©2011 by Crain Communica1ons Inc. All rights reserved.
- 38. How will data be analyzed? Survey Scoring • SIA will do analysis • Promoters minus Detractors = Net Promoter Score • NPS = One simple, easy to understand number Percentage of Percentage of Net Promoter Promoters Detractors Score 42% 28% NPS= 14 9% 16% NPS= -‐7 ©2011 by Crain Communica1ons Inc. All rights reserved.
- 39. NPS survey from 2010 ©2011 by Crain Communica1ons Inc. All rights reserved.
- 40. ©2011 by Crain Communica1ons Inc. All rights reserved.
- 41. ©2011 by Crain Communica1ons Inc. All rights reserved.
- 42. VMS NPS RaQng DistribuQon by Number and Audience 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% 0 1 2 3 4 5 6 7 8 9 10 Buyer Staffing Firm ©2011 by Crain Communica1ons Inc. All rights reserved.
- 43. Net Promoter Score by Industry ©2011 by Crain Communica1ons Inc. All rights reserved.
- 44. VMS –Internally Developed vs. Commercially available ©2011 by Crain Communica1ons Inc. All rights reserved.
- 45. Buyer Experience by Program Type ©2011 by Crain Communica1ons Inc. All rights reserved.
- 46. Provider Experience by Line of Business ©2011 by Crain Communica1ons Inc. All rights reserved.
- 47. NPS Buyers vs. Suppliers ©2011 by Crain Communica1ons Inc. All rights reserved.
- 48. Which is more important? ©2011 by Crain Communica1ons Inc. All rights reserved.
- 49. MSP Company do have some successes Buyer Staffing MSP Company NPS NPS Vendor A 86% -‐11% Vendor B 58% -‐74% Vendor D 47% -‐37% Vendor E 46% -‐42% Vendor F 42% -‐18% Vendor G 38% -‐57% Vendor H 36% -‐57% Vendor I 31% -‐58% Vendor J 17% -‐64% Vendor K 16% -‐73% Vendor L 15% 14% Vendor M 0% 9% Vendor N 0% -‐35% Vendor O -‐5% 11% Vendor P -‐38% -‐68% 2010 NPS Study -‐ SIA ©2011 by Crain Communica1ons Inc. All rights reserved.
- 50. VMS……eh…. Buyer Staffing VMS NPS NPS Vendor A 45% -‐52% Vendor B 40% -‐52% Vendor D 31% -‐42% Vendor E 26% -‐56% Vendor F 26% -‐39% Vendor G 17% -‐16% Vendor H 10% -‐32% Vendor I 9% -‐63% Vendor J 0% -‐15% Vendor K -‐5% -‐72% None of the Above/Don't Know -‐26% -‐76% Internally Developed V MS Application -‐29% Vendor N -‐67% -‐43% 2010 NPS Study -‐ SIA ©2011 by Crain Communica1ons Inc. All rights reserved.
- 51. Scajer Plots of Provider Scores ©2011 by Crain Communica1ons Inc. All Irights ights reserved. ©2011 by Crain Communica1ons nc. All r reserved.
- 52. NPS scores for all VMS Providers with more than 5 Buyer responses ©2011 by Crain Communica1ons Inc. All rights reserved.
- 53. NPS scores for all MSP Providers with more than 10 Buyer responses ©2011 by Crain Communica1ons Inc. All rights reserved.
- 54. NPS scores for all VMS Providers with more than 10 responses as provided by Staffing Firms ©2011 by Crain Communica1ons Inc. All rights reserved.
- 55. NPS scores for all MSP Providers with more than 10 Staffing Firm responses ©2011 by Crain Communica1ons Inc. All rights reserved.
- 56. Comments Overall Dislike Like • Slow Payment • Direct Contact • Lack of Transparency • Easy to use • “Black Hole” • They invest in System • Arrogant Work • “students of the • Flexibility industry” • Proac1ve ©2011 by Crain Communica1ons Inc. All rights reserved.
- 57. This is NOT Beeline……. “It is the worst MSP I have encountered in my 10+ years in the field. My peers in the industry echo my assessments. I would do everything possible to steer a client away from them.” ©2011 by Crain Communica1ons Inc. All rights reserved.
- 58. EvoluQon of ConQngent Labor Management Most MNCs are now Level III or IV HIGH 1980s – Level I ITM or ? 1990s – Level II & III 2000s – Level IV GLOBAL EXPANSION 2010s – Level V & VI EXPANSION INTO ? – Level VII MANAGED ADDITIONAL SERVICE SPEND LEVEL OF VALUE ADDED PROVIDER (MSP) CATEGORIES æ CW and Perm æ Global spend managed in on CLIENT MANAGED LOW PREFERRED SUPPLIER LIST æ SOW centralized and controlled Cohesive Strategy æ Source of labor æ Contingent Labor æ Global workforce dependant on MASTER æ Select set of Management visibility client defined rules VENDOR suppliers æ One point of æ IC/1099 contact for æ Customized SLAs æ contractors and DECENTRALIZED æ Standardized æ Consultants æ A Prime Supplier suppliers, and process hiring managers Contract æ Legal æ VMS Technology æ Multiple suppliers æ One point of æ Procurement contractors and æ Country Specific æ Procurement done on contact Led hiring managers æ Marketing æ Strategic Suppliers an ad-hoc basis æ Limited æ Some æ VMS Technology æ Targeting Integration of æ Localized VMS æ Hiring Manager Automation automation reporting, suppliers and æ System & Configuration Driven æ Limited SLAs æ Limited SLAs compliance and FTE’s Program SLAs cost I II III IV V VI VII ©2011 by Crain Communica1ons Inc. All rights reserved.
- 59. Percent of Buyers Primarily Using Selected Supplier Management, as a Function of Buyer CW Spend 100% Manage internally using 80% a VMS. 60% Master Managed staffing services provider 40% supplier 20% Manage internally not using a VMS 0% <$10MM $10-$49.9MM $50-$99.9MM $100- $150- $500MM+ $149.9MM $499.9MM Buyer Annual Contingent Workforce Spend $10- $50- $100- $150- <$10MM $49.9MM $99.9MM $149.9MM $499.9MM $500MM+ Manage internally not using a VMS 47% 21% 19% 0% 13% 0% Master staffing supplier 21% 10% 7% 6% 7% 7% Managed services provider 11% 50% 67% 69% 47% 43% Manage internally using a VMS. 21% 19% 7% 25% 33% 50% Total 100% 100% 100% 100% 100% 100% ©2011 by Crain Communica1ons Inc. All Irights ights reserved. ©2010 by Crain Communica1ons nc. All r reserved.
- 60. Not Necessarily ©2011 by Crain Communica1ons Inc. All rights reserved.
- 61. In closing • The field of CW management is ever evolving • CW managers are coming to expect more from their CW partnerships • Beyond savings, there is tremendous opportunity to increase adop1on – Pay ajen1on to your supply chain….. ©2011 by Crain Communica1ons Inc. All rights reserved.
- 62. 2011 Risk Forum & WE CWS Summit • June 20-‐21, 2011 • Hotel Okura, The Netherlands • October 5-‐6, 2011 • Red Rock Resort, Las Vegas ©2011 by Crain Communica1ons Inc. All rights reserved.
- 63. 2011 CWS Summit • October 4-‐5, 2011 • Red Rock Resort, Las Vegas Today you will learn how CW Program Managers improve the performance of their programs by using the right measurement tools. In addiQon, we’ll discuss why CW process performance is important. You can further your knowledge on this topic and more this fall at the CWS Summit. Learn more and sign up for the best rates at www.CWSSummit.com ©2011 by Crain Communica1ons Inc. All rights reserved.
- 64. Ques1ons & Remarks? Bryan Pena VP, Con1ngent Workforce Strategies and Research 650-‐390-‐6188 bpena@staffingindustry.com ©2011 by Crain Communica1ons Inc. All rights reserved.