MSP & RPO Masterclass Ciett World Employment Conference Rome, 28 th May 2015

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1 MSP & RPO Masterclass Ciett World Employment Conference Rome, 28 th May 2015 John Nurthen Executive Director Global Research Francesca Vassallo-Todaro Operations Development Specialist

2 Agenda Managed Service Provision Recruitment Process Outsourcing Total Talent Management

3 Confused? MSP VMS Contingent Labour RPO ATS Direct Hire/ Permanent Placement

4 Understanding Terminology Free to download from

5 MSP - Managed Service Provider A company that takes on primary responsibility for managing an organisations contingent workforce program. Typical responsibilities of an MSP include overall program management, reporting, and tracking, supplier selection and management, order distribution and often consolidated billing. The vast majority of MSP s also provide their clients with a vendor management system (VMS) and may have a physical presence on the client s site. An MSP may or may not be independent of a staffing supplier. Source: Staffing Industry Analysts Lexicon of Global Contingent Workforce-Related Terms

6 VMS Vendor Management System An Internet-enabled, often Web-based application that acts as a mechanism for a business to manage and procure staffing services (temporary help and, in some cases, permanent placement services) as well as outside contract or contingent labour. Typical features of a VMS include order distribution, consolidated billing and significant enhancements in reporting capabilities over manual systems and processes. Source: Staffing Industry Analysts Lexicon of Global Contingent Workforce-Related Terms

7 Do You Know? What are you paying for your contingent workforce and is it the right amount? Are your internal customers satisfied with contingent worker talent, output and fit? Is your contingent workforce program able to scale to handle future growth and/or contraction? Who are the contingent workers on your premises and how long have they been there? Who supplies the contingent talent and what is your legal relationship with those companies? What might someone sue you for and what are you doing to protect yourself?

8 Best and Worst Decisions Ever made Ranked by frequency cited Best Decision Implementing an MSP Implementing a VMS Consolidating vendors Consolidating all contingent workers under one programme Standardization, transparency, tracking of results Worst Decision Allowing local branches/managers too much control Overspending Unclear or insufficient management of contingent workforce Not using VMS/MSP sooner Working with too many suppliers Source: Staffing Industry Analysts Contingent Workforce Managers Survey 2014

9 Hybrid Programmes are Common By geography By skills category By type of worker

10 MSP Trends Disaggregation of MSP and VMS Partnerships ERP s recognize contingent workforce management Rise of independent worker engagement models Development of Freelancer Management Systems (FMS) Source: Staffing Industry Analysts 2014 VMS and MSP Supplier Competitive Landscape

11 The Inevitable Growth of MSP 2012/2013 MSP Growth Spend by Country (Number of Programmes) Germany % Belgium % Canada % Japan Spain % 34% India 59 28% US 1,674 19% UK % The Netherlands 113 8% France Australia % 3% Source: Staffing Industry Analysts 2014 VMS and MSP Supplier Competitive Landscape

12 2013 Global MSP Spend By Work Arrangement 16.7% 0.5% Temp/Contract SOW 82.8% Outsourced Services Growth by Work Arrangement Total MSP Temp/Contract 13% 19% SOW 61% Outsourced Services 104% 2015 Crain Crain Communications Inc. Inc. All rights reserved. Source: Staffing Industry Analysts 2014 VMS and MSP Supplier Competitive Landscape

13 Fifth of the Global Temp Market Comes via MSP 300 Global Temp Market v MSP SOW & Outsourced Services 0 Temp MSP 2015 Crain Crain Communications Inc. Inc. All rights reserved. Source: Staffing Industry Analysts

14 MSP Structures are Not the Same Globally Principal Model commonly used in the UK, US and Netherlands Alternative models used where legislation prevents the Principal Model (such as France, Germany, Japan) Agency Model Margin Model 2015 Crain Crain Communications Inc. Inc. All rights reserved.

15 Agenda Managed Service Provision Recruitment Process Outsourcing Total Talent Management

16 RPO Recruitment Process Outsourcing Partial or full outsourcing of the internal recruitment function to a third-party specialist provider, which services to provide the necessary skills, activities, tools, technologies related recruitment supply chain partners and process methodologies to assume the role of the client s recruiting department by owning and managing its recruitment process and related recruitment supply chain partner relationships. RPO is more commonly used as a method for employers to recruit direct-hire personnel, particularly in the U.S. In Europe contingent workers will also be included within that scope in some instances. Source: Staffing Industry Analysts Lexicon of Global Contingent Workforce-Related Terms

17 ATS Applicant Tracking System A Software application that enables the electronic handling of corporate recruitment needs. Most incorporate a company website, enabling companies to post jobs onto their own website, as a way to attract candidates. The ATS solutions store these candidate data inside a database to enable effective searching, filtering and routing of applications. Certain vendors use a different description for ATS software, such as talent management software (TMS), candidate management system (CMS) or recruitment management system (RMS). Source: Staffing Industry Analysts Lexicon of Global Contingent Workforce-Related Terms

18 ATS Functionality Source: ATS Landscape (February 2015)

19 Value RPO Solutions Spectrum Comprehensive RPO Selective RPO Recruiting Services Volume Direct Hire Direct Hire Complexity Source: Staffing Industry Analysts

20 RPO Mix of Hires by Assignment Type Other; 2% Temporary Hires; 30% Permanent Hires; 68% Source: RPO Insight (October 2014)

21 Less than a Tenth of the Global Perm Market Comes via RPO 35 Global Perm Market v RPO Crain Crain Communications Inc. Inc. All rights reserved. 0 Place & Search RPO Source: Staffing Industry Analysts

22 Contingent Buyer Priorities Which of the following are currently in place in your organisation? Approved supplier list VMS Consolidating staffing suppliers MSP Supplier tiering Global management (contingent work) SOW HRO Strategy planning (incl. contingent work) RPO Direct sourcing Trying new suppliers Master supplier 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% In place today Source: 2014 Staffing Buyers Survey

23 Contingent Buyer Priorities Which of the following are currently in place in your organisation, or are likely to be seriously explored within two years? Approved supplier list VMS Consolidating staffing suppliers MSP Supplier tiering Global management (contingent work) SOW HRO Strategy planning (incl. contingent work) RPO Direct sourcing Trying new suppliers Master supplier 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% In place today Exploring in two years No plans Source: 2014 Staffing Buyers Survey

24 Agenda Managed Service Provision Recruitment Process Outsourcing Total Talent Management

25 Converging Markets/Converging Solutions Contingent Hire MSP Permanent Hire RPO

26 Percentage RPOs and MSPs Whose Services Address Each Worker Type Full-time/Part-time Apprentices/Trainees/Interns Temps Contractors Online workers Professional services Outsourced services Partners Formal volunteers Informal volunteers Franchisees/Affiliates/Associates RPO already addressing % MSP already addressing % Robots/Drones/Cognitive computing applications 0% 20% 40% 60% 80% 100% Source: Staffing Industry Analysts, Global Total Talent Management Survey, May 2015

27 Percentage RPOs and MSPs Whose Services Address Each Worker Type by end 2017 Full-time/Part-time Apprentices/Trainees/Interns Temps Contractors Online workers Professional services Outsourced services Partners Formal volunteers Informal volunteers Franchisees/Affiliates/Associates RPO already addressing % RPO addressing by end 2017 % MSP already addressing % MSP addressing by end 2017 % Robots/Drones/Cognitive computing applications 0% 20% 40% 60% 80% 100% Source: Staffing Industry Analysts, Global Total Talent Management Survey, May 2015

28 What is Total Talent Management? Total Talent Management (TTM) refers to an employer s practice of routinely considering TOTAL TALENT when it comes to talent acquisition or management. For example, when there is a job to fill, an employer that practices TTM will consider various options such as hiring an employee, using a contingent worker, acquiring a robot, etc. And when thinking about engaging talent, an employer that practices TTM will design programs/approaches that engage ALL Talent, not just employee talent. Source: Staffing Industry Analysts, Global Total Talent Management Survey, May 2015

29 Firms Use a Wide Variety of Non-Employees Based on what you know, which of the following types of workers did work on behalf of your company/organization during 2014? Robots/drones/cognitive computing Informal volunteers On-line workers 5% 5% 6% Franchisees/affiliates/associates 10% Formal volunteers 14% Partners 27% Outsourced services 45% Professional services 54% Temporary workers Independent contractors or consultants/freelancers 62% 62% 0% 10% 20% 30% 40% 50% 60% 70% Source: Staffing Industry Analysts, Global Total Talent Management Survey, May 2015

30 Organisational View/Understanding of Workforce On any given month, to what extent do you believe that your company/organisation has a good view of workforce activity? i.e. has the ability to see and measure (Percent of Good and Very Good view responses) Lervel of motivation 17% 34% Skills deployed Level of productivity 28% 33% 46% 46% Non-employees Employees Tenure 39% 69% Total Labor costs 49% 71% Number of open positions 49% 73% Number of workers 49% 78% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Source: Staffing Industry Analysts, Global Total Talent Management Survey, May 2015

31 Engagement/Motivation of Workers What level of effort do you believe you (your clients) SHOULD be making to engage and/or motivate these worker types? (Percent of Big and Very Big effort responses) NON-EMPLOYEES EMPLOYEES Franchisees Informal Volunteers Formal Volunteers Partners Outsourced services Professional services On-line Contractors Temps Apprentices/Interns Full-Time & Part-Time 27% 17% 23% 17% 27% 22% 28% 25% 24% 31% 24% 17% 13% 27% 39% 42% 36% Suppliers Companies 62% 56% 58% 87% 91% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Source: Staffing Industry Analysts, Global Total Talent Management Survey, May 2015

32 Barriers to a Whole Workforce View Which of the following are barriers/constraints to your company/organization (or your clients) achieving a combined understanding/view of the Employee and Non- Employee components of your workforce? (Check all that apply) Operational inconsistency 43% 62% Systems/data functionality not geared to this purpose 38% 45% Conflicting inter-departmental priorities 32% 65% Lack of experience/know-how 22% 66% Inconsistent terminology 19% 30% Lack of senior stakeholder support Risk aversion Prevented by contractual arrangements None of the above 5% 8% 14% 14% 23% 31% 31% 47% Column2 All supplier respondents Column1 All organization respondents that believe obtaining a combined workforce view/understanding is important/extremely important to their HR/Executive leadership 0% 10% 20% 30% 40% 50% 60% 70% Source: Staffing Industry Analysts, Global Total Talent Management Survey, May 2015

33 Examples of Total Talent Initiatives Kelly Workforce Solutions KellyOCG service line A Total Talent Approach A holistic approach to talent acquisition and management Randstad Integrated Talent Management Group Launched in January 2015 A holistic capability offering Volt Consulting Group Total Talent Management Solutions Blending recruiting of both contingent and perm workers Peoplefluent A total workforce management solution that spans the acquisition and management of your hourly, salaried, and contingent workers Tapfin Integrated Resource Fulfilment

34 Major Facets of Total Talent Management Total Talent Acquisition Recruiting Resource Fulfillment Tenure Compensation/ Reward Organizational Development Workforce Planning Performance Metrics HR s Role & Responsibilities Acquisition of Non-Employee Workers (and vendors that provide them) Managing Diversity People Engagement HR Technology Performance Management Workforce Communication Coaching/ Training Existing initiatives only address these facets of Total Talent Management Source: Staffing Industry Analysts, Global Total Talent Management Survey, May 2015

35 Summary/Recommendations Establish a position in the market that uses your company strengths relative to MSP and RPO Doesn t mean you have to develop your own MSP and/or RPO services, or act as a sub-contractor But it does mean that you should plan on the basis that these services will continue to grow globally Explore threats and opportunities posed by the development of Total Talent Management Are you ready to meet the next important workforce challenge?

36 REGISTER for Remaining 2015 Classes July Chicago, IL October Dallas, TX 6-7 October London, UK 8-9 December Northern CA ONGOING Online Certification class or training

37 Mark Your Calendar 2015 Staffing Executive Conferences Executive Forum Europe 6-7 October 2015 Park Plaza Riverbank, London, England Executive Forum North America February 2016 Arizona Biltmore, Phoenix, Ariona, USA For attendance, please contact

38 Mark Your Calendar 2015 Staffing Executive Conferences Executive Forum Europe 6-7 October 2015 Park Plaza Riverbank, London, England Register now for the lowest introductory rates, PLUS receive an additional 100 off for attending the webinar. Use discount code: WEBINAR by 30 June Executive Forum North America February 2016 Arizona Biltmore, Phoenix, Ariona, USA For attendance, please contact

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