Industry Stock Market Performance

HR Insight: An Industry Update First Analysis Investment Banking October 2011 Labor Markets The Bureau of Labor Statistics ( BLS ) reported continued labor market improvements with non-farm payrolls flat from July to August while the BLS unemployment rate continues to hover just north of 9.0%. The employment environment continues to present a headwind for many companies across the HR Services and Technology sectors. Monthly Change in U.S. Non-Farm Employment (January 2001 to August 2011) (all employees, in thousands) 900 700 500 300 100-100 -300-500 -700-900 Jan-01 Jan-03 Jan-05 Jan-07 Jan-09 Jan-11 Source: U.S. Bureau of Labor Statistics. 12% 10% 8% 6% 4% 2% 0% Monthly U.S. Unemployment Rate (January 2001 to August 2011) Jan-01 Jan-03 Jan-05 Jan-07 Jan-09 Jan-11 Source: U.S. Bureau of Labor Statistics. Industry Focus: Demographic Changes Highlight Increasing Role of Talent Management Systems While current conditions are dominated by near- to medium-term national and global economic factors, several longer-term demographic trends are likely to have a sustained impact on demand for agile and dynamic SaaS-based talent management systems. Baby Boomers Exit the Workforce. As baby boomers exit the workforce, the need for skilled workers will escalate. An estimated 7,000 baby boomers turn 65 each day, or 78 million between now and 2030. As a result, many companies will soon be facing a shortage of skilled workers. To manage this dynamic, proven and effective talent management systems that enable companies to identify, attract, train and retain new talent will be in demand. Lifers are an Endangered Species. There has been a generational shift in career attitudes that increases employee turnover and, therefore, necessitates developing depth of talent throughout the organization. Younger workers are expected to engage in four to seven different careers in their lifetime. As a result, businesses need to develop workers that are capable of (nearly seamlessly) stepping into vacated positions. Therefore, performance measurement tools that facilitate performance-based compensation and retain the best employees will be increasingly important. Chicago, IL 60 First Analysis Corporation One South Wacker Suite 3900 Chicago, IL 60606 312-258-1400 www.firstanalysis.com

Heavy HRMS Systems Ready to be Replaced by Light Talent Management Systems. Legacy Human Resource Management Systems (HRMS) have often been an offering within a broad suite of products offered by ERP vendors. These HRMS systems are often less effective solutions than focused talent management offerings that are developed and maintained to be class-leading solutions. In particular, HRMS systems often suffer from: Require costly IT support (since they are installed within the firewall); Require expensive and complex upgrades; Require formal training to use. These deficiencies provide opportunities for SaaS-based talent management solutions to replace many incumbent systems by providing intuitive, low-maintenance and easily-deployed solutions. Growth Across Service Sectors Increases Need to Manage Human Capital. As the U.S. economy transforms and the services sector expands while the manufacturing sector declines, people management becomes more important relative to managing hard assets. Competitive advantage will be won and defended by a company s ability to identify, attract, train, and retain an inventory of human capital. In this context, effective talent management systems become an increasingly critical management tool. Industry Stock Market Performance While HR Technology stocks have performed strongly over the past five years, recent performance is has been weaker and lagged both the HR Services index as well as the broader markets. 5 Year Indexed Performance 1 Year Indexed Performance 200% HR Services Index S&P 500 HR Technology Index SDAQ 200% HR Services Index S&P 500 HR Technology Index SDAQ 150% 150% 100% 71.1% 100% 50% 8.0% 50% 1.9% 0% -50% (15.0%) (15.4%) 0% -50% (0.6%) (1.3%) (11.6%) -100% Sep-06 Sep-07 Sep-08 Sep-09 Sep-10 Sep-11-100% Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Source: Capital IQ. HR Services Index includes: ADP, AON, CBZ, HRB, KELY.A, MAN, NSP, PAYX and TW. HR Technology Index includes: CNQR, INTU, KNXA, MWW, SFSF, TLEO, and ULTI. Page 2 of 8

Public Market Trading Multiples Median public market valuations for companies in the industry are currently 3.44x 2011 consensus estimate revenue for the HR Technology group and 1.10x 2011 consensus estimate revenue for the HR Services Group. 2011E Revenue Multiples HR Technology HR Services 5.32x 4.61x 4.29x 3.44x Median Metrics EV / Revenue: 3.44x Revenue Growth: 20.1% 2.84x 1.34x 0.75x 4.18x 2.11x 1.56x 1.18x 1.10x Median Metrics EV / Revenue: 1.10x Revenue Growth: 10.7% 0.81x 0.80x 0.78x 0.48x SFSF CNQR ULTI INTU TLEO KNXA MWW PAYX ADP AON TW HRB CBZ NSP (1) MAN (1) KELY.A(1) 2011 Projected Revenue Growth 52.4% 20.1% 18.7% 13.4% 35.6% 43.6% 18.2% 6.6% 10.7% 31.6% 9.2% 3.1% 1.0% 15.3% 17.7% 13.7% Source: Capital IQ. Data as of September 30, 2011. (1) Reflects EV / 2011E Gross Profit. 2011E EBITDA Multiples HR Technology HR Services NMF 16.5x 25.2x 9.3x Median Metrics EV / EBITDA: 12.7x EBITDA Margin: 18.2% 12.7x 8.4x 4.1x 9.9x 9.9x 7.3x 6.2x 4.6x 7.2x Median Metrics EV / EBITDA: 6.2x EBITDA Margin: 18.9% 4.0x 4.5x 4.3x SFSF CNQR ULTI INTU TLEO KNXA MWW PAYX ADP AON TW HRB CBZ NSP MAN KELY.A 2011 Projected EBITDA Margin 3.9% 28.0% 17.1% 37.0% 22.3% 16.0% 18.2% 42.3% 21.2% 21.4% 18.9% 23.8% 11.3% 3.6% 3.0% 1.8% Source: Capital IQ. Data as of September 30, 2011. Currently, both the HR Services Index and the HR Technology Index are valued below both their near term and longer term historical averages. 5 Year Historical Mean Forward EBITDA Multiples 1 Year Historical Mean Forward EBITDA Multiples 35.0x 30.0x HR Services HR Tech Service Avg Tech Avg 35.0x 30.0x HR Services HR Tech Service Avg Tech Avg 25.0x 20.0x 15.0x Average = 16.6x 25.0x 20.0x 15.0x Average = 17.9x 10.0x 10.0x 5.0x Average = 8.4x 5.0x Average = 7.8x 0.0x Sep-06 Sep-07 Sep-08 Sep-09 Sep-10 Sep-11 0.0x Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Source: Capital IQ. HR Services includes: ADP, AON, CBZ, HRB, KELY.A, MAN, PAYX, NSP, and TW. HR Technology includes: CNQR, INTU, KNXA, LWSN, TLEO, and ULTI (excludes SFSF as an outlier). Page 3 of 8

Industry Merger & Acquisition Activity Date Anncd. Status Select M&A Transactions (Announced 05/01/2011 to 09/30/2011) Industry Location 09/23/11 Closed GMT Corporation Application Software GA 09/22/11 Closed 09/14/11 Closed Paytime, Inc., Paytime Payroll Division Asparity Decision Solutions, Inc. 09/13/11 Closed Eagle Technology Group, Inc. 09/09/11 Closed Tandem Select 09/01/11 Closed Peoplelink Staffing Solutions, LLC 08/29/11 Closed L&L Payroll Service 08/06/11 Closed 08/04/11 Closed Drake & Company Of Madison, Inc. Ashbourne Assessment Systems Ltd. 08/01/11 Closed Multiple Benefit Services, Inc. 07/27/11 Closed National Executive Personnel & Marketing Group L.C. 07/26/11 Closed Drake Beam Morin, Inc. 07/20/11 Closed SFN Group, Inc. 07/20/11 Closed Mahoney Associates Inc. 07/18/11 Announced PayFlex Systems USA, Inc. 07/18/11 Announced Strategic Employee Benefit Services of Louisiana, LLC 07/12/11 Closed Doostang, Inc. 07/11/11 Closed Workplace Benefit Solutions, LLC Application Software Property and Casualty Insurance Acquiror Verint Systems Inc. (NasdaqGS:VRNT) Enterprise Value ($ millions) $42.0 --- TruPay Corporation NC Automatic Data Processing, Inc. (NasdaqGS:ADP) WI The Reserves Network, Inc. CO Sterling Infosystems, Inc. IN Groupe CRIT SA (ENXTPA:CEN) CA Redding Bank of Commerce WI United Kingdom Association Management Resources, Inc. Kenexa Corp. (NasdaqGS:KNXA) GA CBIZ, Inc. (NYSE:CBZ) FL Haskel Thompson & Associates, LLC NY Lee Hecht Harrison $149.0 FL Randstad North America, L.P. $742.9 FL Mercer, Inc. NE Aetna Inc. (NYSE:AET) $202.0 LA Hub International Limited CA Universum Communications AB NH Hub International Limited 07/11/11 Closed Summit Payroll Services, LLC Application Software NJ CPI-HR, Inc. 07/08/11 Closed Schloss & Co, LLC NY Sentinel Benefits Group, Inc. 07/07/11 Closed CyberShift, Inc. Application Software NJ SumTotal Systems, Inc. 06/27/11 Closed Foundation Workshop Inc. Source: Capital IQ, press releases and First Analysis research. MO IBS Industries, Inc. Page 4 of 8

Select M&A Transactions (Continued) Date Anncd. Status 06/24/11 Closed Resume In Minutes, Inc. 06/21/11 Closed Jobpartners Plc 06/07/11 Effective Xi'an Fesco 06/05/11 Closed 06/02/11 Closed 06/01/11 Closed A1 Staffing and Recruiting Agency, Inc. USD Insurance and Financial Services, Inc. Corporate Benefit Consultants, LLC Industry Internet Software and Services Location VA United Kingdom China Acquiror MEDL Mobile Holdings, Inc. (OTCBB:MEDL) Taleo Corp. (NasdaqGS:TLEO) ManpowerGroup (NYSE:MAN) Enterprise Value ($ millions) $26.0 OK Spartan Staffing, LLC CA CT U.S. Retirement Partners Inc. Brown & Brown of Connecticut, Inc. $13.5 06/01/11 Closed Versult Group, Inc. Application Software ON Ceridian Corporation 05/31/11 Closed Apogee Executive Search Inc. 05/25/11 Closed Nationwide Better Health, Inc., Productivity Solutions Business 05/24/11 Closed Pedagogue Solutions, Inc. 05/24/11 Closed Employbridge Holdings Company, Inc. 05/23/11 Closed Decision HR USA, Inc. 05/19/11 Announced CBIZ Benefits & Insurance Services of Northern California 05/17/11 Closed Public Data Works, Inc. 05/17/11 Closed Meridian Partners, LLC Application Software --- Internet Software and Services Other Diversified Financial Services 05/16/11 Closed Comartis Group, Ltd. Application Software Switzerland 05/15/11 Closed Great Lakes Staffing Inc. 05/06/11 Closed Innovation HR Inc. 05/03/11 Closed eplan Services, Inc 05/02/11 Closed Talent Associates Inc. 05/01/11 Closed Consolidated Business Solutions MBE, LLC Source: Capital IQ, press releases and First Analysis research. Internet Software and Services AB DHR International, Inc. NJ SC FL Sedgwick Claims Management Services, Inc. Saba Software, Inc. (NasdaqGM:SABA) Morgan Stanley Private Equity Bankers Employer Services Inc. CA Burr, Pilger and Mayer LLP NC FL FirstPoint Energy Corporation N.A. Pearson Partners International, Inc. Saba Software, Inc. (NasdaqGM:SABA) WI Locate Staffing Inc. FL LRA Global HR, Inc. CO Paychex Inc. (NasdaqGS:PAYX) $15.2 --- Uni-World Capital, L.P. MO SRA Benefits Company, LLC Page 5 of 8

M&A Transaction Synopses September 23, 2011. Verint Systems Inc. (NasdaqGS:VRNT) announces the acquisition of GMT Corporation. GMT provides workforce management and optimization software. September 22, 2011. TruPay Corporation announces the acquisition of The Paytime Payroll Division of Paytime, Inc. The Paytime Payroll Division provides payroll and payroll related services. September 14, 2011. Automatic Data Processing, Inc. (NasdaqGS:ADP) announces the acquisition of Asparity Decision Solutions, Inc. Asparity provides decision support and data solutions for the management of health care and employee benefits. September 13, 2011. The Reserves Network, Inc. announces the acquisition of Eagle Technology Group, Inc. Eagle provides contract, contract to direct, permanent, and executive retained placement and consulting services. September 09, 2011. Sterling Infosystems, Inc. announces the acquisition of Tandem Select. Tandem provides preemployment background checking and screening services. September 01, 2011. Groupe CRIT SA (ENXTPA:CEN) announces the acquisition of Peoplelink Staffing Solutions, LLC. Peoplelink Staffing Solutions offers temporary, temp-todirect, contract, direct, payroll, onsite outsourcing, and recruitment process outsourcing staffing solutions. August 29, 2011. Redding Bank of Commerce announces the acquisition of L&L Payroll Service. L&L provides payroll services to businesses primarily in California. August 06, 2011. Association Management Resources, Inc. announces the acquisition of Drake & Company Of Madison, Inc. Drake offers employee staffing services. August 04, 2011. Kenexa Corp. (NasdaqGS:KNXA) announces the acquisition of Ashbourne Assessment Systems Ltd. Ashbourne supplies attraction campaigns, and selection and development programmes for managers, senior leaders, and executives in the UK. August 01, 2011. CBIZ, Inc. (NYSE:CBZ) announces the acquisition of Multiple Benefit Services, Inc. Multiple Benefit provides employee benefit consulting, support, and services. July 27, 2011. Haskel Thompson & Associates, LLC announces the acquisition of National Executive Personnel & Marketing Group L.C. National provides recruiting and placement services. July 26, 2011. Lee Hecht Harrison announces the acquisition of Drake Beam Morin, Inc. DBM provides career transition and talent development solutions to individuals and organizations. July 20, 2011. Randstad North America, L.P. announces the acquisition of SFN Group, Inc. SFN operates as a strategic workforce solutions provider in the U.S. and Canada. July 20, 2011. Mercer, Inc. announces the acquisition of Mahoney Associates Inc. Mahoney is a compensation and benefits management company. July 18, 2011. Aetna Inc. (NYSE:AET) announces the acquisition of PayFlex Systems USA, Inc. PayFlex provides administration for employee benefit programs. Source: Capital IQ, press releases and First Analysis research. July 18, 2011. Hub International Limited announces the acquisition of Strategic Employee Benefit Services of Louisiana, LLC. Strategic Employee Benefit Services of Louisiana provides employee benefit consulting services. July 12, 2011. Universum Communications AB announces the acquisition of Doostang, Inc. Doostang operates an online career community that connects young professionals to career opportunities. July 11, 2011. Hub International Limited announces the acquisition of Workplace Benefit Solutions, LLC. Workplace provides employee benefit consulting services to companies. July 11, 2011. CPI-HR, Inc. announces the acquisition of Summit Payroll Services, LLC. Summit develops and provides software solutions for payroll, human resource management, and benefits administration. July 08, 2011. Sentinel Benefits Group, Inc. announces the acquisition of Schloss & Co, LLC. Schloss provides retirement plans. July 07, 2011. SumTotal Systems, Inc. announces the acquisition of CyberShift, Inc. CyberShift provides workforce management and expense management solutions and services. June 27, 2011. IBS Industries, Inc. announces the acquisition of Foundation Workshop Inc. Foundation Workshop provides employment opportunities to adults with disabilities. June 24, 2011. MEDL Mobile Holdings, Inc. (OTCBB:MEDL) announces the acquisition of Resume In Minutes, Inc. MEDL focuses on offering professional resume building services online. June 21, 2011. Taleo Corp. (NasdaqGS:TLEO) announces the acquisition of Jobpartners Plc. Jobpartners designs and develops strategic human resources and talent management solutions for companies in the UK and internationally. June 07, 2011. ManpowerGroup (NYSE:MAN) announces the acquisition of Xi'an Fesco. Xi'an Fesco provides human resources to the companies. June 05, 2011. Spartan Staffing, LLC announces the acquisition of A1 Staffing and Recruiting Agency, Inc. A1 provides temporary staffing, temp-to-hire, direct hire, and contract staffing services. June 02, 2011. U.S. Retirement Partners Inc. announces the acquisition of USD Insurance and Financial Services, Inc. USD provides retirement and financial planning services for the 403(b) K-12 education market. June 01, 2011. Brown & Brown of Connecticut, Inc. announces the acquisition of Corporate Benefit Consultants, LLC. Corporate Benefit Consultants engages in the design, implementation, and administration of employee benefit programs in Connecticut. June 01, 2011. Ceridian Corporation announces the acquisition of Versult Group, Inc. Versult provides workforce management and enterprise mobility solutions for retail organizations. May 31, 2011. DHR International, Inc. announces the acquisition of Apogee Executive Search Inc. Apogee provides executive search services for mining, energy, industrial, hospitality, real-estate, and technology sectors. May 25, 2011. Sedgwick Claims Management Services, Inc. announces the acquisition of Nationwide Better Health, Inc., Productivity Solutions Business. The productivity solutions business of Nationwide Better Health designs and develops employee productivity software solutions. May 24, 2011. Saba Software, Inc. (NasdaqGM:SABA) announces the acquisition of Pedagogue Solutions, Inc. Pedagogue provides assessment solutions primarily for the corporate market. May 24, 2011. Morgan Stanley Private Equity announces the acquisition of Employbridge Holdings Company, Inc. EmployBridge is a leading provider of specialty staffing services May 23, 2011. Bankers Employer Services Inc. announces the acquisition of Decision HR USA, Inc. Decision HR USA provides payroll administration and human resource management services. May 19, 2011. Burr, Pilger and Mayer LLP announces the acquisition of CBIZ Benefits & Insurance Services of Northern California. CBIZ Benefits & Insurance Services of Northern California provides insurance, long-term solutions, and employee benefits programs. May 17, 2011. FirstPoint Energy Corporation N.A. announces the acquisition of Public Data Works, Inc. PDW provides workforce management services. May 17, 2011. Pearson Partners International, Inc. announces the acquisition of Meridian Partners, LLC. Meridian provides executive search services. May 16, 2011. Saba Software, Inc. (NasdaqGM:SABA) announces the acquisition of Comartis Group, Ltd. Comartis provides assessment and talent development solutions and services in Switzerland and internationally. May 15, 2011. Locate Staffing Inc. announces the acquisition of Great Lakes Staffing Inc. Great Lakes provides temporary, temp to hire, payroll services and direct placement services. May 06, 2011. LRA Global HR, Inc. announces the acquisition of Innovation HR Inc. Innovation provides outsourced human resources services for small and mediumsized businesses. May 03, 2011. Paychex Inc. (NasdaqGS:PAYX) announces the acquisition of eplan Services, Inc. eplan provides outsource solutions for the design, provision, and management of employer-sponsored retirement plans in the defined contribution industry. May 02, 2011. Uni-World Capital, L.P. announces the acquisition of Talent Associates Inc. Talent Associates provides payroll and benefits administration services to the entertainment industry. May 01, 2011. SRA Benefits Company, LLC announces the acquisition of Consolidated Business Solutions MBE, LLC. Consolidated operates as an employee benefits consulting company. May 25, 2011. Sedgwick Claims Management Services, Inc. announces the acquisition of Nationwide Better Health, Inc., Productivity Solutions Business. The productivity solutions business of Nationwide Better Health designs and develops employee productivity software solutions. Page 6 of 8

Industry Capital Raising Activities In line with broader market activity, capital raising activities for the sector have been subdued. However, with market valuations improved, companies with strong projected growth and the ability to leverage technology to accelerate earnings growth are expected to tap the equity markets to fund future growth and provide liquidity to shareholders. The sector continues to attract the interest of investors, and larger private companies are likely to pursue public market options, including potential IPOs. Select Public Capital Raising Transactions (Announced 05/01/2011 to 09/30/2011) Date Announced / Initial Filing Date Offered / Closed / Cancelled Status Transaction Type Transaction Primary Feature Company Primary Industry Location Amount ($ millions) 07/20/11 Withdrawn Public Offering Follow-on Equity Offering Cornerstone OnDemand, Inc. (NasdaqGM:CSOD) Internet Software and Services Santa Monica, CA $171.6 05/24/11 05/24/11 Closed Public Offering Fixed-Income Offering Aon Corporation (NYSE:AON) Insurance Brokers / Data Processing and Outsourced Services Chicago, IL $499.8 05/16/11 05/19/11 Closed Public Offering Follow-on Equity Offering Kenexa Corp. (NasdaqGS:KNXA) Application Software Wayne, PA $83.3 Source: IPO Monitor, Capital IQ, and press releases. Page 7 of 8

About First Analysis Investment Banking Founded in 1981, First Analysis has a 30 year track record of serving emerging growth companies and established industry leaders within its focused areas of domain expertise. Our investment banking practice leverages industry insights developed through our equity research and private equity activities to deliver value to clients across the life cycle of a business. Providing senior level attention to every client, First Analysis offers superior execution across a comprehensive range of investment banking services, including M&A advisory, public equity and debt financing, and private equity placements. First Analysis Securities Corporation One South Wacker Drive, Suite 3900 Chicago, IL 60606 www.firstanalysis.com Matt Nicklin Managing Director (312) 258-7181 mnicklin@firstanalysis.com Paul Johnson Senior Vice President (312) 258-7180 pjohnson@firstanalysis.com Michelle Moreno Senior Vice President (312) 258-7194 mmoreno@firstanalysis.com This report has been prepared by the Investment Banking Department of First Analysis Securities Corporation. This report is an overview and analysis of trends and is not intended to provide investment recommendations on any specific industry or company. This is not a complete analysis of every material fact regarding any company, industry, or security. The opinions expressed herein reflect our judgment at this date and are subject to change. The information has been obtained from sources we consider to be reliable, but we cannot guarantee the accuracy. This report may contain information which was previously included in a First Analysis Research Report. A complete listing of all companies covered by First Analysis Equity Research and applicable research disclosures can be obtained by calling 1-312-258-1400 or writing to: First Analysis Securities Corporation, Equity Research, One South Wacker Drive, Suite 3900, Chicago, IL 60606. First Analysis Securities Corporation is a registered broker/dealer with FINRA and member SIPC. Page 8 of 8