© 2012 Crain Communications Inc
From Hard to Harder: A Global Analysis of Staffing Market Complexity
Speakers:
• Barry Asin, President, Staffing Industry Analysts• John Nurthen, Executive Director, International Development,
Staffing Industry Analysts
Tuesday, 15 May | 15:15 | Nine Kings Suite
Concurrent Session: Contingent Market Track
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• Background
• Methodology
• Analysis
• Summary
• Q&A
From Hard to Harder: A Global Analysis of Staffing Market Complexity
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European Contingent Workforce Buyer Priorities
Source: Staffing Industry Analysts: Buyer Survey, 2011
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Communication
One ProgrammeOne Site
One ProgrammeTwo Sites
One ProgrammeMultiple Sites
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Culture Clash
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The Seven Dimensions of Culture
• Universalism vs. particularism (Importance of rules v relationships?)
• Individualism vs. collectivism (Functioning in a group or as individuals?)
• Neutral vs. emotional (Displaying emotions, or hiding them?)
• Specific vs. diffuse (Do we handle our relationships in specific and predetermined ways, or do we see our relationships as changing and related to contextual settings?)
• Achievement vs. ascription (Do we have to prove ourselves to receive status, or is status given to us?)
• Sequential vs. synchronic (Do we do things one at a time or several things at once?)
• Internal vs. external control (Do we believe that we can control our environment, or do we believe the environment controls us?)
Source: Fons Trompenaars, Riding the Waves of Culture
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Degree of similarity between home and host countries
Number of foreign
countries in which a company does business
Extent of global operations
Extent of handling of foreign operations
Culture
DomesticBusiness
Low
Medium
High
Company handles its own Global operations
Other domestic firms handle external contracts
Foreign firms handle external contracts
Quite similar
Moderately similar
Not at all similar
One
Several
Many
Limited foreign functions
Multiple foreign functions
Integrated across multiple countries
Source: G. Hofstede, Cultures and Organizations: Software of the Mind
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SwedenNorway
Finland
Japan
United States
UnitedKingdom
FranceGermany
Netherlands
Poland
Denmark
ItalyPortugal Spain
Ireland
Canada
Mexico
Brazil
South Africa
Argentina
Belgium
Switzerland
Global Staffing Market (to scale)
Australia
Source: Staffing Industry Analysts
© 2012 Crain Communications Inc
SwedenNorway
Finland
Japan
United States
UnitedKingdom
FranceGermany
Netherlands
Poland
Denmark
ItalyPortugal Spain
Ireland
Canada
Mexico
Brazil
South Africa
Argentina
Belgium
Switzerland
Global Staffing Market Regional Characteristics
Australia
Rest of World• 32% of global market• Very disparate but mostly
immature and poorly regulated markets
• Exceptions are Japan, Australia, Singapore and Hong Kong
• Variable MSP usage
Europe• 37% of global market• Mixture of well
established markets in North, less established markets in South and immature in East
• Agency Work Directive• Moderate MSP usage
North America• 31% of global market• US and Canada liberal
and mature markets, Mexico less so
• High proportion of professional/executive staffing
• High MSP usage
Source: Staffing Industry Analysts
© 2012 Crain Communications Inc
Country Licensing Pay ParityReasonsfor Use
Length of Assignment
Sector Restrictions
ARGENTINA N N Y Y N
AUSTRALIA Y Y N N N
AUSTRIA Y Y N N N
BELGIUM Y Y Y Y Y
BRAZIL N N N Y N
BULGARIA Y Y Y Y Y
CANADA Y N N N N
CHINA Y Y Y Y N
CZECH REPUBLIC Y Y N Y N
DENMARK Y N N N
EGYPT Y N N N N
FINLAND N Y Y Y N
FRANCE Y Y Y Y N
GERMANY Y Y N N Y
GREECE Y Y N Y N
HONG KONG CHINA Y N N N N
HUNGARY Y Y N N N
INDIA Y N Y N N
IRELAND Y Y N N N
ITALY Y Y Y N N
JAPAN Y N N N Y
Country Licensing Pay ParityReasonsfor Use
Length of Assignment
Sector Restrictions
KUWAIT N N N Y N
MEXICO Y Y Y Y N
NETHERLANDS N Y N N N
NEW ZEALAND N N N N N
NORWAY Y Y N N N
POLAND Y Y Y Y N
PORTUGAL Y Y Y N N
QATAR Y N N N N
ROMANIA Y Y N Y N
RUSSIA N N Y Y N
SAUDI ARABIA Y N N N N
SERBIA Y Y Y Y Y
SINGAPORE Y N N N N
SOUTH AFRICA* Y N N N N
SPAIN Y Y N Y Y
SWEDEN N Y N Y N
SWITZERLAND Y Y N N N
TURKEY Y N N N N
UNITED ARAB EMIRATES Y N N N N
UNITED KINGDOM N Y N N N
UNITED STATES N N N N N
Main prohibitions on temporary agency work
Complexity
Source: Staffing Industry Analysts
Y/N
*Legislation currently before Parliament will introduce pay parity, reasons for use and limit assignments to 6 months
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Research Methodology
MSP/VMS Maturity
Market maturity
Regulatory efficiency
Employment Law Burden
Labour Market
Efficiency
Political Stability/
Corruption
Ability to enforce
contracts
Pricing Environment
Independent Contractor
Environment
Trade Union Influence
Sources: Staffing Industry Analysts, CIETT, World Economic Forum, The Regulation of Labor, World BankGovernance Indicators, Doing Business
© 2012 Crain Communications Inc
Considerations
• ‘Complex’ does not = ‘Impossible’
• ‘Not complex’ does not = ‘Easy’
• No weighting in this analysis– But you could weight the results yourself depending on your own strategy,
risk perception, resources and company culture
• Language as a factor
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Most Complex
Least Complex
Not Recorded
Hot Spots
Source: Staffing Industry Analysts
© 2012 Crain Communications Inc
Unknown Markets
• Interesting category in their own right• Generally, no legislative framework and
staffing industry not organised/ represented– Only 23 countries have ratified ILO Convention 181
• Most significant markets not included in this study: – the South American markets of Chile, Colombia and Peru– the Baltic States of Estonia, Latvia and Lithuania,– other parts of Eastern Europe such as Slovakia and Slovenia– the Asian markets of South Korea, Thailand and Malaysia.
Here be monsters
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CountryMarket
Maturity
Staffing Market
Regulatory Efficiency
Employment Law Burden
Labour Market
EfficiencyEnforcing contracts
Pricing Environment
MSP/VMS Maturity
Trade Union Influence
Independent Contractors
Stability/ Corruption Total
UNITED STATES 4 5 5 5 5 3 5 5 3 3 43
UNITED KINGDOM 5 5 5 5 4 4 4 4 2 4 42
CANADA 4 5 4 5 2 3 4 4 5 5 41
NEW ZEALAND 4 4 5 5 5 2 2 4 4 5 40
HONG KONG, CHINA 4 5 4 5 5 2 2 4 4 4 39
SINGAPORE 4 5 5 5 4 2 3 5 1 4 38
AUSTRALIA 4 5 3 4 4 3 3 4 2 4 36
NETHERLANDS 4 5 2 4 3 4 3 2 3 5 35
IRELAND 3 2 4 4 2 4 3 3 4 4 33
BELGIUM 4 4 3 3 4 3 3 2 3 4 33
AUSTRIA 3 4 2 3 5 3 1 3 4 4 32
FINLAND 2 4 1 4 5 3 1 3 4 5 32
JAPAN 4 3 5 4 3 3 3 2 1 3 31
GERMANY 4 4 2 2 5 2 3 1 4 4 31
SOUTH AFRICA 5 3 5 2 2 4 2 3 2 2 30
SWEDEN 3 5 1 4 3 2 2 2 3 5 30
SWITZERLAND 3 2 2 5 3 4 1 3 1 5 29
DENMARK 2 5 1 5 3 2 2 3 1 5 29
BULGARIA 1 3 2 3 2 5 1 4 5 2 28
Complexity Ranking
Source: Staffing Industry Analysts
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CountryMarket
Maturity
Staffing Market
Regulatory Efficiency
Employment Law Burden
LabourMarket
EfficiencyEnforcing contracts
Pricing Environment
MSP/VMS Maturity
Trade Union Influence
Independent Contractors
Stability/ Corruption Total
FRANCE 4 4 1 2 5 3 4 1 1 3 28CZECH REPUBLIC 2 1 2 3 2 4 1 4 5 3 27INDIA 1 3 5 2 1 3 3 5 3 1 27
NORWAY 2 4 1 4 5 1 2 1 2 5 27CHINA 1 1 3 3 4 2 2 5 3 1 25SERBIA 1 2 2 1 1 5 1 5 5 1 24ROMANIA 1 3 4 2 2 3 1 2 4 2 24HUNGARY 2 3 3 2 4 2 1 1 3 3 24QATAR 1 1 4 4 1 1 1 5 4 2 24EGYPT 1 1 3 1 1 5 1 4 5 1 23PORTUGAL 2 2 1 1 4 5 1 1 3 3 23
UNITED ARAB EMIRATES 1 1 3 3 1 3 1 5 3 2 23MEXICO 3 3 3 1 2 2 2 3 3 1 23POLAND 1 3 2 3 2 1 1 2 5 3 23SAUDI ARABIA 1 1 2 3 1 4 1 5 3 1 22KUWAIT 1 1 4 2 1 3 1 5 2 2 22TURKEY 1 1 5 1 3 3 1 3 3 1 22SPAIN 1 2 1 1 3 4 2 1 3 3 21BRAZIL 3 1 3 2 1 3 1 4 2 1 21
RUSSIA 1 2 1 2 4 3 2 2 3 1 21GREECE 1 1 2 1 1 5 1 1 5 2 20ARGENTINA 1 1 4 1 3 4 1 2 2 1 20ITALY 2 3 1 1 1 2 2 1 5 2 20
Source: Staffing Industry Analysts
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Market MaturitySOUTH AFRICAUNITED KINGDOMNETHERLANDS
Best Markets by Category
RegulatoryEfficiencyNETHERLANDSSWEDENUNITED STATES
Employment Law BurdenSINGAPOREJAPANINDIA
Source: CIETT Source: CIETT Source: The Regulation of Labor
Source: World Economic Forum
Labour Market EfficiencySWITZERLANDSINGAPOREHONG KONG CHINA
Source: Staffing Industry Analysts
Trade UnionInfluenceCHINA INDIAKUWAITQATARSAUDI ARABIASERBIASINGAPOREUNITED ARAB EMIRATESUNITED STATES
Source: World Bank Governance Indicators
Political Stability/ CorruptionFINLANDDENMARKSWEDEN
Source: Doing Business
Ability to EnforceContractsNORWAYHONG KONG CHINAFRANCE
Source: Staffing Industry Analysts
Pricing EnvironmentBULGARIAEGYPTGREECEPORTUGALSERBIA
IndependentContractor EnvironmentBULGARIAGREECEITALYPOLANDSERBIA
Source: Staffing Industry Analysts
MSP/VMSMaturityUNITED STATESUNITED KINGDOMFRANCE
Source: Staffing Industry Analysts
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MSP Adoption Ranking
Rank Country
1 US
2 UK
3 Canada
4 France
5 Japan
6 Netherlands
7 India
8 Germany
9 Belgium
10 Australia
Rank Country
11 Singapore
12 Ireland
13 Malaysia
14 Puerto Rico
15 Mexico
16 Spain
17 Sweden
18 China
19 Denmark
20 Italy
Source: Staffing Industry Analysts: MSP/VMS Global Landscape Report, 2011
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VMS Adoption Ranking
Rank Country
1 US
2 UK
3 France
4 Canada
5 Netherlands
6 India
7 Germany
8 Australia
9 Ireland
10 Belgium
Rank Country
11 Puerto Rico
12 Singapore
13 Sweden
14 Mexico
15 Japan
16 Malaysia
17 China
18 Denmark
19 Hong Kong
20 Italy
Source: Staffing Industry Analysts: MSP/VMS Global Landscape Report, 2011
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Contingent Supply Quadrant
US
UK
CanadaNew ZealandHong Kong
SingaporeAustralia Netherlands
Ireland
Belgium
Austria
Finland
JapanGermany
South Africa
SwedenSwitzerland
Denmark
France
Czech Republic
India
Norway
ChinaRomania
Hungary
Qatar
Portugal
UAE
Mexico
Saudi ArabiaKuwaitTurkeySpain
Brazil
Russia
Argentina
Italy
High
HighLow
Use ofTemporary
AgencyWorkers
Use of Independent Contractors
HIGH TEMP USEHIGH IC USE
HIGH TEMP USELOW IC USE
LOW TEMP USELOW IC USE
LOW TEMP USEHIGH IC USE
BulgariaSerbiaEgypt
PolandGrece
Source: Staffing Industry Analysts
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HIGH INFLIENCEHIGH COMPLEXITY
HIGH INFUENCELOW COMPLEXITY
LOW INFUENCELOW COMPLEXITY
LOW INFLUENCEHIGH COMPLEXITY
Trade Union Impact
US
NewZealand
Hong Kong
Australia
BelgiumAustriaFinland
SouthAfrica
SwitzerlandDenmark
Romania
UK Canada
Ireland
Netherlands Japan
Germany
Sweden
FranceNorway
Hungary
Poland
SpainGrece
Singapore
PortugalMexico
Bulgaria
UAE
CzechRepublic
IndiaChina
Serbia
Qatar
Egypt
SaudiArabia
Kuwait
Turkey
Brazil
RussiaArgentina
ItalyHigh
HighLow
TradeUnion
Influence
Contingent Market Complexity
Source: Staffing Industry Analysts
© 2012 Crain Communications Inc
Labour Market Efficiency as a function of Employment Law Burden
Good
LowHigh
LabourMarket
Efficiency
Employment Law Burden
Italy
US
NewZealand
Hong Kong
AustraliaIreland
BelgiumAustria
Finland
SouthAfrica
Switzerland
Denmark
Romania
UKCanada
Netherlands
Japan
Germany
Sweden
France
Norway
HungaryPoland
Spain
Grece
UAE
Bulgaria
CzechRepublic
India
China
Serbia
Qatar
Egypt
Portugal Mexico
SaudiArabia Kuwait
Turkey
Brazil
Russia
Argentina
Poor
GOOD EFFICIENCYLOW BURDEN
GOOD EFFICIENCYHIGH BURDEN
POOR EFFICIENCYHIGH BURDEN
POOR EFFICIENCYLOW BURDEN
Singapore
Source: Staffing Industry Analysts
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Protests against Temporary work
ISRAEL SPAIN
SOUTH AFRICA POLAND
GERMANY
TAIWAN
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The Black Market
• Many developing economies have a thriving black market for contingent workers– i.e. Mexico, Russia, Middle East
• Undermines credible, professional suppliers
• Inhibits social acceptance and creates union opposition
• Make sure your suppliers are properly licensed!
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Staffing Market Clusters
Market Type Regions Countries
Market Driven Europe UK
Non-Europe US, AU, NZ
Social Dialogue Western Europe NL, CH, AT, DE
Nordics SW, NO, DK, FI
Asia JA
Legislator Driven Western Europe FR, BE, LU
Mediterranean IT, GR, ES, PT
Emerging Markets Eastern Europe Eastern Europe
Latin America Latin America
Asia IN, CH
Characteristics
Rapid AW development, open regulatory environment with limited restrictions, liberal economies favoringflexibility over security
Mature with significant degree of AW penetration
Low penetration, unique Nordic social model
Liberal economy but high value on job security
Penetration varies ranging from low to above average
Highly regulated weighted towards job security
Nascent industries with AW legally recognised only recently, regulatory policies still in development, economic policies and market dynamics still evolving
1
2
3
4
5
6
Source: CIETT
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Identifying Complex Markets
They grow olives They drill for oil They dance salsa
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Main Causes of Failure
• Lack of sponsorship
• No clear ROI for the business
• Moving too fast
• Minimal project planning
• Skimping on appropriate resources
• Not involving your suppliers
• Misjudged localization requirements
• Inadequate budget
• Not engaging all stakeholders
• Underestimating change management
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Global Programme Governance Model
Source: Staffing Industry Analysts: ‘Building and Operating a Global MSP Governance Structure, Feb 2012
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Even Complex Markets have Redeeming Features
• In relatively immature staffing markets, the pricing environment for temporary labour will likely be quite benevolent
• In developing economies, trade union influence is likely to be restricted
• In many underdeveloped staffing markets, the use of independent contractors will be quite widespread and the regulations relating to the use of independent contractors will be quite relaxed – perhaps even non-existent
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Summary
“Toto, I’ve a feeling we’re not in Kansas anymore”
• All complexity is relative– Contingent worker procurement is one of the more complicated
procurement categories regardless of geography
– Complexity multiplies for managers responsible for multi-regional or global contingent workforce programmes
• Local expertise is the key to unlocking the most complex staffing markets
– In-house expertise to ensure you understand and respect the local language and culture
– Professional legal expertise to ensure your programme is legally compliant
– Supplier expertise
© 2012 Crain Communications Inc
Any Questions?