Staffing Industry Analysts - From Easy to Hard - A Look at Global Staffing Market Complexity - 14...

1Confidential Report – NOT for Distribution | ©2011 Crain Communications Inc. All rights reserved.

Western Europe

14 March 2012

3pm GMT/ 4pm CET

10am PST/ 1pm EST

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From Easy to Hard: A Look at Global Staffing Market Complexity

Speakers:

John Nurthen General Manager, Europe

Jon Holden VP Sales EMEA, IQNavigator

Sponsored by

2

From Easy to Hard: A Look at Global Staffing

Market Complexity

• Introduction

• Methodology

• Analysis

• Summary

• Q&A– Your questions are welcome!

• Close

©2011 by Crain Communications Inc. All rights reserved.

3

CWS Council Members (partial list)


4


Western Europe Buyer Webinar

Sponsored by


Market Complexity

Jon Holden

VP Sales EMEA

5

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

6

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


7

Most Complex

Least Complex

Not Recorded


Hot Spots

8

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

9

Country

Market

Maturity

Staffing

Market

Regulatory

Efficiency

Employment

Law Burden

Labour

Market

Efficiency

Enforcing

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

10

Country

Market

Maturity

Staffing

Market

Regulatory

Efficiency

Employment

Law Burden

Labour

Market

Efficiency

Enforcing

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 28

CZECH REPUBLIC 2 1 2 3 2 4 1 4 5 3 27

INDIA 1 3 5 2 1 3 3 5 3 1 27

NORWAY 2 4 1 4 5 1 2 1 2 5 27

CHINA 1 1 3 3 4 2 2 5 3 1 25

SERBIA 1 2 2 1 1 5 1 5 5 1 24

ROMANIA 1 3 4 2 2 3 1 2 4 2 24

HUNGARY 2 3 3 2 4 2 1 1 3 3 24

QATAR 1 1 4 4 1 1 1 5 4 2 24

EGYPT 1 1 3 1 1 5 1 4 5 1 23

PORTUGAL 2 2 1 1 4 5 1 1 3 3 23

UNITED ARAB EMIRATES 1 1 3 3 1 3 1 5 3 2 23

MEXICO 3 3 3 1 2 2 2 3 3 1 23

POLAND 1 3 2 3 2 1 1 2 5 3 23

SAUDI ARABIA 1 1 2 3 1 4 1 5 3 1 22

KUWAIT 1 1 4 2 1 3 1 5 2 2 22

TURKEY 1 1 5 1 3 3 1 3 3 1 22

SPAIN 1 2 1 1 3 4 2 1 3 3 21

BRAZIL 3 1 3 2 1 3 1 4 2 1 21

RUSSIA 1 2 1 2 4 3 2 2 3 1 21

GREECE 1 1 2 1 1 5 1 1 5 2 20

ARGENTINA 1 1 4 1 3 4 1 2 2 1 20

ITALY 2 3 1 1 1 2 2 1 5 2 20

11


Market Maturity

SOUTH AFRICA

UNITED KINGDOM

NETHERLANDS

The Better Markets

RegulatoryEfficiency

NETHERLANDS

SWEDEN

UNITED STATES

Employment Law Burden

SINGAPORE

JAPAN

INDIA

Source: CIETT Source: CIETT Source: The

Regulation of Labor

Source: World Economic

Forum

Labour Market Efficiency

SWITZERLAND

SINGAPORE

HONG KONG CHINA

Source: World Bank

Governance Indicators,

2011

Political Stability/ Corruption

FINLAND

DENMARK

SWEDEN

Source: Staffing Industry

Analysts

Trade UnionInfluence

CHINA

INDIA

KUWAIT

QATAR

SAUDI ARABIA

SERBIA

SINGAPORE

UNITED ARAB EMIRATES

UNITED STATES

Source:

www.doingbusiness.com

Ability to EnforceContracts

NORWAY

HONG KONG CHINA

FRANCE


Analysts

Pricing Environment

BULGARIA

EGYPT

GREECE

PORTUGAL

SERBIA

IndependentContractor Environment

BULGARIA

GREECE

ITALY

POLAND

SERBIA


Analysts

MSP/VMSMaturity

UNITED STATES

UNITED KINGDOM

FRANCE


Analysts

12

Identifying Complex Markets


13

Spotlight on Italy


• Relatively young labour market founded in 1997– Less than 100 staffing firms operating

– Fast growing staffing market (+20% in 2011)

– Highest proportion of short term assignments (less than one month)

• Volatile economy: austerity measures– Pervasive influence of organised crime

– Relatively low unemployment

• Talks on labour reform between government, unions and

employers, resumed on 15th February– Multiple labour contracts

– Growth of ‘co-co-pro’s’

– Reforms will be passed with or without union consent

14

Spotlight on Argentina


• Temporary staffing penetration rate of only 0.4% (in 2009)

• Many people work without having a contract

• Towards bottom of rankings in both World Bank Governance

Indicators (political stability/corruption) and Global

Competitiveness Report (labour market efficiency)

15

Spotlight on Greece


• Staffing market unregulated until 2001– Tiny and immature staffing market

– Temporary staffing penetration rate of 0.1% (in 2009): the lowest

measured rate

– Among the most inefficient staffing markets from a regulatory

perspective (according to CIETT)

• Government on brink of bankruptcy– Unemployment at 19%

– Second EU bailout conditional on further cuts to the minimum wages,

annual salaries and pensions

– Greek economy forecast to contract by 4.5% this year

– Private sector workers have already suffered a 14% loss in annual

income due to emergency taxes

16

Spotlight on Russia


• Economy liberalised 21 years ago– Non-standard employment only began to grow from 1994

– Very high burden of employment law (85th out of 85 countries in ‘The

Regulation of Labor’)

– Most unstable and corrupt country of those we assessed

• 12% of workforce working on a temporary basis – But much smaller market for agency workers

– Thriving black market for temporary labour

– Strong union opposition

– State Duma passed a bill banning agency labour in May 2011 but law is

subsequently in limbo

– Employee leasing popular

17

Spotlight on Brazil


• 5th largest country in the world (by geography and population)

• Agency temps may only be hired to substitute for permanent

staff or during busy periods– Term limit on length of temporary assignments

– Staffing companies are pseudo-outsourcing firms

• Difficult/bureaucratic business environment and challenges

with contract enforcement

18

Spotlight on Spain


• High unemployment currently at 23%– Quarter of the workforce employed on a temporary basis (not through

an agency)

– Skilled workers looking for work abroad

• Radical labour reform underway– Royal Decree Law currently being processed in Parliament

– Easier to terminate and decrease in severance pay

– Rights to temporarily suspend employment contracts

– Arbitrary reduction or extension of working hours by 5%

• Strong trade union influence causing unrest

19


Protest

20

Protest


21

Protest


22

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 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


23

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!


24

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

25

Any Questions?

26


Western Europe Buyer Webinar

Sponsored by


Market Complexity

Jon Holden

VP Sales EMEA

27

SAVE THE DATE!SAVE THE DATE!

15-16 May 2012

Lancaster Hotel, London

www.cwssummitwe.eu

© 2007-2011 The London Organising Committee of

the Olympic Games and Paralympic Games Limited


28

Next European Webinar

Contingent Buyer Case StudySponsored by Fieldglass

Wednesday 18 April 2012

10am EST / 3pm GMT / 4pm CET

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