Mark Adams - 9 December 03

Rising to the
Challenge
Mark Adams
Chief Executive, CSG
The Recruitment Industry Today
Taking the Temperature ...
FRAGMENTED
• 16,000 agencies / little cohesion
• Contrast to US/European picture
AN IMAGE PROBLEM
• A magnet for negative PR
• Seen as margin-focused / parasitical
A TACTICAL DEPLOYMENT
• Generally low level engagement
• Rarely a strategic partner
ESSENTIAL TO BUSINESS MODEL
• Core to ‘just in time’ approach
• Flexibility gives UK unique advantage
Getting Under the Surface
Temporary Work is Key to
the UK’s Business Model ...
Source: BA/ORC
Research 2002
Getting Under the Surface
A Valued Employment Option ...
“
“
“
I find it a useful way of
gaining broader experience
of different work
I can work when I want, for
as long as I want
”
”
”
I would have lost my house
without temporary work
Better
Better pay
pay
More
More flexibility
flexibility
Less
Less ties
ties
Self-development
Self-development
Variety
Variety
Source: BA/ORC
Research 2002+
What will the market be
like in 10 years?
Recruitment in 2013
Ageing
population
End of the
‘Job for Life’
Out-sourcing
of non-core areas
Globalisation
Pressures
on Margins
Economic
uncertainty
Commoditisation
of some sectors
Increased
emphasis on
cost management
European
integration
CHANGE
CHANGE
New demands
from Clients
People and Skill
Shortages
Increased
legislation
Government’s
diversity agenda
Integrated
HR
solutions
Demand for
added value
Growth of new
staffing
solutionsoutplacement,
interim
management etc
Key Market Trends
A reduced, more diverse workforce...
A New Labour Market
• Demographic Changes
– In 4 years there will be more pensioners
than children in the UK for the first time
• Increasing Diversity
– By 2010 only 20% of the workforce will be
white, able-bodied men under 45
– One fifth of the population of working age
have disabilities but only 11% are
employed.
• Greater Migration
Ratio of Working-age Adults
to Over 65s
in the Developed World
0
2
4
6
6.8
1960
1990
5
2000
4.5
2010
2020
– Free movement after EU expansion
– EU will have to look outside boundaries for 2030
younger workers
8
4
3.1
2.5
Key Market Trends
New laws and more equality ...
A Different Legal Landscape
• Anti-Discrimination Laws
– 2003 - new regulations on sexual
orientation and religion
– 2004 - Disability regulations
– 2006 - Age regulations
• Employment Laws
– Minimum wage
– Agency Workers Directive?
– Employment Agency Regulations?
Key Market Trends
Increased consolidation ...
PERCENTAGE OF MARKET
CONTROLLED BY TOP 5 PROVIDERS
A New Industry Structure
• Pressures on margins
– Economies of scale
– Access to new technology
• Greater regulation
– Drive out fringe players
85%
Sweden
80%
France
77%
Benelux
Italy
68%
Spain
68%
65%
Denmark
63%
Finland
35%
Portugal
• Employer demand
– Sophisticated portfolio
– Brand / quality / national ‘footprint’
21%
Germany
16%
UK
0%
20%
40%
60%
80%
100%
Key Market Trends
Greater sophistication ...
New Customer Demands
• Client-centric service
–
–
–
–
Vendor managed / managed service options
Added values services and information
Risk management support
Real-time information / 24/7 solutions
• One stop support
– Multi-sector agency preference
– Integrated HR solutions
– Highly trained support staff
Rising to the Challenge
A way forward for agency working in the UK
Rising to The Challenge
A Key to Business Excellence ...
THE BQF BUSINESS EXCELLENCE MODEL
ENABLERS
Leadership
RESULTS
People
People
Results
Policy &
Strategy
Customer
Results
Processes
Partnership
& Resources
Society
Results
INNOVATION AND LEARNING
Key
Performance
Results
Rising to The Challenge
New industry imperatives ...
ENGAGING DIVERSITY
• In the public sector:
– Public sector contracts
– Employment Zones, Action Teams etc.
• In the private sector
– Business case proven
– Proxy for good governance
– Pushed down through supply chain
• Increased importance and influence of
‘minority’ groups
• US model
Rising to The Challenge
Case History - Age
ENGAGING DIVERSITY
• Life Expectancy Increasing:
– Improved lifestyle & medical advances
• Third Age Poverty a Growing Issue
– Fewer tax payers to support pensioners
– Pension funds ‘under-performing’
• Temporary Work Key to Prosperity
– 9 to 5 model too rigid for employers and
elderly workers
• Need to Develop Bespoke Support
Rising to The Challenge
New industry imperatives ...
TRAINING ‘ASSOCIATES’
• Demand from clients:
– Skills shortages acute in some sectors
– Government initiatives to up-skill
workforce
– Training & development recognised as
a key retention tool
• Demand from temporary workers
– Equal rights to permanent staff
– Agency training credentials key to
attracting and keeping best workers
Rising to The Challenge
New industry imperatives ...
STRATEGIC ROLE
• Increased expertise
– Specialist - diversity / regulations
– General - business consultancy
• One-stop shop
– Out-placement services
– HR consultancy
– Interim management
• Strategic engagement
– Board level interaction
– Strategic modelling
Rising to The Challenge
Case History - Driving & Logistics
STRATEGIC ROLE
• Pressure to reduce costs
– Wages, Fuel, Vehicle, Tyres
• Little investment in training
– 90% of wagon damage down to
agencies drivers
• Working with FTA to develop
a strategic approach
– A well trained driver can save the
client up to 30% on their fuel bills or up to £8,000 per vehicle
Rising to The Challenge
New industry imperatives ...
EMBRACING INNOVATION
• New Business Models
– Increased efficiency / greater flexibility within
economic cycle
– Potential for new models (career
management, employee leasing etc)
– New media
• Creativity will drive differentiation
– Build strong brands
– Service and quality innovation will be key to
success
Rising to the Challenge
“The problem
with the future is
that it normally
arrives before
we’re ready for it”
Arnold Glasgow