SEPT 12 | 4:00 PM | GOLD

CONCURRENT SESSION: ADAPTATION The Evolving Workforce in Developing Markets

Speakers: . Margie Durham, Director, Global Talent Services, Dell, USA . John Nurthen, Executive Director, International Development, Staffing Industry Analysts

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. Insights from Staffing Industry Analysts - What are developing markets? - What are the characteristics and trends in developing markets? - What are the main legislative issues? - Where are the most complex contingent markets? . Insights from Dell’s Global Program Implementation - My Talent On Demand Programs - Globalization complexities – External and Internal - Key takeaways Global Staffing Market* . Global staffing market 2012 = $416 billion Europe

NL CA UK BE DE CH FR Asia Pacific CH US IT JP

IN Africa & Middle East Asia

South BR Pacific America SA AU

*Staffing Market regions are to scale What are Developing Markets?

. Not all contingent markets outside the US are “developing” - Most English-speaking markets are already mature . But some staffing markets in developed economies are relatively young - Less cultural acceptance - Lower penetration rates - Less client sophistication - Legislation still evolving Staffing Market Development

1900s 1910s 1920s 1930s 1940s 1950s 1960s 1970s 1980s 1990s 2000s 2010s

UK US

Belgium India Brazil Italy Sweden

Source: Staffing Industry Analysts Evolution of Penetration Rate

Temporary Agency Workers as % of the Total Workforce 2.5%

2.2% 2.2% 2.1% 2.2% 2.1% 2.1% 2.1% 2.0% 1.9% 1.9% 1.9% 1.9% 2.2% 1.9% 2.0% 2.1% 1.8% 1.8% 1.8% 1.8% 1.9% 1.7% 1.6% 1.6% 1.6% 1.8% 1.6% 1.5% 1.4% 1.5% 1.5% 1.5% 1.4% 1.7% 1.4% 1.5% 1.5% 1.2% 1.4% 1.1% 1.0% 1.2% 1.0% 0.9% 1.1% Europe 1.0% 0.8% Japan

0.5% 0.6% USA 0.5% 0.5% 0.5%

0.0% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Source: CIETT (European average calculated using data from available countries) Largest Global Staffing Firms

Rank Company Name HQ 2011 Corporate Rank Company Name HQ 2011 Corporate Country Revenue $m Member? Country Revenue $m Member? 1 Adecco CH 28,077 Y 26 Brunel International NL 1,367 N 2 Randstad Holding NL 22,624 Y 27 True Blue US 1,316 Y 3 ManpowerGroup US 22,006 Y 28 Kforce US 1,111 Y 4 Allegis Group US 8,275 Y 29 Chandler Macleod AU 1,088 N 5 Kelly Services US 5,551 Y 30 Persona Service DE 965 N 6 Hays UK 5,186 N 31 Hudson US 934 Y 7 Recruit JP 4,755 Y 32 Alexander Mann Solutions UK 927 Y 8 USG People NL 4,525 N 33 Meitec JP 915 N 9 Robert Half International US 3,353 Y 34 Reed UK 906 N 10 Tempstaff JP 3,079 N 35 Act-1 Group US 895 Y 11 Pasona Group JP 2,588 N 36 AMN Healthcare Services US 887 Y 12 Advantage Resourcing1 JP 2,301 Y 37 Fircroft Engineering Services UK 886 Y 13 Express Employment US 2,139 Y 38 Autovision DE 879 N Professionals 39 SThree UK 872 Y 14 Groupe Crit FR 2,106 N 40 Shanghai World Expo Group CN 855 N 15 Synergie FR 2,018 N Harvey Nash UK 855 Y 16 Insperity US 1,976 N 42 Robert Walters UK 848 Y 17 Skilled Group AU 1,940 N 43 Morson Group UK 816 N 18 Nichii Gakkan JP 1,930 N 44 Hamilton Bradshaw UK 802 N 19 Impellam Group UK 1,815 Y 45 Korn Ferry International US 791 N Volt Information Sciences US 1,815 Y 46 I.K. Hofmann DE 789 N 21 The Select Family of US 1,778 Y 47 Proman FR 768 N Companies 48 CDI US 749 Y 22 Automatic Data Processing US 1,648 N Adcorp Holdings SA 749 Y 23 Michael Page International UK 1,637 N 50 Proffice SW 736 N 24 Gi Group IT 1,604 Y 25 Trenkwalder Personaldienste AT 1,395 N

1Acquired by Recruit in January 2012 US Europe Rest of World

Source: Staffing Industry Analysts Level of Market Consolidation

Market Share of Five Largest Staffing Companies per Market

Others Top 5

Source: Staffing Industry Analysts VMS/MSP Spend by Geography

VMS Spend 2012 MSP Spend 2012

Outside US 30% Outside US 33%

US US 70% 67%

Source: Staffing Industry Analysts Recorded Incidence of MSP Contracts

Less than 10 MSPs

10 to 50 MSPs

51 to 100 MSPs

101 to 500 MSPs

Over 501 MSPs

No MSP Recorded

Source: Staffing Industry Analysts The Issue of Staffing Agency Licensing

• Most countries require staffing Country Licensing Country Licensing Argentina N Kuwait N agencies to be legally licenced Australia Y Mexico Y before being allowed to supply Y Netherlands N Y New Zealan N temporary workers Brazil N Norway Y Bulgaria Y Poland Y • Licensing is fundamental to Canada Y Portugal Y China Y Y whether an MSP is allowed to Czech Republic Y Romania Y Denmark* Y/N Russia N operate as a Principal intermediary Egypt Y Saudi Arabia Y – An indication that programme Finland N Serbia Y France Y Singapre Y managers should look more carefully Germany Y South Africa Y Greece Y Spain Y at implications for MSP delivery Hong Kong China Y Sweden N – In some markets, any staffing agency Hungary Y Switzerland Y India Y Turkey Y supplying staff through an MSP Ireland Y Y would be in breach of licensing Italy Y N Japan Y United States N

requirements *Licensing required for provision of healthcare staffing only Common Restrictions on Staffing Provision

TAW regulation

Main restrictions Main obligations Equal pay/ on TAW use for TWAs equal treatment

Sector Duration/ Reasons of Licensing Employment Prohibitions renewals use requirements contract Country examples: Most countries Country Country Country Country Country examples: examples: examples examples: examples Argentina Argentina Argentina Most France South Africa Brazil China countries Belgium Japan Japan India Germany Austria Belgium Spain France Italy

13 Source: CIETT

Staffing Regulation: From Reject to Respect

No Regulation Legal Social Normative Social Full Illegality/Grey Zone Recognition Tolerance Acceptance Acceptance Recognition

Hostility and Containment Agency work Useful tool for Agency work as rejection of this new of an accepted by labor market an acceptable form of work unpopular unions/NGOs policies work alternative, relationship industry, as a if properly combined with no real last resort HR regulated PES-PrES restrictions Russia provider often cooperation combined with Australia India Japan heavy Canada Netherlands Pakistan restrictions Germany France UK Bangladesh Nordics Belgium USA Algeria Argentina Italy Tunisia Brazil Portugal Namibia China Spain Uruguay South Africa Venezuela

Source: CIETT Protests against Temporary Work

ISRAEL SPAIN GERMANY SOUTH AFRICA POLAND TAIWAN

INDIA NORWAY PAKISTAN Indian Employment Structure

Population 1,210 million

Working Age Population 743.8 million

Labor Force 418.4 million

WorkForce Unemployed 404.5 million 13.9 million

Informal Formal 361.8 million 42.7 million

Temporary Permanent 23.3 million 19.4 million

Casual Fixed Term Contract 20.1 million 3.2 million

Tripartite Bipartite 1.3 million 1.9 million Source: Indian Staffing Federation Typical Structure Developing Staffing Market

Professional Staffing Mostly Permanent Placement, focus on multi-lingual Exec Search, senior staffing categories and call centres

Blue Collar High volume Manufacturing Often Quasi-Outsourcing/Payrolling Black Domestic Market Domestic Servants Exploitation of lower waged economies

Source: Staffing Industry Analysts Rogue Agencies

. Many developing economies have a thriving black market for contingent workers - i.e. Mexico, Russia, Middle East . Unlicensed staffing firms - Evasion of employment taxes and social charges - Evasion of business taxes - Scant regard for Health & Safety laws . Undermines credible, professional suppliers . Inhibits social acceptance and feeds union opposition What Makes a Contingent Market Complex?

. Staffing market maturity . Regulatory efficiency . Employment law burden . Labour market efficiency . Trade union influence . Political stability/corruption . Ability to enforce contracts . Pricing environment . Independent contractor environment . MSP/VMS maturity Contingent Market Complexity

Least Complex Markets Most Complex Markets

1 UNITED STATES 1 ARGENTINA 2 UNITED KINGDOM GREECE 3 CANADA ITALY 4 NEW ZEALAND 4BRAZIL 5 HONG KONG CHINA RUSSIA 6 SPAIN 7AUSTRALIA 7KUWAIT 8 NETHERLANDS SAUDI ARABIA 9 IRELAND TURKEY BELGIUM 10 EGYPT MEXICO POLAND PORTUGAL UNITED ARAB EMIRATES Most Complex

Least Complex

Not Recorded

Source: Staffing Industry Analysts Identifying Complex Markets

They grow olives They drill for oil They dance salsa

Source: Staffing Industry Analysts Global Contingent Labor Solution

My Talent On Demand

Margie Durham My Talent On Demand Programs

Independent Services MSP Non- Statement of Services Contractors Work MSP & Payrollees

Non-employee Non-employee IC’s operating as self- Milestones / deliverables resources sourced by resources sourced by employed legal entities. based contracts to approved staffing approved staffing Payrollees are pre- deliver an end product or agencies (regardless if agencies identified non-employee solution. billed to client or not.) resources

Resource Sub - Category Independent Contractors; Consultant Resources; Assigned Resources Assigned Resources Payrollees SOW Resources How Resources Are Invoiced Paid for time and Paid for time and IC’s – deliverables- Deliverables-based pay expenses expenses based pay; Payrollees – paid hourly for time and expenses

24 Confidential My Talent On Demand My Talent On Demand Global Footprint

Legend Flags – Primary My TOD Locations – My TOD supported Locations

25 Confidential Globalization Complexities

External Internal

Process Market Maturity Differences

Country Labor Conflicting Laws Priorities

Invoicing Laws Costs Pressures

Cultural Local Exec utive Differences Buy -In

Language Barriers Local Functional Capabilities

26 Confidential My Talent On Demand Europe

Low Supplier • Very different from US – not much room to negotiate Margins

Limited • Business dependence on specific LLCs Liability • Very complex contractual agreements Corps

Extreme Cost • Specific Businesses can be under very tights cost constraints Pressures

Contractual Language • Contracts are in local country language – difficult to analyze Challenges Discovered Variances

Dell Non- Standard • Terms not always updated to global standards Contract Terms

27 Confidential My Talent On Demand Latin America

Legal Entity • Local banking & incorporation laws & Treasury

Potential Corruption • Many countries have high PCI index Risks

Supplier • Culturally, relationships are very important Challenges Discovered Relationship

Functions Tools Not • Global organizations & technology doesn’t mean utilization Global

28 Confidential My Talent On Demand Asia & India

Market • Largest gap in MSP market maturity Maturity

Invoicing • Some countries have invoicing laws that prevent third party invoicing Laws

Tenure Laws • Complex & evolving tenure laws – India by industry & labor type

Local Functions • Local HR, Procurement, Legal created adoption challenges Challenges Discovered Not Aligned

Functions Tools Not • Global organizations & technology doesn’t mean utilization Global

29 Confidential My Talent On Demand Key Takeaways

• Consider external & internal complexities

• Don’t assume the same solution fits all regions/countries

• Thoroughly analyze global organizations tools & processes

• Keep up to date on evolving country laws

30 Confidential My Talent On Demand Any Questions? Help us evaluate the CWS Summit content.

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