20 Underappreciated Business Opportunities...Freelance.com Freelance.com Freelance.com Freelance.com...

© 2012 Crain Communications Inc

20 Underappreciated Business Opportunities

Jon OsborneVP Research/Editorial, Staffing Industry AnalystsMarch 15, [email protected]


Boom in The Energy Sector

Oil & Gas Extraction Employment, 2007-2012,

+34%

Total Nonfarm Employment,2007-2012,

-3%Source: Bureau of Labor Statistics & Staffing Industry Analysts


U.S. Natural Gas & Oil Output, 2007-2011

Source: U.S. Energy Information Administration & Staffing Industry Analysts


Shortage of Petroleum Engineers

Source: Staffing Industry Analysts, Payscale.com, Bureau of Labor Statistics


Energy Sector Buyers Like Contingents

• Most biased in favor

• Most ambitious in plans

• Most inclined to use more temps

Source: Staffing Industry Analysts 2011 Contingent Buyer Survey


North Dakota The Next Texas?

Source: Staffing Industry Analysts & North Dakota Industrial Commission

Alaska = 550K

Texas = 1,200K


More Job Openings Than Unemployed!

Source: Staffing Industry Analysts & North Dakota Workforce Intelligence Network

0

1

2

3

4

5

6

7

8

US North Dakota

Unemployed Per Job Opening, North Dakota and National


Where the Shale Boom is Happening

Source: Staffing Industry Analysts & U.S. Energy Information Administration


The Return of U.S. Manufacturing


Manufacturing—First Gains Since 1998

-2,000

-1,500

-1,000

-500

0

500

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Manufacturing Sector: 12-Month Rolling Change in Employment

Source: Bureau of Labor Statistics & Staffing Industry Analysts


Manufacturing—What’s HotRank Description Jul Aug Sep Oct Nov Dec1 Fabricated structural metal products 6.4 7.0 7.1 6.8 7.0 6.7

2 Industrial molds 5.2 5.8 5.1 5.3 5.3 6.7

3 Alumina and aluminum production 6.6 6.6 6.9 5.0 6.0 6.5

4 Motor vehicle metal stamping 2.9 4.3 5.2 5.5 4.4 6.35 Primary metals 5.6 5.8 5.8 5.5 5.6 5.9

6 Other nonferrous metal production 5.9 6.0 5.6 5.5 5.1 5.9

7 Motor vehicle power train components 3.0 4.7 4.8 5.0 4.8 5.9

8 Ferrous metal foundries 5.3 5.1 5.6 5.8 5.6 5.8

9 Plate work and fabricated products 5.4 6.1 6.1 6.0 6.1 5.7

10 All other motor vehicle parts 3.1 4.6 4.6 5.0 4.9 5.7

11 Animal slaughtering 2.6 4.2 4.4 4.9 4.4 5.3

12 Metalworking machinery 4.7 5.5 5.8 5.4 6.2 5.313 Grain and oilseed milling 4.0 4.5 4.3 4.4 4.8 5.2

14 Fruit and vegetable canning and drying 4.9 4.6 5.1 6.1 5.9 5.215 Agricultural & construction machinery 5.5 6.0 7.4 5.8 5.6 5.2

Source: Bureau of Labor Statistics & Staffing Industry Analysts


Interns = Temps


About How Big is the Intern Market?

1.8MM College Grads

≈450K Summer Interns

≈$2.2 Billion in Payroll

Source: Staffing Industry Analysts


Automated Staffing is BoomingHeroicZaarly.comCrowdsource.comWeGoLook.comjobboy.com

` Microtask.com Microtask.comThumbtack.com Thumbtack.comCloudcrowd.com Cloudcrowd.comMinuteworkers.com Minuteworkers.comDesigncrowd.com Designcrowd.comTaskrabbit.com Taskrabbit.com

crowdflower.com crowdflower.com crowdflower.comdomywork.net domywork.net domywork.netSmartsheet.com Smartsheet.com Smartsheet.com

Freelancer.com Freelancer.com Freelancer.com Freelancer.comoDesk.com oDesk.com oDesk.com oDesk.com oDesk.comDesigncontest.com Designcontest.com Designcontest.com Designcontest.com Designcontest.comShorttask.com Shorttask.com Shorttask.com Shorttask.com Shorttask.com

LiveOps LiveOps LiveOps LiveOps LiveOps LiveOpsifreelance.com ifreelance.com ifreelance.com ifreelance.com ifreelance.com ifreelance.comvWorker vWorker vWorker vWorker vWorker vWorkerscriptlance.com scriptlance.com scriptlance.com scriptlance.com scriptlance.com scriptlance.commyeasytask.com myeasytask.com myeasytask.com myeasytask.com myeasytask.com myeasytask.comFreelanced.com Freelanced.com Freelanced.com Freelanced.com Freelanced.com Freelanced.com

elance.com elance.com elance.com elance.com elance.com elance.com elance.comFreelance.com Freelance.com Freelance.com Freelance.com Freelance.com Freelance.com Freelance.comGuru.com Guru.com Guru.com Guru.com Guru.com Guru.com Guru.com

1999 2001 2003 2005 2007 2009 2011Source: Staffing Industry Analysts


Automated Staffing is BoomingoDesk: Work Performed, Hours/Week

Source: oDesk.com


Automated Staffing is Booming


Temps

Non-Agency Contingent

Workers

Traditional Workers

The Really Big Recruiting Opportunity

This one!It’s hot!


Which is Better: In-House Monopoly or Outsourced Competition?

In-HouseRecruiting YOU


Recruiting Increasingly Outsourced

Source: Staffing Industry Analysts, Bureau of Labor Statistics, Contingent Buyer Survey


What Wins in 2012? Recruiting!

Selling was a bigger challenge

Recruiting now a bigger challenge

Source: Staffing Industry Pulse Survey


Who Knew Agencies Had Recruiters?

How would you find a recruiter specializing in your particular skills (finance, IT, etc.)?

Temps

Staffing agency

30%

Friend 25%

Web 44%

Freelancers

Web 56%

Friend 33%

Staffing agency

10%

Non-ContingentsStaffing agency

13%Friend 36%

Web 50%

Source: Staffing Industry Analysts 2009 Contingent Workers Survey


Your Recruiters Are Not on the WebSearch Term# of first 20

Actual Recruiters

Staffing Agencies

Other

IT Recruiter 1 7 12

Engineering Recruiter 0 9 11

Nurse Recruiter 0 6 14

Accountant Recruiter 1 5 14

Recruiter 0 2 18

Source: Google & Staffing Industry Analysts


Meet John Kaufman, an Actual Recruiter


Become a Best Place to WorkStaffing firm priorities ranked by correlation with profit

2008 2010 2011

1 Recruting quality candidates to place

Training/developing nternal employees

Acquiring other firms

2 Training/developing internal employees

Creating a positive company culture

Recruiting/retaining quality internal staff

3 Recruiting/retaining quality internal staff

Recruiting/retaining quality internal staff

Training/developing nternal employees

4 Creating a positive company culture

Providing excellent customer service

Creating a positive company culture

5 Expanding number of clients Improving gross margins Reducing internal staff headcount

6 Providing excellent customer service

Recruting quality candidates to place

Improving gross margins

7 Acquiring other firms Expanding/diversifying number of clients

Providing excellent customer service

8 Growing revenue Growing market share Reducing/controlling costs

9 Improving cash flow/collections Growing revenue Expanding/diversifying number of clients

10 Improving gross margins Retaining existing clients Growing market shareSource: Staffing Industry Analysts’ Annual Staffing Firm Surveys


Become a Best Place to Work

•1/220Odds of a

random staffing firm being among the

fastest-growing in U.S.:

•1/8Odds of “Best

Places to Work” staffing firm

being among the fastest-growing

in U.S.:


Become a Best Place to Work

“Best Places to Work” survey opens in Fall, 2012


Construction in Recovery

-1,400

-1,200

-1,000

-800

-600

-400

-200

0

200

2007

2008

2009

2010

2011

2012

Construction Sector: 12-Month Rolling Change in Employment

Source: Staffing Industry Analysts & Bureau of Labor Statistics


Construction

Education

Arts &Rec

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10%

Cycl

ical

ity

Seasonality

Seasonality and Cyclicality of Industries

Construction: Both Cyclical & Seasonal



IC Crackdown to Hit Construction Hard


Where Construction is Picking Up Now

Metro Area1 Lafayette, IN 145%2 Kennewick-Pasco-Richland, WA 80%3 Miami-Fort Lauderdale-Pompano Beach, FL 75%4 Myrtle Beach-North Myrtle Beach-Conway, SC 58%5 Tulsa, OK 45%6 San Diego-Carlsbad-San Marcos, CA 44%7 Washington-Arlington-Alexandria, DC-VA-MD-WV 42%8 Durham-Chapel Hill, NC 39%9 Birmingham-Hoover, AL 38%

10 Denver-Aurora-Broomfield, CO 37%11 Raleigh-Cary, NC 37%12 Lake Charles, LA 36%13 Dallas-Fort Worth-Arlington, TX 35%14 Cape Coral-Fort Myers, FL 34%15 Ogden-Clearfield, UT 34%

Last 12 months percent change in new residential building permits

Source: U.S. Census Building Permits Survey


2%

3%

5%

11%

21%

24%

34%

Channel partnership sales

Spend time answeringRFPs/RFIs/RFQs

Hiring national/regional sales staff

Focus on recurring business

Hiring local sales staff

Telephone/door-to-door cold calling

Existing accountpenetration/development

Which sales tactic would you say has the highest bang-to-buck return on spend/effort?

Cold Calls Still Work

Source: 2010 Staffing Company Survey


Cold Calls Still Work

Buyers: How have you typically heard about the staffing suppliers that you ultimately used?

45% of buyers found agency because “a salesperson called”!

Source: 2010 Contingent Buyer Survey


Some Cold Calling Tips1) Don’t do cold calls—do warm calls, i.e., use marketing in advance of calls to create an impression

2) Ask yourself—are you calling the right person?

3) Get your elevator speech right—you have about 15 seconds to say something smart4) Be opportunistic—use logical opportunities when they surface

5) Discipline—eventually the laws of numbers will work

6) Drop a name of someone they know—use Linkedin, social networking to find relationships


Get on Lists



Get on These Lists

Regions U.S. Temp Segments U.S. Other Staffing U.S. Opportunity ListsGlobal Largest Office/clerical Direct Hire Fastest-GrowingU.S. Largest Industrial Retained Search DiversityCanada Largest Information technology PEO MentorsGlobal IT Services Engineering PEO Revenue Detail ProtégésGlobal Engineering Services Finance Outplacement Acquirers

LegalMarketing/creativeClinical/scientificHealthcare Allied Healthcare Locum Tenens Per Diem Nursing Travel Nursing


Step 1) Find Dan, Step 2) Give Him Biz Card

Dan Begley-GrothResearch Analyst

Give him your business card and he will get you on our lists.

Or email [email protected]


Local Government Outsourcing

19,100

19,200

19,300

19,400

19,500

19,600

19,700

Jan/2010 Jan/2011 Jan/2012

U.S. State & Local Employment

Source: BLS & Staffing Industry Analysts


Local Government Outsourcing


Don’t Be Small

0

1

2

3

4

5

6

7

8

<2.5

2.5-

4.9

5-9.

9

10-2

4.9

25-4

9.9

50-9

9.9

100-

249.

9

250+

Annual revenue ( $Millions)

2011: Average Number of Years Continuous Profitability, as a Function of Firm Size



Don’t Be Small

0

1

2

3

4

5

6

<$2.

5

$2.5

-$4.

9

$5-$

9.9

$10-

$24.

9

$25-

$49.

9

$50-

$99.

9

$100

-$24

9.9

$250

-$49

9.9

$500

-$99

9.9

$1 b

illio

n+

Annual revenue ( $Millions)

2010: Average Number of Years Continuous Profitability, as a Function of Firm Size



Don’t Be Small

Segment offered <10 10-99.9 100+IT $3,300,000 $9,226,190 $16,666,667Healthcare $2,000,000 $15,000,000 $8,250,000Office/Clerical $1,750,000Industrial $2,550,000 $3,660,714 $3,448,617

All firms $2,333,333 $4,420,000 $9,065,217*Insufficient sample size to provide both ranges; combined into one

Median revenue per branch office by primary segment offered/primary industy served and company size

$5,000,000*



Take the internet seriously

9%

4%

6%

6%

10%

12%

16%

18%

18%

Other

Search engine ads

E-mail newsletters

Direct mailings

Search engine optimization

Social media

E-mail blast

Attend/sponsor conferences

Company web site

Which marketing tactic would you say has the highest bang-to-buck return on spend/effort?



Keep a Seasonal Employment Calendar

Of contingent labor is hired for seasonal needs



Keep a Seasonal Employment Calendar

Monthly Change in Employment, 2000-2010

-8

-6

-4

-2

0

2

4

6

Up Spikes = Hiring in Apr, May, Jun, Jul

Thou

sand

s of J

obs

Example: Scenic & Sightseeing Transportation



Seasonal Calendar for Your Sales DeptJan Feb Mar Apr May Jun

Accounting/Bookkeeping

Accounting/Bookkeeping

Building material and garden supply stores

Scenic and sightseeing transportation



State government education

Performing arts and spectator sports

Amusements, gambling, and recreation

Educational services

Services to buildings and dwellings

Heavy and civil engineering construction



Keep a Seasonal Employment CalendarJul Aug Sep Oct Nov Dec


Motor vehicles and parts

Transit and ground transportation


Department stores

Accounting and bookkeeping

Amusements, gambling, and recreation

State/Local government education

General merchandise stores

Couriers and messengers

Arts, entertainment, and recreation


Clothing and clothing accessories stores

Child day care services



IC Screening/Compliance

Odds that a buyer is employing improperly classified independent contractors:

87%

Odds that a buyer will be involuntarily audited by an external entity this year:

49%

Odds that a buyer will be in hot water shortly:

43%Source: 2010 Contingent Buyer Survey



37%41%

49%

62%

2009 2010 2011 2013

Buyers: Do you use a vendor for IC screening/compliance?

Source: 2009-2011 Contingent Buyer Surveys


Think Globally, Act Profitably

16%

21%24% 25%

2008 2009 2010 2011

Buyers: Do you manage your contingent workforce on a

global basis?

Source: 2009-2011 Contingent Buyer Surveys


Think Globally, Act Profitably



Resume Hot List

1.4%

1.3%

1.3%

1.3%

1.1%

1.0%

1.0%

1.0%

1.0%

1.0%

0.8%

0.7%

0.7%

0.6%

0.5%

FirefightersArchitectural and engineering managers

Environmental scientists and geoscientistsPsychologistsVeterinarians

Speech-language pathologistsLocomotive engineers and operators

ClergyDetectives and criminal investigators

Physical therapistsOccupational therapists

Training and development managersDentists

Physicians and surgeonsComputer network architects

Occupations With Less Than 1.5% Unemployment

Source: Staffing Industry Analysts and Bureau of Labor Statistics


Resume Hot List

2.2%

2.2%

2.2%

2.2%

2.0%

2.0%

2.0%

2.0%

1.9%

1.9%

1.9%

1.8%

1.8%

1.7%

1.5%

Computer hardware engineersLawyers

Insurance underwritersLibrarians

Farmers, ranchersPower plant operatorsBiological technicians

Police and sheriff’s patrol officers Database administrators

Registered nursesPrepress technicians and workers

Animal trainersTherapists, all other

Geological and petroleum techniciansSupervisors of police and detectives

Occupations With Less Than 2.3% Unemployment

Source: Staffing Industry Analysts and Bureau of Labor Statistics


Retailers: 0.4% to 5.0% of sales

Automakers: 2.5% to 3.5% of sales

Packaged goods: 4% to 10% of sales

Staffing firms: 0.4% of sales (median)

You Don’t Take Marketing Seriously

Source: Staffing Industry Benchmarking Consortium, Google


Marketing Exec is Last Hired

VP, Sales

CFO

VP, Marketing

0%

10%

20%

30%

40%

50%

60%

0 1 2 3 4 5 6 7 8 9 10

Perc

ent o

f firm

s

Company age

Percent of firms with selected executives, by company age



Marketing Exec is Lowest Paid

25th Median 75th Average N

Founder/CEO/Chairman $110,000 $177,500 $287,500 $224,332 131

President/COO $117,500 $157,500 $262,500 $236,234 78VP/SVP/EVP, Sales $122,500 $162,500 $212,500 $192,336 60

CFO/VP, Finance $145,000 $185,000 $263,000 $222,188 24Region/Division Head $97,500 $162,500 $225,000 $160,326 23VP/SVP/EVP, Marketing $102,500 $127,500 $205,000 $151,591 11

Compensation across occupations



Don’t Be Shy!


Dan Begley-GrothResearch Analyst

Jon OsborneVP, Research

Robert BalickiResearch Analyst

Andrew KarpieResearch Analyst

Timothy LandhuisResearch Associate

Sona SharmaSeniorResearch Analyst

CraigJohnsonManagingEditor

SubadhraSriramEditorialDirector

TonyGregoireSeniorResearch Analyst


Questions

20 Underappreciated Business Opportunities...Freelance.com Freelance.com Freelance.com Freelance.com...

Documents

Transcript of 20 Underappreciated Business Opportunities...Freelance.com Freelance.com Freelance.com Freelance.com...