The ACSESS Conference - Day 2

Today was an easier day for me at the annual conference because I didn't have many official duties. Eagle won a huge award in recognition of our Community Service and that is a big win when so many of the companies in our industry are very generous with their charitable support.


The other duty I had was to help with a session for our technology sector and unfortunately the speaker couldn't make it at the last minute because he injured himself. If I was a polite person I wouldn't mention the words "unfulfilled commitment", but then again if I made a commitment to speak at an annual conference I wouldn't bail 24 hours before my commitment either! In the end it was not a big deal, but I feel it was a black eye for our IT special interest group in an otherwise great conference agenda.


The up side of our "no show" was that I got to attend a session on differentiation which was based upon the book Blue Ocean Strategy. This is a great book that I can't believe I haven't reviewed at some point on this blog!!! I will commit to doing that sometime soon ... but it is basically about redefining your companies market space to eliminate competition. The presenter was a former ACSESS President, friend and industry colleague Bruce McAlpine.

In addition to Bruce's session and the industry awards I attended a very credible session from Fran Goldstein, who wishes her clients a Frantastic day. Definitely a high energy lady with a slightly more aggressive sales style than the typical Canadian (she is from East Coast USA)... but some very good ideas and messages.

I went to an presentation from the WSIB (Workers Compensation people in Ontario) which was another good presentation, that explained their corporate focus on zero accident workplaces in Ontario.

Perhaps my favorite session of the conference thus far was one on mergers and acquisition that featured three well known industry leaders herein Canada talking about their experiences as acquirers and as acquirees! Good information based on real life experiences, with no BS or posturing! Good stuff!

Once again I am convinced that conferences can be one of the best educational tools for any business leader, providing content, networking and the opportunity to establish a reputation for supporting the industry.

For me the 10th anniversary ACSESS conference has been the best one yet and we still have another day to go! If you are given a chance to attend high value industry conferences then grab the opportunity! If you are a business leader then absolutely support your industry association by sending some staff to their conference. I am extremely disappointed that some of the leading companies in our industry are not represented at this event ... in the same way that I think everyone needs to be association members, I also think we have a duty to support these events

The Return on investment is significant in pure learning opportunity, but the networking and reputation building opportunity is probably just as important!

Statistics and Facts About the Staffing Industry

I have been on the National Board of Canada's Staffing Industry Association (ACSESS) for more than 8 years now ... and one of my beefs has been our inability to gather consistent and regular statistics that give a picture of our industry. It is something we are working on, and will correct, however there are some other sources of facts that are relevant.

Today ... at the 10th Annual ACSESS conference I was treated to a number of facts and thought that I would share some of them.

A presentation from Statistics Canada gave the latest data on our industry which is for the calendar year 2006. Canada's staffing industry is an $8 Billion industry, up 8.6% from the previous year. This means that we provide a huge number of people with jobs, we pay a lot of money in taxes, we make a major contribution to the Canadian economy and we support a huge number of charitable causes. We also represent a significant lobby capability when discussing our industry agenda with various levels of government.

Ontario has still by far the largest concentration of staffing business, representing 57% of the revenues generated, although Alberta did surpass Quebec in size representing 17.6% of the business, no doubt driven by the hot Alberta oil economy.

For those who think that the staffing industry are "fat cats" think again ... with average profitability of 3.5% (2.6% in Ontario) this industry operates with very skinny margins. This is a fact that seems out of sorts with an economy experiencing greater and greater skills shortages ... which by the laws of supply and demand should mean increasing margins.

Later in the day I listened to a debate about the industry and the President of the American Staffing Association was one of the speakers. The ASA do have strong data gathering capability and Richard Wahlquist was able to give out some very interesting statistics related to the temporary industry in the States ... much of which should be similar here in Canada.

Surprising to some, but not those in the industry, was a statistic that suggests 90% of "temporary workers" are satisfied with their staffing company experiences. This was validated in the UK and Netherlands in addition to the US. This might fly in the face of some "anecdotal" stories of disaffected temporary workers which can always be found if you look hard enough ... and clearly it is "bad news" stories sell newspapers!

75% of temporary workers saw their assignments as a bridge to something else, which might have been a career change or just a full time position ... and most of them achieved their goal. 88% of temporary workers felt that their temporary assignments added to their resume, thus making them more employable. 20% of temporary workers would not want to be anything else! Validating the fact that there is a segment of the population that enjoys the flexibility afforded by the temporary worker lifestyle, for many and varied reasons.

Less than 5% of workers work for staffing companies, meaning that 95% of workers are in full time employment with some other type of company. I would have thought that the temporary workforce would have represented a larger number, but I guess not. So ... just 5% of the workforce (and typically a rotating 5% as temps take full time employment) provide our economy with the flexibility it needs to meet the ebb and flow of work and keep Canadian companies competitive in a global economy.

This is an industry that I believe in strongly ... I work hard to represent the industry's membership on our board and will see this industry rise in prominence over the coming years as demographic pressures and skills shortages underscore the value we can bring. Its nice to have a few facts and statistics to support these views!

Join Your Industry Association ... NOW!

Today I spent a good portion of my time in an Industry Association board meeting, tomorrow I will do the same and for the next three days I will be attending our annual conference. Our industry association is called ACSESS (Association of Canadian Search Employment and Staffing Services). Our website has information about the association and about the content of our conference.

I choose to be active in the association because I believe in the work it does (a) to support all companies in our industry and (b) to help our industry continue to grow and evolve as times change. The staffing industry has a huge role to play in the economy, allowing companies access to the resources they need to compete in a global market and with the added demographic pressures added by the boomers retiring.

Whenever I am particularly active in these activities I am reminded that not ALL companies support their associations the way that they should.

Here are a couple of previous blog entries that talk on this subject ...

From September 2006 ... Be Passionate for Your Industry Association.
From December 2006 ... Staffing Industry Leadership.
From October 2007 ... A Trip to the Industry Association Board Meeting.

This entry is really a reminder to any company that is not paying its dues to an industry association ... stop freeloading and start paying! That is the minimum acceptable behaviour of any company ... but better still, get involved and donate time to make a difference for you industry.

April IT Industry News

Every month I take a 30,000 foot look at events in the ICT industry. This is my overview of April's news, with a brief reminder of what was news in April a year ago! What you see here is a precis of the monthly report I produce, which will be available at the Eagle website over the next day or two.

Last year in April 2007 Google had a busy month, paying a whopping $3.1 Billion for Doubleclick, in addition to buying Marratech’s videoconferencing software; other big deals included CSC paying $1.3 Billion for Covansys; Mitel paid $732 million for Inter-tel, Software AG paid $546 million for webMethods and Business objects bought Cartesis for about $300 million. Also this time last year Lenovo announced cutbacks of 1,400 staff.

The big M&A deal in April 2008 saw a merger of the third and fourth largest chip makers STMicroelectronics and NXP into a $3 Billion company. IBM was busy, making three acquisitions this month Diligent, FilesX and InfoDyne; Yahoo bought Tensa Kft. despite spending time fending off the attentions of potential buyer Microsoft; and speaking of Microsoft they had a couple of acquisitions Farecast and Komoku; EMC also had a couple of forays into the M&A market with Iomega and Conchango plc.

Other than M&A activity this month there was some bad news from DELL, Symantec and AMD who all announced layoffs. Juniper Research tell us that more than 800 million consumers will be accessing banking services though their mobile phone over the next three years. Despite the US recession IT jobs increased 12% last quarter, which is a good reason to get your kids into IT … but it is engineers that rank as the hardest job to fill according to a Manpower survey. Finally the email scams are getting more sophisticated and “spear phishing” has been getting some press due to its levels of success.

Local Success for Global Companies

I recently read a blog entry on ITWorld Canada that discussed some recent personnel changes affecting Canadian leaders of subsidiary organizations. The ITWorld position was that Canadian success can’t happen without local leadership.

I have worked for several large organizations and have to agree that without local decision making capability it is hard to achieve success. I would also add to that, if the organization in question is not committed to success in the local market then it won’t happen. To be committed to success in a market means sometimes making investment decisions that favor that market, one of which might be to invest in having local management.

Take for example the global company with clients around the world. If a project in Dallas or New York will pay $2,000 a day for a Project Manager that fetches $1,000 or $1,200 a day in Ottawa what should the global company do? If putting the guy in Dallas means winning a big job then of course that is what they will do … but if it is just filling a hole is it the right decision?

Obviously one-off decisions are not the issue, and as long as they remain “one-off” then there is not going to be huge damage. The issue becomes when the decision becomes systemic … the great talent in the local market slowly but surely moves out of town.

It seems like a sound business decision … more dollars for the same person. Why not?

What happens is that the local market suffers … whether it is in Canada or Mexico or New Zealand or any smaller market. The best talent is not available and they find it hard to win business. They may even become a “feeder” system for the “big billing” offices.

The people who travel may like it at first, but working out of town can wear you down and is not for everyone. So … some of those great people will leave. Also some of the management team will not want to work for a company that does not commit to their local market. The result is that slowly but surely the presence in that local market will atrophy and “big company” will wonder why they can’t make a go of it in those smaller markets.

So the most successful global companies make a commitment and investment in the local markets that they attack. They want to be successful locally because ultimately it is better to be successful in many markets than to just be successful in the bigger markets.

Canadian IT Job Market - Quarterly Outlook April 2008

This is a look at the Canadian IT Job market across Canada from our company's perspective. We have offices in 10 cities across the country and our three General Managers have tapped into their market knowledge to write this ... hope you find it helpful. I will stress that this is not a scientific or statistical look at the market ... this is what we say day in day out "in the trenches" of the war for talent across Canada.

Business picked up right across the West in the first quarter of 2008. Companies began the new calendar year by kicking off new projects and re-committing to older projects that were left unfinished over the year end break. Many companies have set their budgets for 2008 to be as large or larger than their 2007 budget, and several large organizations are placing a greater focus on cost control this year. Businesses have asked IT/IS to "do more with less" and this is forcing them to hold firm to their rate tables. The result has been that companies are being highly selective in the hiring process, as well as very rate conscious leading to longer than typical decision cycles.

More companies have been interested in hiring permanent employees and many contractors have been making the switch. Why the sudden interest in permanent employment? There does not appear to be any specific trend. IT contractors are still bullish on the Western economy as contract opportunities continuing to grow. A possible motive is related to the "phase-of-life" of a contractor and their risk profile. Many contractors in the later part of their careers desire benefits, stability, predictability, and, in some cases, a place where they can contribute as they work out their final years to retirement.

In Vancouver, organizations have been watching the IT contractor market to evaluate the possible impact of the coming Olympics, as well as the effects of Microsoft opening their new office. These organizations are concerned with retention and are using longer-term initial contracts and extensions to protect themselves. Security has been a hot skill in Q1 on the mainland.

Victoria still has a large base of mainframe users and these skills have been disappearing as people begin retiring.

In Edmonton, there has been an increased supply of helpdesk resources in the market as Dell begins to wind down their operations. PMs, BAs and .NET resources were in-demand over the quarter...notably absent was demand for Java Developers who had been in very hot demand at this time last year.

PMs, BAs and Program Managers with O&G experience continue to be sought after in Calgary, in addition to ERP professionals - most notably SAP with some interest in professionals with JDE skills as well.

In Manitoba, the provincial government has been looking for both functional and technical SAP resources, PMs and BAs. Oracle skill sets were also in demand in Winnipeg. With Viterra (Agricore's merger with Sask Wheat Pool) moving operations out of Winnipeg, it is expected that there will be a large number of IT professionals available for work as we enter the summer months.

The GTA continues to experience large amounts of activity and plenty of success in the Information and Communications Technology sector. Many Toronto companies recently found themselves on a variety of Top 50 lists including the Branham Top Tech 50, Deloitte Fast 50 and Profit Magazine’s Top 50. Moreover, a study by the IBM Global Location Strategies Team determined that Toronto’s ICT sector continues to rank with other world leaders. The success of these technology-based companies is creating many job opportunities for both those in the technology industry, as well as other professions.

Unemployment in Toronto is lower than it was at this time last year. Throughout the past quarter there was more participation in the workforce, though, which resulted in a slight unemployment increase from February to March. Despite this statistic, many sectors continued to see an increase in hiring activity including the telecom and government sectors.

The Task-Based Vendor of Record (VOR) for the Ontario Government expired at the end of March causing a scramble within the Provincial Government Sector as the evaluation for the most recent RFP to replace this contract vehicle has not yet been completed. Hiring managers have been put in an awkward position as they delay the hiring of new resources in hopes that the completion of the evaluation will come quickly. Though they are not completely without options, the available options are limited and more costly from both a time and financial perspective.

Opportunities for both IT contractors and professionals looking for full-time work remained hot, with permanent placements continuing to show increased activity. IT professionals have more options available to them, especially those looking for full-time employment as they continue to receive more than one offer in addition to counter offers.

Over the past quarter, there was a huge increase in needs for functional consultants, PMs, and BAs. There was also an increased need for niche skills such as Plumtree and ITIL while the hot skills for the region included Java, .NET, SharePoint, and ITIL.

In Eastern Canada, spring continued to wrestle with winter for attention, with the latter holding on till the bitter end, as companies saw more "snow days" affect projects with more unexpected down time than recent memory can recall. That being said, activity over the winter months continued at a fairly strong clip undeterred by the effects of Mother Nature. It really, however, was a tale of two different sectors as private companies seemed decidedly more affected by the plethora of bad economic news of late than government. Most observers are confident that any ill effects of a US downturn in Canada will spillover and hit sector by sector rather than in an across the board, uniform, negative impact to our economy and jobs.

The federal government continues to be focused on "Public Service Renewal" and an overall more aggressive approach to targeted recruiting, particularly with an emphasis on recent grads. That being said, governments at all levels, at least for the foreseeable future, will face the challenge of lower revenues combined with greater demand for better and more services at all levels.

The Ottawa region continued to see strong demand for resources within the federal government, curtailed more than ever by expiring contracts and/or supply arrangements that see many organizations anxious to secure their current resources, acquire new and necessary resources, and plan for the new fiscal year. With contracts nearing their natural end along with an increased focus on transparency, there is more contractual scrutiny than ever before, a painful but absolute necessary exercise. Many federal government divisions anxiously await the imminent and long awaited implementation of TBIPS, the contracting solution the government has put in place to serve most of their IT contract resource requirements. PWGSC has been actively educating their internal clients as to how to use TBIPS, are in the process of setting up a website and 800 number to assist users, and are close to going "live " with TBIPS. There is, as a result of the cumulative effects of the aforementioned expired contracts, fiscal government year end, and an imminent TBIPS, a sense that there exists a pent up demand in government that could see strong demand for resources in that sector continue through the spring months.

In Montreal, where the economy is more export and manufacturing oriented, there was a definite dampening effect on demand as there were more full time job losses in the winter months. Not to the extent of recessionary numbers but significantly more than Western Canada. Technology requirements have not been as deeply impacted as other employment sectors and both the provincial government and the financial services sector in Montreal continue to forecast strong demand for both contract and full time IT resources for the near- and mid-term.

Skills and roles in demand in the region continue to be Project Managers, Java Developers, .NET Developers and Architects, QA /Tester resources and Oracle Financials Developers, and ETL Consultants.