Tim Riker's List: MPS Group

• Internet employment sites expand companies' ability to find workers without the help of traditional agencies.

• nline job searchers are young, well-educated, and racially diverse,

• n the US, over 40,000 personnel staffing offices generate total annual revenue of more than $130 billion.
• Despite strong consolidation in recent years, the industry remains fairly fragmented: the 50 largest firms hold about 40 percent of the market.
• Job growth drives demand for the personnel staffing industry. The profitability of individual companies depends on good marketing. Large companies enjoy economies of scale in marketing and back-office operations. Small companies can compete successfully by specializing in an industry or by job function.
• Marketing involves direct sales' presentations, referrals from existing clients, radio commercials, and print ads. Agencies compete both for customers and workers. Depending on market supply and demand at any given time, agencies may allocate more resources either to finding potential employers or potential workers
• he revenue of personnel agencies depends on the number of jobs they fill, which in turn depends on economic growth. During economic slowdowns, many client companies stop hiring altogether.
• Internet employment sites expand companies' ability to find workers without the help of traditional agencies.
• Startup costs for a personnel agency are very low. Individual offices can be highly profitable, but consolidation is driven mainly by the opportunity for large agencies to develop national relationships with big customers
• New online technology is improving staffing efficiency.
• Gross Profit31.2%43.2%
• 45.8%8.3%
• Valuation MultipleMVIC/Net SalesMVIC/Gross ProfitMVIC/EBITMVIC/EBITDAMedian Value0.51.56.97.4

9 more annotations...

• Changes in economic growth is the key sensitivity of this industry, with temporary staff quite often being the first to be employed in any economic upturn, but the first to also be laid off in any recession.
• Changes in the attitudes and willingness of workers to work on a temporary basis as they seek out more flexible hours of work etc. are important.

• The top 4 players are estimated to have less than 15.0% market share of available revenue, in 2007 and, therefore, this is not a significant barrier.
• By far, the largest cost is the payment of wages of the temporary staff, which is charged directly to employers along with charges for other payroll and benefit costs, overheads and profit margin on an hourly or daily or contract basis.
• The internet listing of vacancies has increased in importance and is now almost a mandatory requirement for both clients of and firms in this industry. The ability for applicants to view vacancies and to lodge their resumes via the internet or e-mail is now critical.
• There has been the development of strategic alliances between firms in this and related industries to supply a fuller range of employment services required by clients, including expansion into other areas of employment placement.
• industry will be subject to an increasing level of globalization over the coming years

3 more annotations...

• The strike price is non-standardized and is often the current price of the company stock at the time of issue. Alternatively, a formula may be used, such as sampling the lowest closing price over a 30-day window on either side of the grant date. Often, an employee may have ESOs struck at different times and different strike prices.