Seventy years ago, it was just two lawyers in Wisconsin helping businesses find temporary typists. Today, it’s a global company with annual revenue of over $20 billion. Meet the Manpower Group.
The Manpower Group is the one of the largest workforce management companies in the world, with nearly 2,700 offices and 29,000 corporate employees in 80 countries. On any given day, hundreds of thousands of Manpower’s temporary workers support hundreds of thousands of clients.
The Human Age
Manpower has developed its own point of view about the global economy. In this view, we have entered the “Human Age” where “human potential is the major agent of economic growth and access to talent has replaced access to capital as the key competitive differentiator for organizations.” Contrast this point of view with the “we will all be replaced by robots” perspective that dominates today’s popular narrative.
Sure, this framing is in Manpower’s self-interest to promote, however several trends seem to favor this point of view. Global demographics are shifting from younger to older populations of workers. Technology changes are requiring the rapid acquisition of new skills. Employers require more and more flexibility, complemented by workers who have more choices about when and how to work. Manpower obviously plans to be at the nexus of the Human Age, and is taking several strategic steps in this direction.
The Human Age in the U.S.
Manpower’s latest strategic step came to our attention as we’ve followed the aftereffects of President Trump’s executive order 13845. As we noted in our recent article, EO 13845 was signed alongside a challenge to American companies to commit to new training and apprenticeship programs called the “Pledge to America’s Workers”. We noted then that “as with so much else this Administration has done, it creates a (potentially) self-fulfilling perception of progress, that despite its illusory beginnings has the potential to yield real-world benefits.”
As we predicted, many companies have since signed the Pledge, including Manpower, which committed to train more than 130,000 American workers over the next five years, making it one of the 10 largest pledges to date. Their commitment will be implemented via Manpower’s MyPath program, an “education as a benefit” program started by the company in 2016 before “education as a benefit” even was a thing.
The Manpower Story
Manpower has been publicly listed on the NYSE since 1967 (with the hilariously politically incorrect ticker symbol: MAN), and was founded in 1948 by attorneys Elmer Winter and Aaron Scheinfeld. The attorneys needed a typist to work on a deadline project but weren’t able to find a anyone to fill their temporary position. Polling other businesses, no one else knew how to solve the problem either, so the founders scratched their own itch and started a temporary help agency.
Manpower grew organically for the first several years, and then in 1954 began to franchise temp agencies as part of their business model. By 1957, the company had expanded to most major U.S. metro areas, as well as opened offices in the United Kingdom and France, which is now Manpower’s largest international market. By the 1960’s Manpower was in South America and Asia, and in the 70’s had over 50% of its revenue coming from international market. Today, their global revenue stands at 87% of total.
The Manpower Group today is considered to be one of the most ethical and admired companies globally. It is composed of 4 business units:
- Manpower — Provides temporary staffing and permanent recruitment and represents over 60% of its gross profits.
- Experis — Delivers professional talent specializing in Information Technology (IT), Engineering, and Finance.
- Right Management — Helps organizations and individuals with skills assessment, development and coaching to increase productivity and optimize business performance.
- ManpowerGroup Solutions — Is the global leader in outsourcing services for large-scale recruiting.
It’s American Business represents about 12% of global revenues at $2.7 billion, and is Manpower’s second largest global market after France, which is 2x higher at $5.5 billion. Manpower competes in a highly fragmented competitive market composed of a few global peers, such as The Adecco Group and Randstaad, as well as specialized players like Recruit Holdings, and Robert Half.
The Talent Shortage
Given its global reach and status as one of the largest staffing companies, Manpower has a front row seat to the global labor markets. Since 2006, Manpower has been surveying companies in its markets about talent shortages. The 2018 Talent Shortage Survey includes over 39,000 employers in 43 countries, and asked respondents:
- How much difficulty are you having filling roles compared to last year?
- Which skills – hard skills and human strengths – are the most difficult to find, and why?
- What are you doing to solve talent shortages?
The results of the survey are fascinating. First, there is a clearly a global talent shortage, with 45% of employers reporting difficulty filling roles, the highest level since the survey began.
Employers cite a lack of applicants (29%), the “skills gap” (27%) (a lack of hard and soft skill abilities), and inexperience (20%). To put it another way, there are too few applicants, with too few abilities.
The solution employers use to solve this problem are not surprising: providing employees with additional training (54%) and changing their hiring standards to consider a broader range of candidates (36%). However, what is actually very surprising is that “over half are investing in learning platforms and development tools to build their talent pipeline, up from just 20% in 2014”.
To say it a different way: The number of employers offering learning programs and training to employees has more than doubled in the last 4 years. This is the wave of employer interest that companies like Guild Education are riding to grow businesses focused on helping large corporations train their workers.
Manpower’s business units map nicely to the strategies they advocate for solving the talent gap, none of which will surprise anyone in tech. Namely, that companies need to choose a “build, or buy” strategy, where “build” includes investments in worker training, and “buy” is means paying more in salary and benefits to attract the employees with more abilities from the start. The numbers above clearly indicate that most employers are actively choosing a “build” strategy, and this trend only promises to continue as the global labor market tightens.
Manpower was an early leader in the “Education as a benefit” model. In 2016, Manpower launched MyPath to provide their employees with free college education opportunities at for-profit colleges, currently in the form of an exclusive partnership with the University of Phoenix. Manpower gets both a tax write-off as well as a more highly trained worker than can be billed out to clients at a higher rate. These two factors are sufficiently rewarding to offer the benefit to over 50,000 people working for Manpower in the U.S. every year.
In addition to its partnership with the University of Phoenix, MyPath seems to also be in the midst of exploring additional skill acquisition tools. Examples include:
- Pathways: A tool that offers data on the career pathways available to people in office administration and warehouse work, including the training required to move from one role to the next.
- powerYou: Free access for Manpower associates to thousands of videos, similar to Lynda.com, that help with knowledge acquisition in topics like business or data analysis.
It’s clear that the University of Phoenix partnership is the cornerstone of MyPath. But, despite the fact that the other efforts feel like they are in “beta mode”, they are all worthy attempts to help workers gain new skills.
The Future of the Human Age
Expect to hear more about Manpower, especially as we delve into more of the reports issued by their Workforce Insights Group. We have an article in the works on “Learning Culture” and its importance relative to innovation, diversity, and many other elements of culture that impact organizations. We’re also going to highlight the ways in which Manpower (and other workforce companies) are helping large organizations map out skills gaps internally, a proxy for innovations to come externally in the broader labor market. Finally, we’ll look more at the data behind the Human Age and show how robots and algorithms are new tools for humans to use, rather than replacements for humans themselves.
Manpower believes in the Human Age, and we do too.