Piper Jaffray Publishes 2005 Human Resources Outlook Survey

Piper Jaffray & Co. Senior Analyst Brett Manderfeld and a team of analysts recently released the findings of a proprietary survey of human resource professionals. The national survey, which was conducted by Harris Interactive(R) (HPOL, Market Perform, $4.70) included more than 320 human resource professionals designed to provide institutional investors deeper insight into key trends and spending plans across the U.S.-based human resources community.

The survey took a close look at the human resources market and covered topics ranging from hiring plans for this year by functional area and recruitment channel to overall trends and budgeting plans for human resource technologies, outsourcing and offshoring initiatives and company-provided education.

Findings of the survey suggest 2005 to be a solid year for headcount growth with overall hiring of full-time employees forecast up five percent more than 2004. Roughly four times the number of respondents indicated plans to increase headcount in 2005, versus those planning declines (44 percent, versus 11 percent) while 45 percent expected to maintain current levels, versus last year.

In online recruitment, we expect Monster (MNST, Outperform, $28.08) to maintain its dominant market share position relative to CareerBuilder in 2005, while the rate of online recruitment spending will dramatically outpace that of newspapers, recruiters and job fairs this year, said Manderfeld. Based on our interpretation of the data, we expect spending growth in the online employment market to increase 12 percent in 2005 with Monsterís market share
advantage expected consistent with 2004 spending levels at roughly two times CareerBuilder and five times HotJobs.

The survey also suggest that the overall market for pre-employment background screening is also expected to grow 12 percent in 2005 and ChoicePoint (CPS, Outperform, $38.98) is by far the most recognized and used vendor of any company in this very fragmented space. Additionally, although respondent familiarity with particular temporary staffing firms is generally low, most likely because of the fragmented nature of this market. Among the four firms mentioned in the survey, Adecco, Kelly Services, ManPower and Robert Half, (RHI, Outperform, $25.44), respondents who were familiar with the firms rated Robert Half highest in terms of job candidate quality.

The 2005 Human Resources Outlook Survey also includes information in enterprise software, technology BPO, infrastructure software and learning services. The survey points out that Oracleís (ORCL, Outperform, $12.40) acquisition of PeopleSoft has had little effect on the likelihood of purchasing PeopleSoft applications, with 93 percent of total respondents saying their likelihood of doing so remains unchanged. In fact, 97 percent of PeopleSoft customers surveyed expect spending on PeopleSoft applications to either remain the same or increase in 2005, with nine percent of PeopleSoft customers seeing an increase in spending on PeopleSoft applications even though they will be buying them from Oracle.

The survey points to expected growth in new outsourcing initiatives focused around companies of all sizes. Additionally, the survey suggests that network management will see the highest percent headcount growth within the IT group in 2005. Lastly in learning services, about 80 percent of the companies surveyed are maintaining 2004 tuition reimbursement allotments in 2005 and 12 percent have increased these allotments.

Survey Methodology
Harris Interactive conducted the online survey on behalf of Piper Jaffray & Co. between February 21 and 28, 2005 among 324 U.S. adults aged 18 and over who are employed as human resource professionals and are at least aware of their companyís hiring decision process. Data were weighted where necessary using targets for companies with 99 or fewer employees up to companies with 10,000 and more employees provided by Dun & Bradstreet to align them with their proportions in the population.

Though online surveys are not probability surveys, in theory, with samples of this size, Harris Interactive estimates with 95 percent certainty, that the results for the overall sample have a sampling error of plus or minus six percentage points. Sampling error for subsamples is higher and varies.