Keynotes and Resources from CONNECT 2026

Thank you, Rachel, and welcome to CONNECT 2026. I certainly am happy to be here. And that happens to be my favorite song from Despicable Me's. So great, great song there. I'm gonna spend just a few minutes. I'm brand new, I'm gonna spend a few minutes talking about myself here this morning, but let me just tell you, it's been a whirlwind. I've been here 42 days, three hours, and now twenty-one minutes, So I'm counting. When I walked into the office the first time in Minneapolis, there's a there's a wall that has people that have been here for five years, people have been here for ten years and fifteen years. I'm starting a new line that's gonna count days at the bottom, put my picture down there. I'm very excited about that. But I'm gonna do five things today. I'm gonna first talk a little bit about myself to give you a little background and this is really to create an icebreaker for us when we're out at a break or at breakfast or at lunch, and so you can have, we can have some conversations. I really wanna learn about your business and more about that. Two, I'm gonna talk about the history of Avionté. Twenty years we've been in business. And I want to just review some of the things that we've done historically, as it's a great predictor of the future as well. I've also done a ton of research and so I'm gonna share five trends that I see are impacting the industry today, and and I'll and I'll review those five trends, but don't just believe me. I've asked three of your peers to talk specifically about some of those areas, and what they're doing, and what they're leveraging to grow amongst these trends. And then lastly, I'm going to recap it all with a view of where we're going strategically as a company, and there are four areas right now which my team will talk about over the next couple days, and and give you highlights into where we're going and what we're gonna accelerate. So let's jump right in. This is my family. My wife for 33 years, she puts up with all my antics, allows me to travel around the country which is so fun. I'm gonna get out and see a lot of you. I've been able to interact a little bit with people via email and LinkedIn and I had some round tables and I also had the opportunity to do some one on ones with folks and yesterday was fantastic. I got to meet a bunch of people and have a lot of great deep conversations and I'll continue to do that do that over the next couple months. Those are my two boys, 29 and 27, Brett and Kyle, and let me tell you a quick story, and this will be one of the icebreakers. When they were 11 and 13, I asked them, I said, what what did you what did we get you for Christmas last year? And they couldn't remember. I'm sure we've all had this. And I realized that we were just buying junk for them, so we started to switch, and we said, you know what, we're gonna do vacations, we're just gonna take a trip and enjoy each other's company, and we've been doing that since we were 11 and 13, they're 29 and 27. We've done we went to Patagonia and went hiking, We went to France and went biking. We're a very active family. And then we went to Thailand and built bikes for an orphanage and gave bikes to kids, and they remember every single one of those trips. So here's my question to you. When you see me at a break or at dinner, I'd love to know what recommendations you have for a trip for us to take, because we're gonna continue to do those things because it just brings us closer together as a family. Now, the upper right-hand corner is he's a Hungarian Vizsla. He's a it's my dog. His name is Goose. I don't if everybody has. I'm sure we have dog lovers out there. Does anybody have a Hungarian Vizsla? No? Oh, I would love to have talked to you about Hungarian Vizslas. They're Velcro dogs, they stick by your side at all times, wonderful dogs. And then every once in a while they get what I call the zoomies. They just run around in circles over and over and over again. So I was looking for some advice there, but if anybody has any advice or has friends that have Vishlas, I'd love to learn how to control the zoomies. And then lastly, the picture at the top center is the picture of the team. So my first week here, I had the opportunity to do a little team building. We went out and went putt-putt golfing. I did play golf yesterday, did not play well. As you see, we weren't on a winning team, but we went and played putt-putt with a team and what I realized is that the team is so competitive. I'm thinking I'm a golfer, I'm gonna do fine, right? It's gonna be great. I was second to last. Second to last. It was terrible. So anyway, they're very competitive, but what they're most competitive about is who's taking the best care of their customers. And I'm gonna talk more about this as we go through the day because it's very important to me how we show up for all of you in this room. So let me talk a little bit about the history of Avionté. Okay. Founded in two thousand and five by John Long. Is John in the room? John, stand up. Oh, he's in the back of the room over there. Big round of applause for John for finding this coming. It's been absolutely amazing. Our first customer was in 2007. First customer. We're now over 800 customers. Right? Over 800 customers that we're servicing today, which is just an incredible journey. 2010, the first CONNECT. Anybody at the first CONNECT? We have some people. I see like ten to twelve people. That's amazing. First CONNECT fifteen years ago. Thank you for continuing to come back. 2019 purchased BOLD. We started the conversion over to BOLD, the modern technology. Right? In 2021, WorkN which became the base for our 24/7 mobile application. This is so critical and I'm gonna talk more about this later. It is so critical for us to be able to engage our talent with mobile. That's where they wanna be met today. And so we'll talk about what we're doing there. In 2023, we purchased SimpleVMS. So we have a bunch of SimpleVMS people here with us today as well. SimpleVMS is the digital feed from the employers. So as more and more employers use that, we're going to link that in with the ATS so we can streamline things. We know that people want staffing to happen very quickly. Right? 48 hours is typical turnaround, average turnaround, so we have to digitize the entire supply chain and that'll be a key part of that. And then 2025 was 20 years. Twenty years in business, which is absolutely incredible. So where are we going from 2026 perspective? You'll hear from the team over the next couple days about things that are around unleashing our data, around unifying our platform and making sure it's really simple to use from the front office capabilities to the back office capabilities, around enabling workflows across the entire application, and also being able to inject AI agents, agentic agents in to take pressure off of the recruiters to allow them to spend more time with the talent and more time with the employers. So I'm very excited about what '26, '27 and the next few years have in store. Let me share my simple philosophy because this is really important. I've been using this for thirty years. It's two part. Part A is we're here, Avionté is here to take care of our customers. It's that simple. We need to show up for you because things don't always go perfectly. Right? Things break and we need to show up for you and be available. And if we do that and do a good job of that, guess what's gonna happen? You're gonna stay with us for a long period of time and when you need something you're going to say, can you help me with this? And the answer is going be obviously, yes. Right? That's the kind of relationship we want and that's how we want to show up for you as Avionté. Now Part B of that philosophy is we have to have an incredible team to do that. We have to take great care of our team, because they're the ones that are gonna pick up the phone to seven AM in the morning, and I heard this conversation yesterday when I was at a break, they there was a there was a conversation where we said, we call in at seven AM every morning to talk to the Avionté support team. Right? They gotta be there to do that. Seven AM, at night, on the weekends, on a holiday, that's how we wanna show up for you so we're always available because things will happen, and the special part about this company is the team, and that we're here for you, and we're gonna show up. So that's my simple philosophy. As I said, I've been using it for thirty years, it works wonderfully, and that's how we wanna show up for you guys as our customers. Let's talk about who's here. Who's here at CONNECT? Very excited about this. So over 370 staffing professionals are here. As I talked to people last night, they said, we need to leave a couple people behind because our business is booming right now and people had to go do work, which is great. Right? That's absolutely fantastic. But 370, over 370 staffing professionals are here. So use that as an opportunity to network with people and learn from each other. Over a hundred partners. I don't know if you spent time yet out at the partners' booths. I did, and I've learned a ton. There's so many value-added capabilities that plug directly into Avionté that you could take advantage of. And then over a hundred Avionté employees as well that again take you take care of you here at the conference. So let's take a look at some numbers here. How many people in the audience have been here for five or more years? Just show hands. So about fifteen percent of people have been here. These are the veterans. Right? They found value. For you to take time out of your schedule to come here and spend time with us, you have to be able to take one or two things back that's gonna make your business better. So you saw the people raise their hands at a break, tap them on the shoulder, figure out what they did and how they drove value. I'm gonna ask two to four year people veterans, people have been here for two to four years. So quite a few people more like twenty thirty percent which is great. So you guys are just coming off that you could have been here first time last year, second second year here. So clearly you saw some value in coming here. Continue to talk to people and network. I think there's a big opportunity there. Learn what we're doing and please stop by the partnership booths. Here's my favorite one. How many rookies are out there? About forty percent. That's unbelievable. People that came for the first time. Welcome to CONNECT, and take this as an opportunity. Here's my challenge for you. Take back one or two things that you could take back to your business, and make changes or do something differently than you did before you came here. Right? Learn one or two things from one of your peers and that'll be that'll make your time, it'll make the the time you spent here well worth it. The last group of people I want to call out is the Avionté team. Can they stand up? Can the Avionté team please stand up? So they're all in the back of the room as they should be, right? So big round of applause for the Avionté team. Incredible job in pulling this together, but more importantly, they're here to help support you. If there's anything you need, they have the pink lanyards on. Just grab them, and they will help you. We wanna make sure this is delightful for you and that you can get a lot of value out of this conference over the next couple days. Okay? So they're here for you. Okay. Let's talk about what I heard. I mentioned before that I got a lot of emails and feedback, I got some LinkedIn messages, I had some round tables, I had some one-on-ones; and I had a lot of great conversations yesterday as well. What I heard was three things at a high level. First and foremost, every conversation started with, we love the Avionté team and that warms my heart. Right? That makes me feel really good that they're showing up for you day in and day out. So that's fantastic. The second conversation or topics that we talked about were some tactical things. Like, oh, not everything in Classic do I get in BOLD, and we need those things. And, or I need the security thing, a lot of tactical things, which are important by the way. And Jason, product leader is going to take those down, and we're going to kind of prioritize them, we'll get through them. But we have to balance that prioritization with some of the strategic things you asked for as well. And strategically you said, hey, I need you to unleash my data. I want to be able to create dashboards and do things differently. I need workflow enablement so I can drive productivity through my organization. I need to be able to easily put AI, agentic AI agents in to do things that are mundane, to free up my recruiters time, to spend more time with their customers, with with their talent. So those are some of the things that we heard from you, and when I summarize that up to the highest level, it comes down to two things in my mind. You're asking for our help as a company in helping you grow your business, and helping you grow your business profitably. Those are the two things. And that's a lens I'm gonna put on everything we do. So whether we're adding a feature, or doing something and adding a new capability, or signing up a new partner, it's got to be with a lens on it that says, will it help you grow your business and grow it profitably? So I'll use that lens as we go through the rest of the presentation today. But here's what I want to shift to now. I did a bunch of research as you would expect as I was taking this job and there were five trends that I saw up there, five trends I want to talk about, and these are trends that are really reshaping the industry today, and you have the opportunity to take advantage of these, and we'll hear from some of your peers and what they're doing related to these trends as well. So here's the first trend. Uncertainty is a tailwind. Uncertainty is a tailwind, specifically in light industrial. So we all know there are jobs coming back to the US. Data centers, factories, manufacturer plants are all coming here, and we also know that they're all very uncertain about how long they're gonna how big they're gonna be, and how long they're gonna stay here, and so what do they do? They look for temporary support. That's a huge opportunity for us. Right? A huge opportunity for us. Now Chris is gonna come up after me, he's gonna talk about some of the macroeconomic things that he's seeing and how we think this is gonna continue for another twelve to eighteen months. So we have this tailwind which we have to take advantage of over the next twelve to eighteen months. It's really gonna help us as an industry. Trend two. Trend two. The labor squeeze is hitting every single one of our verticals. Every one of our verticals. So let's just talk about this for a second. There's a macro issue for sure. Right? We had a labor pool that was this big, and we have groups of people that are aging out of that labor pool. They're retiring, which you would expect. And the groups aging in are of lesser numbers. So that takes our pool and shrinks our pool, makes it smaller. On top of that, you're all aware of the immigration challenges. Right? Which makes our pool even smaller. So what does that mean? It means we have to engage our talent like we've never engaged them before. Right? We have to do that going forward. So let me just give you a couple examples across a few of the segments. So light industrial. First half of this year was phenomenal. Right? I think the second half of the year is going to continue like that, and I think we're going to have a little bit of tailwind in '27 as well. However, in light industrial, you're all seeing this, right? The turnover is pretty high. So you have to have an engaged talent base to take advantage of that. That's really critical. Healthcare. Twenty-two point seven percent is the turnover in healthcare. Nine point six percent vacancy right now. Think about that. Huge opportunity from a temporary staffing perspective to be able to fill those voids out there. IT. We thought cybersecurity was going to get better with AI. It's actually getting worse, Cause it's it's exposing all of the issues that are out there. There's five hundred thousand cybersecurity jobs open in the US right now. Another opportunity. On the professional side as well, if you think about professionals, Tax season. We have to find people to help with tax season. It's taking seventy three days in order to fill those roles and those are forty one percent longer than non-credential-based roles. The net of this is, our industry is is very interesting because it has to, we have to be able to fill these roles very quickly. Sixty-one percent of our employers are asking us to fill the roles in 48 hours, and it's even shorter than that when you get into education. Right? If you need a substitute teacher, it's a very short period of time. So anyway, trend two is a labor squeeze is real. It's real at a macro level, and it's also real at a micro level inside each one of these industries. Trend three. Talent expectations have changed. Right? We've all felt this. This is what every single one of our talent wants to use, especially the younger generation. Right? The older generation that's aging out got this in their thirties, thirty five, forties. The younger generation was born with a phone in their hand, so they wanted to be thumb ready. Right? They want to be able to use their thumbs versus their fingers to type things. Couple things I'd say here, one is as people take additional shifts in light industrial, they want to be paid right away. This is feedback we've gotten. So they're taking the shift because they need the money, so they want to be paid right away. That's one. Speed of onboarding is absolutely critical. So I know we've all, I just recently went to the doctor's office and they asked me to fill out the forms, you've all done this right? You get ten forms and you start filling them out and you realize you're writing the same thing over and over and over again. It's friction filled. We have to make it frictionless and we have to be able to deliver all the onboarding needs right here on their phone. That's critical to engaging the talent. Then I'm gonna talk about communication. So my kids I mentioned before, twenty nine and twenty seven. Right? Twenty nine, twenty seven years old. They don't call me. They text me. They text me. Right? I know your kids probably do the same thing. I'd say the shift is people aren't answering emails. They're not as apt to take phone calls anymore. There's two areas that they really want. They want text, and then I find more and more that people want in app communication. In app communication. So I want to be able to go into the app when I want to look for a new job or an opportunity, right, versus getting a phone call. So we're seeing that shift happening right now just from a talent perspective, what talent's expectations are of us as an industry. The fourth trend is not gonna surprise anybody. Not gonna surprise anybody. AI is no longer optional out there. You'll hear us talk about the ability to do workflows across the entire platform, and then plug in AI where you need it. It's gonna differ. All your organizations are gonna be a little bit different. Some people are gonna wanna use it for candidate sourcing. Some are gonna want to use it for interview interviewing and screening candidates. Some may not want to use it at all. Some may want to use it for job management. So there's gonna be a lot of different options out there as to how you want to use it. Visit some of our partners out there, they have solutions that can be plugged in to support some of these activities. And again, the whole premise behind this is take the mundane away to give your recruiters the time to focus on the talent and work with the employers. Here's some stats for you. Forty-six percent of the agencies today are still not using AI. Forty six percent. Forty one percent are using one to two AI workflows or capabilities. Thirty four percent, three to four, and only thirty one percent have more than five. It's a massive opportunity for us as an industry to take advantage of. Trend five, specific to light industrial. Skills are the new credentials. Skills are the new credentials. Let me explain. Forty five percent of companies have eliminated the requirement for degree. The days of going through and saying, oh, don't have a they don't have a degree or they haven't they haven't graduated from high school is behind us. Right? Forty five percent are saying I don't care about that, what I care about is do they have the skills to perform the job? Eighty one percent of the companies are actually saying, are shifting to a skills based hiring process, and when they shift to skills based hiring process, here's what happens. Five times more predictable of performance. These are people who have the skill, they want to use the skill, they're gonna perform well, and here's the kicker, thirty four percent longer tenure. They stay longer in the job if you hire based upon skills. So let me recap really quickly. First, we have a tailwind right now that we could take advantage of, which is fantastic. Two, labor squeeze is happening at a macro level, the pool is getting smaller, so engaging our talent is critical. Three, mobile phones. All of our talents, specifically the younger generation wants to communicate in them in in in on their mobile phone where they want to be communicated at. Right? It could be at home, it could be in the car, whatever. AI is no longer optional, I think we all know that, it's popping up everywhere, we have to figure out how to leverage it effectively for our organizations and then skills are the new credentials. So let's talk about let's talk about what we do with these trends. And as I mentioned, we have three three of your peers that are willing to talk to us and we're going to talk about the practices that they're embarking on to continue to grow their agencies amongst these trends. So there's three areas we're going to talk about today. One is deep AI adoption, right? Deep AI adoption. Two is operational discipline, And the third one is owning the sourcing channel. So I'm going to ask, first off, Reed Laws, if Reed would spend just a little bit of time sharing with us a two minute snippet on deep AI. And these guys are gonna be up later today, later this afternoon on a roundtable, so you'll get more information. And if you please talk to them at a break as well. Sorry about that. It's okay. That that I think that was a cue for me to get Reid on the stage here. So can we get a microphone to Reid? Reid, you're over here. Right? Hey Reid. How are you? Good. How are you? Good. Can I ask that you turn and face the audience? Everyone say hi to Reid. Hi. I'm gonna give you guys my comment here that you're never gonna forget who I am. Think of a football team, offense and defense. My family played both at the same time. I'm one of nineteen kids. So you'll never forget me. Okay. On to AI. Deep AI is you've you've got to leverage AI and what I'm not talking about is spending AI. Spending dollars is not leveraging AI. The way you leverage AI is you have to point every single dollar to solve a problem. That's how you leverage AI. Hopefully, you're solving your customer's problem. So I'm gonna give you a quick example of how we leveraged AI. We brought multiple, not three, not four, not five, dozens of AI things are happening with my organization. What we looked at and this one's really important and I would write this down to you because yes, we have a tailwind, but after a tailwind means maybe a headwind. We have to get really good at solving the problem of every gross profit dollar that we get, we need to put more of those dollars to our net income or EBITDA. So what we did is when we used AI, we grabbed seventeen hours per recruiter that they had extra to give to our customers. Now, we're meeting with our customers and when you're meeting with your customers with those seventeen hours, they're giving us more orders and then we use AI so we can fulfill those orders. And so the average industry right now, you're putting twenty two percent of your gross profit dollars to your bottom line. Our AI took us from twenty two percent to forty eight percent and we did that in seven months. So deep AI is important. It's going to be really important for this industry and doing this for thirty-one years, I'm absolutely on board with Avionté that it's an absolute necessary tool to be having. Thank you Reid. Thank you. Thanks Reid. Incredible. So a couple things a couple things. One is experimentation. Right? But more importantly measuring and what I loved about that is AI, he's leveraging AI to grow profitably. You heard the profit story there, right? So fantastic. Thank you very much Reid. Operational discipline. Iris Miller. Iris, can you tell us a little bit about what you're doing with operational discipline? Hi, my friend. How are you, Iris? Good. And you? I'm doing so well. Tell us. I do not have nineteen siblings. Only four. So let's talk about operational discipline. Right? As we all know, technology and AI is not gonna replace the operational discipline. They ignite it. Right? So the technology is only as good as your processes. The quality of the technology is only gonna be as good as your processes and the data behind it. So our staffing network, what we have been driving is that operational discipline starts with all of us following SOPs. Working on having workflows that align our business in consistency. For us, consistency is really, really important. Consistency creates reliable data. Reliable data impacts the the effectiveness of the AI. So for us, we have been pushing our teams to follow SOPs consistently consistently consistently, but as well, we're seeing that automation also has helped our recruiters to have more time to spend on relationships. When we talk about operational discipline, we talk about this is not a just one time initiative. It takes accountability, discipline, adapting, learning, and consistently improving those processes that we have in place as the technology continues to evolve. Thank you. Thank you very much Iris. Thank you Iris. So what's beaut I'm an operator at heart, right? And what I loved about that was refining and continuing to refine the process to free up time for your recruiters, Right? I think that's fantastic. Operating processes and just simplifying things will free up time for your recruiters and allow you to spend more time with the talent and the employers. Lastly, Jane Hamilton. Jane, are you out there? Hi, Jane. How are you? I'm good. I'm doing so well. I only agreed to do this so I could share a stage with you. Stop it. Alright. Let's give it up for Jane. I'll pay you later. Yes. Jane, tell us a little bit more. Yeah. So, I was asked to talk about that channel arrangement. We're all struggling with finding good talent. That's something we all deal with. I think that's gonna continue to be the challenge. Do I get a close one? Okay. For all of us. So what I'm looking at is more like once you get them, how do you keep them? So in our channel, I wanna extend our connection past just the front office and allow our talent to get directly to the subject matter experts in our back office where we have time and experts who can get them corrected pay, address any benefit questions they have, and the likes, and to be able to create a three hundred and sixty degree experience with our talent. So we're exploring all these connections by leveraging the new mobile, the universal chat in Avionté, using more email and integrated phone systems to get there. Now the other thing is creating that stickiness factor, and I have the good fortune of being a hundred percent employee owned. So we have done a lot where our talent now are actually owners in the company. We have PTO programs. We give interest free loans to people, and this is all to make sure that they once they come to work with us, we wanna reward them for being a part of our family with all of these programs that we've been able to build. So Great. Thank you, James. Thanks, James. I think finding talent finding talent cost us about forty seven hundred dollars each. And if you can retain the talent it's almost close to free right? So leveraging some of those capabilities and techniques is fantastic. So special thanks to Reid, Iris, Jane, big round of applause for these guys. And a reminder that this afternoon, they'll be on a roundtable. So please be here this afternoon and listen to the roundtable conversation where they'll go much much deeper. Okay. Really quickly, one more thing I've heard in conversations is the issue around tool sprawl. I call it tool sprawl. Right? We're trying to set up is a digital supply chain. You have this need to fulfill fulfill jobs very quickly, which means you need to get them from a VMS digitally at some point in time. Right? You need to have a unified platform that cuts across all these your recruiters aren't faced with logging into multiple systems. It's just one platform they log into once, and they can do their entire job. That will drive efficiency in ten percent to fifteen percent to the bottom line, in my opinion. On top of this, you put workflow enablement. You heard Iris talk about workflow and processes. Put workflow on top of that, and then leverage the appropriate AI tools for your organization to drive productivity and allow you to free up time so your recruiters can spend more time with the talent and then with the employers. So let me talk quickly about where we're going from here, where we're going from here. So again, forty two days in, it's my opinion working with the team and listening to a lot of customers. My my goal is to keep that lens of keep that lens of growth and growing profitably for all of you. If we can help you do that, you're going to stay with us for a long period of time. So here are the four areas that we're going to we're going to accelerate on. One is the ability to put workflows across the entire platform, and then for you to select the AI agents you'd like to use inside your organization to free up your recruiters time. Learn over the next couple days, you'll hear from Jason and OT in their keynote about what we're doing there and how that's going to be rolled out. So that's one. Two is, we're going to unify the platform. We're going to do this by persona. So the first persona is a recruiter's persona. So what they do when they're finding finding a job for an employer, or getting a job for an employer, matching the appropriate talent, and then obviously getting them onboarded, getting them to work, paying them, all that sort of stuff will be in one system with one interface as well. You'll see that from the product team as well. Engaging the talent. Please go to the Experience Center if you haven't seen this already. We have about twenty percent of you using the mobile capability. I think it's a game changer for us to engage talent. They want to be met on their mobile phones. We have to meet them there. So learn what we're doing there. Take advantage of that as we go forward. And the last one I heard over and over again is you have to help us unleash the data. My understanding is that we still take feedback for custom reports, and we'll develop a custom report and give you a custom report. That's that's early two thousands technology. So I've challenged a team to figure out how we can unleash the data for you so you can actually pull your own reports, create your own dashboards, and things along those lines. So more will come on that, and you'll hear more about that from both Jason and OT. These are the four areas that we're going to work to accelerate to help you. I am so open to additional feedback, so please tell me where I should go on my next vacation, but also give me feedback on on where we should actually focus our businesses. So with that, I want to thank you for the warm welcome. This has been an incredible conference so far for me. I've gotten to meet so many people, and it's just such a great community. The team's been great, and you all have been great as well. I am so happy to be here, and I'm happy you're here as well. I wish you a very good connect, and I look forward to connecting at the breaks or over dinner. And with that, I'm gonna invite Rachel back up and play my happy song. Thank you.

Morning and welcome to CONNECT so I'm delighted to be here. This is my sixth CONNECT I can't think of any other place I'd rather be right now. Last year I stepped down from in my executive role at Avionté and after 45 years in the in the in the working world it was time to pursue some other opportunities and one of the opportunities that I pursued was a lazy month in France, in southern France with my wife and here's one of my photos. This is the Senenque Abbey it was founded in 1148. In fact it was sacked and burned a few times so you know looks beautiful now but fields of lavender cultivated for a thousand years, the air smells like perfume, there are a million bees harvesting pollen and making honey and in the midst of all this splendor all I could think was Avionté still has the best staffing platform in the industry and I haven't left Avionté I just have a little more time to do what I want but what's really gratifying to me and one of the reasons why I come back is the Avionté community. The community is more than any one of us it's the customers, it's the partners, it's the associates, it's people like me who are now sort of ex Avionté but I guess I'm still here and the other thing is after three decades studying what's going on in the workplace right here right now we are on the cusp of extraordinary change in the American workforce. This is one of the most interesting times and the people in this room are on the front line. Our customers, our business partners and our associates and this community is going to drive change in the workplace and it's going to be our software and your grid that will do it. And one thing that I love as some executives leave a company and other executives join is that there are certain things that people come and go but values don't change, the culture doesn't changes. The way Avionté was in 2005 was very much built around a certain culture, a community and that continues today and it's passed on to a new CEO in Dirk so I'm really excited to see where Avionté can go with that. So at CONNECT 2025 I shared my views on the future of staffing and we talked about a few things, we talked about uncertainty and opportunity, we talked about a challenge being it's not that there isn't market demand it's figuring out what our customers actually need how customer needs are about evolving and it's also about no longer selling harder it's about selling smarter and w two staffing still remains very relevant in the US economy today the shock absorber of the US economy for labor but employers are also looking for other workforce solutions as well and that creates both a challenge and an opportunity. Now in 2025 we talked about engines for growth and you don't need to be an economist to spot growth. Take a drive down any highway what do you see rows of brand new production in distribution centers and data warehouses they need to be staffed. The next time you're at the airport take a look at who is riding in first class it used to be investment bankers and consultants. Now you get on and they call boarding group one or the million mile club and all these burly dudes get up there gray haired long haired hands as big as mitts and they look like they can handle themselves in a bar fight and they know each other and these are your skilled tradesmen going just about anywhere in America to build install automate and transform work sites and factories around the country so growth is all around you if we can spot the opportunity and see it. Now back in 2025 we also analyzed Avionté data to see who was buying and selling services from our clients. We saw significant growth in areas like data centers, power and cooling, construction, semiconductors, and so on food processing very big area And I'm pleased to say that the trends that we saw in 2025 remain today. We also see green shoots. What Dirk said, before I absolutely believe. We're going to have a little mini boomlet over the next twelve to eighteen months. There'll be a subtle uptick in manufacturing continued strength and skilled trades continued build out of data centers and expansion of health wellness and elder care but and I'm getting my clicker all mixed up the question we should ask is should we be singing happy days? Should we be complacent? And it's not just yet because the issues that are facing our industry are not all cyclical. A downturn followed by a recovery rather it's that the market for contingent and intermediated labor is changing and we're going to need to change with it. If you're in the room today you're probably asking how do I grow my revenue? Why aren't my sales teams getting traction? Where are all the hiring managers we used to talk to? Why are markups over cost so brutal? How many of you had a client who wanted a maximum markup of fifteen percent? Any? I've heard about some stories of this where people are coming in and asking for absolutely unreasonable markdowns and then there's the challenge of compliance. So when I go to staffing conferences, when I hear people talk, there's one number that everyone always wants to talk about from an economic standpoint and that's the temp staffing penetration rate. You look at the total number of people who are working at any point in temp staffing and you divide it by the total number of non-farm employees in the United States, and the number is currently at about one point five seven percent approximately two and a half million people being continuously employed right now in staffing and that's a you know that that's a little low. The thing that's interesting about this is that you know a lot of pundits a lot of people in the industry will say we're we're just going through a little trough it's a little flesh wound but what bothers me we dance around the numbers but how you know it's like something much bigger is going on and we are not necessarily willing to look this trend in the eye and confront it. So just out of curiosity how many of you are familiar with the scene from Monty Python and the Holy Grail with the black knight? Any of you familiar with that? Yeah, a few. I mean it's boomer humor I admit but you know there's this famous scene well, you know what I'll just show you. People say but a scratch. Well let's look at the worst case of denial in cinematic history. Now stand aside worthy adversary. 'Tis but a scratch. A scratch? Your arms off. No it isn't. But what's that then? I've had worse. You liar. Come on, you pansy. And as I said the best example, when we look at what's happened in staffing over the past few years we've had a few people saying just about a scratch. It has not been done but a scratch but the bigger issue is our industry is changing we need to know what's happening we need to know why we need to know how to respond to it and Avionté and our customers need to be prepared to figure out how to meet these challenges going forward. So all of you have seen graphs of staff and penetration rates over the past four years I'd like to provide you with a slightly different take, so let's take a look at the last ten years and what I did here is I indexed staffing employment GDP back to 2016 levels to see what the last ten years can tell us and so GDP since twenty sixteen has grown twenty seven and a half percent, twenty in the quarter, and then if you look at total employment you'll see that it has grown by closer to you know almost eleven percent and then when you look at staffing employment as a number what you see is that there's been a decline since 2016 to you know fourteen percent and and the decline was almost twenty one percent over the last four years. So something has happened and it appears to be very non-cyclical but structural. The point here is we're not in a recession, we haven't been in recession despite all the craziness in the world growth remains positive so why does the economy feel challenging sometimes for staffing agencies and I know it's very heartening the last couple months have started to pick up a little but broadly there are still challenges and so perhaps the biggest disconnect that I would say is that I think we may be asking the wrong question. Temp staffing declined but what about the underlying demand for contingent labor? Has that declined? What if it hasn't declined but employers are purchasing labor differently and if that's the case are there opportunities that we might be missing and are there competitors that you don't know about and don't know about you? So let's look at the data a little further at the current federal job openings and labor turnover survey or jolt is definitely weird. The hiring rate is the lowest it's been in over a decade only three percent but at the same time we have four point two percent unemployment rate which is low and these shouldn't both be true at once. Slow hiring and healthy unemployment rate shouldn't don't they don't go together. When hiring stalls unemployment should climb fast it hasn't. Even more curious the number of unfilled job openings remains strong. The gap between monthly jobs posted and monthly hires is significant and growing again. Employers posted over seven and a half million jobs. Are they real jobs? Absolutely. To be counted in this report it has to be posted open more than thirty days and the employer has demonstrated that they are willing to fill the job immediately if they have the right talent so what that says to me is our economy is starving for labor and if we could find it that's an opportunity for recruiting as well. Now Dirk touched on this earlier there's a talent shortage, the US labor pool is getting smaller, he talked about slower immigration and more retirements, I'm a good example of that. I was born in 1960. Imagine having five or six million people suddenly turning over year over year or leaving the economy that can be a challenge. AI is also transforming the job market but I want to be really precise here. AI is not eliminating jobs across the broader economy yet despite all the headlines and everything else not yet it will someday absolutely but many jobs have been cut through simpler forms of automation and restructuring and that's real and it matters significantly to the people in this room. What AI has done is it's redirecting money. Anyone hear about what happened at Oracle? They laid off twenty-one thousand people. AI didn't replace twenty-one thousand people. Twenty-one thousand people were laid off so they could pay for AI investment which is a very different you know different point. So AI is going to force companies to rethink who they who they hire, who they retain and it also drives unfilled job demand because there are many new jobs that are being created and nobody knows quite how to how to fill them. Now finally there is policy uncertainty, tariffs, immigration enforcement, geopolitical shocks, you know them as well as I do I'm not going to dwell on them as a matter of fact all I'm going to say is yes the labor market is a little bit unpredictable so whatever I say here today wait twelve months there's no telling what what will happen next but whatever happens staffing shows up as we like to say in Aviante staffing always shows up whatever they whatever the challenge we'll be there. But behind all of this surface economics is a bigger story one that will impact staffing for years and decades to come and this is very important for us to understand. So the workplace is changing and the change is powered by some fundamental trends in the US economy enabled by technology and so on. One of those is the rethinking of the US, corporation and I'll explain that a little bit more. The second is around favoring horizontal versus vertical integration. Right now people are buying companies, stripping them, specializing them, scaling them, rolling them up all you you're seeing that and the the third, thing that's happening is workforce planning, strategic workforce planning. If you go to HR conferences, if you sit and talk to HR departments about their large workforces they are thinking very carefully about what are the different components of our total labor force and it's not just full-time employment, it's part-time, it's temp staffing and it's a variety of different workforce solutions that are all related but not exactly the same. So to illustrate a little bit more what I mean let's take Ford Motor Company. It's 1926; it's this huge monolithic company. Basically you take coal, water, and iron and you stick them in one end of the factory and the other end of the factory outcome automobiles and everyone in that mile-long assembly room even the cafeteria workers they all work for Ford, they're all Ford employees. That's just the way it was done it was much easier to organize a workforce as a single monolithic workforce but today you look at Ford and you have full time people, you have temp and part time, you have outsourced solutions, you have BPO arrangements, you have contractors, it used to be so simple and now a large blended workforce half the people in the building can be not full time employees but something else. Now the question is how much of that other group can we work with an intermediate W2 staffing is just one part of that slipper are there other parts that we could take advantage of. The other thing that's important in this trend is and I talked I've talked about this before is the outsourcing of domestic production and distribution in the US. Now what is this? Mature industries, automobiles, aerospace, consumer essentials, they're closing smaller facilities to concentrate production on new centralized facilities. It's all those buildings you've been looking at on the highway. Who do you think is moving in there? If somebody's moving in they've moved out of somewhere so something is closing down and being centralized and moved somewhere else and these new facilities are often outsourced to third parties and rely on high levels of automation which completely changes the dynamics of the workforce. So now you're saying why, well you know what what's the advantage of doing this? Well let me give you an example, why would a major company like Coca-Cola, very financially strong healthy company, why would they shut down a bottling plant and spin off production to a third party? It's simple, some of their plants are fifty years old and they need new automation but investors are not going to reward Coca-Cola stock because Coke has great bottling plants. They're gonna that's generic. They buy Coca-Cola products for innovation distinct or branding. So when you shift the production to a third party you get a clean balance sheet, you get a lot of working capital, you shift the employment risk, you get REIT financing for all those buildings on the highway, get private equity is scaling up all the smaller operations and what that means is a twenty five percent compounded annual growth rate for contract manufacturing in North America. Kinda that's what's powering this that's why it's such an inexorable trend. Now let's get down to brass tacks. What happens when this is one of your clients that's involved in this? You have a strong relationship you think you know them and suddenly you don't because your client changes overnight because they aren't just sold they're transformed and if your client is one of many operations that's being consolidated and scaled through the process they're going to be smashed into a facility with five other facilities into a single super facility and that super facility is going to be a little different it presents great growth opportunity wouldn't you love to offer temp staffing to that to that facility but their buying patterns are going to be different and their service requirements are going to be a bit of a puzzle. So you know before you had a decentralized operation with loose cost controls you know five separate Coca-Cola plants each one might have had its own person in charge, their own budget, their own hiring managers but now all the cost controls and decision-making are centralized and the workforce needs are very closely linked so temp staffing looks very different. So staffing remains local and the needs remain local but their procurement could be off-site it could be automated with a VMS or an MSP and there you know simple we'll talk about that you know the the issues with that a little bit later You're likely to face a longer sales cycle with a formal RFP process, the buyers may have different expectations they may speak a different language and their workforce plans may include other types of workforce solutions, they might want a recruitment process outsourcing, they might want to write you know BPO statement of work, they might want an employer of record for certain out of state or you know out of country employees. So the rules have changed, you think you're playing tennis and you're playing pickleball. Have you ever watched a skilled tennis player learning to play pickleball? It's quite humorous you know all of a sudden all their power is useless and power backhand, the power serve doesn't work. Tennis doesn't have a kitchen but if you don't understand a kitchen in pickleball you're done. So you can be dinked and dunked to death by somebody who knows how to use a kitchen in pickleball. So how does this change your sales process? Well let's let's talk about your current client. Meet Dave. You've known him for ten years. He's an on-site hiring manager. He knows his operation soups to nuts. You have a great partnership. He takes your calls. His top priority is hitting his production goals and he will bring in whomever he needs whenever he needs in order to hit those goals. Your kids may even go to school together. Dave likes donuts so you can always get a meeting bring in the donuts. How many of you have a client like Dave? I bet a lot of you do and then Dave gets bought spun off, outsourced, privatized, rolled up, reallocated, focused, automated, scaled. Dave's old employer was an integrated manufacturer with a twenty percent profit margin. His new company is a focused logistics provider with five times the production but an eight percent margin. In the old world world spending for temp labor was a footnote in the corporate p and l. Now labor is the main item. So what's happening now? Back at corporate investors are nervous they've just spent hundreds of millions in assets to buy and scale a business and now they have to show a return. They've just moved it into one of those new facilities and the first thing they'll ask is what's our biggest cost? The answer is labor fifty to seventy cents on the dollar. You slash a million in labor costs your valuation goes up ten million. As a new owner, what would you do? I know what I'd do. I'd hire someone to own those labor costs, soup to nuts. I'd give them outrageous incentives to do so and I'd keep thumb screws handy for the slightest whiff of failure. So now here's your new sales target. Let's meet Bob. Bob, I drew this one myself with AI. It looks appropriately amateur but you know, since I no longer work on Avionté's marketing team I don't have to cringe he's a finance guy or an ops guy, an HR guy, a procurement guru. He owns the number and his financial cost reports are going to the board on a monthly basis. His dashboards are monitored daily and every variation is dissected to the penny. Local hiring managers like your friend Dave have been cut out but unlike Dave, Bob doesn't have the same visibility to day-to-day operations so you've got somebody who's got more power but less knowledge who you're selling to now and behind Bob's MBA bravado he's also gonna be a little defensive and insecure. So you know and then Bob's got you know he's got stock options that are tied to his result or some kind of performance incentive. If he delivers he wins big, if he has a negative surprise he's done. So Bob isn't feeling warm and fuzzy as a matter of fact he wants ironclad guarantees, clear lines of accountability, proof of expertise, and one throat to choke. And he's going to seek out the top industry experts and workforce planners with access to the best pools of talent and because he's dealing with such a large scale he has or he thinks he has more limited options to fill his roster of workers and he's looking for large scalable solutions. Now you see the challenge it creates for w two staffing if you're just trying to do local stuff and you gotta figure out how to work with this guy and the other thing is donuts aren't going to work because Bob likes protein. Okay? He's like a lot a lot of younger people now MBAs is kind of like I'm I'm I'm taking my protein. He's maxing. So the other thing about Bob is he doesn't answer his phone. Email and solicitations go straight to the junk folder. Bob is a planner so he hates unplanned interruptions. Your old sales contact Dave can't help you get in to see Bob either because Bob may actually view Dave as part of his cost problem, oh he's an old timer. When Bob is ready to buy he's gonna proactively seek out the vendors that he wants to talk to and issue an RFP and you can be at bet that before he does anything to reach out he's going to have researched all the vendors extensively and built a shortlist. Now you see where this again makes a problem for sales and sales process and here's how Bob is going to pick his shortlist he's going to go to me so smart dot com or GTP and any firm that is not recognized by the AI platform as a category leader in his industry as Bob defines it will not make the shortlist and if Bob can't find you or your firm your sales team won't stand a chance and when you do get that first meeting with Bob if you're lucky enough to do so you better already know his business understands his needs and ask him questions that he hasn't thought of himself. So to succeed going forward, suddenly brand reputation is really important and your sales and marketing teams better be really well aligned. Now here's the scary part if all you offer is W2 staffing Bob may not even let you bid. Workforce requirements have changed these new automated environments may require fewer people but the ramp time to onboard new workers has increased and higher wages and longer ramp time are less favorable for w two staffing contracts. When a workforce planning expert looks at a new staffing, operating you know a new way to staff at a major facility they may be doing this two or three years in advance before the warehouse actually opens and they're gonna look at their mixture of fault a full-time, part-time temp contract employer of record and outsource and for each of these options they're going to be looking at things like cost efficiency, flexibility, control, speed to scale, compliance risk, knowledge retention. Now staffing gets really high marks for flexibility and speed, time to scale I take a staffing company any day; they know how to respond faster, better in the moment. They're the people I want in a real firefight but here's the thing, other workforce solutions may offer a better trade-off between cost and quality dependent on the situation and the planning need so this is where we have to figure out how to fill these additional needs. The other thing to note from a standpoint is hourly wages in the US between 2014 and 2020 grew at seventeen per from seventeen percent up increased to thirty three percent between 2020 and 2026 and those talent shortages that everybody was warning about including a few million baby boomers said they've come to pass and American business owners saw the trend and they've been investing in automation so they can grow profitably while adding fewer jobs. So what's interesting now is and this is an exercise I did where I said okay let's take a specific duration and let's take a specific set of hourly rates and let's compare the economics of traditional w two staffing versus things like recruit recruitment process outsourcing, employer of record, direct work, you know flex work pools, let's look at defined services like statement of work BPO and so on and what you see is that as duration increases as w as as the wages increase the act of the the economic advantage in writing a contract moves from the top left to the lower right corner of that diagram. So this is something that you have to be aware of and many of you noticed that your durations are getting shorter and shorter employers aren't giving you the longer durations as long as they used to and that is part of what's happening here with this trend. So the other thing I'll say temp staffing versus statement of work it's a good idea it's a trend if you're going to write statement of work contracts please please please do it for the right reasons, it because you're experts in the field, you have focused expertise, you can do it better faster cheaper, you can build your brand identity around it but watch out for employers who just want cheap bodies while sticking you with all the financial and employment risk, okay, because they will in some cases. So where does that leave us? Staffing is stabilized, there's signs of green shoots and so on. Where's the opportunity? Remember this number I shared it earlier? I think it's wrong. I think we got to stop defining our industry with this number and what we need to do instead is start talking about the total number of jobs that are potentially available to be intermediated. So while I was wandering around the lavender fields of France I started to look at some hard economic data across critical industries and I looked specifically at jobs and occupations that were most related to or had most relied on staffing in the past things like business services, security, specialty and trade, waste and sanitation, health and long term care, hospitality and education and I drilled into occupation codes very carefully in order to estimate the percentage of of employees that might be associated with with with temp staffing and here's what I found. When you compare temp staffing against a market basket of these specific segments that rely heavily on intermediated work solutions of one kind you're looking at seven times the workforce, about eighteen million FTEs. Now we already knew that contingent work is larger but the question is by how much and is it growing and so to answer that I looked at the data over you know twenty plus years and when you look at the ratio of intermediate work versus temp staffing what you see is that ratio has grown substantially since twenty fifteen. In fact it's at it's larger than at any time since the Great Recession but with this disclaimer there is no recession. So the ratio spiked in 2001 and 2009 because temps got cut first. This time the ratio has spiked in part because of continued growth in precisely the job categories that have been most valuable to staffing industry in the past. So this suggests a significant permanent structural change in the market. What it really means is employers are buying workforce solutions so demand for w two staffing has stabilized but there are other intermediated workforce solutions that are going to be more important. We're going to be spending a lot more time trying to build and cultivate talent than we are actually you know actually simply selling it. So if you think about it please increasingly they're relying on these other kinds of solutions and in many cases they're bringing it in-house. They may be taking recruiters straight from staffing right into their in-house HR department and trying to build their own temp labor internally which is potentially a short-term solution but a better one in the long term would be for the employer to continue to rely on you to do it for them. So I think there there in lies the opportunity and what this means is there's a larger addressable market, there are you know new buyers and new competitors and you know there are great opportunities but it's with a twist. So what's the plan? What do you do with all of this? If we want to start serving this evolving market we need to evolve with it. It starts if I were if I were in charge of a staffing agency right now it's all about focused excellence. Whole industries are being consolidated automated rolled up and scaled. To sell to this market you have to speak their language and prove expertise and scale so whatever you do no matter your size small or large distinguish yourself with focused excellence in the specific industries and occupations you serve. Be known to be really good at at least something. Have an edge. Have something that makes you special and stand out from your competitors. And secondly, be prepared to support a variety of different workforce solutions. Your agencies need to evolve flexibility over time some clients are going to want w two staffing but increasingly they might be asking you to unbundle or or reframe your service offerings and so we need to have the flexibility to be able to do that. You may have a customer who needs only five temps but they might ask you to hire fifty remote workers. Smaller margin but you know continuous income. So that that's that's the second thing I would say focused excellence and and and and and and sharp definition of your services. Finally there's life a lifetime value of talent the quality of your talent is important. This is something that several people in this room have talked about you know Dan Mori, David Folowell, I'm a huge advocate of lifetime value of talent. What is it? It's basically it's the gross margin generated by each talent individually over their tenure with your firm. It basically says on average when a recruiter finds one new talent how much gross margin in total over a lifetime is it going to generate for your agency and it's a great metric because it captures so many fundamentals. Talent shows up for work it goes up, deliver for clients it goes up, they stay to the end of the assignment it goes up, you have a great partnership with your clients and you find them the right talent and you pay them higher margins it goes up, you treat people better it goes up, you hire people back for more it goes up, It shows you have better talent who stay longer and accept redeployments it goes up. It shows your recruiters are doing a better job of matching people, it shows your sales people are doing a better job of selling and negotiating better margins. It basically is something of all the things it is the ultimate measure of how much total value is being generated by each member of your workforce. Now high lifetime value of talent also lowers hiring and recruiting costs. Why? Well when you retain quality talent you don't need to hire as many people and quality talent tends to attract more quality talent. Last year I looked at gross profits by source of talent across Avionté's entire customer base and I published my results in a blog and two thirds of talent found through staffing agencies typically comes through job boards but our research suggests that referrals as a source that that talent actually generates substantially more income and it makes perfect sense when you think about it. Happy people, competent people tend to to attract other happy and competent people who will hire more. Talent source through referrals, you know, walk in walk ins job fairs one lesson from this this little exercise is that no matter how much we use AI and recruiting human relationships remain the bedrock of this industry so if AI isn't helping you build better relationships in the end that that should be one of the measures of how well you use it's spending more time with the client because AI has freed you up to do that. We've talked about focused excellence, flexible solutions, quality of talent in this new world it also starts with marketing and this is a huge cultural sift because sales have always been important for staffing agencies marketing not as much but in the future you need to have a distinctive brand and you need people to be able to find you because your buyer is far more likely to be a proactive buyer searching for vendors rather than somebody waiting to take a cold call. So it's a very different thought process. We're gonna be thinking more about transactional versus consultative selling. This means that your sales and marketing team they better be speaking the same language and you know if that salesperson walks in they're the biggest reflection of your brand they if they're asking smart questions and making you look like an expert they're doing their job and if they aren't well you don't have the right sales team and finally as you build out new service offerings and sharpen your focus you implement AI in your organization your structure is going to change and it may change dramatically. Accountability, roles, skill requirements, performance metrics, incentive models, recruiters will likely work in highly specialized teams, sales associates shouldn't be handing off an opportunity because somebody wants RPO rather than w two staffing and it has to be handed off to a different division and back office and operations teams may need to set up and organize around dedicated workflows for different product and delivery models. So all of this is going to take a huge amount of nimble and focused leadership, and my final point that I will leave you with this, the agencies who come out ahead over the next few years won't be the biggest they're going to be the ones who rebuilt themselves to match how their clients actually want to buy. So thank you. Agencies who adapt win.