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State of the 2011Records & Information Management
Industry Report
SponSored by
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www.SDBmagazine.com | 2011 State of the InDuStry | SDB 3
2011State of
the industry
Inside the RIM IndustryIn the fall of 2010, Storage & Destruction Business
magazine asked our readers to participate in our first survey of records and information manage-
ment (RIM) professionals. In addition to inviting visitors to our website, www.sdbmagazine.com, to participate in the survey, we also e-mailed a link to the survey to readers of our magazine and bi-weekly e-newsletter. I’d like to thank the 259 people who took the time to respond. This report is the result of your time and candor.
I’d also like to thank EzShred; Jake, Connor and Crew; and Vecoplan for their sponsorship of the 2011 State of the RIM Industry Report. Without their sponsorship commitments, SDB’s State of the RIM Industry Report and its associated research would not be possible.
Because 2011 marks our inaugural State of the RIM Industry Report, it is loaded with data and light on analysis, as we don’t have a history of survey results to compare against. As we continue with this project going forward and build on this preliminary data, we will add analysis and commentary on the evolution of the industry.
The current report, however, provides a series of snapshots of the industry as of the close of 2010, heading into 2011. On the pages that follow, we look at everything from service offerings to revenue to staffing considerations as well as the challenges and opportunities facing firms in the near future.
There is no shortage of good news to report. 2010
was a good year for RIM firms, with more than 75 percent of respondents re-porting that their revenues were either significantly or slightly up from those of 2009. Respondents also report growth in revenue from recovered paper sales as well as plans to reinvest in their businesses through capital equip-ment acquisitions.
While survey respondents foresee growth in the year ahead, it won’t necessarily be easily obtained. Among the challenges survey respondents say will affect their companies in the next five years are the economy, competition from national firms, fuel costs, competition from local firms and labor costs.
In addition to these factors, respondents also report being concerned about the effects of health care reform and the new business realities of the HIPA (Health In-surance Portability and Accountability) and HITECH (Health Information Technology for Economic and Clinical Health) acts.
Despite these potential challenges, survey respon-dents predict further business growth in 2011. The majority of respondents (35 percent) forecast 6 to 10 percent growth, while 22.6 percent say they anticipate 16 percent to 20 percent growth for the year.
Group publisherJames R. Keefe, [email protected]
editorDeAnne Toto, [email protected]
editor-in-chief, recyclinG today Media GroupBrian Taylor, [email protected]
b y D e A n n e T o T o
senior editor & internet editorDan Sandoval, [email protected]
associate editorKristin Smith, [email protected]
art directorKaren Angus, [email protected]
state of the industry desiGnerNichole Frye, [email protected]
adVertisinG salesJen [email protected], 330-523-5395Diana [email protected], 330-523-5342Marty [email protected], 330-523-5376
corporate offices4020 Kinross lakes pkwy., suite 201richfield, ohio 44286phone: 330-523-5400fax: 330-659-0823
MeMber• NationalAssociationfor information destruction• PRISMInternational• InstituteofScrapRecycling industries inc.• NationalRecyclingCoalition• BureauofInternational recycling• AmericanBusinessMedia
2011State of the industry
S4 SDB | 2011 State of the InDuStry | www.SDBmagazine.com
reSpondenTS by reGIon
Midwest 26 8%
Southeast 18 9%
northeast 17 3%
West 15 0%
Southwest 12 2%
Atlantic 5 9%
Mountain 3 9%
DemographicsStorage & Destruction Business magazine received 259 responses to our state of the industry survey, which was conducted in the fall of 2010 with the assistance of Michael Sheehan of Skyhawk Resources Inc., Cleveland. This page offers a closer look at those respondents and the companies they represent.
Title no percentage
owner/Partner 121 46 7%
President 31 12 0%
Sales 20 7 7%
Manager 18 6 9%
General Manager 18 6 9%
Director 12 4 6%
Vice President 12 4 6%
Corporate/executiveofficer
11 4 2%
other 11 4 2%
Supervisor 4 1 5%
Purchasing/buyer 1 0 4%
RESPONDENTS BY JOB FUNCTION
Only Storage. . . . . 4.1%Only Destruction . . 48.8%Both. . . . . . . . 47.1%
11.7%
1 . . . . . 60.5%2 - 3 . . . 24.2%4 - 5 . . . . 3.5%> 5 . . . . . 11.7%
60.5%24.2%
3.5% 54.5%Private
Family
Public9.0%
36.5%
COMPANY OWNERSHIPNUMBER OF COMPANY LOCATIONS DOES YOUR COMPANY OFFER…
of our respondents, 115 report offering both destruction and storage services
48.8%47.1%
4.1%
2011State of
the industry
S5www.SDBmagazine.com | 2011 State of the InDuStry | SDB
BusinessRevenueDespite the lingering effects of the recession, which officially began in December 2007 and ended in June 2009, many RIM firms experienced growth in 2009 and 2010, as reported to SDB editors in conversation with industry professionals and as the results of our polling reveal.
The forecast for the year ahead also seems favor-able. Survey respondents predict revenue growth for their businesses in 2011. The majority (35.2 percent) forecasts 6 to 10 percent growth. Nearly 23 percent predict revenue growth of between 16 to 20 percent.
Where do you sell your recovered paper?
broker . . . . . . . . 31.6%Paperrecycler . . . . 44.1%
direct to mill consumer . . . . 24.3%
Item <10% 11%-20% 21%-30% 31%-40% 41%-50% >50%
Records Storage 23 1% 11 9% 12 6% 4 2% 3 5% 4 9%
Document Imaging 25 2% 9 1% 7 0% 3 5% 0 7% 2 1%
Media Vaulting / Tape Rotation 21 7% 7 7% 9 8% 7 0% 2 1% 0 7%
Data Center 25 9% 2 1% 4 2% 1 4% 2 1% 0 7%
Software as a Service 25 9% 4 9% 0 7% 1 4% 1 4% 0 0%
Document Destruction 11 9% 24 5% 16 8% 14 0% 7 7% 18 9%
Production Destruction 18 2% 12 6% 8 4% 7 0% 6 3% 4 9%
Data erasure 25 2% 4 2% 1 4% 0 7% 1 4% 1 4%
Hard Drive / electronic Media Destruction 20 3% 15 4% 8 4% 11 2% 5 6% 6 3%
electronics Recycling 23 8% 10 5% 4 9% 4 9% 2 8% 3 5%
Tape Sales 25 9% 4 9% 2 8% 0 7% 0 0% 0 7%
box Sales 28 0% 8 4% 5 6% 4 2% 2 8% 3 5%
What is your company’s gross profit margin for the services offered?
pAper SALeS And THe boTToM LIneCompaniesofferingdocumentdestructionservicesre-portgrowthinrevenuerelatedtorecoveredfibersales,with52percentnotinggrowthofmorethan10percentcomparedwiththeir2009figures.Somefirms(22.6per-cent)experiencedmoremoderategrowthofbetween5and10percent,while13percentreportthefigureasflat.Roughly5percentofrespondentssawadeclineinpapersalerevenuesofmorethan10percent.Therevenuegeneratedthroughrecoveredpapersales
influencesthecapitalexpendituredecisionscompaniesmake, according to the survey results. More than 58 percent of respondents rank the revenue generated through paper sales as very important or important in determining future capital expenditure decisions. Themajorityofrespondents(44.1percent)selltheir
paper to recyclers,andnearly64percentbale theirshreddedpaper.
do you bale your recovered paper?
What is your company’s estimated 2010 gross revenue?
63.8%yes
no 36.2%
44.1%
24.3% 31.6%
17.2%> $5M
13.9%$2.5M - $5M
20.5%$1M - $2.5M
7.3%$750,000 - $1M
7.9%$500,000 - $750,000
14.6%$250,000 - $500,000
18.5%< $250,000
0% 5% 10% 15% 20% 25%
2011State of the industry
S6 SDB | 2011 State of the InDuStry | www.SDBmagazine.com
How many full-time employees do you have?
Staffing
0
1 - 2
3 - 5
6 - 10
10 - 20
> 20
How many part-time employees do you have?
0 2.5%
1 - 2
3 - 5
5 - 10
10 - 20
> 20
6.7%
21.5%
16.6%
15.3%
37.4%
5%0% 10% 15% 20% 25% 30% 35% 40%
15%0% 10% 15% 20% 25% 30% 35% 40%
29.2%
39.8%
13.0%
7.5%
5.0%
5.6%
What is the average hourly wage paid to your employees?
0 10% 20% 30% 40% 50% 60%
> $10 13.9%
$10 - $15 51.9%
$15 - $20 29.1%
> $20 5.1%
InSIde SALeSNearly61percentofrespondentsreportemployingdedicatedsales-people.Thechartsbelowprovidea closer look at the size of those sales forces and how commission figures into their salaries.
How many sales people do you employ?
> 20 salespeople
What portion of your salespeople’s compensation is commission?
1 - 2 salespeople
3 - 5 salespeople
6 - 10 salespeople
11 - 20 salespeople
< 10% . . . . . . . . . 40.8%10% - 25% . . . . . . . 30.4%25% - 50% . . . . . . . 15.2%50% - 75% . . . . . . . . 8.0%> 75% . . . . . . . . . . 5.6%
50.0%
35.7%
8.2%
3.1%
3.1%
40.8%15.2%
8.0%5.6%
30.4%
www.SDBmagazine.com | 2011 State of the InDuStry | SDB
2011State of
the industry
S7
ServicesInformation Destruction Services Snapshot Survey respondents providing information destruction services note the following:
Survey respondents providing records management services note the following:
54.8% of
respondents say
they serve the
residential sector.
0% 10% 20% 30% 40% 50%
What portion of your destruction business is on site?
75% - 100%
50% - 75%
25% - 50%
0 – 25%
42.2%
11.1%
10.1%
36.7%
81.3% of respondents
provide a key to their clients.
0% 5%
0% 5% 10% 15% 20% 25% 30% 35% 40%
10% 15% 20% 25% 30% 35%
How many containers do you have in service?
27.5%31.1%
13.5%8.8%
19.2%
60.5% of respondents
do not key locks
differently for different accounts.
How many consoles do you have in service?
0 – 100 38.9%
101 – 500 22.1%
501 – 1,000 15.8%
1,001 – 2,000 7.9%
> 2,000 15.3%
0 – 100
101 – 500
501 – 1,000
1,001 – 2,000
> 2,000
How many boxes do you have in storage?
76% to 100% . . . . 4.0%51% to 75% . . . . 10.3%26% to 50% . . . . 21.4%0 to 25% . . . . . . 64.3%
boxes percentage
<1,000 45.5%
1,000 - 25,000 9.1%
25,001 - 100,000 11.4%
100,001 - 200,000 4.5%
200,001 - 500,000 11.4%
500,001 - 1,000,000 8.3%
>1 million 9.8%
What percentage of the records you have in storage are active records?
64.3%21.4%
10.3%
4.0%
Records Management Services Snapshot
SDB | 2011 State of the InDuStry | www.SDBmagazine.com
2011State of the industry
S8
Services continuedMenu of serVicesRespondentsindicateofferingthefollowingRIMservices:
other
Tape Sales
Software as a Service
data erasure
data Center
document Imaging
Media Vaulting / Tape rotation
electronics recycling
box Sales
records Storage
product destruction
Hard drive / electronic Media destruction
document destruction
7.8%
9.6%
10.2%
12.0%
13.3%
32.5%
33.1%
35.5%
42.8%
47.0%
60.8%
67.5%
92.2%
0% 20% 40% 60% 80% 100%
Business Expenses
employee Compensation . . . . .35.0% equipment Acquisition. . . . . . .10.7%Fuel . . . . . . . . . . . . . . . . . . 9.2%Insurance . . . . . . . . . . . . . . . 8.4%equipment Maintenance . . . . . . 8.2%Marketing/Advertising . . . . . . . 7.4%
What percentage of your total annual revenue do you spend on…
35.0%
10.7%
9.2%
8.2%
8.4%
7.4%Despite the considerable expense represented by equipment ranging from shredders to balers for those companies offering document destruction services to racking and software for firms providing records management services, employee compensation considerably outweighs these costs. Employee compensation represents the largest expense for RIM firms, accounting for 35 percent of total annual revenue, according to respondents.
www.SDBmagazine.com | 2011 State of the InDuStry | SDB
2011State of
the industry
S9
bUSIneSS deVeLopMenTCustomer referrals serve as a vital source of new business for the RIM industry. One hundred percent of respondents rank referrals as very important (87.3 percent) or important (12.7 percent). The Internet ranks in second place, with 50 percent of respondents rating it as very important and 25.3 percent as important. Reflecting the declining importance of Yellow Pages listings, 24.1 percent of respondents say they have no impact on new business development, while 19.6 percent rank them as unimportant. However, some RIM firms are not ready to completely abandon their Yellow Page presence, as nearly a third of respondents rank it as somewhat important.
SerVICe GroWTH AreASRespondents ranked the fastest-growing service areas for their businesses in 2010. Document destruction far and away showed the most growth for respondents, with nearly 63 percent of re-spondents selecting it. Hard drive/electronic media destruction ranked a distant second at 25.2 percent.
In terms of service areas that offer the most business oppor-tunity, again, document destruction is the clear winner, as 70.8 percent of respondents rank it as very important. Almost 35 percent of respondents also see records storage as a very important service area. Two other destruction services, product and hard drive destruction, also are seen as high growth areas.
& CHALLENGESOPPORTUNITIES
SDB | 2011 State of the InDuStry | www.SDBmagazine.com
2011State of the industry
S10
Fastest Growing Service Areas in 2010 Challenges Ahead
Very Important Important Somewhat
Important not Important no Impact
document destruction 70.8% 14.0% 7.0% 1.8% 2.9%
records Storage 34.5% 10.5% 10.5% 14.0% 24.6%
Hard drive /electronic Mediadestruction
29.8% 18.7% 25.1% 9.9% 9.4%
production destruction 29.8% 14.6% 24.6% 13.5% 8.2%
electronics recycling 22.2% 14.0% 14.6% 17.0% 19.3%
document Imaging 19.3% 13.5% 14.0% 19.3% 25.7%
ranking of Service Area opportunities
62.9%document destruction
25.2%Hard drive / electronic
Media destruction
18.2%records Storage
electronics recycling17.0%
15.1%document Imaging
product destruction10.7%
5.0%data Center
Among choices that included competition from local firms, labor costs, health care, energy costs, business taxes, errors and omissions insurance, regulations and labor availability, respondents ranked their three greatest challenges as:
1.
2.3.
Economy
Competition from National Firms
Fuel costs
www.SDBmagazine.com | 2011 State of the InDuStry | SDB 11
Leader of the Pack for 15 Years
INTEGRITY Our manufacturing process and commitment to service excellence provides you with unparalleled document security and purchase confidence.
SECURITY We manufacture containers specifically designed and engineered for the document destruction industry.
INNOVATIONWe are unveiling our newest line in 2011, a new Driver Friendly “Ergonomic” Series of consoles, bins and accessories.
www.jakeconnorandcrew.com
Join us March 18-20 at the 2011 NAID Conference
Presenting: ‘Safety and Security of Containers in the Shredding Industry’3-3:50pm on Friday March 18th, 2011Stop by Booth #311 for contest prizes.
“eConsole”
“Executive Console”
“The Retriever”
The “Pedigree Series”
NEW “Ergonomic” Series
Your Best Friend in
Document Protection
Follow us:
All Jake, Connor & Crew consoles are CARB II compliant. All of our bins are fully recyclable.
A portion of our after-tax profits are donated to TheJAKE Foundation, a charitable fund that supportsanimal and children’s causes worldwide.
SDB | 2011 State of the InDuStry | www.SDBmagazine.com12
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