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European uncertainty helps top temp agency Adecco
ZURICH, Aug 9, 2018 (BSS/AFP) – The world’s biggest temporary staffing agency
said Thursday it saw revenue growth last quarter as uncertainty in key
European markets helped drive demand for short-term workers.
Economic growth slowed in Europe in the second quarter, but a range of
other issues also discouraged firms from hiring permanent staff, said Adecco.
“Between the elections in Italy, Brexit, uncertainty in Catalonia, the
strikes in France, there are lots of elements that weren’t favourable to
growth,” said firm’s chief executive Alain Dehaze.
“Even if just barely, this lack of clarity had a tendency to push companies
to prefer flexible hiring,” he said after the company announced its second
quarter results.
Overall, Adecco’s revenue edged 1 percent higher to 6.1 billion euros ($7.0
billion) in April through June. Net profits fell by 11 percent to 170 million
euros as the company stepped up investments to modernise and restructure its
operations.
Revenue growth was fastest in Italy, at 11 percent when adjusted for
factors like changes in the value of the currencies and the number of working
days.
Italy has been gripped by uncertainty that was aggravated by an election
that finally led to a populist government that has already moved to tighten
restrictions on firing staff.
In France, Adecco’s largest market, revenues rose by 8 percent for
placement of temporary workers, with increases driven by the manufacturing,
logistics, and automotive sectors.
France also has labour market rules that make it more difficult to reduce
staff numbers when business slows, which employers say discourage them from
taking on permanent employees.
“The impact of the strikes was clearly marked, but it is difficult to
quantify in terms of hiring,” said Dehaze.
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Meanwhile in Britain and Ireland, Adecco also saw strong revenue growth of 6
percent thanks in part to winning new contracts. Ireland will feel the
largest impact from Britain leaving the EU if London is not able to work out
easy access to the single market.
In Spain and Portugal, revenues rose by 5 percent, after having grown
strongly in previous quarters due to the recovery of the Spanish economy and
uncertainty triggered by Catalonia’s independence drive.
In the United States, where employers are having increased difficulty in
finding workers, revenues rose 3 percent, although this represented the best
result in three years.
Adecco’s shares fell by 2.6 percent in midday trading while the Swiss SMI
index was 0.3 percent lower.
BSS/AFP/SR/1800 HRS