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France – Adecco to diversify to offset market decline

19 December 2012

Swiss recruiter Adecco has seen large falls in sales in France this year, a key market for the staffing firm which now wants to increase diversification towards employment-related services in order to offset the decline in the temporary employment market.

The firm’s most important market saw revenue decline by -16% to €1.3 billion in the third quarter after major industries, including the automotive sector, reported lower demand for temporary workers.

Head of Adecco France, Alain Dehaze, said in an interview with Les Echos that the firm will also complete its voluntary redundancy plan by the end of December, cutting around 530 jobs. Since merging with the Adia brand, the firm is keen to diversify, he said.

“The temporary market is seen to drop by 15% in 2012 and no signs of recovery are in view,” said Mr Dehaze. He said that France and Southern Europe have suffered from deteriorating market conditions in particular while the US has been better off.

France also faces another problem. “We are very dependent on GDP,” he said, which is expected to see a growth rate of only 0.3% next year. He believes that this increase will not be enough to get the temporary staffing market going again. For the staffing market to recover, a GDP rate of 1% or above is required, he said.  

“We must manage to compensate for the 15% decline recorded in the temporary employment market by developing our other businesses: recruitment, consulting, integration, human resources solutions,” said Mr Dehaze. 

Staffing Industry Analysts also expects the French staffing market to continue to deteriorate in terms of revenue next year, according to the recently published growth forecasts.

Adecco France accounts for 27% of the Group’s total revenue. The company earlier this year stated that it was shifting its focus in France from large contracts to small and medium ones in order to improve profitability.

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