Japanese staffing giant Persol (2181: JP) reported revenue today for the nine months ended 31 December 2020 of JPY 703.83 billion (USD 6.70 billion), a decrease of 2.4% when compared to the previous period.

The group said the pandemic had hit its results.

“In the nine months ended December 31, 2020, deterioration of business circumstances due to the effect of Covid-19 pandemic began to be controlled and the ratio of job offers to job seekers in Japan bottomed out in September last year and slightly recovered to 1.06 (seasonally adjusted) in December. Since late December, however, the Covid-19 pandemic spread in the urban area mainly in Tokyo and the emergency declaration was issued again at the beginning of 2021, so the economic concerns are still existing,” Persol stated.

Due to the concerns about future prospect caused by spreading Covid-19, the placement business suffered the effect of companies’ continuous caution on hiring, Persol added.

In the Staffing SBU segment, the group operates its temporary staffing business, including mainstay clerical and administrative staff dispatching and wide range of staffing service, BPO (Business Process Outsourcing) business and job referral service business mainly for administrative talent in Japan. Revenue for the nine months ended in December 31, 2020 were JPY 394.3 billion (USD 3.75 billion) (increased by 4.0%).

Sales were increased in temporary staffing business as a result of an increase of operating days by one from the same period of the previous year and increased unit billing rates in accordance with “equal pay for equal work” although the number of active temporary staff decreased year-on-year because new temporary staffing demand decreased on account of concerns about future prospects due to spreading Covid-19.

In the Career SBU segment, the group operates placement business, supporting corporate client mid-career hiring activities, and job recruitment media business. Revenue was down 32.2% to JPY 43.3 billion (USD 412.3 million). Revenue decreased because companies were continuously restrained from recruitment due to concerns about future prospect because of spreading Covid-19,as well as the termination of a unit in late 2019.

In the Professional Outsourcing SBU segment, the group operates manufacturing and development outsourcing business in IT and engineering areas and temporary staffing business specialised in engineer dispatching. Sales increased by 7.0% to JPY 82.3 billion (USD 783.6 million). Revenue increased due to the fact that business demand in IT areas was continuously strong although sales continued to decline in engineering due to the reduction of R&D budgets in manufacturing companies.

The Solution SBU segment provides digital solution services for hiring talent and human resource management, and creates new businesses through an incubation program. Revenue declined by 25.0% to  JPY 3.7 billion (USD 35.2 million)(decreased by 25.0%) as a result of a continued tendency of companies to reduce recruitment costs and deteriorated business circumstances surrounding restaurants both due to the effect of Covid 19.

In the Asia Pacific SBU segment, the group operates temporary staffing business and placement business in the APAC area and human resource-related business and maintenance business in Australia (those businesses are operated under the PersolKelly brand in Asia and under the Programmed brand in Australia). Revenue was JPY 186.8 billion, down 7.9% over the last year. Revenue decreased because most of the APAC region suffered an economic slump due to the spread of Covid-19 while Singapore staffing showed growth and China’s placement business was recovering in the third quarter.

The Board of Directors of Persol also announced today that effective 1 April 2021, Masamichi Mizuta (currently Representative Director, President and CEO) would become Director and Chairman while Takao Wada who is currently Director, Deputy President and Executive Officer, would become Representative Director, President and CEO. Furthermore, Hirotoshi Takahashi who is currently Director, Deputy President and Executive Officer would become Representative Director, Deputy President.

Mizuta said, “Going forward, in order to achieve a sustainable enhancement of the group's corporate value at a time when the employment environment will undergo significant changes, I have decided to step down from the position of President and CEO, and, upon the due process by the Nomination and Compensation Committee, Mr. Takao Wada will assume office.”

“As President and Representative Director of Persol TempStaff, the core company of the Persol Group, since 2016, Mr. Wada has been leading not only Persol TempStaff but also the industry and contributing to the stable development of the group's core business through enhancing the working environment for temporary staffs and sincerely caring for corporate clients,” Mizuta said. “In this fiscal year, Mr. Wada has been promoting the transformation of not only the Staffing SBU, but also the entire group as Director, Deputy President of the Company. Moreover, Director, Deputy President, Mr. Takahashi, will also have representative authority as an assistant to Mr. Wada, which we believe will be the most appropriate structure for improving the corporate value of the group from now on.”

According to SIA’s report Largest Staffing Firms in Japan report, Persol was the 2nd largest staffing firm in Japan based on revenue.

Shares in Persol Holdings set a new 52-week high during today's trading session when it reached JPY 2,232.00 (USD 21.25). Over this period, the share price is up 3.29% and down 0.29% on the day. The company has a market cap of JPY 521.22 billion (USD 4.96 billion).