Randstad nv, the world’s largest staffing firm, reported challenging market conditions in the first quarter. Client activity remained subdued. Still, there were spots of growth, and the company said it has recently seen some positive economic indicators.

“We continued to adapt and respond well in Q1 as market conditions remained challenging,” CEO Sander van ‘t Noordende said in a press release. “While we performed well in Southern Europe, LatAm and Asia Pacific, we encountered softer conditions than expected in North America and Northern Europe.”

First-quarter revenue fell 8% year over year on an organic basis to €5.94 billion (US$6.41 billion).

Perm fees fell by 21% year over year in the first quarter on an organic basis to €131 million (US$141.4 million).

Recruitment process outsourcing fees declined by 20%, with RPO fees reported in the company’s “enterprise talent solutions” segment amounting to €79 million (US$85.3 million).

The company noted conditions continued into April with volumes stable when compared to March, although there are signs pointing to improvement.

“While uncertainty remains into Q2, we have recently seen some positive economic indicators change,” CFO Jorge Vazquez said in a conference call with analysts.

“It was a slow start to a more normalized year,” Vazquez said. “In general, it appears some of our markets are bottoming out, but things remain challenging.”

Revenue by geography

• Revenue declines in the US appear to be easing, the company reported. US revenue was down 15% year over year in the first quarter on an organic basis compared to a 16% decline in the fourth quarter.
• Randstad also reported revenue declines in Canada appeared to be bottoming out, with revenue from the country down 13% year over year on an organic basis in the first quarter compared to a decline of 11% in the fourth quarter.
• Meanwhile, there were persistent headwinds in Northern Europe, though Randstad reported positive momentum in its “Southern Europe, UK and Latin America” reporting segment — revenue from Iberia rose 4% in the first quarter on an organic basis, with growth led by Spain.
• Latin America revenue posted mid-single-digit growth led by Brazil.
• In Asia Pacific, trends were mixed. Revenue from Australia and New Zealand was down 16% year over year on an organic basis, while revenue from Japan rose by 5% and revenue from India rose by 2%.

Reporting changes

Randstad changed how it reports revenue by geography. Previously, the company reported its “global business” segment separately from North America, Northern Europe and other geographies. However, revenue from global business revenue is now included within the geographic segment where it was earned. Global business had included enterprise solutions (Sourceright and RiseSmart) and Monster.

The company also changed how it reports revenue by category. Previously, Randstad’s revenue categories were staffing, in-house services, professionals and global business. The new categories are:

• Operational talent solutions — light industrial; skilled trades; supervision; engineering, design and R&D; industrial management; hospitality, retail and events; call and contact center reps.
• Professional talent solutions — operational accounting, finance management, HR and legal management, sales and marketing management, health and education, and office and administrative support.
•  Digital talent solutions — customer experience, cloud computing and infrastructure, data and analytics, and digital and product engineering.
• Enterprise talent solutions — RPO, MSP, outplacement, workforce advisory and total talent solutions.
• Monster

Randstad averaged 558,900 temporary workers on assignment during the first quarter, down from 607,100 in the first quarter of last year.

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Share price

Shares in Randstad closed down 7.22% today to €45.00 (US$47.94). They hit a new 52-week low when they reached €44.78 (US$47.70).