Adecco targets faster growth as global economy recovers

ZURICH: Adecco Group is investing in digital technology to make it more attractive to employers seeking flexible workers, the world's largest staffing company said on Friday, as it targets faster growth as the global economy recovers.
The Swiss company said it wanted to grow four times faster than global GDP by 2020, up from a previous goal of three times. It also unveiled a raft of cost savings and digital investments ahead of its investor day in London.
Among its innovations is a mobile platform that enables employers to request temporary staff for hourly or daily assignments, which was developed together with Indian IT company Infosys.
Zurich-based Adecco said its investment in digital ventures along with a cost-saving programme would delay improvements to its operating margin in 2017 and 2018, but would pay off from 2019 onwards.
The company said it would be spending €245 million on restructuring, which aimed at eventually delivering productivity savings of €250 million per year by 2020. The cost savings are slated to improve its operating profit margin by 1 percentage point by 2021, Adecco said.
Previously the company had targeted an operating profit margin of 4.5% to 5%, which it has achieved this year. In its new targets, it said only that it wants "sustained EBITA profit margin improvement".
"By strengthening the core of our business and leading in digital innovation, we will accelerate growth, enhance our margin and deliver increased total shareholder returns," Chief Executive Alain Dehaze said in a statement.
Adecco is investing more in digital technology as employers increasingly seek more flexible staff to respond to swings in demand, and carry out more project-based work.
Staffing companies are seen as a bellwether for the health of the wider economy, with employers often taking on temporary staff at the beginning of a recovery before switching to permanent staff.
The new strategy comes as Adecco's growth lagged rivals Randstad and ManpowerGroup during the second quarter.
In an update about its third-quarter trading, Adecco said its organic revenues increased by 6% in July and August, when adjusted for trading days and currency swings, with September continuing at the same pace.
"We see the new targets as good news, particularly the reduction of the cost ratio," said Marco Strittmatter, an analyst at Zuercher Kantonalbank. — AFP