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Adecco Q2 revenue rises as hunt for skilled workers heats up
Global Banking & Finance Review®
Company
By John Revill
ZURICH (Reuters) -Staffing and training group Adecco reported a 13% increase in second-quarter revenue on Thursday, as employers intensified the search for skilled workers and hired more permanent staff.
The battle for talented employees has also driven up wages, which have also increased to offset rising inflation, Chief Financial Officer Coram Williams said.
The jobs market has become more competitive as more staff voluntarily quit their jobs after the pandemic, leaving many companies understaffed, he added.
“There is a real scarcity of talent across the globe,” Williams told Reuters. “This is a key driver of wage inflation, along with inflation generally.
“There is strong wage inflation, although this varies,” he added. “In continental Europe it is low to mid single digits, but elsewhere it is high single digits.”
Adecco, which competes with Randstad and ManpowerGroup, is seen as a signifier for the broader economy with companies hiring when they feel confident about the future.
The Swiss group said hiring volumes had also increased as second quarter revenue rose to 5.94 billion euros ($6.04 billion), in line with forecasts.
Still, the company’s second-quarter net profit dropped 47% to 77 million euros, as the company spent more on sales and marketing and also incurred costs integrating AKKA Technologies which it bought for 2 billion euros in July 2021.
Its shares were down 2.7% on the Swiss exchange, as investors were disappointed by the net profit figure which missed forecasts of 112 million euros.
“While revenues and gross margin are solid, the high one-off costs and high amortisation are disappointing, primarily due to AKKA,” said Zuercher Kantonalbank analyst Gian Marco Werro.
When currency and acquisition effects were stripped out, Adecco’s Q2 sales increased by 4%, weaker than Randstad’s 9.1% increase and the 6% currency-adjusted increase at Manpower.
July, the first month of Adecco’s third quarter, had seen revenue slightly higher than 4%, Williams said.
($1 = 0.9841 euros)
(Reporting by John Revill; Editing by Jacqueline Wong, Sherry Jacob-Phillips and Emelia Sithole-Matarise)
Wage inflation refers to the increase in wages across the economy, often driven by a shortage of skilled workers and rising living costs.
Revenue is the total income generated by a company from its business activities, typically measured over a specific period.
A staffing agency is a company that matches employers with employees, providing recruitment services for temporary or permanent positions.
Net profit is the amount of money a company retains after all expenses, taxes, and costs have been subtracted from total revenue.
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