Adecco S.A.  - Staffing Services -  Category Directory

41 1 878 88 88

1275 Chéserex
Switzerland
www.adecco.com

Sales

$20 billion

Business Description

The Adecco Group resulted from the August 1996 merger of Adia S.A. (“Adia”) and Ecco S.A. (“Ecco”), pursuant to which each Ecco stockholder received Adia common shares or cash for each share of Ecco common stock they held. In connection with the merger with Ecco, Adia changed its name to Adecco.

Henri F. Lavanchy founded Adia in 1957 in Lausanne, Switzerland to provide temporary personnel to businesses in that country. Beginning in the 1960s and continuing through 1996, Adia expanded throughout Europe, the United States, Mexico, Japan and Southeast Asia.

Philippe Foriel-Destezet founded Ecco in 1964 in Lyon, France. By the early 1980s, Ecco had become the largest supplier of temporary personnel in France and continued to develop its business in Europe, the United States, South America and Asia Pacific through to 1996.

Business Overview by Operating Division

The Adecco Group is a global leader in Human Resources Solutions. The Adecco Group network connects up to 650,000 associates (temporary workers) with up to 150,000 business clients each day through its network of 28,000 colleagues (employees) and 5,800 branches in 70 territories around the world. Adecco S.A. is registered in Switzerland and managed by a multinational team with expertise in markets spanning the globe, the Adecco Group delivers a broad range of flexible staffing and career resources to corporate clients and qualified associates.

The staffing industry is quite fragmented and is highly competitive. Customer demand is very dependent upon the overall strength of the labour market as well as an established trend towards greater workforce flexibility. The business is also strongly influenced by the macro economic cycle which typically results in growing demand for employment services during periods of economic expansion and, conversely, contraction of demand during periods of economic weakness.

Forecasting demand for staffing services is difficult because of the sensitivity of demand to the economic cycle. Typically customers are not able to provide much advance notice of changes in their staffing needs. Responding to such fluctuating demands of customers for staff in a flexible way is a key element of the Adecco Group’s service offering. Anticipating such trends is an important aspect of managing the internal cost structure and the ability to do so efficiently is a key component of maintaining profitability.

The Adecco Group in 2003 was comprised of four divisions: Adecco Staffing Division, Ajilon Professional Division, LHH Career Services Division and e-HR Services & Others

During 2003, the Adecco Group generated 89% of its revenues from the Adecco Staffing Division, 10% from the Ajilon Professional Division, 1% from the LHH Career Services Division and less than 1% from the e-HR Services & Others Division. For 2002, the comparable percentages were 87%, 11%, 2% and less than 1% respectively. The Adecco Group ceased providing e-HR Services in 2004 upon the sale of jobpilot.

Adecco Staffing Division focuses on providing flexible staffing solutions to a broad range of businesses and industries, including the automotive, banking, electronics, logistics and telecommunications sectors. Ajilon Professional Division offers a range of specialised staffing and consulting businesses, with particular emphasis on the provision of information technology services, finance and accounting and high-end clerical support. LHH Career Services Division provides outplacement and counselling to employees in transition, together with leadership development and organisational consulting. e-HR Services & Others Division provides online recruitment advertising. In April 2004 the jobpilot operations of this division were sold.

Within the divisions, management is principally organised along geographic lines, defined as North America (United States and Canada), Europe (primarily France, the United Kingdom, Belgium, Germany, Italy, the Netherlands, Spain and Switzerland), Asia Pacific (primarily Japan and Australia) and the Rest of the World (primarily Latin America).

The Adecco Group generates revenues from sales of services through its branch office network. In 2003, 94% of revenues were generated from selling staffing services where billings are generally negotiated and invoiced on an hourly basis. Temporary associates record the hours they have worked and these hours, at the rate agreed with the customer, are then accumulated and billed each week or month according to the agreed upon terms. The temporary associate is paid the net hourly amount after statutory deductions on a daily, weekly or monthly basis. Certain other employer payroll related costs are incurred and the net difference between the amounts billed and payroll costs incurred is reported as gross profit. In 2003, the Adecco Group also generated 6% of its revenues from permanent placement of staff and other consulting services where the placement fee is directly negotiated with the client.

Adecco Staffing Division

At December 28, 2003, the Adecco Staffing Division operated in 70 territories across Europe, the Middle East, Africa, Asia Pacific and North and South America from a network of approximately 5,250 branches.

As of the date of this Annual Report, the Adecco Group believes Adecco Staffing Services is Number 1 or 2 in 11 of the largest 13 staffing markets in the world.

The Adecco Staffing Division network has international coverage and focuses on flexible staffing solutions for both global industries including automotive, banking, electronics, logistics and telecommunications and local customers of all services and sectors. Under the Adecco brand (in France also the Adia brand), the Adecco Staffing Division provides the services of temporary and full-time clerical, industrial and technical temporary employees in 70 territories. Many branches specialise in a specific activity: Adecco Technical, Adecco Clerical, Adecco Light Industrial, Adecco Construction and Adecco Call Centres Solutions.

Ajilon Professional Division

At December 28, 2003, the Ajilon Professional Division operated in 16 countries across North America, Europe and Australia from a network of approximately 450 branches.

The Ajilon Professional Division operates with business lines specialised by industry, serving customers with temporary associates, contractors and permanent placement. The major focus is on information technology. Additional sectors include finance and accounting, clerical and engineering. The Ajilon Professional Division operates primarily under the Ajilon brand name worldwide. In selected markets, the Division’s business lines also include Computer People, Icon, Office Angels and Roevin.

Ajilon Professional Division is one of the largest technology employers in the industry. Ajilon’s clients range from large multinationals, to mid-size corporations, to public employers and include a variety of industries such as manufacturing, finance, communications, health, transportation and insurance. In addition to supplemental staffing, Ajilon offers several managed services, where the Ajilon team takes responsibility for a complete project. Managed services include systems transformation, functional outsourcing, systems capacity, and software testing. From its strong base in the United States, Ajilon has expanded its operations to Canada, the United Kingdom, continental Europe and Australia.

LHH Career Services Division

At December 28, 2003, the LHH Career Services Division operated from over 100 branches worldwide.

Lee Hecht Harrison established in 1974, is the career services company specialising in providing outplacement, leadership development, coaching and career development services. Lee Hecht Harrison’s focus is helping organisations and their employees deal with career transitions, career management and the effect of change on careers, work and employability. With worldwide office locations, Lee Hecht Harrison’s experience helps companies of all sizes effectively manage change, downsizing and internal career mobility.

e-HR Services & Others Division

At December 28, 2003, the e-HR Services & Others Division operated mainly through jobpilot in 11 countries across Europe. The Adecco Group acquired jobpilot during 2002 and disposed of it in April 2004.

Europe

At December 28, 2003, the Adecco Group operated in Europe in 3,763 branches, producing 64% of the Adecco Group’s consolidated revenues in 2003. The eight largest countries by revenues are described below:

France

At December 28, 2003, the Adecco Group operated in France in 1,643 branches, producing 36% of the Adecco Group’s consolidated revenues in 2003. According to market statistics published by the Syndicate of Temporary Staffing Companies in France, in 2003 the Adecco Group ranked first in personnel services revenues in France. In 2003 the market share of Adecco Staffing in France was about 32%. Price competition in the French temporary personnel market is intense.

United Kingdom

At December 28, 2003, the Adecco Group operated in the United Kingdom through 458 branches offering temporary personnel and permanent placement services. According to the December 2003 edition of the Top 100 Report, the Adecco Group is the number 1 personnel services company in terms of revenues in the United Kingdom. In 2003 the market share of Adecco Staffing and other mainstream staffing operations in the UK was 7%.

The Adecco Group operates several speciality brands in the United Kingdom: Jonathan Wren supplies high-level permanent personnel to the banking and finance industry and technical personnel; Computer People supplies personnel who have skills in information technology and data processing and provides training in these areas; and Lee Hecht Harrison specialises in outplacement, career development, executive coaching, leadership development, retention and workforce consulting services.

Italy

At December 28, 2003, the Adecco Group operated in Italy through a network of 471 branches. Based on market statistics provided by the Italian Ministry of Labour and competitor information, in 2003 the Adecco Group ranked first in temporary personnel services in Italy. The market share of Adecco Staffing in Italy was about 31% in 2003. In Italy, the Adecco Group also offers full-time employment services and outplacement counselling services. Temporary work was legalised in Italy in June 1997, and has expanded rapidly. Although the environment is liberal, under government regulations, barriers to entry and to serving certain sectors remain.

Spain

At December 28, 2003, the Adecco Group operated in Spain through a network of 305 branches. According to market statistics published by the Association of Main Temporary Staffing Companies in Spain, in 2003 the Adecco Group ranked first in personnel services revenues in Spain. The market share of Adecco Stafffing in Spain was about 31%. The Adecco Group entered the Spanish market in 1994, following deregulation.

Switzerland

At December 28, 2003, the Adecco Group operated in Switzerland through a network of 94 branches. According to market data published by the State Secretariat for Economic Affairs in Switzerland, in 2003 the Adecco Group ranked first in personnel services revenues in Switzerland. The market share of Adecco Staffing in Switzerland was about 28%. In addition to the temporary and full-time employment business, the Adecco Group offers outplacement counselling services, including assistance in résumé preparation, development of contact lists, interview skill-building, career planning and administrative and office support.

The Netherlands

At December 28, 2003, the Adecco Group operated 186 branches in the Netherlands, primarily under the Adecco brand, providing temporary personnel and permanent placement services. According to the statistics provided by the ABU (the Federation of the Dutch Staffing companies), in 2003 the Adecco Group ranked fifth in personnel services revenues in the Netherlands.

Germany

At December 28, 2003, the Adecco Group operated in Germany in 170 branches. According to data recently published in the Lünendonk Study, the Adecco Group ranked third in Germany based on 2003 personnel services revenues. The Adecco Group provides personnel to government entities and businesses seeking to outsource certain functions.

Belgium

At December 28, 2003, the Adecco Group operated in Belgium in 160 branches. According to information published by the Federgon (the Federation of Temporary Staffing Companies in Belgium), in 2003 the Adecco Group ranked second in personnel services revenues in Belgium.

North America

At December 28, 2003, the Adecco Group operated in North America in 1,588 branches throughout the United States and Canada. According to the information published by the ASA (American Staffing Association) and Canadian market estimates based on Statistic Canada data, in 2003 the Adecco Group ranked first in personnel services revenues in North America, where it provides temporary personnel, places permanent staff, provides outplacement counselling services and outsourcing and provides training and testing of temporary and permanent workers. The Adecco Group’s North American operations produced 23% of its consolidated revenues in 2003. In the United States, the Adecco Group operates through company-owned, franchise and licensed branches.

Asia Pacific

At December 28, 2003, the Adecco Group operated in Asia Pacific in 255 branches, producing 10% of the Adecco Group’s consolidated revenues in 2003. The Adecco Group’s principal markets in Asia Pacific are Japan and Australia.

Japan

At December 28, 2003, the Adecco Group operated in Japan in 89 branches, principally in the Tokyo area. According to market statistics published by the Yano Research Institute Ltd in Japan, in 2003 the Adecco Group ranked first in personnel services revenues in Japan. The Adecco Group anticipates that demand for its temporary personnel will remain strong in Japan, given that temporary staffing companies are now allowed to operate in the manufacturing sector, which was previously served exclusively by outsourcing companies. A change in the competitive landscape is also expected as large outsourcing companies that formerly operated in the manufacturing sector now share the expanded market with temporary staffing companies.

Australia

At December 28, 2003, the Adecco Group operated in Australia in 90 branches, providing personnel services, outsourcing services, engineering services and information technology staffing. According to statistics provided by the Australian Bureau of Statistics, in 2003 the Adecco Group ranked first in personnel services revenues in Australia. The market share of Adecco Staffing in Australia was approximately 9%.

Staffing Companies in the Directory

Adecco

CDI Corp.

Kelly Services

Manpower

MPS Group