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Kelly Services, Inc. - Staffing Services -
Category Directory
www.kellyservices.com
Sales
$4.3
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
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