Uncertainty caused by the US-China trade war, a weakening motor sector and Britain’s exit from the EU has caused companies to cut spending on hiring staff, global recruitment giant Adecco has said, as it reported a drop in third-quarter revenue.
Adecco, which vies with the Netherlands’ Randstad as the world’s largest staffing company, said its revenue fell 4% in the three months to the end of September when adjusted for currencies and trading days.
“When you look at our figures, you can say this economic uncertainty is here and definitely still present,” chief executive Alain Dehaze said.
The fortunes of staffing companies are closely watched as barometers of broader economic development. Employers tend to hold back on taking on extra staff when they worry economic growth will slide and orders fall.
Rivals Randstad and Manpower Group have also been hit by reduced hiring by customers operating in cooling economies.
Factory activity across the eurozone contracted sharply in October, as manufacturing in Germany remained mired in recession.
Still, the downward trend was not worsening, Mr Dehaze said. “When you look at September and October there is a kind of stabilisation at -4%; there has been no further deceleration.”
The temporary staffing market in Britain was largely stable, Mr Dehaze said, because companies were hiring temporary staff as they worked out how Britain’s messy departure from the EU would affect them.
But permanent hiring had been hit because employers have “no clue” how Brexit will develop, he said.
Demand for permanent IT staff in Britain had particularly slackened, Mr Dehaze said, indicating problems in the financial services sector which traditionally hires lots of IT professionals.
Zurich-based Adecco’s third-quarter group revenue fell by a reported 2% to €5.89bn, just missing expectations. Net profit fell to €179m. The 34% drop reflected a tough comparison with the €110m gain it made last year from selling its Beeline software staffing company.
Adecco said it was selling its US healthcare staffing business Soliant Health for €551m to private equity firm Olympus Partners.