Thirteen global recruitment agencies have recently released quarterly updates for trading results to 30 June.
The results tell a strikingly similar tale:
Selected global recruiters: Q2 2020 results
|Company||Global result||Decline in regional result||Region or business unit with largest decline|
|1.||Talent||+4%||ANZ (+5%)||UK (flat)|
|2.||PERSOL||-3.6%||APAC 1.6%||Solution (29.5%)|
|3.||Outsourcing||-5.3%||NA||Other Business (H1 92.3%)|
|4.||Will Group||-5.9%||Non-Japan 7%||Non-Japan (7%)|
|5.||Recruit Holdings||-20%||Non-Japan 26.6%||HR Solutions (32.1%)|
|6.||Kelly||-21.7%||APAC (+10.8%)||Ireland (61.9%)|
|7.||Adecco||-30%||ANZ 12%||France (44%)|
|8.||Randstad||-30.7%||Rest of World 2% (revenue)||France (41%)|
|9.||Manpower||-31.9%||Asia Pacific Middle East 19%||France (47.5%)|
|10.||Robert Half||-33.6%||NA||Accounting & Finance (49.6%) *|
|11.||Robert Walters||-34%||Asia Pacific 34%||Other International (36%)|
|12.||Hays||-34%||ANZ 28%||UK & Ireland (42%)|
|13.||Michael Page||-47.6%||Asia Pacific 41.6%||UK (61.5%)|
Note: All results are gross profit changes for the April – June quarter of 2020, compared to the same quarter in 2019, except SThree (Dec 2019 – May 2020, H1) and Outsourcing (Jan – June 2020, H1), all results are in constant currency unless otherwise noted. Robert Half only released data by division, rather than by region. * indicates revenue decline as gross profit results per division were not released. Robert Half Accounting & Finance is permanent placements only. Persol’s APAC results are consolidated with a delay of 3 months. Q2 for PERSOL APAC covers the period from January to March 2020. PERSOL operates a 1 April – 31 March financial year hence they report their results as Q1 results. For comparative purposes, I have labelled them Q2 results. Talent’s financial year is 1 July – 30 June. Recruit Holdings figures are revenue.
The profit updates that have been released make for sobering reading for most analysts and shareholders.
Without question, the standout business was Talent, the privately-owned Australian IT recruitment business, headed by Executive Chairman Richard Earl and Global CEO, Mark Nielsen.
Talent grew in a market where every other significant global recruitment business went backward in the June quarter; an outstanding result. In a brief chat with Mark Nielsen last week, he attributed the performance to the extensive work undertaken across the last four years to remake the company’s culture.
Japanese listed companies; PERSOL, Outsourcing, WIll Group and Recruit Holdings each delivered results significantly ahead of their European or US-based global competitors.
Although not all companies reported profit results for the quarter I have listed those that did, below.
- Manpower reported a Q2 operating loss of USD 64.4 million down from a USD 127.3 profit in Q2 2019.
- Randstad reported a Q2 operating loss of €69 million down from a €238 million profit in Q2 2019.
- SThree reported a 49% operating profit decline, from £23.3 million to £13.7 million, for H1 (1 December 2019 – 31 May 2020)
- Hays released full year (July 2019 – June 2020) operating profit guidance of £130-£135 million, down approximately 46% from £248 million in the 2019 FY
- Adecco reported a quarterly operating profit decline of 79%, from €241 million to €50 million
- Kelly reported a quarterly operating profit decline of 68.2%, from USD 34.8 million to USD 11.1 million
- Outsourcing (owner of Australian brands; Clicks, Bluefin Resources, Jigsaw Talent Management, Red Appointments, Hoban, Luxxe and PM Partners) reported a half-yearly operating profit decline of 40.3%
- PERSOL reported a quarterly operating profit decline of 9.4%
- PERSOLKELLY business (the PERSOL brand for their APAC division) showed 23% growth on USD although reported an operating loss for Q2 of JPY 116 million (circa USD 1 million).
- PERSOL‘s fully-owned subsidiary, PROGRAMMED, recorded a sales increase of 7% on AUD basis.
- Talent reported a full FY sales lift of 14% to AUD 726 million and a 13% improvement in operating profit to AUD 13.6 million
- Recruit Holdings (owner of Australian brands: Chandler Macleod and peoplebank) reported a quarterly operating profit decline of 62.6%
- Will Group (owner of Australian brands: U&U, Quay Appointments, DFP Recruitment and Ethos Beachchapman) reported a quarterly operating profit decline of 7%.
Context with respect to the Kelly APAC results, as compared to the companies on this list, is seen in Kelly APAC total quarterly gross profit of $6.8 million.
The overall Kelly results were significantly less impacted due to their Global Talent Solutions (GTS) division, which accounts for 25 per cent of their global gross profit, recording a 3.8 per cent increase in their quarterly gross profit. Kelly GTS encompasses services across; Master Service Provider; Contingent Workforce Outsourcing; Recruitment Process; Outsourcing; Business Process Outsourcing; Advisory; and Talent Fulfillment solutions.
Staffing accounts for 58% of Recruit Holdings’s total business (by revenue) with HR Tech (including Indeed and Glassdoor) and Media Solutions accounting for the remaining 42 per cent. Within Staffing, revenue decreased by 12.3%, year-on-year. Revenue for Japan operations increased by 5.9% but the non-Japan staffing business (Overseas) decreased by 26.6%.
Across the globe, It’s hard to be optimistic that results will get better before they get worse with significant headcount reductions likely to continue for the rest of this year.
I suspect everybody in the global recruitment industry is already looking forward to 2021 with an optimistic air; surely it couldn’t be worse than this?
- Updated on 24 July 2020 to include Q2 2020 results for Robert Half
- Updated on 7 August 2020 to include Q2 results for Adecco and Kelly
- Updated on 10 August to include H1 results for Outsourcing
- Updated on 13 August to include Q2 results for PERSOL
- Updated on 26 August to include FY 2020 and Q2 results for Talent (their Q4) and Q2 results for Recruit Holdings (their Q1 2021)
- Updated on 27 August to include Q2 results for Will Group (their Q1 2021) and new commentary