The Adecco Group released its December 2020 quarterly results yesterday, making it the last of the group of fourteen global recruitment agencies that I have been tracking this year to release to do so.
The good news is that the financial impact of the COVID-19 pandemic became progressively less damaging on the global recruitment sector, as 2020 drew to a close.
The December 2020 quarter median gross profit decline was 6.5 per cent, compared to the same quarter in the previous year, a substantial improvement on the September 2020 median decline of 16 per cent (compared to the September 2019 quarter) and a vast improvement on the June 2020 quarter median decline of 30 per cent, (compared to the June 2019 quarter).
An imperfect way to assess the company that was able to best withstand the financial impact of COVID-19 is to average out the gross profit change across the three relevant quarters of 2020.
The table, below, is imperfect as a comparison because not all companies reported gross profit results, so I have used the relevant revenue result. Some of the companies on the list have substantial non-recruitment divisions and there are a number of variations in the way companies report their metrics (eg constant currency, adjusted days, like-for-like etc).
Therefore please take this table with a hefty dose of salt, however as a generalised indicator of performance trends I would argue it has some validity and use.
Selected global recruiters: average Q2 - Q4 2020 results
|Company||Q2-Q4 2020 average||Q4 2020 result|
Note: * indicates revenue decline as gross profit results per division not available. All other results are gross profit changes in constant currency for the October – December quarter of 2020, compared to the same quarter in 2019, except SThree (Sept 2020 – Nov 2020). Q4 for PERSOL APAC covers the period from July to Sept 2020.
Talent was knocked out of the number 1 spot for the December quarter by Japanese company Outsourcing (owner of Australian brands; Clicks, Bluefin Resources, Jigsaw Talent Management, Red Appointments, Hoban, Luxxe, PM Partners, and HorizonOne) however Talent was the only company, of the fourteen, to report a gross profit improvement in each of the three quarters (as compared to the equivalent 2019 quarter), consequently Talent ranked top of the list for their overall performance across the nine COVID-months of 2020.
The world’s largest recruitment agency, Randstad, was the best performer in terms of improving their result from Q2 to Q4; reporting a 6% decline in their Q4 result (compared to 2019 Q4), a vast improvement on their 30.7% decline in Q2 (compared to 2019 Q2).
Michael Page was a significant improver in Q4, with their 19.3% decline (compared to 2019 Q4) beating the Q4 performances of Robert Half (-23.7%) and Robert Walters (-26%) with Hays (-19%) just slightly ahead of them.
In summary, it’s close enough to the truth to say that the average COVID-19 impact on financial performance, subsequent to the first COVID-quarter (ie June 2020), declined by roughly half in each of the following quarters, compared to the quarter that immediately preceded it (30%, 16%, 6.5%).
In the US the current 7 day moving average of reported COVID-19 infections is 68,603 and the equivalent average for the UK is 10,485.
Both of these figures are significant declines from recent peaks (US: 259,571 on 8 January and UK: 59,660 on 9 January) and the current averages for both countries are back to the levels reported in October 2020.
If the current trends in both the decline in infections and improvement in performance continue, we should be heading for March 2021 quarterly result that will be on par with the March 2020 quarterly results.
As vaccine roll outs across many countries are into their second or third months (as Australia heads into its second week) it’s looking like the worst is behind us; let’s hope so.