ZURICH: Swiss staffing group Adecco facing a major slowdown in permanent hiring by British firms as financial groups wait to see what will happen once the country triggers it exit from the European Union, Chief Executive Alain Dehaze said on Thursday.
Revenue from placing workers in permanent jobs in Britain fell 15 percent in the last three months of 2016, accelerating from a 5 percent decline in the previous quarter. The fall was most pronounced in London’s financial industry, Dehaze said.
“We see companies waiting to make decisions on new hiring in Britain as they expect Article 50 to be triggered in the coming months,” Dehaze said after the company announced fourth-quarter results. The British government hopes to start divorce talks with the EU before the end of March.
Adecco revenues rose to 5.87 billion euros ($6.18 billion) in the last three months of 2016, a forecast-beating 6 percent increase as hiring strengthened across mainland Europe.
But the Zurich-based company said revenue growth slowed in January and February, months in which firms are typically more cautious on hiring.
The performance of staffing providers such as Adecco is watched as an indicator for the health of the broader economy, with companies taking on temporary workers at the beginning of an upswing before switching to permanent workers.
Adecco warned it would keep a tight lid on costs amid global economic uncertainty, with open questions ranging from Brexit to French elections and the direction of the U.S. economy.
“We’re all waiting for more clarity,” Dehaze said of investments under U.S. President Donald Trump.
Shares were down 3.2 percent by 1210 GMT as analysts and traders expressed concerns over a squeeze on margins, as well as the group’s subdued outlook.
“While the fourth quarter showed solid growth, the trend has not accelerated further with January and February up 4 -5 percent,” Vontobel analyst Michael Foeth wrote in a note.
Rival temp company Randstad last month reported an improving hiring situation at the end of 2016 and a brighter outlook for 2017, while U.S. staffing company Manpower said revenue increased by 3 percent during its fourth quarter.
Adecco proposed an unchanged dividend of 2.40 Swiss francs ($2.38) per share, as well as a share buyback worth up to 300 million euros. ($1 = 0.9500 euros) ($1 = 1.0104 Swiss francs)
