The tight labor market is not fun for any employer. Except for temporary employment group Randstad. This takes full advantage of the high demand for personnel.
The temporary employment group from Diemen recorded a turnover of almost 6.9 billion euros in the second quarter of this year. figures released Tuesday. That is 13 percent more than a year earlier. For the whole of 2021, the group booked a record turnover of 24.6 billion euros. Randstad speaks of “a record” this quarter as well. The net profit of the temporary employment group, which also owns brands such as Tempo-Team, Monsterboard and Yacht, rose by 11 percent this quarter to 196 million euros.
According to CEO Sander van ‘t Noordende, companies are increasingly turning to Randstad to recruit employees because of the high demand for personnel. It was the first time he did the financial presentation. At the beginning of this year, Van ‘t Noordende took over from Jacques van den Broek as chairman of the board of Randstad.
Investors were less satisfied. At the opening of the stock market Tuesday morning, the Randstad share price fell 4 percent.
The fact that Randstad is now benefiting from the high demand for personnel is partly due to the data that the temporary employment group has been collecting for years. Of millions of people worldwide, Randstad not only knows what their level of education or work experience is, but also, for example, what work they would prefer to do. And whether they want to change jobs soon. The group collects such data through surveys.
As a result, Randstad not only knows for which vacancies in which sectors there is potentially the most interest. It also says it can link job seekers to open positions faster and better.
Quest
Of course, Randstad itself also has to navigate a tight labor market, says analyst Konrad Zomer, who follows the temporary employment group for ABN Amro. But unlike other companies, Randstad can “start a quest” using millions of data. “For Randstad, it is also the core business.” Companies are also more likely to outsource their search for staff if searching costs them a lot of time, effort or money. Summer: “So the net effect is beneficial.”
Even if wages rise due to the shortage of staff, the temporary employment sector benefits. In the past six months, collective labor agreements (CLAs) have included wage increases of 3.1 percent on average. “And high wages are favorable for broadcasters,” said Zomer. The amount that an employment agency earns often depends on the salary that a temporary worker receives at the company where he or she will work. A higher salary means more margin for the employment agency.
The shortage on the labor market is still high. Opposite there are 133 vacancies for every 100 unemployed. The shortage of personnel will only increase in the future, experts expect. The labor force is likely to shrink: in the coming years, more people will retire than will be added to the labor market.
Also read: Why staff are scarce right now
A recession can – temporarily – slow down the demand for personnel. Unemployment rose slightly in June to 3.4 percent of the labor force. Two months earlier, that was still 3.2 percent. Still, according to experts, there is still no sign of ‘cooling off’ of the heated labor market.
Although, for example, De Nederlandsche Bank does take into account the possibility of a recession. The economic outlook for the rest of this year has deteriorated considerably, partly due to the war in Ukraine and high inflation. That could mean rising unemployment.
That has a direct effect on a company like Randstad. Because macro-economic developments ‘seep through to companies’ personnel policy’, says Zomer. “And then to the number of placements that employment agencies can do.”
It is difficult in the temporary employment sector to look far ahead, he says. “The predictability is low. If panic breaks out tomorrow, companies will stop hiring first.”
According to Van ‘t Noordende, Randstad is able to respond “quickly and effectively” “in the midst of an unprecedented macroeconomic environment”.