A worsening skills shortage coupled with recovering economies
will drive growth this year for staffing company ManpowerGroup
(MAN), Chief Executive Jeff Joerres said Wednesday.
Even big countries like India and China are facing acute
shortages of skilled staff while lingering uncertainty in developed
countries would boost demand for temporary workers, Joerres told
Dow Jones Newswires in an interview.
"Almost two years into the recovery and we are still seeing
shocks, either what is really happening in China, or concerns about
the U.S. housing market or debt in Europe," he said.
"Companies are feeling that their businesses are becoming
healthier, but there never seems to be enough daylight or enough
margin for them to hire the people they need."
Amid the uncertainty, companies are placing more value on
flexibility in hiring staff, while increasing global competition
between companies made them more sensitive to downturns in
particular regions, he said.
Joerres said the global skills shortage applied particularly to
technical areas, like specialized trades, but also sales staff.
"There is still unemployment, but companies are having a
difficult time finding the people they need to fill their
positions.
"As the world is becoming more technical, the sales staff are
having to become more technical, too," Joerres said.
The shortage also applied to laborers, especially in developing
markets.
"You cannot just throw people at production to get more output,"
Joerres said. "With the use of (computer numerical control, or CNC)
machines, for example, it is more difficult to find the right
people."
ManpowerGroup's sixth annual talent shortage survey, to be
published Thursday, will show that persistent talent shortages
across many geographies and industry sectors are frustrating
employers who struggle to find qualified talent amid an oversupply
of available workers.
Although European countries aren't yet feeling such an acute
impact of talent shortages, the U.S. has seen a considerable uptick
in the number of employers who can't find the talent they need,
Joerres said.
India now has the second-highest problem with skilled labor
shortages. "The number of companies in India reporting difficulty
filling vacancies is second only to Japan," Joerres said.
"India is a big place with lots of people but there's a shortage
of assurance engineers, people who can read blueprints, designers
and (computer-aided design, or CAD) designers."
Manpower, based in Milwaukee, is looking to expand its
operations in emerging markets that make up around 15% of its
sales, which reached $5.07 billion in the first quarter of
2011.
The company has joint ventures in China, and was expanding into
the west of the country away from the highly developed coastal
strip.
In April, Manpower acquired a 74% stake in Web Development Co.
Ltd., which provides IT services and professional staffing in
India.
Manpower would continue to look at takeover targets, with
acquisitions in the $50 million to $500 million price range,
Joerres added.
It would look at speciality firms, working in the high end in
accounting, IT and engineering, but also general staffing
companies.
Meanwhile, he expected the higher margin professional business
would continue to grow, because many companies were taking on
smaller and more one-off projects, which made them reluctant to
recruit permanent staff.
Like rival staffing companies Adecco SA (ADEN.VX) and Randstad
Holding NV (RAND.AE), Manpower has enjoyed a strong start to
2011.
Last month, it reported its first-quarter profit rose to $35.7
million from $2.8 million a year earlier and said it expected its
second-quarter earnings per share to rise to a range of 74 cents to
82 cents from 43 cents in the first three months.
According to a calculation by Dow Jones Newswires, this would
give Manpower second-quarter earnings of $61 million to $68
million.
"We have had a strong first quarter and we increased our
estimates for the second quarter," said Joerres.
"With GDP growth, we see a good solid growth in the second
quarter."
-By John Revill, Dow Jones Newswires; +41 43 443 8042;
john.revill@dowjones.com
Randstad NV (EU:RAND)
Historical Stock Chart
From Jun 2024 to Jul 2024
Randstad NV (EU:RAND)
Historical Stock Chart
From Jul 2023 to Jul 2024
