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Great leap towards China
Rick Gangwani
update on Saturday, December 3, 2011
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Like many in the workforce solutions business, US-based ManpowerGroup clearly has its eyes set on China. If in doubt, just ask  Jeffery Joerres, company chairman and CEO, who recently flew his board of directors to Beijing for a week's worth of client and branch visits. Rick Gangwani caught up with  him during his stopover in Hong Kong to discuss the firm's expansion plans, new brand name, and outlook for 2012. 

What brings you to this part of the world?
We decided to hold our annual board meeting in China this year. Asia's a fast-growing place for us. We've made a lot of investments here, especially in China.

I felt that our directors needed to come and visit to gain a better appreciation of it all. We spent an entire week making client visits, government visits and also visits to some of our offices.

How much time do you spend visiting Asia on average?

Most of our business – 75 percent - is in Europe. Our largest country is France – France is about 30 percent of business. Having said that, I would say I spend 30 to 40 percent of my time in Asia.

There are two reasons for this: One, it’s a complicated market, two, it’s our fastest growing market.

How many new offices do you plan on opening in Asia in the near term?
We are probably looking at anywhere between 15 and 50 new offices, depending on what happens with the economy.

Do you plan to continue opening offices elsewhere in the world?
We’re still opening in Eastern Europe – Poland, for example is very strong market for us.

But really it’s Asia, particularly China, where were are expecting the bulk of expansion.

We don’t however see as much office expansion in Hong Kong as much as we would see an expansion of our level of specialisation here, in particular, deeper specialisation in finance, in engineering and IT.

Will you be hiring new staff in Asia to help fuel this expansion?
Where we need to hire, we will. In the third quarter, globally, we hired about 500 people worldwide, so we’re clearly expanding our headcount.

What are you hearing from clients in terms of their hiring plans for 2012?
Many of our clients, regardless of where they come from – with some exceptions in certain industries – are saying they’re in pretty goo shape.

In terms of hiring, most are looking to get demand first and then hire. They plan on doing very little anticipatory hiring, which in the past, was what people did.

Now for very specialised skills, for very difficult people to find, yes they will hire in anticipation of. But for the bulk of their employee base, they’re going to wait for the demand, test that the demand is stable, then hire. And that is true across the globe.

Speaking of the economy, how might the Euro crisis affect recruitment in Asia?
My sense is that we will not see a double-dip. We will likely go into a period of very slow growth for 18 to 24 months before we see some real momentum in the West. 
This will then help Asia, because  there is still a need for consumers here.  While Asia is still in a very good position demographically, we have noticed that, as Western Europe and the US slow down, parts of our business are being affected – though only slightly.

Given the disparity between market conditions in Europe and Asia, do you plan to relocate any of your staff?
Because we're not new in Asia, the leaders of our offices here tend to be locals. While we do have expatriates and do move people around, the fact is that in our mature markets – the US and Europe – we might be doing some office consolidation – but very, very little, if at all.

Will you consider shutting down any offices next year?
We may do some office consolidation in our mature markets, such as the US and Europe. But very little, if at all.

On which aspects of the business are you spending most of your time these days?

We rebranded ourselves at the end of March. As a company, we're now called ManpowerGroup and underneath this are our recruitment divisions, Manpower and Experis.

Then, of course, we have Right Management, which offers leadership training and outplacement career management services. 

This branding initiative is where I spend most of my time – trying to make sure that  the strategy is fully executed, and guiding our country managers to understand how to offer truly unique solutions to our clients.

What compelled the launch of your new recruitment division, Experis?

Our research revealed that we were largely seen as a trusted brand that gets it done and understands our clients. But it also revealed that we stood for mid-level positions and below.

While we were happy with that, we wanted to start focusing more on mid-level positions and up. Some of our brands, such as Manpower Professional, already stood for that, but didn't have enough strength.

Since we launched the new brand and have put some muscle behind it, we've actually noticed that the growth rate in that business has far exceeded the growth prior to the name change. Clients are receiving it very well.

Where are you seeing the bulk of growth in this region in terms of the three divisions?

If I were to exclude Japan, it’s across the board.
 
Even in this tepid growth period, all of our lines are growing. This is not true for the rest of the world.

What are some of the current trends taking place in the recruitment industry in this part of the  world?
We seem to be seeing a secular move away from what I would call episodic projects, such as five-year software rewrites. When you have a five-year rewrite, what you can do is hire somebody for five years.

These days, however, companies are looking at eight-to-nine-month projects, which serves up to our industry and our company perfectly.

We’ve also noticed that companies are growing increasingly reluctant to deal with boutique firms. They want industrial strength.

Now that doesn’t mean boutiques go away. But we clearly see a trend towards industrial strength and regionally-strong global players.

Which industry sectors are you particularly enthusiastic about in Asia?
In general, if you look at manufacturing, it’s phenomenal. Banking is suffering right now and is going through a bit of a reconstruction. But on a macro level we are still very excited about it. 

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