The Adecco Group (TAG), the largest human resources company in the world, will continue to invest in China by exploring newer geographies with its local partner, said the chief executive of the Swiss company, highlighting its strong double-digit growth in the nation over the past few years.
Denis Machuel made the remarks during his visit to China in early July, his first since 2019.
TAG is looking to expand FESCO Adecco, its joint venture with Beijing-based human resources company FESCO since 2010, to more places within the country. At present, the JV is operating in nine provincial-level regions, including Shanghai, Chongqing, Zhejiang and Anhui.
The expansion plan is based on FESCO Adecco's robust growth over the past few years. Despite the effect of the COVID-19 pandemic, the JV's net income surged 26 percent year-on-year to 29 million euros ($32 million) in 2022. That followed a 15 percent year-on-year growth in net income in 2021.
The staffing business, which can be broadly termed as flexible employment, has shown the most rapid growth among all of TAG's business units in China.
This is also in line with the global trend, as the annual revenue growth rate of the staffing industry was 9 percent last year and 21 percent in 2021, according to advisory firm Staffing Industry Analysts.
"Clients need services with true value. As staffing services include labor contracts, recruitment, talent management and payroll, it can truly help clients lower costs and increase efficiency," said Machuel.
China's sustained economic growth is the major driver of TAG's business buoyancy here, which has translated into increased demand for HR and talent services both from domestic as well as foreign companies operating in China, he said.
The country's rapid technological advancement has led to the emergence of new HR service models. Companies here have demanded more efficient HR services that can help them to better attract, cultivate and retain talent. These have brought in more business opportunities for TAG, Machuel added.
Though certain aspects of China's economic data were weaker than market expectations in the second quarter, TAG has noticed strong hiring demand in the Chinese market, especially from industries where skills are emphasized.
High-end technology jobs as well as research and development roles related to digital transformation and green transition, such as smart manufacturing, semiconductors, new energy, electric vehicles and life sciences, have shown the biggest recruitment demand, he said.
"China is recovering from the pandemic, and it takes time. However, we still believe this market is agile and resilient," Machuel said.
In 2021, TAG teamed up with FESCO again to set up a JV LHH FESCO, which provides reskilling and upskilling services for the career transitions of employees.
This mapping was based on TAG's outlook that reskilling and upskilling services will register the most rapid growth within the HR industry in the near future due to digitalization and technological advancement.
During his trip, Machuel met Beijing Mayor Yin Yong, Shanghai Mayor Gong Zheng and Wang Xiaoping, minister of human resources and social security, as well as leaders of companies such as Huawei and Volkswagen.
He expressed his admiration for China's innovation over the past few years, and sought to understand the overall investment environment and seek more cooperation opportunities here.
"My role is to be close to the countries where we operate and where our growth potential is massive," said Machuel, who is planning another visit to the country later this year.