The CFO Edge

Jack Sweeney The CFO Edge: Jack Sweeney was the former editor of Business Finance.

Manpower CFO: Focus on Variable Costs May Be Downturn’s Most Lasting Legacy

While finance executives continue to turn a wary eye toward the economic uncertainty clouding the upturn, there’s little doubt that staffing services companies are already savoring the fruits of the seemingly contradictory environment known as a jobless recovery.

In short, the failure of corporations to turn on the hiring spigot – despite an uptick in sales – has been good news for staffing companies, which tend to prosper when employers are reluctant to make permanent hires.

“The ideal situation for us is when the purchasing index – both in the U.S. and globally – is strong; however, economic uncertainty keeps companies cautious when it comes to hiring, and that’s what we’ve been experiencing,” says Michael Van Handel, CFO of Manpower, the $16 billion staffing company that operates with 28,000 employees globally.

What makes the current environment even more ideal for Manpower and other staffing companies is signs that the downturn may have left a lasting impact on corporate hiring practices.

“Having been through something as long and as deep as this recession, executives are looking at their business models and asking the questions: How do I make my costs more variable? What percentage of my workforce do I want to have flexible versus permanent?” says Van Handel, who adds that companies that once kept only 5 percent of their workforce as temporary workers are now considering growing their temp workforce to 10 to 15 percent.

Be that as it may, the results of an employment outlook survey released by Manpower earlier this month suggest that employer optimism may be headed in a new direction. According to the survey results, employers in 30 of 36 countries and territories indicated stronger hiring plans compared to 12 months ago and 23 reported improved quarter-over-quarter hiring plans.


We look forward to posting our extended interview with Manpower CFO Michael Van Handel later this month. ###

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