Risk management

In 2007 approximately 65% of Group sales was covered by risk management workshops. Based on those workshops, it appeared that on an aggregated level the top three risks that required action included:

1. Continuous profitability

Staffing markets are highly susceptible to macro-economic conditions and change. Continuous development of new products and services as well as identification of new markets are prerequisite to maintaining and improving our market position. The development of new products and services is not only important to attract new clients but also to recruit and interest new (internal) staff and/or candidates. Both clients and candidates are necessary to further grow the business.

Our diversified market and geographical presence as well as our presence in less cyclical recruitment sectors and expanding fast growing sectors in new and existing markets mitigates, to some extent, the impact of economic changes at a Group level.

As part of the strategic review in 2007, the Board of Management assessed the Group’s weaknesses and strengths together with our top 120 employees. This assessment included the strategy of the Group including identification of new markets, new services, synergies and whether the current position of the Company still meets our objectives.

This review, along with the collective knowledge within the Group enables us to pursue strategic growth opportunities in existing markets and to develop new sectors in both current and new markets in order to avoid reliance on a few economies and prevent overall margin erosion.

2. Human capital (retention and hiring)

The first signals of demographic risks like ageing and scarcity of labour in western European countries are becoming visible. The tight labour market complicates the recruitment of both internal staff and candidates. This affects the opportunities for growth in the sector and could affect our future growth.

Nevertheless, we have identified these demographic developments as a potential business opportunity. Possibilities are being explored and implemented for exchanging human resources among different countries to balance shortages and surpluses. In addition, our multibrand approach provides us with the competitive advantage of being able to target specific employee groups for internal and commercial purposes.

At the same time, in some markets, the tight labour market results in increased staff turnover that could potentially affect our growth. Our increased focus on retention of internal staff through career development opportunities, long term incentive systems, training possibilities and increased working flexibility mitigates, but not fully eliminates, this risk.

3. Competences and skills

In a business like ours well trained staff with the right competences and skills, is a basic condition to maintain and improve our market position. Within our Group, many operating companies already have or are developing training programmes for temporary staff in order to provide them with the specific type of knowledge their customers require. At the same time, the competences and skills of internal staff are trained; not only in order to develop our people and, therefore, the business (sales perspective) but also due to increased regulation of all aspects of the staffing industry (perspective of compliance), knowledge and awareness of rules and regulation applicable to specific markets or to doing business in a legal and ethical manner is essential.

Compliance risks

We face different laws and legislations in the various markets in which we operate. We use in-house and/or external legal expertise, provide adequate training programmes for our (legal) staff and reviews are carried out by local legal counsel and external advisors to ensure compliance with all applicable laws. To share ideas, establish best practices and discuss issues an international legal conference was organised by the corporate legal counsel in 2007.