Adecco to harness Indian growth engine

Adecco, the Euro 18.56 billion human resources solutions firm which earns 8 per cent of its revenues from Asia, is leveraging the demand-supply gap in the booming Indian economy to help raise the Asian share of its pie and turn India into one of its global engines of growth. For this, it has targeted a CAGR of 8-9 per cent per annum till 2009 in India.

The global firm first indicated its commitment to the Indian market by taking over PeopleOne in 2004 and in the short period since then has tripled its branches and doubled its headcount in India, according to Dominik De Daniel, chief financial officer of the Adecco Group.

With 26,000 associates on assignments and 35 branches, Adecco is one of the largest HR solutions firms in the country today.

The reliance on emerging markets for growth flows from the differing nature of business that Adecco gets in those and other markets. It sees most of its business in Europe and North America coming from manufacturing, and most of its Indian business coming from the services sector.

The manufacturing base of Europe and North America is not growing rapidly at all but the services sector in a country like India is growing very rapidly.

In the case of India, Adecco is also well placed to rise with the tide as it claims to be very strong in the IT, engineering and manufacturing and ITeS, in that order.

The segments growing the fastest and the ones showing greatest potential for growth in future in India are the ones on which Adecco is concentrating. The verticals growing for it are banking and finance, telecom and retail.

Daniel told Business Standard: "Our overall group strategy is to focus on the new six professional business lines, which include IT, engineering and technical, sales, marketing and events, medical and science, finance and legal, and human capital solutions." Adecco already has a strong position in the industry and office segments.

The company is the market leader in the highly-fragmented US market with 5 per cent of the market share. Since the firms which are in direct competition with it in the Indian market are not so integrated, it does not perceive them as a threat. Most play in only one or two segments. So, the risk is less for us, says Adecco.

Adecco, which has been continuously increasing its holding in PeopleOne, intends to acquire a 100 per cent stake in the firm in three years.