A Global Spin on Staffing
When Jeffrey Joerres became CEO of suburban Milwaukee staffing company Manpower in 1999, he had a simple message for the company's board: "We're getting the [expletive] kicked out of us." Overly focused on building market share, the company had neglected key trends in the global labor market like outsourcing and information-technology staffing-and was paying dearly for it. Profits were flat-lining, and the stock price was in a free-fall.
So Joerres, a former high school basketball star, put the company in a full-court press for international profits. He opened over 1,000 new offices, made key acquisitions, and diversified the company's services. And today Manpower rides the waves of the global labor pool-outsourcing, contract work, layoffs-to considerable success. Since Joerres took the reins, operating profits have nearly doubled to $436 million. And while the S&P 500 has advanced only modestly over the past seven years, the company's stock has jumped 185 percent.
To be sure, Manpower has long had an international presence. Less than a decade after the temp agency opened its doors in 1948, it established offices in France and the United Kingdom. But when Joerres became CEO, he knew that a loose network of far-flung offices focused on clerical and light industrial temping wasn't enough. "We saw that as immensely inefficient," he says. "It reduced our brand to the lowest common denominator."
Talent scouts. During his first years on the job, Joerres broadened the company's product line, purchasing an ITstaffing company, a financial services firm, and an outplacement services provider. The diversification makes Manpower more attractive to large companies, Joerres says, because they can now offer everything from recruitment to outplacement in almost every major labor market in the world. "This was not a strategy that required a McKinsey consultant. We wanted to add services for our clients," he says. "We want to be global talent agents."
At the same time, Joerres pushed for greater growth at the local level by opening new offices. Ironically, Manpower has had some of its greatest success in countries with restrictive job protection laws because tight regulations on hiring and firing often push companies to hire more temp and part-time employees. In France, for instance, which has highly protective labor laws-remember those riots last year?-Manpower's business has more than tripled since 1999, and the country has become the company's largest market.
But Manpower's biggest challenge in going global might be staying local. Labor markets are intensely regional, so while companies in Quito, Ecuador, might be desperate for Web designers, a shortage of administrative assistants could be plaguing Shanghai. To keep a local perspective, Joerres pushes his 4,400 offices in 72 countries to cultivate hometown staff. Of the 350 employees in China, for instance, only two are foreigners. "Expats are not really able to take advantage of all the subtleties of local markets," Joerres says.
Manpower's combination of global reach and local experience has been particularly appealing to companies working internationally. Honeywell, for instance, has hired Manpower to find workers abroad. And Manpower has helped multinational companies like Motorola and IBM tap the Indian workforce, recruiting and training employees for IT and financial services call centers.
Still, all is not rosy. Some of Manpower's recent purchases have not been operating at full bore. For example, the operating profits of 2004 acquisition Right Management, an outplacement firm, fell some 20 percent in the first half of 2006 compared with the same period a year earlier. "Strategically, the acquisitions make sense, but they will have to execute better," says Morgan Stanley analyst Chris Gutek. And, Gutek says, Manpower is highly exposed to business downturns because when the economy turns south, hiring tends to slow.
While that doesn't keep Joerres up at night-"We're in for the long term," he says-he does worry about keeping up the company culture. "We're a service organization," he says. "The challenges are at a local level, keeping our core values." Of course, Joerres can afford that concern now that he has conquered the globe.
MANPOWER
Founded: 1948
Headquarters: Milwaukee
CEO: Jeffrey Joerres
Number of offices: 4,400 worldwide in 72 countries
First foreign office: Canada in 1955, followed by England in 1956 and France in 1957
2005 sales: $16 billion
Client base: 400,000
Temporary workers: More than 4 million in 2005
This story appears in the October 16, 2006 print edition of U.S. News & World Report.
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