review group pa and national pa plans 2011-2012/media/files/r/randstad … · ·...

regulatory environment

analyst & investor days Annemarie Muntz Director Group Public Affairs

December 2, 2011

content

growth drivers: deregulation

adapting to change

lifting restrictions

AWD: need for balanced content key provisions process transposition overview

state of play on regulation & image changes regulatory environment in Japan overview deregulation

analyst & investor days December 2, 2011 2

3

growth drivers: deregulation


need for flexibility

demographics

deregulation

clients looking for total offering

strong concepts best people excellent execution superior brands

targ

ets - EBITA margin of 5 to 6% through the cycle, not below 4% in normal downturn

- mid-term EBITA margins of 4 to 5% for inhouse services, 5 to 7% for staffing and > 10% for professionals - continuous market share gains - sound financial position; leverage ratio of between 0 and 2

deregulation

staffing/professionals (specific triangular labor relationship)

legislation is based on:

at international level: ILO Convention 181 on Private Employment

Agencies (if ratified)

at EU level: Agency Work Directive (minimum requirements)

at national level: law & CLA


the continuation of a series of industry strategic research reports

December 2, 2011 analyst & investor days 5

"Orchestrating the evolution of Private Employment Agencies towards a stronger society"

"More work opportunities for more people"

2000 2007 2011

"Adapting to change"

‘Adapting to Change’ - chapter 6: efficient labor markets need relevant regulation on private employment services

“as a specific service provided by private employment

agencies, if regulated appropriately, temporary agency work contributes to improved functioning of labor markets, fulfils specific needs for both enterprises and workers, and aims at complementing other forms of employment”

points of consensus of ILO Workshop to promote ratification of the Private Employment Agencies Convention (2009)


current status & potential of agency work markets

1. maturity 2. operating environment*


depends on:

* operating environment: the total environment of political and social systems, the impact of regulatory regimes and socio-economic as well as historical social dynamics in which private employment services operate

source: Adapting to Change

1. maturity: agency work markets tend to go through stages of development


2. operating environments: 4 different market types important sub-groups based on nuances of social systems


Market type

Market driven

Europe

Non-Europe

West Europe

Social dialogue

based Nordics

Asia

Legislator driven

West Europe

Medi-terranean

Emerging markets

Europe

Lat Am

Asia

Countries

•UK

•US, Australia, New Zealand

•Netherlands

•Switzerland, Austria, Germany

•Sweden, Norway, Denmark, Finland

•Japan

•France, Belgium, Luxembourg

• Italy, Greece, Spain, Portugal

•Eastern Europe

•Latin America

• India, China

Cluster characteristics

•Rapid AW development, with appreciable drop-off in the crisis •Open regulatory environment with limited restrictions •Liberal economies favoring flexibility over security

•Above average AW penetration in relatively mature markets •Moderately regulated, varying balances of flexibility and security • labor market organized and regulated by collective agreements between social partners

•Historically low AW penetration and slow industry development •Unique Nordic social and economic system

•Generally liberal economies but high value on security and social acceptance challenges

•Penetration depending on level of industry development, ranging from below to above average

•Highly regulated, weighted towards job security over flexibility •Historically labor markets with high unemployment relative to Social dialogue peers

•Nascent industries with AW legally recognized only recently •Regulatory policies still in development •Economic policies and market dynamics still evolving

Belgium France

level of industry development different within country clusters


date of first sector regulation and AW penetration, Europe

AW penetration (%)1

4

3

2

1

0

year of first regulation

1965 1970 1975 1980 1985 1990 1995 2000 2005

Spain

Germany

Netherlands

UK

R2 = 0.46

average

early adopters encouraged AW development and contribution to

labor markets

legislator driven

social dialogue based

market driven

4 types of conditions & restrictions

length of assignment

• Belgium • France • Spain

reasons for use


sector restrictions

• Belgium • France • Germany • Spain

contract restrictions



common in “legislator driven” markets

lifting restrictions: Randstad priorities

Belgium • broadening reasons for use • opening public sector

France • restriction on public sector lifted (2009),

developing slowly

Spain • restricted sectors (public & risk) formally

opened in April 2011 but ‘de facto’ closed. Union depended


lifting restrictions: potential in public sector

lifting restrictions in the public sector will have a positive impact on turnover:

long-term perspective; culture is main reason for slow development


countries AW penetration rate 2010*

employment public sector **

potential AW jobs

Belgium 1.8 1.4 mio 25,452

France 2.0 7.6 mio 153,860

Spain 0.8 3.9 mio 31,080

* source: WoW ** source: Eurostat/SEO

Agency Work Directive: need for balanced content


legal recognition and freedom to operate

protection of agency workers

no fees to be charged to agency workers

non discrimination for agency workers in terms

of rights and working conditions

conditions of use of AW (e.g. licensing systems) should be proportionate, non-discriminatory and

transparent

need for a legal recognition of the

triangular employment relationship

“flexicurity”

Agency Work Directive: key provisions

article 4: review of restrictions justified prohibitions and restrictions only allowed on a limited number of grounds, of general interest:

protection of temporary agency workers

health and safety at work

ensure that labour markets function properly & prevent abuses

article 5: principle of equal treatment

equal treatment and equal pay from day 1 covering pay and basic working conditions

3 forms of derogation of equal pay: for open-ended contracts

through CLA

through agreement by social partners (UK, Ireland)

principles of equal treatment and equal pay are already common practice in continental Europe


Agency Work Directive: process

• national law will be

amended where necessary and reported to the EU Commission

part I deadline final

implementation AWD =

5 December 2011

• possible scenario’s: • 1. review not received • 2. review received but

incomplete • 3. review received but

disagree with final conclusions

part II deadline review current

restrictions to be reported to the EU Commission

= 5 December 2011


in case of non-compliance by Member States, this could lead

to infringement procedures by EU,

starting at the earliest by the end of 2012

2012 and further

Agency Work Directive: transposition overview - 1

country state of play equal pay additional info

UK transposition completed: AWR has come into force as per October 1st, 2011

after 12 weeks in 1 assignment at the same user company

impact monitor in place, first results expected in Q1 2012

Germany transposition is completed

no threshold to equal pay derogation, however, ongoing CLA negotiation with emphasis on implementing equal pay system

Netherlands transposition pending

no change in current system of 26 weeks threshold period

ongoing discussion on CLA (renewal to be negotiated in 2012 and 2014)


introduction NL: equal pay after 26 weeks in 2004


70

80

90

100

110

120

130

140

150

160

170

180

190

200

1999 q1q2 q3 q4 2000 q1q2 q3 q4 2001 q1q2 q3 q4 2002 q1q2 q3 q4 2003 q1q2 q3 q4 2004 q1q2 q3 q4 2005 q1q2 q3 q4 2006 q1q2 q3 q4 2007 q1q2 q3 q4 2008 q1q2 q3 q4 2009 q1q2 q3 q4 2010 q1q2 q3 q4 2011 q1q2

NL PEA's: turnover and hoursindex: 2004 q1 = 100

Hours worked GDP

Agency Work Directive: transposition overview - 2


country state of play equal pay additional info

Belgium transposition pending

no change; equal pay from day 1

no government; discussion social partners on broadening reasons for use

France transposition is completed


review lifting restrictions pending

Spain transposition is completed


new government in 2012; review lifting restrictions pending

EU: state of play on regulation Country regulation regulatory

trend AWD: lifting restrictions

results

BE -> Extension maximum length of assignment ‘97 + Lifting of sector constraints ‘01

CZ -> Legal recognition Oct ‘04

DE -> Time limitations '02 + Lifting of sector constraints ‘04

DK stable

FR -> Opening to permanent recruitment ’05 Opening public sector ‘09

HU -> Legal recognition ‘01 + amended ‘06

IT -> Legal recognition of the industry ‘97 + Lifting sector constraints + Opening to HR services ‘03

LUX ->

NL stable Extension maximum length of assignment ‘97 + Lifting of sector constraints ‘01

PL -> Legal recognition ’03 + revised regulation ‘10

PT stable Extension maximum length of assignment + Opening to HR services ‘99

ES -> Legal recognition ‘94 + Removal of extra costs ’ 06 + Opening public & risk sectors ’11

CH stable

SE stable Legal recognition ‘93

TR <-

UK stable December 2, 2011 analyst & investor days 20

changes in regulatory environment: Japan

developments new law on dispatched labor very volatile; a lot of dealings going on; developments change on a daily basis Randstad Japan well involved in the lobbying process at current probably be dealt with in Parliamentary session in (May) 2012

opportunities: more involvement of the industry via a ‘discussion Forum’ 3 year limitation will be on individual temp instead of on client company 3 year limitation doesn’t apply to 26 categories (but they cannot do anything outside their designated function/assignment)

concerns: possible ban on daily (spot) contracts if there is a breach of contract/regulations: user company is obliged to hire temp directly limited impact


overview deregulation


• to be implemented by EU27 before December 5, 2011 • recognition of the positive role of our sector in the

labour market • aiming at more and better jobs

EU Agency Work Directive

• 2009: Opening of public sector in France • 2010: Opening of construction and public sector in Spain

Recent successes

• opening public sector Belgium • opening public & construction sector Spain

Opportunities to come

• limited impact from potential restriction in Japan • continued (legal) pressure on EU Member States to

transpose AWD and lifting unjustified restrictions

Hurdles to take

Thank you!

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