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2016 Annual Report

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Chief Executive Officer's strategic review
CEO Review
Performing,
transforming and
innovating
Our Executive Committee looks back on 2016 as a year of strong progress. The Adecco Group delivered a steady and solid financial performance: we maintained our revenue momentum, and profitability was again the highest amongst our industry peers, while we invest in the business. We also launched a series of strategic and operational initiatives under our agenda of Perform, Transform and Innovate. Some of these will already make a positive contribution to our performance in 2017, and we are confident that over the next few years their cumulative effect on our Company will be substantial.
Our steps in 2016 to drive Performance
In 2016, we took many steps to strengthen our current operations and enhance our competitive position – the essence of our Perform agenda. We made good progress in implementing our six strategic priorities: Professional Staffing and Solutions; Permanent Placement; Segmentation; Digital; Engagement; and Thought Leadership.
Enhancing our IT infrastructure
In our increasingly digital world, another key initiative is the enhancement of our information technology infrastructure. We are addressing customer-facing, middle-office and back-office systems. We decided to adopt a modular approach, working with leading IT providers. The elements already in place are receiving positive reviews from our colleagues, clients, and candidates.
Optimising our portfolio of businesses
In 2016, we took several measures to enhance our overall portfolio of businesses. We operate a ‘watchlist’ for businesses that are not achieving our expected level of performance.

We also took some limited but important steps in the area of mergers and acquisitions. In May, we acquired Penna Consulting, further strengthening our operations in the UK and our career transition and talent development (CTTD) business.
Streamlining our brands
Like many global companies that have grown in part through acquisition, we do business under a number of different brand names. Two years ago, that number stood at 70. We are in the process of shrinking this to approximately 20.
Adapting to the future by Transforming and Innovating
The world of work is changing rapidly, driven by five global megatrends in the areas of technology, sociology, demographics, regulation and political economy. These megatrends will transform the world of work in the coming years. This may challenge our industry, but it will also create new opportunities.

Although it is too early to know the exact nature of the transformation, we believe the time to begin acting is now. The broad directions are already becoming clear: increased employee and employer flexibility, new employment models, rapid job creation and destruction, digital-physical hybrids, data-driven insights and solutions. Under our Transform agenda, we are adapting to these developments by introducing new delivery models and enhancing digitisation across all business lines. As well as adapting our existing offerings, we are developing and acquiring new approaches and capabilities – this is the focus of our Innovate agenda. We are exploring, experimenting, and launching pilot projects in new solutions, enlarging the scope and value of our activities in the emerging world of work.
Our Grow Together initiative
One of the most important initiatives for transforming our business is named Grow Together. Working with a leading external partner, we have performed a strategic analysis of our business operations: the way we interact with clients and candidates, and the operating procedures we follow in our branches, back offices, and central functions. This has revealed many examples of best practices, but also opportunities to improve.
Widening our core business
One way in which we are offering more is by broadening our service offering. Our traditional core business has been temporary staffing, which accounts for 1% to 3% of the workforce in most developed economies. We have widened our focus to the entire flexible, or contingent, workforce. This includes not only temporary staffing, but also outsourcing, contractors, freelancers, and other workers; together they account for up to 40% of the workforce at some large companies.
Reinventing customer experience
To reflect the changing sociology of employment, we are reinventing The Adecco Group customer experience, providing tailored employment support for all. Recruiters are becoming career coaches.
Exploring digital opportunities
Digital is an area of particular exploration and experimentation. The outcome of some initiatives will be new tools that we can take to the market; other initiatives may create a new marketplace itself. One pillar of our digital strategy is to take existing service offerings and create Digital Twins, providing workforce solutions with little to no human intervention. Another pillar is Digital Innovation, creating truly new products and services.
Our purpose is key to our culture
The strong sense of this purpose and making a difference to people’s lives is a critical part of our culture. Our colleagues say it is part of what attracted them to The Adecco Group and what makes it a great place to work. We are very proud that The Adecco Group ranked as the 7th best multinational to work for in the world, amongst 6,000 multinationals participating in the 2016 Great Place to Work® survey. It confirms that we truly live our values, and this recognition helps us to attract more great talent to join us in fulfilling our mission.
Building on our strengths
The Adecco Group achieved much in 2016. One of the most remarkable achievements was how our more than 33,000 employees embraced the changes we are making within our organisation, as well as the opportunities and challenges that we see ahead. They are the embodiment of our strategic vision, and they will make that vision a reality.

We enter 2017 better able to grow revenues, profit, and cash flow, thanks to the actions we took in 2016 to strengthen our operations. And we move into a period of significant change in our industry with confidence that we will be a leading player in the changing world of work, thanks to the initiatives we have set in motion throughout our company.
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Full 2016 Annual Report