Randstad Holding n.v. History

Address:

P.O. Box 12600
1100 AP Amsterdam-Zuidoost
The Netherlands

Telephone: 020-5 69 59 11
Fax: 020-5 69 55 20

Public Company
Incorporated: 1960 as Uitzendbureau Amstelveen
Employees: 4,200
Sales: NLG 3.76 billion (1994)
Stock Exchanges: Amsterdam London
SICs: 7363 Temporary Help Services; 7361 Employment Agencies; 7349 Building Maintenance Services, Not Elsewhere Classified; 7381 Detective & Armored Car Services; 7372 Prepackaged Software

Company Perspectives:

Randstad helps clients achieve a match between their ideal and actual staffing levels. The group assures the right people in the right numbers in the right place at the right time for the right job. Randstad has built its reputation, providing leadership to an industry, by anticipating and creatively responding to the changing needs of companies and workers for more than three decades.

Company History:

Randstad Holding n.v. thrived in the era of widespread corporate staff reductions and outsourcing, supplying other businesses with labor, management, and professional talent as needed. Its fourth decade was marked by expansion into what could prove to be the Dutch company's largest and most lucrative market: the United States. In 1994, a half million people received paychecks from Randstad, the largest temporary services agency in the Benelux countries and the fifth largest in the world, with annual sales of $1.7 billion. Randstad estimated the total global potential of its markets at NLG 500 billion.

Beginnings and Early Success

In 1960, Frits J. D. Goldschmeding was working on a thesis for a master's degree at Amsterdam's Vrije Universiteit. His topic: temporary employment. He subsequently started his own temporary services agency, known as Uitzendbureau Amstelveen, from his dorm room. Soon he had more than three dozen employees. Goldschmeding is said to have conceived the idea after reading a Citroën annual report.

The company was renamed Randstad Uitzendbureau in 1964. (The Randstad is a very densely populated region in the western Netherlands made up of cities, towns, and villages which encircle an area of woods and lakes.) The next year, the company's first international branch, Interlabor, opened in Belgium. In 1968, new offices in Germany followed. The 32 offices in the three countries brought in more than NLG 47 million of revenues in 1970. Three years later, Randstad broached the French market.

In 1974, a contract cleaning division was established in Germany. These services were initiated in Belgium the next year, and Belglas was acquired. Contract cleaning services were expanded to the Netherlands in 1976, and Korrekt Gebäudereinigung was acquired in Germany. Randstad cleaned or serviced a variety of different things, including planes, trains, and buildings. According to the company, this revenue source grew consistently because businesses believed in the motivational benefit of a clean working environment while at the same time they preferred to delegate non-core activities. Randstad supported the formation of objective quality standards in the cleaning industry and has proudly displayed its ISO certification in this area since 1992.

In 1978, the corporate name was changed to Randstad Holding n.v. The next year, the company opened its 100th office and achieved a net income of more than NLG 10 million.

Group revenues surpassed NLG 500 million in 1980. The decade began with the formation of Randon, the security division, which opened in the Netherlands. Besides guard and surveillance services, Randstad provided a home security alarm system through Randon Meldkamer. The company felt its insistence on professionalism made it attractive to this market.

In 1983, the company continued its expansion in the Dutch staffing market with the purchase of a mid-sized Dutch temporary services agency, Tempo-Team, which specialized in industrial and technical services, as did two other of Randstad's Dutch offices, Werknet and Otter-Westelaken. Belgium followed with training services in 1988, when automation services were added to the company's repertoire in the Netherlands. This profitable venture eventually had six offices. Software and hardware sales to financial, distribution, and transport companies added to the revenues of AICA, the computer services bureau, which also developed accounting systems.

Revenues exceeded NLG 1 billion in time for the company's 25th anniversary in 1985. Over 1,300 staff and a daily average of 36,000 temporary employees then worked for Randstad's 257 offices in four countries. In addition, Lavold, a cleaning services company, was bought, adding to Randstad's capacity in the Netherlands and Belgium.

Randstad began training cashiers, computer operators, and telemarketers, and other personnel for its Dutch clientele in 1986. The Randstad Training Center consisted of fourteen offices in 1994; Randstad also conducted these activities on-site for client companies.

Offices were opened in Great Britain in 1989, when group revenues exceeded NLG 2 billion. By 1993, the Randstad Employment Bureau there had seven offices. Randstad entered the Spanish market late in 1993, as the one-office firm Randstad Trabajo Temporal.

In the 1990s, Randstad began offering higher-trained technical staff in the Netherlands, Belgium, and Great Britain through nine specialized companies (Randstad Interim Techniek, Randstad Research & Development Services, Inter Techniek, Polydesign Nederland, Polydesign België, Interdesign, Randstad Inter Engineering, Randstad Specialist Engineering, and Technisch Bureau Visser). Randstad's technical services division was active in the machinery, transport equipment, electronics, hospitality, insurance, petroleum, and construction industries, among others.

Industry Liberalization in the 1990s

Since the 1960s, the Netherlands had an ideal environment for temp agencies. In the early 1990s, it was estimated that two percent of Dutch workers were temps, more than four times the ratio found in Germany. A third of all Dutch workers had worked for a temporary services agency at some time in their careers. In 1994, the company had 408 offices overall in the Netherlands.

The bugbear for Randstad in Europe, like that for many other companies with international aspirations, was the restrictive attitude of certain governments, particularly Germany, Spain, and especially Italy. In these countries, temporary employment agencies were seen as a threat to the job security of long term employees. The "Doppeleinsatz" requirement in Germany, where Randstad Zeit-Arbeit had 31 offices, mandated temporary agencies provide two successive temporary positions for every worker. After a group of temp agencies filed a complaint with the European Commission in 1992, Spain and Germany liberalized their markets somewhat; the "Doppeleinsatz" rule was waived for hard-to-place workers in Germany in 1994, and workers were allowed to work nine months as temporaries, rather than six months. A class action was filed against Italy, ultimately to be decided by the European Court of Justice. In areas where public and private sectors controlled labor supply, Randstad foresaw government agencies focusing on gathering candidates, while temporary agencies concentrated on matching the candidates to the most appropriate jobs. In 1994, legislation was passed allowing Belgians to work as long as six months as temporaries, compared to three months previously. Randstad operated under the names Interlabor Interim, Randstad Interim, and Flex Interim in Belgium.

After determining that many of its clients were seeking long-term solutions, Randstad set up several new programs. Vendor-on-Premise placed a Randstad staffing manager to support company management. Facility Staffing handled large-scale, long term staffing needs. Outsourcing gave Randstad functional responsibility for an entire department, process, or function. Other solutions were labeled "Vectoring" and "Temp-to-Hire."

Preparing for a New Century

Randstad termed its processes "social technology." ISO certification gave Randstad the opportunity to highlight its systematic approach. These international quality guidelines, originally applied to manufacturing industries, were extended to service industries in 1992 in the Netherlands. Soon, Randstad had picked up a series of certifications--first as a specialist cleaning company, later, in 1993, as the first international temporary employment agency to receive the appellation.

In 1994, Randstad operated 780 offices in seven countries, including Belgium, Germany, France, Great Britain, and Spain. Nevertheless, the Netherlands hosted the majority--495--of the company's offices, where it had a 37 percent market share. Thirty-five percent of revenues were earned outside the Netherlands. On the average day, nearly 100,000 were employed by Randstad. This figure had tripled from 36,000 in 1985. Most (86 percent, or NLG 3.2 billion in 1994) of the firm's income came from Temporary Services.

The company's French operations, Flex and Randstad, were integrated in 1994 under the name Randstad Intérim. This move, which reduced the number of offices in France from 94 to 75, resulted in some loss of market share but also more efficiency and greater revenues.

The acquisition of Temp Force in 1993 allowed Randstad entrée into the world's largest temporary services market, the United States. Randstad limited itself exclusively to the Southeast, a region where growth in temporary services consistently exceeded 10 percent annually and in which relatively few worked as temporaries. In spite of Randstad's tradition of hiring workers with higher than average educational backgrounds--more than sixty percent had attended post-secondary schools--they reported no problems regarding worker skills in the South, which had long had a spotty reputation for education. Randstad acquired 12 Atlanta offices with the Temp Force purchase, and instantly became the city's largest temporary employer. Nashville's Jane Jones Enterprises, Tennessee's largest independent staffing service, was bought the same year, giving Randstad a total of 25 U.S. offices. Nearly 40 new offices were opened in the next two years; by 1995, the company had over 70 in the United States. Erik Vonk, a newly hired banker who specialized in mergers and acquisitions, led U.S. operations for Randstad Holding n.v.; Randstad's U.S. presence was named Randstad Staffing Services.

As had been its custom elsewhere, the company actively managed its U.S. acquisitions, to the chagrin of many existing managers--fewer than half stayed with the new owner more than two years. A chasm existed in most temporary agencies between recruiting temps and marketing to clients; however, Randstad managers were responsible for both areas. The company also prided itself on its decentralized organization.

Randstad supported its risky American start-up with an audacious marketing strategy. While bidding to supply employees for the 1996 Olympic Games, the company elected to become an official sponsor--an unprecedented position for a staffing service. The challenging contract reportedly gave the company a loss on some of its assignments but allowed it instant name recognition and a chance to display its skills. Part of the job included finding over 4,000 bus drivers for the public transportation system.

Company managers were expecting 1995 to be Randstad's first profitable year in America. In 1996, Randstad aimed to expand beyond its single office in Greenville, South Carolina, to become a key player in the Carolinas and beyond.

Principal Subsidiaries: Randstad Uitzendbureau b.v.; Tempo-Team Uitzendbureau b.v.; Tempo-Team Beheer b.v.; Werknet Uitzendbureau b.v; Uitzendbureau Otter-Westelaken b.v.; SAVAZ Uitzendzorg; Lavold Schoonmaak b.v.; Lavold-IDG b.v.; Randon Beveiliging b.v.; Randon Meldkamer b.v.; Randon Services b.v.; Randstad Opleidingscentrum b.v.; Randstad Automatiseringsdiensten; AICA b.v.; Randstad Interim Kader; Randstad Interim Techniek; Tempo-Team Projecten; Inter Techniek Rotterdam b.v.; Polydesign b.v.; Technisch Bureau S. Visser b.v.; Randstad Research & Development; Maxon Project Support; Randstad Automation Center b.v.; Randstad Automatiseringsdiensten b.v.; Randstad Contracting b.v.; Randstad Dienstengroep Nederland b.v.; Diemermere b.v.; Randstad Interim (Belgium); Interlabor Interim (Belgium); Flex Interim België (Belgium); Lavold Nettoyage/Lavold Schoonmaak (Belgium); Interlabor Training & Services n.v. (Belgium); Polydesign België n.v. (Belgium); Interdesign s.a. (Belgium); Randstad Intérim s.a. (France); Randstad Organisation für Zeit-Arbeit GmbH (Germany); Korrekt Gebäudereinigung (Germany); Randstad Employment Bureau (Great Britain); Randstad Inter Engineering (Great Britain); Randstad Specialist Engineering (Great Britain); Randstad Empleo, Empresa de Trabajo Temporal s.a. (Spain); Randstad Interim (Switzerland); Randstad Staffing Services LP (USA).

Principal Divisions: Temporary Services; Cleaning Services; Security Services; Automation Services; Technical Services; Training; Interim Management; Transport and Logistics Services.

Randstad Holding n.v. History

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