Incorporated: 1960 as Uitzendbureau Amstelveen
NAIC: 561320 Temporary Help Services; 561310 Employment
SIC: 7363 Help Supply Services; 7361 Employment Agencies; 7349 Building Maintenance Services Nec; 7371 Computer Programming Services
Randstad Holding n.v. is a Netherlands-based international provider of staffing and employment services to businesses and institutions. With 2,000 branches in 12 European and North American countries, it is the third largest staffing company in the world and is the market leader in the Netherlands, Germany, and the southeastern United States. In 1996, Randstad was the Official Staffing Sponsor of the 1996 Olympic Games in Atlanta, and filled 16,000 positions. Randstad boasts an average growth rate of 20 percent annually over the past 25 years, and the company reached sales of $5.81 billion in 2000. Randstad placed 244,500 staffing employees worldwide in 2000, over twice the number the company placed five years previously. While Randstad's primary business is employment and staffing, the company also offers cleaning and security services.
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, 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 that 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 Nfl 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 types of sites, 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 Nfl 10 million.
Group revenues surpassed Nfl 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 Nfl 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 onsite for client companies.
Offices were opened in Great Britain in 1989, when group revenues exceeded Nfl 2 billion. By 1993, the Randstad Employment 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.
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 challenge 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."
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, and 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 an average day, nearly 100,000 people were employed by Randstad. This figure had tripled from 36,000 in 1985. Most (86 percent, or Nfl 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 60 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 offices in the United States. Nearly 40 new offices were opened in the next two years so that by 1995, the company had over 70 offices in the United States. Erik Vonk, a newly hired banker who specialized in mergers and acquisitions, led U.S. operations, which were named Randstad Staffing Services.
As had been its custom elsewhere, the company actively managed its acquisitions in the United States, 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. Despite the widespread problems reported in the press, some difficulties in communication between Randstad and the Atlanta Committee for the Olympic Games, the disaster of the July 27 bombing in the Centennial Olympic Park, the company assembled the largest single peacetime flexible workforce to date and counted the experience as positive for the company. Debra Drew, Randstad's vice president and director of Olympic programs told Workforce magazine in 1997 that the company had expected a 30 percent staff "no-show"--employees quitting or skipping work without notice. In fact, only four percent of Randstad's Olympic employees did so. "The opportunity to work at the Games just changed people's lives. In the end, it wasn't just about giving people a job, it was giving them the experience of a lifetime," she said.
The exposure gained by participation in the Olympics seemed to help the company grow. In 1997, the company had reached 1,000 branches in Europe and North America. In 1998, the company expanded its North American operations by acquiring the staffing branch of its competitor AccuStaff, Inc. The $850 million cash deal boosted its American presence and helped the company become one of the industry leaders in the United States. Also that year, founder Frits Goldschmeding stepped down as CEO and was succeeded by Hans Zwarts.
The turn of the century saw further growth for Randstad on both sides of the Atlantic. In 1999, the company enlarged its European operations with its acquisition of Time Power Personal-Dienstleistungen in Germany and Tempo Grup in Spain. However, 2000 saw the company with lower revenues than expected, and that year the company sold its cleaning services company Lavold. In 2001, the company once again expanded its operations in North America with its acquisition of Strategix Solutions. By acquiring Strategix, Randstad increased its locations in the U.S. from 89 to 478, providing the company with offices in 34 states. Randstad planned further growth for the twenty-first century, both organically through existing holdings and through acquisitions. In its 2000 annual report, the company specifically pointed to Germany, Spain, and Italy as promising growth regions.
Principal Subsidiaries
BouwFlex; InterTech; Tempo-Team IT-Flex; Randstad Automatiseringsdiensten; Randstad Interim Kader; Randstad Polytechniek; Randstad Interlabor (Belgium); Randstad Vikar (Denmark); Randstad Interim (France); Randstad Zeit-Arbeit (Germany); Time Power Personal-Dienstleistungen (Germany); Randstad Italia (Italy); Randstad Interim (Luxembourg); Randstad Trabajo Temporal (Spain); Tempo Grup (Spain); Randstad Schweiz (Switzerland); Randstad Employment Bureau (UK); e-staff (US); Excel Temporary Services (US); Modis Professional Services (US); Placers (US); Randstad Staffing Services (US); The Richard Michael Group (US); Tempo Services (US).
Principal Divisions
Randstad Europe; Randstad North America; Yacht; Capac/Hedson; Tempo-Team/Otto-Westelaken Group; Cleaning; Security.
Principal Competitors
Adecco; Spherion; Vedior.
Further Reading
"AccuStaff Inc.," The Wall Street Journal, September 17, 1998, p. C20.
"Accustaff to Sell Staffing Unit to Randstad," The New York Times, August 29, 1998, p. B4.
"Atlanta's Top 25 Temporary Employment Agencies," Atlanta Business Chronicle, January 9, 1998, p. 6B.
"Atlanta's Top 25 Temporary Employment Agencies," Atlanta Business Chronicle, March 22, 1996, p. 8B.
Branningan, Martha, "Randstad Holding Agrees to Purchase Division of Accustaff for 850 million," The Wall Street Journal, August 28, 1998, p. B4.
Bueno, Jacqueline, "Shortage of Bus Drivers Has Put Organizers of Olympics in a Jam," The Wall Street Journal, October 25, 1995, p. 4S.
Coleman, Zach, "Major Acquisition Boosts Randstad's U.S. Plans," Atlanta Business Chronicle, September 4, 1998, p. 16A.
DeChant, Meredith, "Atlanta's Top 20 Temporary Employment Agencies," Atlanta Business Chronicle, June 23, 1995, p.10B.
DeChant, Meredith, "Atlanta's Top 20 Employment Agencies," Atlanta Business Chronicle, June 23, 1995, p. 10B.
DeLavan, Joanne, "Temping Appeals to a Wide Range of Workers," Atlanta Journal-Constitution, September 10, 1995.
DeMarco, Edward, "Randstad Will Try to Boost U.S. Temp Use," Atlanta Business Chronicle, May 7, 1993, p. 10A.
Dorsey, James M., "Randstad Expects to Post Surge in Profits for 1999," Wall Street Journal Europe, January 11, 2000, p. 6.
Flynn, Gillian, "HR's Game Plan for the Olympics," Personnel Journal, July 1996, p. 72.
Flynn, Gillian, "The Summer Olympics: An HR Disaster?," Workforce, February 1997, pp. 25, 28.
"Frits Goldschmeding, Eredoctor University of Rochester," Amsterdam: Randstad Holding n.v., n.d.
Gelnar, Maaike VeenMartin, "Randstad Lowers Forecasts for 2001 for a Second Time," Wall Street Journal Europe, April 26, 2001, p. 4.
Hiday, Jeffrey L., "Temporary Workers Reap Higher Pay, Competition, Changes in Sector Also Boost Benefits," The Wall Street Journal, November 8, 1996, p. B14.
Joyner, Tammy, "Atlanta Staff Firm Nears Top of Industry with Acquisition," Knight-Ridder/Tribune Business News, August 28, 1998.
Laster, Kasee, "Changes in Temping Industry Varied, But Needed," Business Ledger, June 13, 1995, p. 14.
Pousner, Howard, "Welcoming the World," Atlanta Journal-Constitution, May 9, 1995.
"Randstad to Buy AccuStaff for $850 Million Cash," Wall Street Journal Europe, August 31, 1998, p. 3.
Rose, Robert L. and Martin du Bois, "Temporary-Help Firms Start New Game: Going Global, Far-Flung Networks Are Key Assets As Clients Expand Internationally," The Wall Street Journal, May 16, 1996, p. B4.
Salwen, Kevin G., "How a Bold Temp Agency Took Gambles--and Won," The Wall Street Journal, July 5, 1995, p. 1S.
Turner, Melissa, "Randstad Signs on as Olympic Sponsor, Will Handle Hiring," Atlanta Journal-Constitution, September 8, 1994.
Van de Krol, Ronald, "The Netherlands' Invisible Army," International Management, March, 1993, pp. 44-45.
Vance, Nick, "Many Ways to Work Temp," Atlanta Employment Weekly, June 18-24, 1995.
— Update: Lisa Whipple
