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May 17, 2005 

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 Q&A: Manpower CEO Jeffrey Joerres on Comparison Between U.S., France 5/17/2005
The mission of Going Global, which appears on ePrairie on most Tuesdays, is to educate and inform Midwest technology companies on what local technology companies are doing internationally so other firms can learn from the successes of like-minded peers.

MILWAUKEE – Jeffrey Joerres, CEO of Milwaukee-based Manpower, recently received at the 13th annual La Nuit des Etoiles (Night of the Stars) event the executive of the year award for his significant contributions in fostering commerce and cross-cultural exchange between the U.S. and France.

Jean-David Levitte, the ambassador of France to the U.S., joined the French-American Chamber of Commerce of Chicago to honor the head of Manpower, which is the largest staffing and employment service in the world. Manpower France is the company’s largest operation in both revenue and profit followed by the company’s U.S. operation. Manpower France is currently the fourth-largest American company in France.

Joerres was appointed president and CEO of Manpower in 1999 and chairman of the board in 2001. He joined Manpower in 1993 as vice president of marketing and was responsible for the company’s overall marketing strategy. He then served as senior vice president of European operations and global account management and development.

Prior to joining Manpower, Joerres was vice president of sales and marketing for ARI Network Services, which is a public high-tech electronic data interchange company. He has also held several management positions within IBM. Joerres received his bachelor’s of science from Marquette University in Milwaukee.

In part one of a two-part Q&A, ePrairie international expert Michael Muth spoke with Joerres prior to the event about the industry similarities and differences between the U.S. and France.

Michael Muth: What was Manpower’s international strategy that allowed it to become the largest staffing and employment service in the world with 2004 revenues of $15 billion?
Jeffrey Joerres: Our international strategy was founded many years ago. In fact, in just a few days, I’m leaving for Argentina to celebrate their 40th anniversary and next week to Germany for their 40th anniversary. We clearly expanded very early. As a result, it’s second nature to us and it’s ingrained in our culture.

In the 1950s and 1960s, we set the footprint for the global organization and we opened all the offices organically. They were all homegrown. In recent years, however, our international growth has shifted toward following our customers to where they need us most (such as in newer markets like China, eastern Europe and India where we weren’t really present five or six years ago).

We entered many of these markets later primarily because they said we couldn’t be there in the early years of our expansion. Either the employment laws said that temporary and contract employment weren’t allowed or the labor market itself was just too chaotic to be viable for us.

In recent years, our customers were saying: “You’re providing us with flexible employment solutions in 20 other countries and now we need you in these emerging markets.” We have found ways to successfully enter these markets as well as work with governments to enable acceptance and understanding of our services. We have also learned to change the laws to fulfill the needs of our clients.

It’s a much different process than in the early years of our international expansion.

MM: How long has Manpower been doing business in France?
JJ: We opened our operations in France in 1957 as the third country in our network (after the U.S. and Canada). The United Kingdom was opened shortly thereafter.

MM: How much has Manpower invested in France?
JJ: We have assets of $1.83 billion in France as of 2004, which compares to $688 million in the U.S.

MM: How did Manpower France become the company’s largest operation in 2004 in both revenue ($5.227 billion) and profit ($179 million) followed by the company’s U.S. operation ($2.041 billion in revenue and $50 million in profit)?
JJ: That’s a fairly recent phenomenon. As recently as 1998, the U.S. was a bigger operation than France in terms of sales and profitability. This changed in 1999 as the Internet bubble burst and the U.S. market became more difficult. Though the French market was also affected, it didn’t bottom out as much as the U.S.

Since that time, our French management team has done a great job developing the business and gaining market share to keep the momentum going. In addition, the French market has been more stable than the U.S. We expect the French market to continue to be very strong for us because we find that contract help is a much better tool in France than it is in any other country in which we operate.

For example, 2.7 percent of the French population is employed as temporary workers. Only 1.8 percent of the population in the U.S. is employed as temporary or contract workers. Part of the reason for this disparity is due to French labor laws, which are much more restrictive than those in the U.S.

In all markets, companies want a level of flexibility in their labor force to help them deal with fluctuation in demand for their services.

That’s where Manpower comes in by providing flexible staffing. In the U.S., it is a more fluid labor market with fewer labor laws restricting the relationship between employees and their employers. Therefore, the attributes of an employment services company are of a more limited value to companies than they are in France.

MM commentary: What’s impressive is how and why Manpower is so much stronger in France with the second-largest economy in Europe ($1.54 trillion) than Germany ($2.184 trillion, or an economy 40 percent larger than France) or the United Kingdom ($1.52 trillion).

Not to minimize Manpower’s success in France but part of it is due to the fall of the U.S. dollar relative to the Euro. The greenback has fallen precipitously during this time period, which makes accounting entries originated in Euros gain value as the currency appreciates. It’s also important that Manpower posts its financial results in “constant currency”.

MM: In what industries are your 80,000 French clients? In what types of positions did Manpower place 608,000 French people in jobs through Manpower France in 2004?
JJ: In France, our business mix is much different than in the U.S. About 70 percent of our business in France is light industrial. The types of jobs in this segment include both unskilled laborers and skilled trades such as plumbers, electricians and welders.

Construction is between 10 percent and 15 percent of the business. We’re building skyscrapers there. While we can’t provide jobs like electricians, plumbers or construction workers in the U.S., we can do it in France because we are part of the labor unions there. This would not be possible in the U.S.

MM commentary: This is a great example of adapting to local markets. If Manpower simply implemented its office service strategies for which they’re known in the U.S., they would have missed many major market opportunities.

MM: How is Manpower’s business different in France as compared to the U.S.?
JJ: For one, it’s much more concentrated. We have about 1,100 offices in France, which is more than what we have in the entire U.S. The reason for this is a difference in culture and lifestyle. In France, the Manpower brand is better known because it’s a more retail presence with about 250 of our offices at the street level in Paris.

This wouldn’t work in the U.S. because we’re all driving our cars from point to point. It’s more of a walking culture in France. That’s why the retail presence works there. The business is also much more legislated in France than in the U.S. and our business is more focused on fewer services. What’s really interesting is that most people in France don’t know that Manpower is based in the U.S.

They think we are a French company because of our people and the way they work with our clients, candidates, the government, the trade unions and the community. This is the Manpower way of doing business internationally where local people serve local markets and our stakeholders really feel our commitment to them.

MM commentary: This is a classic case of thinking globally on strategy and acting and implementing locally. Because they are literally in the people business, their office locations are actually part of their distribution strategy.

MM: How do you manage your French operation from the U.S.: centralized or decentralized?
JJ: Our concept is a “centerless” organization without the massive central headquarters at the top that you typically see in global companies. We centralize only the core elements that are necessary to ensure consistency of the vision, values and strategies as well as large-scale elements (like certain IT elements) where there is a significant efficiency gain by centralizing.

Our philosophy is all about local people serving local markets around the world because this is where we have our core relationships with customers and employees. Jean-Pierre Lemonnier is the managing director of Manpower France and he is empowered to run our French organization.

While he is part of our executive management team and we have frequent contact with him, he makes the decisions about his business unit and he is accountable for performance metrics. We find it to be a huge advantage to have this level of autonomy and accountability at the local level because this is what enables us to instill the passion for the business that is essential to our success.

MM commentary: It’s always a fine line to determine how much centralization or decentralization to implement. As a professional services organization that is strongly impacted by local legal regulations, Manpower has to be strongly focused locally. The difficulty is keeping the brand consistent across countries.

Michael Muth is managing director of GATA, an international business development consultancy that helps technology companies build international partnerships. He can be reached at mike@intlalliances.com.
Click here for Muth’s full biography.

Previous Columns:
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Q&A: Federal Reserve Bank’s William Testa on Headquarters, Exports (4/19/2005)
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Q&A: Lisle Technology Partners CEO Adarsh Arora on Offshore Outsourcing (3/15/2005)
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Q&A: CEC’s David Weinstein, Kapil Chaudhary on Internationalization (2/22/2005)
Q&A: Brian Briggs of Acclaro on Whether to Outsource Localization (2/8/2005)
Q&A: Brian Briggs of Acclaro on the Complexities of Localization (2/1/2005)
Q&A: Brian Briggs of Acclaro on International Localization Services (1/25/2005)
Q&A: RPX’s Robert Okabe, IEC’s John Janowiak on Global Events (1/11/2005)
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Q&A: IEC Senior Director John Janowiak on Trade Show Realities (11/16/2004)
Q&A: International Engineering Consortium Senior Director John Janowiak (11/9/2004)
Q&A: Founder John Lee of Chicago’s Hostway on Web Site Localization (11/2/2004)
Q&A: Founder John Lee of Chicago’s Hostway on Growing Globally (10/26/2004)
International M.B.A. Guide to Moore School of Business, Thunderbird (10/12/2004)
Your International M.B.A. Guide to Northwestern, Loyola University (10/5/2004)
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Q&A: ADVIZOR Solutions CEO Doug Cogswell on the Art of Partnering (7/13/2004)
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