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Recruit surges forward overseas

The Yomiuri Shimbun

The Yomiuri ShimbunRecruit Holdings Co. has been accelerating its overseas expansion, primarily buying temporary staffing firms in the United States and Europe.

Overseas sales have rapidly climbed to account for about 40 percent of the company’s overall sales, up from the 3 percent level as of the end of March 2012.

The domestic market has been maturing, so the company is employing a growth strategy through temporary staffing and job information businesses overseas. However, Recruit Holdings’ presence still lags far behind other major companies in this sector in the rest of the world.

Word of mouth as opportunity

On May 9, Recruit Holdings announced it would purchase Glassdoor Inc., a major U.S. operator of online job information services, for $1.2 billion (about ¥128.5 billion).

Established in 2007, Glassdoor operates a website that provides word-of-mouth information about companies based on postings from the companies’ employees and people who have had employment interviews with them.

Glassdoor’s current sales stand at about $170 million. Recruit Holdings decided to acquire it on the presumption that word-of-mouth information, which has become popular in searches for travel destinations and eating establishments, will also be seen as important in job hunts.

In the United States, it has become common for job seekers to obtain employment information via smartphones.

Another U.S. job information website company, which Recruit Holdings acquired in 2012, has also increased its sales. Its sales as of December 2016 were about $1.1 billion (about ¥120 billion), or about seven times the level at the time of the acquisition.

“The market has been rapidly expanding on a global basis, and we judged that [Glassdoor] can be a foothold for the Recruit group to build a firm business base to grow further,” said Junichi Arai, an executive officer of Recruit Holdings.

Aiming to be world No. 1

Recruit Holdings President Masumi Minegishi, who took up his post in 2012, set a goal of “becoming the world No. 1 in the staffing service sector in 2020.”

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  • The Yomiuri Shimbun

Some in the company were skeptical at the time, saying Recruit Holdings should aim for growth through domestic business activities, such as services to provide information about job hunts, housing and trips in addition to temporary staffing services.

However, “based on ‘entrepreneurship’ — our corporate culture — I decided to take on a challenge,” Minegishi said.

Recruit Holdings listed its shares on the First Section of the Tokyo Stock Exchange in 2014 to procure funds for corporate acquisitions.

In 2016, it acquired USG People, a major Dutch temporary staffing company, for about ¥188.5 billion.

Recruit Holdings has spent a total of more than ¥600 billion for acquisitions of foreign companies, mainly those providing temporary staffing services, since 2010.

As a result of a series of aggressive acquisitions, Recruit Holdings’ consolidated sales revenue under international accounting standards as of March 2018 exceeded ¥2 trillion.

However, there are temporary staffing companies whose sales exceed ¥3 trillion, including Adecco of Switzerland and Randstad of the Netherlands. Their sales are still much larger than those of Recruit Holdings.

There are risks to the rapid expansion of overseas businesses.

But one market player said: “Compared with temporary staffing services, which are difficult to distinguish among different companies, the range of online job information services is wider. The move can be praised as the next step for growth.”

Observers will be watching whether the latest acquisition can propel Recruit Holdings toward becoming a global company.Speech

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