Good morning, everyone, and welcome to the Adecco Group's Analyst and Investor Seminar 2018. Most of you probably already know me, but my name is Nicolas de la Grenz, Head of Investor Relations at Adecco Group. And we're very pleased today that so many of you could join us in person and also on the phone lines. As you can see, we have a relatively full agenda today. You'll hear from Alain and Hans, of course.
But you'll also get to hear from the leaders from a number of our businesses across the group and also from some of the founders of the new ventures that joined the group or were created over the last 12 months. We will hopefully give you a feel for the exciting work that's going on within the group in regards to the strategic agenda that we laid out at the Capital Markets Day last year. And you'll go away feeling as positive about those opportunities as we do. There will be a Q and A session at the end of the morning session. So if you could hold your questions until that time, we'd be very grateful.
And with that, I hand over the floor to Alain de Haas, Group CEO. Thanks,
So also in my name, good morning to everybody and thank you for your presence. I recognize a lot of faces. And a lot of faces were also present just 1 year ago, also in London, when we were presenting to you our strategy at the Capital Market Day. We were presenting you, yes, our vision on how we were willing to make the future work for everyone just 1 year ago. 1 year later, my colleague present here and myself are very pleased to give you the progress we have done regarding not only the vision, but also the ambition we have, the plan, the strategy.
Because 1 year ago, we presented to you this vision about the future of work, which was based on the megatrends. And yes, we presented to you quite an ambitious strategy in order to make the future work for everyone. 1 year later, today, we will present the real progress. Remember, the mega trends, an ambitious strategy to capitalize on the opportunities, A clear vision, a clear strategy, clear ambition, but also a clear action plan on how to generate higher revenue growth, strengthen the margin and also increased cash flow, allowing us to generate shareholder return. Now the question you probably have is, where are we 1 year later?
Where are we on this strategy about perform, transform and innovate? How much differentiation have we been able to put in our strategy offering and in our service offering? How much progress did we do on Grow Together and especially transforming the candidate and the customer journey experience enhancement. And how much progress did we do, especially in the new ventures we have developed and acquired. And remember, last year, we committed to perform and transform and innovate.
And perform was meaning to deliver operating discipline on one hand, but also strong cash flow. Transform was meaning to drive growth through differentiation, not only through differentiation, but also by enhancing the customer and the candidate experience, especially in combination with technology. And last but not least, innovate was meaning to capture new growth opportunities either by expanding into existing markets or penetrating new adjacent markets. All of this perform, transform and innovate, allowing us to deliver through structural revenue growth, expand our EBITDA margin and maintain a progressive and recession proof dividend policy. Where are you?
Where are we 12 months later? On the performance side, we put our recipe at work. Segmentation, CCPM and farm, we put our recipe at work among other also in France. And what you have seen according to what we committed to you, we went back to the market growth in the first quarter. And now since the Q2, we are outperforming the market.
We committed to the same for the Adecco General Staffing U. S. And again, we put segmentation, CCPM and technology at work in the U. S. And since the Q2, we are also in a positive growth situation in the U.
S. Further, thanks to a really focused organizational focus and a dedicated operating model in a permanent recruitment, Since now a few quarters, we are outperforming the market in the permanent recruitment. And overall, we maintained during the last 12 months a strict cost discipline, and we continue to work on our pricing, allowing us to improving the trends in the pricing. For sure, we had some challenges and some delay. Challenges, for example, in Germany, were the transformation of the general staffing activities, Adeco and Tuya, yes, is taking some time.
But we take the time to create on the German market from the number 6 and the number 7, a strong number 2 on the German market. We were also slightly impacted by the tax credit change in France with the CECO, the reduction from 7% to 6%. And last but not least, yes, we did commit some investment regarding the support of our transformation strategy. And this morning, we published a trading update mentioning a slowdown in the market driven by Continental Europe. This is for the Perform side.
On the transformation side, we laid during the last 12 months strong foundations, allowing us to fundamentally strengthen our core business by investing in IT, in our IT legacy systems, but also apply the so called perform concept. And you will hear in a minute or in some minutes, Hans explaining you what this PERFORM concept means. It is based on the lean manufacturing principles. You will hear not only Hans about this, but you will hear also my colleagues, Alex from U. K.
And Christophe from France, on how they have applied this PERFORM methodology in their market and the results they have achieved. Also in the transform, we are facing some challenges. We have a higher cost of transition in 20 18 even if our overall investment program remains on track. Now on innovation, innovate. There, when we look back at the last 12 months, the Adecco Group has built the most comprehensive HR solutions portfolio in the industry.
We co created together with Infosys Adia, a 0 touch online staffing business or platform. We co created with Microsoft a new freelance platform, YOS. We acquired Vettery, one of the only 2 companies in the world being able to provide 0 touch online recruitment. And finally, we acquired recently General Assembly, the global leader in digital up and rescaling. Now this morning, we published a trading update, and there were some key informations.
First of all, we informed that the market had a slowdown in the months of July August to plus 2% trading days adjusted. We said also that there was a slight deceleration versus the month of July August in the early weeks of September and that this slowdown was driven by Continental Europe. And on our side, for sure, we continue to have the impact of the transformation of General Staffing in Germany. On the other side, where we have our official market data, we can confirm that we continue to outperform in France and also that we have a very strong performance in all the markets where we have put our strategy or recipe at work. And also as announced, we have already taken we are already taking the adapted measures to take into account the slowdown of the market.
Now before deep diving into the strategic programs, remember the context we are in. Basically, we are in a growth market, and we are in a growth market driven by the megatrends. And the first megatrends I would like to mention is the geopolitical economic uncertainty. I'm sure that you, like me, are reading newspaper, listening to radio, sometimes watch to television and everywhere a lot of uncertainty. Not only uncertainty regarding the geopolitical, but also uncertainty regarding economic development, technology transformation and so on.
And as a consequence, our customers are putting more and more flexibility into their work organization model. Our global customers have today more than 50% of flexibility solutions in their organization, offering for us huge opportunity to grow. Now the next megatrend is the inroad of technology, artificial intelligence, robotics, automation, chatbots. There is no single day where you don't see and read something about this. And yes, for us, it's a huge opportunity.
Yes, we put artificial intelligence at work. Yes, we put chatbot at work. Remember what we told you or we presented to you last year, Maya. In the meantime, 64 customers in the U. S.
Are working with Maya solutions. Maya, based on artificial intelligence, is doing the outreach to the candidates, is doing the prescreening of the candidates and is doing for the ones succeeding in the outreach and the prescreening, is also doing the scheduling with all recruiters for the appointments, fully automated. So this is one example of technology application. You will hear order from Hans and Christophe and Alex. But yes, we are working on the automation of or the digitization of the time capture, the automatic reading and interpretation of the time registration.
We are putting a chatbot in France at work so that we can have this conversation 24 hours 7, 7 days per week with our customers and candidate, thanks also to the client and candidate portals we have developed and put at work. So all of this has significant positive impact regarding efficiency on the back office and the middle office, but for sure is also enhancing the customer experience, the customer and the candidate experience. And by the way, you will hear from Adia, from Ernesto, from Adam, from Vettori and also General Assembly that all our new ventures are really making a leap forward with the NPS, great customer and candidate experience. Yes, with technology, you and the technology on road, it is sure that you have then skills and balances because a lot of people, a lot of workers are working based on old processes, old technology in the companies. Technology coming in needs either to change the people or to reskill the people to really fill the gap of these skills and balances.
And this is the background of our acquisition of General Assembly. As you know, we are the global leader with Lee F. Harrison last year in carryout placement. Last year, we helped 360,000 people to find another job from and layoff process. But for sure, we said instead of for some of them laying off people and then recruiting new profiles, why don't we reskill these people?
Because there is such a massive demand of talent. And so we spotted this skills imbalances and the need for reskilling as a huge opportunity for us. And that's why we acquired General Assembly. And Jake I see Jake here at the back of the room. Jake will present you today more insight about General Assembly And even more, 5 minutes from here, we will take you to a workshop in the campus of London of General Assembly so that you can discover and touch yourself what the experience with General Assembly is.
Good. Now we speak about also sociological trends. The new generations, my children, these millennials, these Gen Z have other expectation regarding their behavior, their behavior towards work. They want to work for company or even for project with a very strong purpose. They want to have flexibility, balance between professional life and private life.
They want somehow to decide when they want to work and when they want to do all these things. They want also to be to travel internationally. So based on that, you see the development of the freelancing, which is somehow the way of work which corresponds to this new generation. And I will come back in a minute on that. And also at the back of this sociological trends, we have decided to co create with Microsoft YOS, YOS being the abbreviation of your own boss or your one stop shopping, allowing these freelancers to find a job, but also to be secured to work in a compliant and secure way with the employer they have in front of us.
Also as last, you have demographic trends. And there you have 2 demographic trends or sub trends. First, it is an aging population. Good news for all of us. We will live longer and older.
It means a lot of care, need of care, a lot of life sciences, pharmaceutical development. But it means also, unfortunately, demographically, that we have or we are facing a fertility rate, which is lower and lower. And as a consequence, we have in many countries in the world a shrinking workforce. Some figures, Japan. Japan has already lost 6,000,000 workers and is losing today 1,000,000 worker per year.
Germany expected to lose 10,000,000. China, 24,000,000 workers, one child policy, but also Brazil. So many countries in the world are facing this shrinking workforce and thus this talent scarcity. Also again, a huge opportunity for us to develop solutions such as augmented staffing, and I will come back in a minute about that. Now as you can see, all these megatrends are impacting the HR solution industry.
And it means also that all market is a growth market. All market is not and that's what you see here. Here, all market is not about the temporary staffing of the permanent recruitment or even career transition. Our market is about human resource solutions, including freelancers, including statement of work, including sometimes outsourcing. And what you see here is 2 information.
First of all, you see that the temp staffing penetration continues to develop and even get higher and higher in many markets. This is one type of information showing that we are in a growth situation. And on the other side, you see that new type of flexibility and flexible contract are developing. If we take the employment growth in the U. S.
During 10 years between 20052015, you see that the total majority of the growth in employment is coming from new type of employment what we call alternative work arrangement. Freelance is one of the example. So I think this is worth to mention. Now if we zoom further in, you see already today that 16% of the U. S.
Labor force today is living from the income from this new type of work, let's say, contract. You see also that in the U. S, 30% of the workers are freelancing. And even further, 47% of the new grads in the U. S.
Are entering in the labor market through freelancing. Now thanks to digital solution, we see also the opportunity to expand our market share as digital and technology will allow to consolidate the fragmented industry. We are the market leader the global market leader of this industry with, I would say, just 5% market share. But thanks to digital solution, we see different opportunity. First, we see the opportunity to raise higher barriers of entry towards especially the smaller competitors.
Why? Because these small competitors are somehow not so open to develop technology, to develop platform like we are doing. Because when we partner with Infosys or with Microsoft, for sure, this global tech company are interested to partner with the global leader of the industry, but they are not interested to partner with some local competition. And we know that thanks to this technology, we can both develop and expand our market share in some markets we are in. For example, in the temporary staffing, thanks to Adia, we are now able to tackle the small segment for which we were not equipped with a classical branch network, so huge opportunity for us.
Or we are able to enter new markets such as the freelancing market, thanks to Yost and this partnership with Microsoft. And by the way, thanks to this partnership, you will discover that Adia is the best app on the Apple Store today in the world. So what is the advantage? Raise barriers of entry, but also increase economies of scale because we can leverage the online and the offline offer. And we see that we can leverage the candidate base, the customer base, but also technology.
We can also scale up and leverage globally because once you have the platform, you have seen Adya. In less than 18 months, we are already present in 3 countries with Adya. So we are really leveraged technology and we are leveraged also the partnership. And we are also able to create real true differentiation. This is the example of general assembly, where we will have and we have now the largest scope of human resource solutions.
Now during the last 12 months, we have really strengthened our competitive strengths. First of all, the ones we have since many years. And if I'm trying to summarize our competitive strengths, it's rather easy. We call them the 3 Ds. We have a deep knowledge or domain knowledge because we know the labor regulation in more in details in more than 60 candidates how to develop their activities.
Domain knowledge also because we know the HR practices in these 60s countries. So it is a huge domain knowledge. 2nd, we have a lot of data and rich data. And everybody is saying today, data is the new oil of the world or the new currency of the oil. And we have a lot of data that we can leverage either for our own insight, leveraging this for pricing analysis for to be more efficient and some, but we can also leverage the data to provide more insight to our customers and again, having a kind of advantage because the ownership of this data.
And third, also we have the distribution. We have every day 100,000 customers trusting us for all kind of debt service delivery regarding human resources services. So this 100,000 enterprise, yes, network is a huge asset we can leverage. And we see that when you combine the different things, you see that compliance is becoming more and more important. The best example is the GDPRP.
Everybody has spoken about that. Very important is also cybersecurity becoming more and more important. There is no single week when you don't see in the newspaper that there has been a hacker active on one company or the other or you receive, like me yesterday again a mail saying, oh, by the way, we have been hacked, so we warn you and so on. It is important going forward in this new world to be really compliant and companies are looking for trusted partners in compliance, but also in cybersecurity. And you will hear Rolf, I can tell you, with the experience of the pharmaceutical company or the pharmaceutical industry that Rolf has, we have equipped ourselves to be very not only compliant, but also cybersecurity resistance.
During also the last 12 months, we have worked on unique assets, and we have 3. First, with the acquisition of General Assembly, we have now the largest human resources solution scope in the industry. And we can engineer real solutions for any kind of problem, going from the temporary till the carryover placement and the risk killing. Also with Grow Together. Grow Together is not only a savings plan or a kind of regular action plan.
You will get more insight. But with Grow Together, we are fundamentally strengthening and transforming our core business, thanks to process optimization, reengineering and technology. And last but not least, as I said, we have now the most comprehensive portfolio of digital human resource platform, especially with Adia, YOS and Vectory. And there also we will hear Adam very soon. Now this is important now to recognize that the Adeco Group is not a general staffing company.
Today, I would say only 52% of our gross profit is coming from General Staffing and 48% from other solutions. It means that in the future, this part of solutions gross profit will continue to increase, and this will have a continued positive impact on our margin. Also, thanks to our broad solutions offering, we can now support our client and our candidates during the whole life cycle of their professional life or their professional existence as customers. And now also thanks to the Jolt acquisition, we are now in a global leading position, not only in career transition, but also in up and reskilling, which allow us to elevate our chain of compact to the C level because transformation is really a C level topic on the agenda of the C suite, not only to elevate the contact, but also to develop secure relationship. Now having said that, by working together all these solutions and these brands, we are creating ecosystem.
And what you see here on my right side is the global ecosystem of the Adeco Group. And it can perhaps seem a little bit complex, So that's why we will zoom together on one of the novel on the and I took the MODIS 1 as an example. And what we expect from all brands is to develop interconnection with the other brands, not only with the other brands, but also with the partners we have, the Microsoft, the LinkedIn and the Infosys of this world, but also the programs. And it's exactly what you see with MODIS. You see that MODIS is connected to the eHektaristan.
Why? Because we can transfer the candidates of eHektaristan directly to MODIS to find another job in IT or in engineering. Or if the assessment has proved that has
proven
that these candidates need an up or rescaling, no problem. They will transit to general assembly before being putting at work at MOBIS. The same with our partnership with Formula E and more particular, the new program we have launched, which is called Innovation Manager. And the Innovation Manager is a copy and paste of the CO for 1 month program, but just dedicated for technical profile. This year, we got first time, 1st year, this year, we got 2,000 excellent candidates, young candidates in IT and Engineering that we will be able not only to put at work at Formula E Organization, but to put at work at MODIS.
And you see CO for 1 month, the same. CO for 1 month is a source of candidates for our various brands, including for the technical profile for MODIS. And it's the same with Yoss! Because yes, a freelance can be active directly through the platform of Yoss, but also can be put at work through Modis, the customer of Motes. And the same for VETRI.
Adam will present this. But either we can use the candidate base of VETRI to put people at work through MODIS and the other way around, we have candidates of MODIS, which are very interesting for the battery customers. And you see that by creating this interaction between the brands and this connection between the brands, we are creating a very attractive recruitment platform for the candidates and for our Remember, last year, based on this context, we said our strategy going forward will be to perform, transform and innovate. And we said perform means driving the business forward in a very disciplined way, in a very returns focused way. Transform means strengthening the core business, enhancing clients' and candidates' journey experience and improving productivity by putting technology at work.
And finally, innovate means capturing opportunity growth either in existing markets or in new frontiers, adjacent markets. Now for you as investors, it means more revenue growth, strengthened margin and finally, our generation of more cash flow, allowing us to have a greater and more sustainable value for our shareholders, not only that, but also to guarantee a recession proof, progressive and attractive dividend. Because ultimately, our goal and our commitment is to deliver leading total shareholder return. And we are committed to do that. We are committed to drive this revenue growth by capturing market share in our core business, but also in adjacent market by putting our recipe and our operating models at work, by expanding into parts of the market we are not here today, idea in the small segment, JOS in the freelancing, battery in IT, but also add new frontiers.
General assembly is one example of them. We are committed to drive our margin growth through 2 channels. 1st, by putting growth together at work. And you see, you remember, we have a commitment to deliver EUR 250,000,000 savings or 100 basis points by 2020 on one hand, grow together and on the other hand, by developing new ventures, which are all margin accretive versus the current margin. And we are committed to deliver strong cash flow, allowing us, as said, to maintain a recession proof progressive dividend policy.
Our underlying performance is good, And we will come out in the investment of the out of the net investment phase in 2019 so that we can begin to show the results of our strategy. And you will see what my colleagues, Alex in U. K. And Christophe in France, are doing with this. So this strong cash flow we are generating allow us to deliver attractive returns to shareholders while investing in the future.
And the one who are and there are many who are following us since many years will recognize this slide. We presented to you these slides 2 years ago. This is our strategy and our policy regarding capital allocation. And you will notice that there is no single change. So going forward, we are we continue to be committed to return first to create strong cash flow and on the other side, to return excess cash to our shareholders.
And when we speak about cash flow, it's good to look at our balance sheet. You see that we have a strong balance sheet. And then once again, this year, by the end of the year, our net debt ratio our net debt to EBITA ratio will be around approximately 1%. And again, that's our dividend policy is really stress resistant. And with this, I leave the floor to Hans for more insight on the Perform pillar.
Thank you very much.
Thanks, Helene. Good morning. Let's start with discussing the 2018 performance. Our objective remains to broaden the growth across the group. France is stronger, and we're improving our market share.
In North America, General Staffing, we're making good progress on the growth agenda. We continue to deliver strong cost discipline and operating leverage while we're transforming the business and in a very exciting way. In Germany, Thule integration will take a little longer, and that is impacting the margin. Our strategic investments are in full swing, 25 basis points on Grow Together and IT, plus 25 basis points on the new digital ventures. On Grow Together, we'll provide an update, and we will deliver the first benefits in the second half of twenty eighteen.
With the new ventures, we're adding an exciting portfolio, providing new solutions for our customers. We're already getting great customer feedback. They need these type of solutions going forward. And as Helene mentioned, our balance sheet is strong, supporting the transformation. Investments.
This slide comes from the Investor Day of last year. This slide, we added the euro amounts to give a little bit more clarity. In essence, this slide is exactly the same as last year. So we remain committed to deliver the €250,000,000 altogether savings, and the total investment program over the 4 year period will be the same while we are making some additional investments in 2018. Recall, grow together is about strengthening the core of our business.
We're making some additional investments. Transitioning from this stand alone disjointed legacy IT environment to the world of connected, integrated and cloud is very exciting, but it took some additional investments this year. The new digital ventures mean an additional 25 basis points of investment. We're adding Adia. We're adding JOS.
We're adding General Assembly and Battery, all innovative solutions for our customers. And as Alain said, they fit very well in the Adecco 2019. If we come back to the performance, our growth is driven by the segmentation strategy. In France, we have improved our market share. We continue to have strong margin leadership.
We have a good balance between growth and margin and strengthened the segmentation strategy to support the growth. We're doing the same in the U. S. In the U. S, we're laying the foundation for strong growth going forward.
That takes time. We saw some first results. This again proves that our commercial strategy of segmentation is working. This is already in place in many other markets where we're delivering the growth. So we'll continue to drive the segmentation strategy to broaden the growth across the group and across customer segment.
The transformation before I talk to Tanfay, strong growth in the perm business, plus 18%. So that confirms that our strategy of building that growth pillar in professional staff and permanent recruiting is the delivering good results. As I said, our strategic investments are impacting the margin. We're investing now in Grow Together, IT and the Digital Ventures. And as we disclosed at the end of Q2, we have plus 40 basis points investment into Q3 and plus 30 into the 4th quarter.
So the investments we're making are also into the second half. The transition and the transformation to this new world is impacting our results. We're not growing in line with market in Germany, and that is impacting the company results. We're making the right investments for the future, which is impacting our margin. What you see is that Germany matters and the strategic investments are impacting the margin.
We're in the midst of the German integration of the AdecoTUYA business. That is impacting our margin by 20 basis points. The strategic investments are now in full swing, 50 basis points, 25 basis points on Grow Together and IT and 25 basis points on the digital ventures. We cannot look at the results excluding Germany and the investments. That's clear.
But what it does show is the opportunity to strengthen our margin going forward. The opportunity to get the performance back in the German general staffing business adds 20 basis points. Yes, this will take time, but remains our priority. On Grow Together, we will already deliver the first results in the second half of twenty eighteen. And with the new ventures, we're driving new revenue streams, which we will bring to profitability, which shows the opportunity of Adecco to strengthen the margin going forward by fixing Germany and delivering the returns on the strategic investments we're making today.
Alain already talked a little bit about this. If we look at the current trading, July August slowed to around 2%. And when we entered September, we saw a modest deceleration from that trend. In Germany, we're in the midst of that transformation. That is taking a little longer.
That is impacting our results, but we will continue to make the right investments in strengthening the business in Germany to become a solid number 2. Let's talk Transform and Grow together. Recall cost leadership is in our DNA. So when we came, we studied how can we bring that cost leadership to the next level. In 2016, we studied a multiple of brands.
We talked to candidates. We talked to clients. We talked to our people. And from that, build the Grow Together initiative. Grow Together is all about strengthening the core of our business.
It's bringing the Adecco business from a branch based model to a digital enabled model so we can go beyond that branch. Today, we will share with you where we are on Grow Together and how we deliver the €250,000,000 This is a slide which is very important because this is the foundation of Grow Together. We met our total value chain and activity system. Sales, how do we find the client? Recruiting, we need to find the candidate to fill the order.
And we have a lot of administrative processes, including time capture to invoice and cash collection. This is very important because we are at a very granular level like in the plant, laid out the full value chain and activity systems, which is the foundation for any big transformation. What we saw is where we were adding value to the customer already and the candidate and where through work process simplification, reengineering and technology, we could enhance the productivity to the next level. From this, we built the Grow Together program. And there are 3 key building blocks in this Grow Together program, as you see on this slide.
We renewed our performance management. And what does that mean? Today, we're much more data driven. We have much more granularity of performance management. So we know the P and L of small and medium.
We know the customer profitability to a much deeper level. And we know the cost of these activities. We even changed the chart of accounts, which was a big undertaking, so that we can track and set the budget at that level of position so we track the Grow Together benefits and we become more precise in our performance management. This is already bringing better results because if you look at our operating leverage today and you compare it to the first half of twenty fifteen when we weren't transforming, when we weren't making these investments, when we didn't Germany, we have been every year improving the productivity by 3%. So while we're transforming, we remain productive.
From that, you know the performance management and you have the clarity, comes process optimization. I've run plans in my life, and lean manufacturing works in the office. We use it in our on-site business, and Alex will give us some good examples on how this is helping the business. So process or reengineering, simplification is really driving results. And then comes technology.
We can apply technology to automate activities, to bring new technology into the business. And those three together are important. The clarity of the performance, the process optimization and the technology because if you combine the 3, you get better results. And we will show you that, that will give us €250,000,000 of savings. Technology is important, and we'll show you how we're applying technology around our key value chain: sales, recruiting and the middle and the back office.
Let's start with the middle and the back office. What this slide shows you that 29% of our people are working there. What this slide also shows you is this circle, which is 22%. What does that mean? It shows that we addressed with Grow Together 22% of the activity.
So we applied the method of the new performance management, the automatization and lean manufacturing on 22% of 29% of the activity system. We digitalized the time capture. You say, why haven't you done that before? Well, a true end to end digitalization of timesheets needs work with customers and candidates. Many people will say they have that.
But if you really look at that statistic, we have that in the U. S, in the U. K. We're building it in Germany, in Holland, France. We are very far on this.
That's the beginning because from time capture, you can go to time interpretation. And a lot of the time interpretation in the paper world was just being on the phone. But when you have digital time sheets, you can automate the time capture. If you bring the contracts of our clients from a paper based world to a digital world, you know much better in the system what we agreed also on the time agreements. So then you see if you bring those 3 together, how we fill that solutions, and Rob will talk about that.
Alex and Christoph will also talk about that. In the U. K. And the U. S, we have them in place, and the productivity is there.
We're rolling these client portals out going into France and Spain next year, and we're further leveraging data analytics because this is 30% of the workforce that people visit the right customer at the right point in time for the right opportunity because it's 30%. Still early days, but we address 13% of 30%. Recruiting. We don't talk a lot about recruiting, but the recruiting funnel is the interesting one because that's where we fill the order for our clients. We're bringing new candidate portals, which drive the experience and the productivity.
Frans will talk about it with Christoph, a very exciting progress on directly engaging with the candidates. Bots and artificial intelligence, we read a lot about that in the newspaper. We're bringing it into the business. We learned a lot from Maya, but we're also replicating other bots and IE technologies into the business. So that's 40% of the workforce, 14% the rest.
Now we're making investments. We have to be cognate that we're making these investments and we'll deliver the returns. I hope you have seen that we have a very robust, rigorous tracking of those benefits through the Perform and Transform agenda we're driving, And I'll show you how we do that in a minute. So the process improvement comes ahead of the technology, like in manufacturing. We have a clear I mean Henry Ford was the first one to figure that out, but everybody who applies that in manufacturing is always winning.
Simplification and optimization are the core recipes of strong productivity. We objectified Performance Management to a level which is good. And as I said, the underlying operating leverage of the company continues to be very strong while we're investing for the future. Co creation, we co create in 2 ways. 1, as Alain said, we co create with the Microsofts and the Infosyses, so we have the best partners with whom we co create, and we co create across the countries.
Otherwise, we reinvent, and reinvention is not a good idea. So if we have a good idea in France, how can we scale it across the business? Because the lens is something very important. We can drive scale into the business model, which locals will not be able to replicate. And that is the powerful part of our transformation of Grow Together.
If you go to the next, we will deliver €250,000,000 We track that project by project, activity by activity, and I'm showing it to you. If you see on the slide there, or maybe stand closer to it, you see that we track middle back office recruiting sales. We do that project by project, activity by activity. And we have the €50,000,000 for this year. I'm also transparent to show you that I have a gap of €40,000,000 next year, which I need to fill.
What is that gap? That is a gap where through our activity mapping, we have identified the opportunity, but we still need to work with IT, and that's our what we call AGX, the bringing new digital tools into the business. So we know what we're going to address. We just need to complete the projects. We will complete that to deliver the HONGO 20 in 20 19.
I just wanted you to show how we track it from our internal transparency so you understand how we're managing growth together. I am really excited because we're driving true productivity from the investments in Grow Together with the first benefits coming into the second half. We're really making progress on productivity. Now what I learned that when we become more productive, what do we do? We fill the order faster with a better candidate for our customer.
That's what we do because we spend 40% on recruiting, and we find the candidate faster and better. That means the engagement with the candidate is better because he gets, of course, he gets a better job faster. And with the new sales tools, we don't need to bore our clients with the wrong things because the value add discussion goes up. We will become more distinctive, differentiated. And that will drive true growth.
So that GDP growth milestone buyer hasn't gone away, it probably comes a little later. But we will be able to capture a higher size of the economy, and we will drive out the fragmentation. I am confident. I am confident with that distinction. And I'll give you one analogy.
We will show you ADIA, Factory, General Assembly and Joss. Look at their Net Promoter Scores. They are already into the new world. They are widely above classical recruiting companies net promoter score. So we'll get the productivity.
This will enhance the growth. And the locals can't replicate this because the data was working with Infosys, as Alain said. They won't we're investing big money at the moment, which we're realizing, but they won't be able to invest these type of amounts and scale it above the group. And that's why the co creation is so important. Thank you.
I want to give it now to Rob, who is our CIO, to give a little bit more color on the exciting work we're doing and examples on how we are really strengthening the IT landscape and infrastructure.
Good morning, everyone. My name is Rob James. I'm the Group CIO here at Adecco, accountable for IT. I joined the company almost exactly 2 years ago. And I guess, Alan, if you were here 2 years ago, what you would have been telling everyone here is we needed to shift the approach in IT.
We needed to stop trying to build everything ourselves internally, and we needed to partner with leading global technology partners. We needed to make the right choices on cloud based technologies, not the old on premise that's been problematic in this industry. And we needed to move super fast, super fast, okay? So that was the start point 2 years ago. The challenge for us, we had a highly fragmented IT landscape.
If you looked at infrastructure, it's different in every country. If you looked at our applications, they were incredibly old, primarily through underinvestment over many, many years, probably margin driven and probably not unique within this industry, okay? So the challenge for us is in the modern world, with margin continuing to be an ongoing challenge, we needed a major transformation in IT, and we needed to move fast. So what did we commit to doing? We committed to, okay, 1st and foremost, we need to modernize certainly our core applications and our core infrastructure.
We needed, right, to make sure that our branch offices had sufficient performance and reliability, right? If I go back to just one quarter in 2016, we had 158 outages. And Alex, that impacted and Christophe, that impacted your branches and their productivity as well, okay? We were in what we call we were in technical debt. We were technical debt, and we needed to invest, okay?
And that required an ambitious 3 year agenda that would allow us to put the kind of critical tools and capabilities in the hands of our branch offices that would allow us to invest and leverage digital innovation. You heard Hans talk about the ability with delivery bots to do outreach to candidates, to even screen candidates, okay? All of that would contribute to the Grow Together agenda. And what we would get out of it is the ability to have differentiated services for our clients, whether it's for our small clients or for our very large clients, in a way that a company of our size, it would be difficult for competition to scale up and do the same thing. We would get better decision making in the branch offices.
And I will talk about this later, but the ability for us now to get underlying metrics, not just the outputs, right, from what we do at branch office, but day to day underlying metrics that lets us optimize how we serve our candidates and how we serve our clients. That is a very exciting opportunity. The ability with new tools and capabilities to actually improve our net promoter score, right, which we also know drives our business and which there's room for improvement. And last but not least, when I first came here to the U. K.
And I went to Oxford Circus to a branch office there, I couldn't believe the amount of paper and the manual processes that our branch office colleagues had to do, okay? Golden opportunity, right, whether it's for timesheets or timesheet interpretation. So this is what we committed to doing. This is what we said we would get out of it. It was an ambitious 3 year agenda, and we needed to get out of technical debt, and we needed to invest, okay?
Now we've been focusing on the foundation in the last 21 months. That's since when we've been investing. And I want to share with you just several highlights, I think, that show some of the progress that we're making. The first one here I'm going to come back to, okay, because this is the one I'm really excited about. This is the one where you've heard it before, we've got a cutting edge approach.
But I'm telling you right now, let's talk about that and what we're doing on the front office and bringing in capabilities that I don't think anyone else is focusing on really on. The second bit, maybe surprisingly, is we've invested a lot actually in building leading IT capabilities. Some may question, why is that a big deal in our industry? Well, we have sensitive data, sensitive data on candidates and sensitive data on clients. And in today's world, with all of the cyber threats and attacks that you all read about, it's essential that we can look our clients and candidates in the eyes and say, hey, we've got the kind of leading capabilities you would expect from us, right?
And in this staffing industry, in 2 years, I've learned, you know what, many, many companies can't afford to put these kinds of capabilities. We've put advanced technology into 30,000 devices across the Adecco world in the last 18 months that help us with advanced threat monitoring and the ability to respond very quickly no matter where it is in the world. And if you've worked or you've read about security, it isn't the big countries usually, right, which is the entry point. It's some of the smaller countries with weaker capabilities. So we really have invested.
We think it's a competitive advantage that when we go and we talk to a customer about a global deal, this is something we should be talking about, and they should be looking at whoever's competing with us, have they done similar things. So competitive advantage, foundation in on IT security. We've signed major global partnerships with Microsoft. It's going to be a key company for us, with Salesforce, which I will talk about, but also global deals with Infosys on digital, with HCL on global infrastructure, with Accenture on front office and with TCS on back office, okay? And the purpose here is from those partners, we get technology, we get talent and we get scale, okay?
And in order to do a fast transformation of this kind, you have to have all three of those. So global partnerships in place. On the application infrastructure modernization and infrastructure, we've come a long way. In many of our branch offices, we've significantly improved the speed and improved the reliability. If I look back to 2016, and I mentioned the kind of outages we were getting, and actually that was accelerating, We've seen over a 60% improvement in reliability, right?
As now with investments, we start to bring up the liability and we bring down the number of outages and the time that it costs our branch office people. And then last but not least, what we've really been doing is defragmenting IT. And again, I've been around 35 years in IT in large companies. When you defragment IT, you release IT productivity, okay? So by having more consistency on global network, by managing data center hosting where you have to, but also moving everything to cloud, by establishing regional IT hubs where we can base our talent rather than fragment them all over the Adecco globe And by really focusing on global contracts with scale, you can release a lot of IT productivity.
And we're on track very much to do that within our 3 year plan through the work that we've done so far. So let's go to the slide, right, which doesn't look that exciting. But this is the one I'd like to talk about. So what are we doing really on the front office? So 2 years ago, when we stepped back, we said, wait a minute, the front office is really what touches clients and candidates.
And if we can have a big impact on that, this is where we would get the biggest return. If you look at our industry, what's everyone trying to do, right? I would say for the most part, everyone goes country by country, local packages. They're all closed. They get very old very quickly.
They hit a wall. It's difficult to integrate anything. If you want to do one new thing, if you want to do global pricing, right, and you've got 64 countries with different packages, it's really expensive and difficult to plug that in, okay? We see a lot of that in our industry. We don't think that's the right way, and we were a bit like that before.
Some companies have tried to build the all singing, all dancing single system. And I think maybe we were guilty of trying to do that 3 or 4 years ago. It doesn't work. It doesn't work in other industries. It's just too complicated when you do this, and it takes forever, okay?
So what we decided to do is we're not building 1 system. We're not having local different packages everywhere. We want to build with 1 technology, namely Salesforce, what we call an ecosystem, an IT ecosystem for our countries, okay? Now Salesforce is not going anywhere in the short term. Salesforce is open, right?
I can get any of my global partners to provide me with talent to supplement my own. I can develop internal talent that can do anything here within the Salesforce paradigm. But what we do with it with this ecosystem is, right, we take the branch office solution and we put that we implement that in sales force. We put nuances in for small, midsized, large clients, okay? It's all still on the same technology.
For our on-site, again, Roy, we will have nuances for our on-site all in the same. For our largest customers that want to do major staffing deals across the globe, again, it's all in the same ecosystem. When we want to put in our candidate portals to connect our candidates, it's in Salesforce. The clients, when they want to log in to look at handset timesheets, it's in Salesforce. The mobile apps that we develop, okay, layer on top of Salesforce.
So we have an open ecosystem that when it comes now to plugging in a new pricing approach, maybe it comes in, in one place. But there's sufficient flexibility for our local country markets. And again, it's a technology. It's not going anywhere in the short term as we've seen repeatedly with technology investments in our industry in the past. So that's kind of what we're trying to do here.
Now what we've done is our initial version of this, which primarily was focused on permanent staffing And our initial version on general staffing, which UK actually piloted, is in and running at the moment. And I will leave Alex to talk a little bit what that looks like. But as you heard from Hans, we're really starting to see now some of the benefits and productivity from Grow Together that we projected starting to come through. And the reason for that is we now have underlying metrics show us shows us really what's working in branch offices, not just the end outputs, but actually you're right. If we see 5 branch offices that are over performing, we can really look at the metrics that contribute to that and then replicate that elsewhere.
The last thing about this that's really interesting, so where we're at right now is our initial version is in place. We have about over 3,000 colleagues up and running on the system. We are actually in 20 countries. Many of those countries are quite small at moment. And where we are at the moment is in the process of deploying now to our larger countries like France and like Spain.
We plan to deploy at the end of this year. We're a little bit late on that, right? So we're probably going to move that into next year. That's what Hans referred to early in the presentation. But we're absolutely convinced this is the right strategy, right?
Now where does this lead us to in the future? Just imagine this right now, right? So we now have an open ecosystem. And in an open ecosystem, you can apply artificial intelligence, If you've got local packages in every country, good luck. You've got closed little pools of data.
You can't apply that directly at it. And so with Einstein, the artificial intelligence engine for Salesforce, what we want to be able to do is apply that against our data ecosystem in order that we can develop algorithms that allow for better decision making. So when someone's placing a candidate, at that point in time, Einstein will know exactly what is the optimal place you want to put this person for that individual and for the client. And that's a capability that we don't have today. So that's where we lead to with the ecosystem, and we think that's a big, big competitive advantage for us.
We just need to scale what we've worked so hard to put in over the last year or so. The lessons we've had from it is big change management, right? The system by itself is it's got to be the combination of working with our countries and branch offices, getting the right change, but giving them the kind of leading tools for the now and the tomorrow. And we're convinced this is the right strategy. And maybe last but not least, how does this relate to what we do with the Digital Ventures, okay?
And as you know, on the Digital Ventures, what we've done is we've brought into the house now new capabilities, new models through acquisition, two examples being general assembly and Vetri that we're very excited about. And we've also co created with some of our global partners when we look at ARIA and when we look at YOS, okay? Now if we look at the synergies between what we're doing with the branch office world and with our ventures world, is really interesting, right? Number 1, with our acquisitions, we bring in some new AI capabilities that we leverage back into what we're doing on the front office. That's fantastic, okay?
When we look the other way, each of our new ventures are small. They need to be able to address IT security. They need to be able to address architecture and scaling up, right? They need to be able to address GDPR capabilities that Adecco brings to the party and can help there. The global partnerships go both ways.
We have great partnerships with Microsoft, both on co creation as well as what we do internally and with our other partners. And that really allows us to go super fast. When we look at Adia that we built with Infosys, the mobile app functionality right, within Ardia is directly replicated back into our front office mobile app, okay? So we get direct synergies that way. And last but not least, we get fantastic exchanges on talent, right, as we look between our new companies, the young guys, as I like to call them, and the more traditional IT.
So taking a step back, in summary, we're implementing against what is an ambitious 3 year transformation. We're running a bit late, in particular, on the front office, but we're convinced absolutely the strategy is the right strategy. And this will deliver not just productivity and capability uplift for the company, it also delivers hard core IT savings as well in a less fragmented world. So that's it for me. I guess, Nick, now we go to the break, right?
Or over to you.
So we'll take a 15 minute coffee break now and come back and hear from France and the U. K. And also some of the new ventures at 10:30, please. Thanks.
Great to have the opportunity today to give you a follow-up of what we have launched in France those 12 last months after our event last year. For sure, you know that France is an important country for our industry, one of the main one. And clearly, it's not a surprise, we want to reinforce our leadership both in terms of value and in terms of volume. To achieve this challenge, clearly, we have to change our way to deliver some of our services and to give to get the support of technology as we will see just after. Clearly, it's a question of technology, but it's a question of product also and the way we address the new expectation of our market.
That's clearly the reason why of our Grow Together in France program. Let's see the different opportunities we have today in our business. It's the case in France, but probably also in other countries. First of all, market expectations are evolving very fast. First of all, the one of our clients.
They need, 1st, more and more flexibility, not only through temp but also through freelance, outsourcing, apprenticeship, open ended contract and so on. And it's a huge opportunity when you are we are today the clear leader for temp and we are such an area of development in other types of flexibility. They need also more and more qualified people. It's the clear consequence of their own automation and digitalization, and it's a great opportunity to bring them with more value because it's the clear hurdle for the growth. In front of those client expectations, one of our candidates are evolving very fast also.
And you can see that in the Sudhai you have between your hands. Our candidates are more and more open minded to flexible contracts, even in France, provided that we provide them with better employability and there is sense in front of their own project. So market gives us a lot of opportunities. But we will see that technology gives us also a lot of opportunities, especially to leverage productivity and also to get more added value for our client. To summarize, our Grow Together project in France is a great platform to tackle those opportunities, to improve our productivity in order to get more added value in front of our clients and candidates instead of administrative and to create clear different And to create clear differentiators, as Alain mentioned it this morning, by creating new products and new services with more added value for our clients and a clear differentiator not to become a commodity in our markets.
Let's have a look at a couple of very operational initiatives we have today in France. As I said, productivity is a key pillar of our transformation. The first initiative is based on the idea to fully digitalize the paper documents we generate in each of our countries. In France, each year, our group generates more than 30,000,000 paper documents. It's not only a question of printing cost, but it's also a question of time dedicated by our team in our branches to deliver these paper documents.
This year, we will achieve the digitalization of more than 19,000,000 paper documents, which represents the equivalent of 170 full time employees in our network. It's time to feed our growth. And you know it's our one of our key challenge in France. The second initiative is based on the automation of a part of our calls. Through a new technology called aero, we manage now more than 2,000,000 calls without any human touch, which represents the equivalent of 38 full time employee.
Those two examples are among the main one to get those productivity gain. And our goal is clearly to free up time in order to feed our growth and to provide more added value for our clients. To get productivity, technology is key. Our candidate application Adecco EMUA has enabled us to leverage our growth and new habits for our clients, but also new processes for our own colleagues. Remember, last year, I spoke about AdecoAIMOIR as a new candidate application with first results after 6 months.
We had 12,000 downloads. This year after 1 year, at Decoie Moi, our candidate application registered more than 350,000 downloads, more than 120,000 unique users per month during the Q2 and registered also more than 250 1,000 operations transferred from our branches to our candidate application. And Adecoemois today is able to manage more than 26 different functionalities. And before the end of this year, we will deliver new application in addition. Clearly, and I come back to what was mentioned by Hans this morning, it's a clear concept of the co creation because this application has gathered the best of the functionalities we have developed both in Spain and in France.
And based on those first successes, it's time today now to scale it up and to deliver this application in other countries in order to get the same gains of productivity. So technology is key. But technology is also a learning and experimentation where we learn a lot with as soon as possible the goal to succeed. And for me, in France, Aloha is clearly a great example of that. Our chatbot Aloha has been launched 1 year ago.
Our goal was clear. It was to source new types of candidates, 1st. And second, the goal was also to improve our registration process, both in term of speed and in terms of efficiency to get the best candidate on the market. This year, some few months ago, Aloha has been awarded as the best chatbot in France across all industries, not only the staffing one. And clearly, it was a very nice surprise, but not really a surprise when you see the recipe of Aloha.
Three main reasons for this success. 1st of all, Aloha provides to our candidates a very nice experience, a great experience because it gives us time to dedicate to their professional orientation, and we need that in the fast changing world of employment. 2nd, Aloha has been placed on Facebook Messenger, and clearly, it meets perfectly the expectation of the new generation, very comfortable with such a digital platform. And at least for us, Aloha has enabled to improve our efficiency to get the best candidates of the market and not only a lot of candidates in the market. Clearly, with this technology, we are very pleased of this innovation and the result generated by this innovation.
And we want to go further because as you see on the screen, it's not only now a question of quality of candidate, but it's also a question of quantity of qualitative candidate we tracked, thanks to this technology. So technology is key and technology is key also to leverage the experience of our clients. Remember last year, spoke about our new client portal, Mail, Mona Jean Salin in French, my branch online. It was the 1st digital portal of our story in France with the goal both to get a nice experience for our clients but also to generate sales development in addition of the one of our branches. 1 year after, Mael is no more at a proof of concept stage.
This platform has convinced more and more clients during the year, and clearly, we have nice results. 1st, as you can see, 69% of the clients driven by this platform are new one. They were not client of Adecco before. Probably a reason why 50% of those clients placed their order on this platform outside our opening hours of our branches over the weekend. And Cherry and the Cake today, the gross margin generated by those clients is clearly above the one of our physical network due to a strong exposure to small segments for sure, but due to a strong NPS also for the users of this platform.
This year, we will exceed €10,000,000 of revenue. So it's not a huge figure when you know the figures of France. But at the same time, we have a sustainable growth. Each quarter now, we deliver a growth with a factor which multiply the revenue of the same quarter last year by 2 point 7, and each quarter, we deliver the same growth. Nice promise for next year.
So technology is key and is clearly a pillar of our transformation in the Grow Together journey. But the product diversity is also another pillar of our transformation. To cope with the fast changing world of employment, we have created a lot of new product and services in order to meet the new expectation, which brings more added value to our clients against bigger gross margin. As we want to develop those products very fast, we have changed for a part the way we produce our services in our branches, both in our urban areas but also in the rural one. As a consequence, our exposure, as you can see to the screen, to those new products is increasing very fast.
Our exposure to qualified people, part of the future of work. Our exposure also to perm placement, our exposure to open ended contract, more than 10% of our attempt will be on an open ended contract end of this year. Our exposure to apprenticeship also, our exposure to outsourcing. All those pillars are increasing very fast. And clearly, we experienced a double and sometimes a triple digit growth in our portfolio of product.
And it's good for our profitability because those gross margins are clearly above the one of our traditional classical general saving temp. Among those different products, and it's another key challenge for us, we have some key differentiator in our very competitive landscape. Let's take 2 examples. The first one is called PCP. PCP, it's a shared talent pool.
We take between 50 150 unskilled people. We bring them skills to become qualified people. And we share those qualified people between 5 10 clients no more, bringing new qualification in front of skill scarcity. And at the end, when they need to recruit, they can induce them in their own organization against perm fee. Clearly, these new types of delivery is a very nice one to tackle the scarcity we have to face with in our countries.
The school for apprenticeships is another differentiator also in France. Last year, we have trained more than 6,000 different people for revenue of more than €50,000,000 with a very nice gross margin rate. And at the same time, we deliver a social promise for the employment environment. For sure, product diversity is also a pillar of our transformation in France in addition to the technology. We are very pleased with this first step of our transformation, but we still have a lot of ambition for the future based on those first results.
Productivity remains a key focus we have. And for next year, we want to reach a digitalization of 83% of our paper document, an additional gain of productivity of more than 1%. We want also and we work for it to transfer more than 1,000,000 operations from our branches to our candidate but also client application, another big gain of productivity. And for sure, we will have the support of a new front office tool, very important to tackle this efficiency among our team. Sales is also in the middle of our focus.
Next year, our goal is to exceed €30,000,000 with Monet Jean Sanslin with MAIL. But in addition, we want to leverage the new digital ventures. First of all, ADEA, which will be launched in France next year, but also general assembly, which could be a new skill we will develop in our school for apprenticeship, a nice promise also because we need a lot of digital skills in our countries and our clients require that very strongly. And at least, we want to implement and to develop very fast those products I speak about just before. And we have an expectation of a double digit growth for each of them.
And our goal is to increase the weight of these products in our recipe, in our product portfolio in order to grow our gross profit as a whole. To summarize, clearly, Grow Together is a great platform and a great way to tackle all opportunities, both to mitigate pricing pressure but also to nurture our growth and to prospect and to supply the future of work with very added value HR solution. Thank you for your attention. Let me introduce and invite Alex, who will speak about the implementation of Roll Together in U. K.
Good morning, everyone. So my name is Alex Fleming. So I'm the Managing Director of the Adecco UK Business. And I'm here today to talk to you about 2 initiatives. 1 is Perform, the lean methodology that we've implemented and also the implementation of Connect, which is our integrated front office system that Rob talked about earlier today.
So just to give you a little bit of landscape on the UK. So we have about 6% market share, incredibly fragmented market, very, very competitive. And I think we don't have our competitors are not typically the traditional competitors. They are the local independent niche players, and they vary from north to south to east to west throughout the UK. We segment the business into looking after small and medium clients, which typically our branches look after these clients throughout the UK and also our large clients in Adecco Corporate and our public sector, which is typically the volume recruitment on on-site or large volume requirements.
And we have different challenges with both of these two areas. For our small and medium clients, it's really about the speed of finding that candidate. The client is not necessarily loyal to one brand over another. It's about having the right candidate with the right skills the fastest. In the large clients, slightly different challenge.
We are constantly being pressured around our margin in the UK market. And therefore, it really is about us centralizing and really automating in order for us to be able to reduce that cost to serve as much as possible to be able stay in that market and be competitive. So the first thing that we have introduced is the Perform lean methodology. And as Hans mentioned earlier, this is all about simplification. It's about process optimization, but also it's about us really having continuity and consistent working practices across the business.
And more than that, it's about accountability. What Perform has done is really given every colleague that accountability. But of course, it needs constant management rigor all the time, and that's something that we've worked very, very hard on to make sure we gain that consistency. And this for us was the precursor to us rolling out our integrated front office system because we really needed to have that consistency and that management rigor within the business in order for us to be able to get the value out of the front office new system. And so we rolled this out for the front, middle and back office, and it's one of the first areas to roll out for the front office, and that's where we're really seeing the greatest benefits.
There's 10 elements to high performing teams, and it takes about 12 week period to roll it out. And I suppose the key benefits that we're really seeing here is 22% reduction in time to hire in our volume clients, so in our on sites and in our large client population and also more time for the middle and back office, so 15% more time generated for the middle and back office. And also the candidate to cash collection, we've reduced the DSO to 43 days, which is now well above the average for the group. And also equal efficiencies also in the front office too. So as a prerequisite, Perform rolled out.
In February of this year, we rolled out the integrated front office. So the 1st country to go live with the pilot of the new Connect system in the UK. And I think the real power of Connect is in conjunction with Perform. These 2 absolutely go hand in hand to get that real improvement culture. We had very much outdated legacy systems.
We didn't have one candidate database, so the systems weren't connected. So we didn't have access to all candidates previously across every branch, across every brand in the UK. And loads of manual processes, loads of spreadsheet work taking up valuable time that we could have been in front of our clients and our candidates. So really, we wanted to give the front office that time back to be in front of the customer. So one CRM system, candidate and client portals, also applicant tracking systems and the digitalization of timesheets, the key real benefits of this new front office system.
And what we found is that it has given 30% more time back to our front office staff because it has really helped to take out the admin processes in and around payroll in particular and other processes that are now automated within the system. So that's given our client facing colleagues at least an hour more every day in order to be in front of our clients and 20% more time to dedicate to recruiting, so to spend with our candidates and to improve that candidate journey that is incredibly important and where we need to make sure that we are constantly evolving that solution. We are in the first instance, we were adding in and around about 3,000 candidates every single week. And recent statistics are showing now that, that has moved to 10,000 candidates. So we now have since February, we have now 269,000 candidates on the database, and that is just accelerating and improving all the time.
And this for me is where I see the real benefit. So we not only have access to more candidates, it enables those candidates now to also have scale and flexibility in terms of where they work because it's an integrated system, and it allows us to be able to be quicker. So we're able to find those candidates faster than those local competitors, we're able to scale much, much more quickly in the large clients. So in terms of the time frame of doing this, so we launched in February, and we've just put our final wave live onto the system, which was in August. And we're starting to see the greatest benefits in the early adopters.
So the early stages are giving us the greatest benefits. And this is where I think it's really exciting, and this is where I feel we have a real opportunity for the future, quarter 4 going into next year because some of the people have only just gone on to this integrated front office system. And therefore, the benefits are just going to accelerate as we move further into next year. But it's that speed and our ability to be able to find a better candidate that is really what is going to differentiate us. The client ultimately, locally, is, as we said, is not loyal to one brand over another, and therefore, they want the fastest candidate and the best candidate.
And therefore, I believe the system is giving us that edge that we haven't previously had. It also gives us this ability to charge a premium. And I think this is really important. In a candidate scarce market, it gives us this opportunity to be able to raise the price. And again, we've seen significant improvement as a result of the system and us working specifically in and around knowing that we can be faster and more agile with our candidate.
I think also leveraging the scale of the Adecco Group through technology. Rob mentioned earlier that we that this new integrated front office system is on sales force. There are so many add ons that we haven't even yet seen and constant upgrades and improvements that we will be able to benefit from as we go forward. And I think in terms of the way that we benefit more from our larger clients, it's more around us being able to automate and centralize. And again, it's about that speed because it means that we can reduce our cost to serve.
And that is incredibly important for us to stay competitive in the UK in that large client space with our local competitors undercutting us all the time. So I guess as a summary, it's the connect and perform together that is the powerful combination. It makes us far more sustainable and it makes us helps us structurally to be able to improve the profitability and growth in the UK, which is the all important part. And I'm really, really excited to see how the next phase pans out, and I know it is going to give us increased growth next year. Thank you.
Thank you, Hans. Thank you, Hans. Thank you, Alex. Thank you, Christophe. Now we are leaving the perform part, the transform part to now deep dive in the innovate.
Remember, perform, transform and innovate. And again, flashback, when we met last year in London, I presented to you a clear strategy around our digital innovation goals. Again, our intention was thanks to technology, thanks to digital, to leverage the megatrends, not only through technology, but also to address the upskilling and the reskilling parts. Now 12 months later, where are we? 12 months later, we have 4 new concepts, and they are here on the screen.
First of all, we are in the market we have created, Adia. And by the way, you will meet Ernesto. And Ernesto was in the top 5 of the CFO 1 month 2 years ago. He was in the top 5 finalists, and then he joined our company. And a few months later, he came to me and to Federico Vionnet, and he told us, I have a great idea.
I am from the new generation. We should create a fully digital temporary staffing company. 2 years later, thanks to the co creation with Infosys, his idea, his team, we are already in 3 countries, and you have heard we will open 4 countries. I would say that's also the combination of talent, co creation and ideas. You will see also now you won't see here today because we are at really early stage.
But again, freelancing, gig market, a huge opportunity in the freelance market. So since now February of this year, we have launched in one country in France the platform Yoss that we have co created with Microsoft. And again, I'm sure next year you will hear much more about Yoss and the progress of this freelance platform we have co created with this tech giant. What you will hear right now, it's permanent recruitment and especially what Adam and his co founder Brett had as an idea some years ago to really leverage technology in the permanent recruitment. Permanent recruitment is a very transactional business.
And this is the ideal way or the ideal field to leverage technology, thanks to artificial intelligence. And Adam and Brett have created this company, Vetri in New York, which is able to really offer to their customers, all customers now, a zero touch recruitment process. And then the last acquisition was General Assembly. And remember, we told you that upskilling and reskilling was extremely important as such, but also that there were a lot of synergies with our various brands. By the way, when we did the study about upskilling and reskilling, we saw that this function was important for 10 out of our 14 brands.
And you will hear today Jake Schwartz, who is one of the co founder and now the CEO of General Assembly, which is a little bit more mature. They are 6 or 7 years old. And in the meantime, they are the global leader in the up and rescaling for digital competencies. Now when we look back at the last 12 months and what we have done in this field, I told you in my introduction, we have created, we have acquired the most comprehensive human resource solutions portfolio in the digital field of this industry. But we went even further.
We are convinced that we have created a so called unfair advantage. And what is about this unfair advantage? This unfair advantage is the combination first of all three d, the domain knowledge together with the data, the richness of the data and the distribution network. And when you combine the 3 and you put on top of this the capability to co create with tech global tech companies like Infosys, Microsoft and Salesforce, you create this kind of unfair advantage because you can scale up faster and cheaper than any other competitors in the world and especially towards the small competitors. Because yes, we can leverage very rapidly our deep local market understanding.
We can leverage very rapidly all candidates, all local candidates and all local companies we have. So a huge asset we are leveraging through the new ventures. And by the way, this is the reason these are the reasons why or behind the rationale of Adam and Brett, but also Jake, when they came to us and they wanted to partner with us. Now for sure, you see here, these new ventures are requesting investment. And today, we spend about 25 bps, 25 basis point of our margin to develop them.
This is the equivalent of 5% of our profitability. But we firmly believe this is a great, a great investment for the future as all of these ventures are value accretive for the medium term. And with this, I'll leave the floor to Adam to present us the concept of VETRI. Adam, the floor is yours. Thank you.
All right.
Welcome to the high energy, fast talking, jeans wearing, New Ventures portion of today's program. So I'm Adam Goldstein, the co founder of Vettery. And so today, I have 3 real goals. One is I want to introduce you to Vettery. I want you to understand a little bit more about what we do and try to help explain that.
I know in the Q and A session after, we can go in a little bit deeper, too. 2 is I want to help describe the technology behind what we've used to build the company and kind of why it works and why the experience from both the candidate and the client side is so good. And then 3rd is, I want to show you some of the traction that we've made and some of the progress and help you really start to piece all these things together to understand why Vetere and the marketplace concept is going to be so big. All right. So Vettery, we are a talent marketplace, and we aim to directly connect the Kenneths and the clients together.
And we do this across 3 main verticals today, with technology being by far our biggest one. But we do it across technology, sales and then also finance. And these are 3 pretty different markets with some different characteristics. And so we've learned a lot by kind of combining those 3. But what is a marketplace?
Market, and specifically across permanent placement, which we really play in, and specifically across permanent placement, which we really play in, you have 3 kind of or I guess, 2 real categories today with marketplaces being the 3rd. First, you have sort of your do it yourself model, which is like a LinkedIn, right? Where if you want a lower cost option, you can go out there and you can do it yourself and you can recruit the people and you can spend a lot of time, right? It doesn't cost you a lot of money. The second option is to go on the other end of the spectrum, which is to hire a full service agency to do it, which is more expensive but less time.
And now enter the marketplace, which comes in the middle of these 2 and really helps to expand kind of the options and allows you as the customer to do it yourself and do it in a really time and time and time. A So I'm going to walk you through the user story of both a candidate and a client using Vetter. And I'll try to help you understand sort of what we're doing and why it's working so well. So the VETERI platform, you log on to it as a client and you can see the candidates fully transparent, which is interesting because that's different than a traditional recruiting platform. It's sort of almost like LinkedIn, except there's much less candidates, right?
Today, we have about 20,000 candidates on the platform. So imagine if you logged on to, let's call it, Vettery, this platform, Everybody's qualified, they're really good, and they're all willing to talk to you. That's pretty cool. So I'll give you the user story of a candidate. So the question that we ask our candidates and the reason why they're signing up and signing up in droves is we ask them, would you be interested in understanding which opportunities are available to you?
How much those companies will be willing to pay you and the title they'd be willing to give you? It'll take you 90 seconds to sign up. Is that interesting? You want to see? You don't have to go on any interview if you don't want to.
But are you curious? And most people say, Yes, sure. That sounds pretty interesting. I'll check it out. Why not?
It's not very much of a time commitment. And they sign up. And now they sign up 90 seconds and they start getting all this information back. And in a 5 day period, you get 5, 10, 20 companies that sends you what we call an interview request or request to come interview with the company. With all this information, so you see, oh my goodness, 20 companies, some big, some small.
Wow, I'm making $100,000 now. I didn't realize I could do the same exact thing another company for $150,000 That's pretty interesting. Or wow, I didn't realize that Uber's Autonomous division was interested in me or my profile, my background would actually work for that. That's really exciting. So maybe I will go and actually interview there.
So what turns what starts out as almost this curiosity oftentimes turns into a full blown recruiting process. And so that simple just access to employers is really driving candidates to do this. The experience that the candidates get on the platform is what drives them all in for a relatively low cost. And so it's that mousetrap, this new model that's really just attracting all these new candidates to it. But the essence of price discovery is actually a really new concept for people.
It's really hard to understand that. We all work hard. We all are excited about our jobs. But are we compensated fairly? Who knows?
How do we figure that out? We can go to an anonymous posting site to try to understand that. But what about real information? Understand that. But what about real information that can tell you from other companies that would actually pay you that?
That's really interesting. Now imagine you could do all that and control the process where someone's is interesting. Now imagine you could do all that and control the process or someone's not going to a broker's not going to heavy handedly try to convince you to do stuff. You can do it. You can go on the interviews if you want or you cannot.
It's totally up to you. That's the candidate's user story on VetterE, which I think is pretty exciting. On the employer side. So from an employer perspective, take a user story of we're a company, we have to hire somebody quickly. Let's assume it's the technology front.
It's really hard to find candidates. Where am I going to get these candidates from? I log on to Vettery, and I see, wow, here's a huge list of candidates. I have a lot of transparency in here I never got to see before. I ask the question, are these candidates any good?
And then you start to look at their profiles. You're like, oh, my goodness, there's hundreds of Google engineers in here. I've never seen this collection of high quality candidates before ever assembled in one place. Are these candidates really willing to talk to me? Try it.
You push one button to request an interview with a candidate. And 60% of the time, those candidates will go on a 1st round interview with you. It's a really high level of engagement. It's almost 30 times as high as a traditional kind of platform where you would do a kind of a blind outreach on. And so that's pretty incredible.
So now you can control your whole process. You can reach out to as many candidates as you want. You can do it on your time. It's flexible. It's open whenever you feel like it.
And it starts to feel like this, wow, this is this process I can control as a company. And the user experience of that is just wonderful. So today, Vetter has onboarded about 10,000 companies. We started the business about 3.5 years ago. So 10,000 companies in 3.5 years is actually a lot.
But Vetter will probably onboard another 10,000 companies between now and the end of the year. That's how fast it's going. And so when the companies come on
to the
platform, they are vetted for what we kind of want to make sure that the candidates are going to have a good experience, too. So we vet them not to just make sure that they have open roles, but that they can pay market level rates of compensation, that there are companies that our candidates would be interested in. So they are organizations that would be attractive to very high quality talent like Bettery has. We get thousands and tens of thousands of applications, but we only select the top 5% of candidates to actually come onto the platform. So on a weekly basis, we put today, we're up to about 1100 candidates per week.
2 years ago, that was like 100 candidates per week. So 1100 to us is actually a lot. There's about 20,000 candidates in total on there. When I walk through pricing, I'll help you understand how much what kind of value that really is on there. So the platform was built to really operate autonomously.
So if you want, you can go on to the platform, interview the candidates, never talk to anybody from Vetter outside of the initial just being onboarded us vetting you. But we do actually provide support today too. And the reason we do that a lot of our focus today is really on adoption. And so if you think back to the 1990s, when the online travel agencies really just formed, it was an overwhelming experience, right? You try to book a flight by yourself for the first time from London to New York, from Heathrow to JFK, and you see there's like 800 options.
That's like super overwhelming when you've never seen that before. That's like pretty scary. And so we offer the ability to help companies when they're looking from candidates, when they see, oh my god, 20,000 candidates? That seems like a lot. We help them understand how to filter, how to how the machine learning works, how the more they use the platform, the greater it will be.
So we do offer support. But over time, you will see that the autonomy that's built into the platform really just scales up pretty infinitely. Now VETERI operates on a regional basis. So we launch markets 1 at a time and in a regional specific basis because we are a marketplace. So candidates tend to not want to move across from city to city.
It's harder to place somebody that's a relocation than a non relocation. And so what we're trying to do in this marketplace is balance supply and demand. And so we need to make sure that the candidates have a really good experience and the clients have a really good experience. So if you take another marketplace, as an example, like eBay, and if you logged on to eBay and let's say you wanted to buy a bicycle, there were no bicycles on eBay, you wouldn't go back to eBay. That's kind of annoying.
On Vettery, when our clients come, we want to make sure there's enough ample supply within the specific things that they're looking for. So if you're looking for something that's specific the technology side, let's say, like a back end Python developer, we would have that. But also, if you're jet.com and the whole platform is built on F, you want an F developer, which extremely rare, we will have that too. And so we balance supply and demand. And because we do that, we make sure we specifically we go city by city to do that.
So we launched initially in New York. We spent a full year there. And then we opened San Francisco. Now we have about 14 markets open with London being our 1st international market, which we launched at the beginning of the year, which has done very well. We'll launch about 11 new markets internationally next year, so outside of the U.
S, and then an additional 50 markets inside the U. S. That are much smaller cities, as we're really starting to build out this national brand in the U. S. So our pricing.
So we have 2 different ways that we price. But really, most of our clients end up going towards one of the methods. So our standard pricing is a freemium model. So this is our pitch to the clients. Hey, I know you really need to make these hires.
We've got all the talent. Want to take a look? It's free. It doesn't cost you anything to look. Oh, by the way, literally the best technology companies in the world use it.
Amazon, Uber, the best companies. You want to take a look? Sure. So they go and they take a look. We say, okay, you can even interview our candidates.
It doesn't cost you anything. It will only cost you something if you make a hire. Cost you 15% of the candidate's 1st year base salary. Our average base salary is about $120,000 so it's about 18,000 dollars So if we think back to, okay, there's 20,000 candidates on the platform today, all engaged, all high quality $18,000 That's the inventory that exists. It's almost $400,000,000 of inventory that effectively exists.
So it's a huge it's actually a big number if they're placeable candidates, right? So that's how we get the clients to come in. Now once the clients start using us and they start saying, okay, I have 10 candidates in process, they have a decent amount of numbers in process, someone from the sales team will call the candidate the client up and say, hey, look, don't pay us on an individual one off basis. If you're going to make a hire from us, you should sign up for our subscription, which is where most of our clients end up paying us. So the majority of our revenues, the vast majority of revenues all end up coming from our unlimited hires over the time period.
So it ends up being a really good deal. And we're trying to really kind of make sure the price is something that's very attractive to them. Today, we don't try to optimize for price. I think most sort of new ventures don't try to do that. I think what most are trying to do is focus around adoption.
Because once the clients use us, they get addicted. It's the same reason why when most people when in the 1990s, they started going to the online travel agencies, they end up still today, most people will book their flights online. It's a very transactional type of opportunity. That's the same thing as Alain mentioned. Permanent place recruiting is very transactional.
And so if we can get them coming back to the platform, used to logging on, making the interview requests, not having to talk to anybody and all of a sudden becomes really easy and it's really cost effective, it ends up being a pretty a solution that becomes a really permanent part of their process. So this chart here, I want to show you this chart on new employers that we're adding on a weekly basis. This chart ends really in August. It's already out of date, and meaning the number is actually way higher than this now. So it's like hard to keep redoing the graphs because the numbers keep working.
So this concept of helping people hire people very quickly, giving them full insight and transparency to it, giving them full control over the platform, even just looking at the market and seeing full transparency what even exists, people just want to be on the platform. And so we've been onboarding more and more companies on the platform. And by the way, candidate becomes client and client becomes candidate very quickly in this business. So as we've grown and the multiplier factor has really been pretty incredible. We probably add about 150 new clients per day today.
It's about what we're adding. So it's been very effective in terms of us being able to add new companies onto the platform. Again, we are only in 14 geographies right now. They happen to be large geographies. They're not small cities, but it's only 14.
So the opportunity here is incredible. The beautiful thing about HR tech is once the product works, it's basically wash, rinse and repeat, right? And so you can scale it from city to city. You can scale it from location to location doing roughly the same thing. And so what worked in New York and what worked in San Francisco worked in Chicago and L.
A. And Boston and D. C. And what's now working in London, we're hopeful will work in the rest of the U. K.
And we're going to keep doing that across the globe, and I think these numbers will continue to shoot up. Some additional key performance indicators that I thought would be helpful to discuss would be starting on our top of our funnel, sort of this metric that we all look at, what we call interview requests. So that's, if you remember, a company logs on to the platform and they request an interview with a candidate. So as of the end of August, it was about almost 9,000. Last week, we did about 4,000 interview requests, just to give you a sense for, again, just how all these things scale.
So 4,000 interview requests, roughly 60% interview acceptance rates. You can just think of how many candidates are going into interviews at just in a week, right? It's pretty incredible. And so the chart kind of speaks for itself. This is roughly across what we call an active hiring manager, would be a company that actually does make an interview request.
So it's roughly across 4 would be about 400 or so companies on a weekly basis. And sometimes companies come back every week, sometimes they come back once a month, every other week. So it depends how many candidates they have in the process, they manage their workflow that way. All right. So I want to switch over to the technology side of things.
So I want to help everybody understand the important factors that go into really building and scaling a marketplace like this. And a lot of it has to do with making sure the processes are repeatable and scalable, and a lot of that will come down to the artificial intelligence capabilities we're building. So when we think about what Vetter is focused on, we call it the core recruiting engine. So we call these 4 kind of key things over here: candidate sourcing, screening and curation, matchmaking and ultimately hires. What Bettery is not focusing on today is all the post automation stuff.
So that's basically everything else, right? And you'll hear a bunch of the other groups that will focus on that, which is very hard, very valuable, just not the stuff that we're focusing on today.
So what we want to
do is make sure the machine can accurately source candidates, can screen those candidates and can match those candidates. So how do we do that without humans doing that? And the way we do that is through AI. So we've developed a bunch of different AI models that we roll up into 1 we've really kind of humanized it, one central brain that we call Vicky. And so Vicky is really taking the best of all these different kind of pieces, putting it all together and trying to make it really useful for our companies.
So they're spending a very little amount of time on the platform and hiring very high quality candidates, again, for a very low cost. So I'll walk you through like an example of kind of how all this stuff is working. So this is an example of Capital One, which is a client.
So Viki is the
central AI that we've built. And so we think about things like candidate sourcing. Candidate sourcing at Vettire is all digital. There's no one picking up a phone, calling candidates trying to convince them to come on. The product itself is has a viral nature to it though, because of the curiosity of the business model.
Most people are just would say, sure, I'd love to see which other companies are interested in me and how much they pay me. Sure. If that actually works, I'll do it. So imagine that, let's say Ernesto did that, and Ernesto got 20 interview requests. There's no way Ernesto is not telling all his friends about that.
That's just too cool. Just, hey, you got to try this, see what you get. How cool is that? And other people come, and then they do it. Now because all there's the viral component of it, but the other component of the digital side, we do advertise from a digital perspective and we do other things in order to attract candidates to come to the platform.
Now each of the candidates that come in are then broken down, and we try to understand all the different attributes behind those candidates. All that stuff is then pumped into the central kind of core of the technology platform. And each time that there is a development on the candidate goes through the pipeline, it's another piece of data that we record that we then understand can help refine kind of this process. So what Vetere ultimately is kind of becoming is search for people. We're trying to make sure the right people are in front of the right companies.
If I was if we just had everybody on there and you could fish through it, it'd just be LinkedIn. LinkedIn is extremely time intensive, incredible platform, very valuable, one of the most valuable technology tools in the HR space, but we're trying to make it very time efficient. LinkedIn took you a very long time to find people that you want that will actually talk to you. So we source the candidates. The candidates then come in and we'll start by what we think recommending a candidate to a client.
So let's say we recommend a candidate to Capital One. The company will then view the profile and either interview them or not, but that's really relevant important information. It's the same thing a human recruiter does. I might have a really attractive candidate. The candidate went to Stanford and worked at Google.
That's probably a pretty decent shot. It's going to be a high quality technology candidate, an engineer. But if I sent that candidate out to 3 companies and they interviewed there and the candidate got denied 3 times, as a recruiter, I probably don't work with that candidate anymore because there's something wrong. I don't know what it is, but it doesn't work. The machine can collect all that information from all these pieces of data points, store that in one place and then help spread that out.
So all that information is being collected. So again, when we think about why all these companies are coming onto the platform, it's not just the access to the candidates, it's the ability to quickly find them and hire them and then ultimately for a much lower cost. So lastly, I want to talk about Vettery and Adecco. So I think there's some obvious advantages to better partnering with Adecco. The most obvious one is navigating the global HR landscape is super complicated.
If you want to launch a new country, we were like, sure, let's go into London, that will be easy. And then boom, GDPR. And it was like, wow, that was what is going on. This is crazy. We have to completely redo our entire technology platform, right?
And so now as we think about expansion, we have a partner that is an expert in most of the countries we're going to play in. That is a very huge advantage that we have in order to move very quickly. This is largely a land grab in this space, where the more users come in, the more data Vettery has, the better the matching gets and the more candidates and clients get placed, just it keeps kind of growing on a snowball. That's marketplaces, liquidity. Typically, it's a winner take all or a winner take most type of mentality, which is why in eBay, at least in the United States, is by far and away still the most dominant marketplace for e commerce, even though there's plenty of other companies that have tried.
So the marketplace liquidity is huge. Some of these benefits from partnering with Adecco is just enormous. But the other one that I think is actually, I thought it was more of a hidden kind of value, but actually it's funny because Alain talked a lot about it today, was the data that Adecco has. The goal of fine tuning Viki to make it work where it's very, very easy to find Kin, The goal of fine tuning Google, right? If you remember the old days of search, if I typed in restaurant, it would just give me the top restaurants in the world.
That's not super relevant. Today, it geolocates you to a specific it understands exactly which part of London I'm in and it gives me a restaurant right around there, right? That's very, very relevant, right? Same thing with when you're trying to find people. It's not that I'm just trying to find a back end engineer or a back end engineer that knows Python or a back end engineer that knows Python that went to schools that also fit this compensation period.
I also know just so much about these candidates from just understanding how people move around the world, Understanding that when candidates go from a financial institution, are they likely more likely or less likely to go to a technology company? That information is super valuable. There's an incredible amount of anonymized data that we can use to help really fine tune just how ultimately people move around the world and how their jobs progress, what their career paths look like and starting to predict those kind of moves. Thank you very much for having me here today. I appreciate it.
And I will turn it over to Ernesto
Atadia. Thank you.
So good morning. Great to be standing in front of so many familiar faces. I guess I'll wait till the Q and A section to find out if they're also friendly faces as well as familiar faces. But my name is David Hancock. I'm now CFO for a number of the digital ventures at the Adecco Group, one of them being Adecco.
Thank you, David, and thank you, Adam, for a nice introduction. And it's very good to be here today. We had the pleasure last year to introduce you to Adient what was our vision, where we're trying to go. And today, very excited to give you an update. Before getting into the details, I'd like to show you a short video about our
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So I hope you enjoyed the video. Adia. So Adia is a marketplace. On one side of the marketplace, we have companies which look for temporary workers. On the other side of the marketplace, we have workers which are looking for temporary jobs.
What we do is we connect the two sides of the marketplace in the best way possible, very seamlessly and very fast. This is one of my favorite slides. So what we see right there is the user experience. In the end, it's all about the user experience, it's all about how do we make the life of our workers the easiest possible. How do we get a worker that thinks that want a job to the money in his wallet?
Because that's all the job the worker cares about. So what we did, what my team did and I did over the last couple of years is really trying the user experience in different places, in traditional staffing firms, in digital marketplaces and really going through the process. And sometimes that process ends up being very lengthy with a lot of steps or a lot of ups and downs between the time I think I want the job and the time I really get the money in my pocket. So what we did is, we thought how can we simplify the entire process? How can we reduce the number of steps that I have to go through between the time I want to get the job and the time I get paid?
And then only after that, we apply technology to really then optimize each single step. So in my opinion, the technology component is a huge enabler, but the first step is really rethinking and redesigning the user experience. It's all about user experience. When I look at the what that user experience allowed us to do over the last 1 year is essentially three things. So first of all, we were able to increase our market share and we were able to increase also the share of wallet within the clients that we had.
I'll give you just an example. Roughly a year ago, we had this client was a medium sized soccer stadium in Switzerland. They usually buy about 100 to 150 people each week because they have the soccer match. So in the past, till they started to use Adia, they really were handling the entire process on the phone, by e mails, etcetera, etcetera. So this person called Patrick, every Monday would call 3 different agencies and start saying, who can fill my job?
I need 100 and 20 people Saturday who can fill it. And then you start with endless rounds of calls, someone doesn't pick up, someone doesn't want to work, someone doesn't show up last minute. And so we said, how can we make that user experience better? How can we make Patrick actually take only one step, fill the job and actually focus on the game? So right now, we fill the same job in about 2 hours.
So the order gets placed on a Wednesday evening or a Thursday evening. And then by 2 hours later, everything is fulfilled and the contracts are done and the candidates are ready to work. How we do that is because the platform doesn't need to call anybody. In the end, we send push notification on the smartphone of everyone and the people can just say, yes, I want the job or no, that day I'm busy. And yes, we geolocate them too.
So we know that maybe 3 hours before your assignment, you're still very far away. So we predict that you're going to be a no show and we met somebody else. The second thing we were able to achieve is effectively increasing the overall market size. So with Adient, we are able to capture a lot of opportunities that normally are easy to are very hard to capture. So for example, again, if I would place an order Saturday 2 a.
M. Because that's where I finished my shift at the previous game and tomorrow I have another game, it's going to be very hard to call a recruiter and say, Hey, can I have another 200 people for tomorrow? However, on Adia, you can. Also, we can capture any shift which is really, really short notice. So I need someone in half an hour from now, maybe I need 50 people, provided that in that city we have a good amount of liquidity, we can really fill that order without basically any notice.
Now the consequences of that user experience is actually reducing cost. So to me reducing the cost of service is not my main target. My main target is how can I make the life of the workers the easiest possible? How can I make the life of each company the best possible? Once you achieve that user experience, by cutting the number of steps, effectively, you reduce your cost to serve, you automate more, then you increase your market share, you increase your market size and basically you have a positive flywheel effect which keeps improving and improving.
And if I go back, that results in our Net Promoter Score, which is 52. That's measured in Switzerland, which was our first market over the last 4 quarters. We were consistently above 50, and that is a significantly higher NPS than in the industry. And we really see that the candidates love this kind of process. The industries we focus on, as you saw in our video as well, is any industry where we can create liquidity.
So how do we create liquidity in the marketplace is by focusing on industry where there is high volume, so the clients need a lot of the same, otherwise we can't create liquidity. 2nd, where there is a lot of flexibility involved and a lot of shifts because again, a lot of shifts means a lot of demand and a lot of liquidity needed. And third, where the skills are actually easy enough to verify. So we do not place engineers. We do not place high skilled IT profiles.
What we place is people in hospitality, retail, warehouse. So what is kind of called commoditized workers because that's the best type of profiles that we can transact in our marketplace. Here is few screenshots about our product. Last year, I showed you the product. We had a little booth.
Some of you was there and you tried our product. So I guess you know Netflix. And probably some of you have used Netflix and you watch a movie.
So you watch a movie on
Netflix, then what happens? You watch movie A and then next day Netflix says, hey, I recommend you movie B, C, D, E. How do they know that? It's basically because they saw what you watched that has some tags and then based on that, they predict what you're going to like. So by thinking about Netflix, we said, okay, can we do that within the staffing world?
Because can we actually reshuffle the way that the entire staffing works? So what our platform does is, as soon as a client place an order by saying what they need, when they need, where they need it, people get matched. And those are all verified candidates that we have in our platform. Now before those people even apply for a job, we show the profiles to the companies. And they sift through Tinder like.
Then they go inside, they review CVs, they view the video presentation of candidates and they learn more about them. And then what can happen is that as you can probably see here on this button, they click like. So if they click like, we'll let the candidate know that someone already looked at your profile and if you apply, most likely you're going to get the job. Based on the number of likes and other kind of data, we predict how likely is it that you are going to be hired. And so then how cool is it to basically apply for a job and know really that you're going to get hired.
It's actually pretty cool compared to maybe making an application and never reading back anything. So another thing we did and I'm not going to go through all those points, but we did few pilots now in the U. S. U. S.
Is a fantastic market. I think every state has its own differences, and we did few pilots in different cities. So what we learned by effectively going through different staffing and recruitment processes is that the onboarding of a worker in the temp staffing industry is actually a bottleneck within the process. So it's something that really takes people time and it's really something that somehow frustrates people in the end. So we said, can we reengineer, can we redesign completely that process?
And I'm not talking about technology. I'm talking about if I wanted a job, how do I make my life the best? That's all I care about. In the end, technology comes second. So what we achieved, we took that process down from a 30 minutes process that people had to do on either their laptop or paperwork taking roughly 30 minutes to a mobile first and mobile only experience, which takes roughly 3 minutes.
This is not 27 minutes we gained. In the end, I don't care about the 27 minutes I gained. It's about the 27 minutes we gave back to the people, not to our people, to the actual worker. So I made the life of the worker easier, so he comes more on our platform and he wants to have more jobs because he knows that every single step he takes on Adia is actually easier. Now a couple more screens about our platform here, but the main message among all of those numbers is that we measure liquidity.
So there is if someone asked me what is the single metric that you care about is actually liquidity. So how can we make the marketplace as liquid as possible? How can we make sure that if there is demand, there is supply and those 2 gets correlated and David will talk a bit more about it in a few minutes. And so this is our kind of internal cockpit where what we monitor is liquidity at the granularity level of geolocated liquidity by role, by type of profiles and by every type of country, job contract, etcetera, etcetera, etcetera. So with this, what we are able to do is basically to play the role of the market maker.
So if somebody we see an imbalance on the demand side, we say, okay, now we need more supply. If we see an imbalance on the supply side, we go for demand and this feeds our algorithm, feeds our advertisements, feeds our marketing, etcetera. Now David will talk a bit more about how we started and how we're going to deliver exponential growth.
Thanks, Ernesto. So hopefully, Ernesto has got you excited about the opportunity that we see to increase our market share, to increase the market overall and also to decrease our operational costs. And at the heart of doing that is two things. It's this relentless focus on excellent user experience, and it's about building a marketplace, building liquidity, like Adam talked about also with Battery. I want to talk a little bit about, over the next couple of minutes, the time scale to achieve that because it does take time for us to build that excellent user experience and to build that liquidity in the marketplace.
And at the moment, we're really in this first phase of this exponential growth that we're aiming What are we trying to do in this first phase? We're really trying to experiment, to test and learn, to develop so we get really an excellent product ready to scale. And a couple of examples of the things that we're trying to experiment on, we're trying to test and learn. One would be the candidate attraction, the recruiting model. So Ernesto talked a little bit about pilots in the U.
S. 1 of the pilots we did in the U. S. Was with the National Hockey League draft. So it's a major sporting and entertainment event in the U.
S, broadcast live on TV. Over 100 over 100 associates for that event. And we used it as an opportunity to test what are the best channels to recruit the associates. And we found that actually, Instagram was our best channel for recruiting candidates, not a traditional channel for staffing agencies to recruit their candidates. But it allowed us using Instagram to target associates who were interested in ice hockey.
And so they were super motivated to work at the event and to make the event a success. And we need to take the time to test some of those channels to say for different candidate profiles, for different jobs, for different industries, what are going to be the best channels. 2nd example is around product and product innovation. We are constantly testing our product developments with really data driven testing. So AB testing on all of our new developments.
So client A sees a feature highlighted in green. Client B sees the same feature highlighted in gray. Candidate A sees a button in the top right hand of the screen. Candidate B sees a button in the bottom right hand of the screen. It really gives us data to figure out what are the best product developments to really take this further and further in terms of our product.
And we've been able to do that driven really based on the data rather than asking someone in the office which one looks better or having a focus group to see which people respond to better. It's really data driven. And we've since we launched in Switzerland 18 months ago, we've had a new version release of the Adio product every 5 weeks. So we're really bringing these innovations, data driven innovations to market on a consistent basis. So coming back to the chart.
The temptation would be, now that we've launched, is to go for growth and scale as fast as we possibly can. And the risk is that you end up chasing sales in the short term and following that dotted line where you end up plateauing in a relatively short space of time. It's really important for us that we still spend the time to do these developments, do these innovations. Of course, revenues are important to us. Revenues ultimately show you that the product is getting traction.
But revenues in this phase are not the single most important KPI that we 2.5 years to 2.5 to 3 years is where we really started to see that acceleration. We'd expect something similar at ADIA. And as we said before, we launched in Switzerland 18 months ago. We launched in the U. K.
Around 12 months ago. So we still have a bit of runway before we get to this exponential accelerated growth phase. I think in terms of where we are in sales numbers and in hard numbers during this early phase, we're not going to give lots of disclosure, but it's fair to say that for 2018 2019, the kind of revenue numbers we're talking about for Alia are in the tens of 1,000,000 of euros rather than the 100 of 1,000,000 of euros at this stage. But that's not to say that we're not making progress. And so I just want to spend a couple of moments on these two charts to show the development, the progress we'll be making in Switzerland.
Ernesto talked a bit about some of the product innovations, the NPS score, the process improvements. Here are a couple of charts on clients, candidates and revenues in Switzerland. On the left hand chart, you see clients and candidates in Switzerland since the beginning of the year. These are not the actual numbers. These are indexed.
So we indexed the client number to 100 in January and the candidate number in the same proportion as the real numbers, so around 25 candidates for each client that we have. And the actual numbers are clearly much higher than this. And you see that the clients and the candidates have both grown strongly during the course of the year. And really importantly, they've grown roughly in proportion. So what we're doing is we're managing the liquidity in the platform to make sure we have the supply and the demand.
The chart on the right is straightforward. It's the average weekly revenues by month as we've gone through the year. And you see here again a strong development. So with clients, with candidates, with revenues, in the second half of the year as we started H2, we're more than double where we were at the beginning of the year. So as I said, I think to get to that really strong acceleration and scaling, rolling out into more countries in a very aggressive way, we're some time away from that, but we're really happy with the progress that we're making so far.
Back to you, Ernesto.
Thank you, David. And before moving into the Q and A, a short summary and the key messages that I want to leave you today. So the first is all about user experience. So the main point of Ade is making the user the center of our world and make sure that his life is the best possible. And then we optimize everything around the user.
That's the first message. The second message and I think here Adam already anticipate part of it with battery is that within 18 months not only we were able to open Switzerland effectively every relevant city within the country and major cities within the U. K, but we were able to pilot in the U. S. Now that has only been possible because of 2 main components.
One, we got a lot of access to clients and workers during our product building phase. So yes, develop every 5 weeks, we have a new version of the product. While we develop, every single screen is actually tested with real data, with real customers, with real workers. So we don't need to wait a year or 2 years to find out if we did the right thing, but actually we need to wait only a few weeks to really understand where we are going and eventually course correct. And so make mistakes, learn from them and move on.
The next point is that the temporary staffing market is effectively, as all you know, highly regulated. And the legislation in Switzerland is very different from the legislation in the U. K, which is very, very different from the legislation in U. S. Where, by the way, you have Texas different from California.
Now having the pool of, let's say, compliance, legal and back office of the Adecco Group allowed us really to do that scaling phase extremely, extremely fast. Now before getting into the Q and A, we'd like to show you a very, very short video about client acquisition, and thank you a lot.
It used to be easy. 1st, it was straw, a huff and a puff, and that was it. Then came the sticks. They were a little harder. Harder, but manageable.
And that's the thing about what I do. The more I progress, the harder it gets. Some jobs seem too big to accomplish alone. I felt lost, like maybe the job was just too big for me, but I could only achieve smaller things. But that was when I found Adia.
It gave me the ability to hire my team, my pack at the touch of a button. I felt I could finally do what I really loved at a scale where I could really make an impact. They were blown away. And so was I.
So thank you, David, and thank you, Alan. So we now have time for Q and A until 12.20. There's another Q and A session at the end of the day after the General Assembly session. So if you don't have a chance to ask your question now, hopefully, you will do then. At 12:20, we're going to break for lunch, which is outside.
At 12:15 at 1:15, we're going to meet downstairs at the main entrance because we're going to transfer to German Assemblies campus, which is about a 5 minute walk away for the afternoon sessions where you'll hear more about GA and you'll be able to attend a GA class. So I'd like to invite Alain and Hans on stage for Q and A. And obviously, you're welcome to ask questions of both Alain and Hans, but also anyone else who's presented this morning. And Hans, I think you're not mic'd anymore.
Okay. Lady first on the right.
This is Simona Sarty from Merrill Lynch. Thanks for taking my questions. I have 3, if I may. Firstly, it's related to the trading update that you provided. How much of the slowdown in organic growth is market related and how much coming from Germany?
The second one is probably if you could provide an reorganization of Germany, which initiatives have already been undertaken and which ones are still work in progress? And lastly, if you could remind us the building blocks for Q3 gross margin and the impact that softer organic growth might have on operating leverage? Thanks.
Maybe I start with the trading update. We saw that when we entered the second half of August and entering in September that it was a modest deceleration. And you probably have seen a little bit already, France and Spain and Southern Europe had very strong growth momentum, and that we didn't see picking up when we entered after the holiday period because for us, the end of August, early September is always an important period to see the business coming back. So the market definitely played. What is also playing is that our German business in the midst of that transformation and that there the results are not where we fully wanted them to be.
We're doing all the right changes and Helane will give a little bit more color on it. If we look at the margin in Q3, what we said at the end of Q2 is that we'll have the benefit in gross margins from these exciting new ventures, which is around 30 basis points positive. CCA will still be a net reduction of 15 basis points, and we have shared with you where we are on the pricing mix in the TAM business of around that 10. So that gives you a couple of points on the gross margin. We are still investing in the strategic transformation.
That's 40 basis points for Q3. And we gave at the end of Q2 an SG and A guidance sequentially, so from Q2 into Q3 of +1%. Now we were entering when we were talking in the call, we had a higher level of growth. We were, yes, surprised, but the pickup didn't happen early September. We are now adjusting our cost base for that, but that will have a little bit a negative impact on the operating leverage in Q2 because we are now adjusting the cost base in response of not seeing the pickup we had hoped to see entering September.
And to elaborate on your question Germany, I would like first to step back. And when first of all, when we look at Germany, we have different businesses. And when we speak about, let's say, the transformation of Germany, we speak only about the General Staffing. We are very pleased with the performance of professional staffing, the permanent recruitment and some. But back, I think, in 2007, we did the acquisition of Tuya.
And this the agricultural staffing and the Tuya companies have never been merged. And I must say that TUYA was really working in an autonomous way, to say it in this way. Now with the reality of today, there was no, let's say, no argument not to play the synergy and to combine the 2 companies. So and that's exactly the decision we took, like by the way we did some years ago in France with Adia and Adecco. And so we decided to really merge the 2 companies.
Why? Because you have the external context. And again, regarding the portfolio, the margin structure and so on, there were no argument to keep the 2 companies separate. And second, we had the synergies and the opportunity to put our strategy or recipe at work. And remember, we spoke about a lot about segmentation, and that's exactly what we are doing now in Germany since the first of May because technically, legally, we are not allowed since the 1st May to do this merge.
It's a long process in Germany. You need to negotiate with the workers' councils and so on. We have done that. Now since the 1st May, we are putting the segmentation in place, which means that we have separated or we have put the 2 organizations together, but we are carving out the on-site business. And so today, you have 2 different channels, 2 go to market channels, One organization called managed services or on-site.
So it means customers for which we are located at the customer side with dedicated process, different process than the other channels, which is retail, which is network, a branch network based organization. So now when we say it is challenging because it is challenging because first, we have to put the recipe at work, not only the segmentation, but for example, we put in place the customer and candidate portfolio management, asking people to do a certain number of visits, to do a certain number of offers per year. So it is a totally different way of managing, especially the Tuya organization as it was in the past. So besides putting the recipe at work, it is also a major cultural transformation because these people were not used to work in this way. And we know that it is always asking some time to adapt to this new way of working.
But especially, when you merge 2 different companies with really different cultures, that's why UCG takes more time than you would do that in a classic one size organization. Alain?
Thank you very much. Alain Oberhuber, MainFirst. Just a follow-up question on Germany. I have 3 questions as well. Follow-up question on Germany.
How much is then the negative margin impact? Could you give us a guidance there on gross or on EBIT for the group then? The second question is regarding France. Have we seen already positive effects because of the new presidency of Macron? And maybe probably could give us a guidance what you could expect further from his government.
And then regarding the regarding Adja, what is the gross margin in that business currently?
Start and I will go.
I'll start. So the margin drag we have from Germany is around 20 basis points. And Germany used to be margin accretive. So the German margin is playing into the performance of the company, and we will see that margin drag given the investments Alain is talking about. And if you look where the results are, I think it's fair to assume that, that will be a little longer with us because we need to keep making these investments, whereas the results are not yet there.
On Adia, we didn't mention it, but it's very good on the digital ventures. Actually, the margin structure at the pricing level is very healthy and compares very well to what we get in our offline channels. So the move to digital is not having a negative impact on the pricing. And why is that? Because you see 2 exciting guys explaining it, the net promoter score of these tools and the candidate attractiveness and the tools we're providing to our clients are simply better.
And then on France and the political situation on France, when we look at the first part of, let's say, the government under Macron, we were and we are still positive about the 2 waves of restructuring they have done regarding the labor regulation. So the first wave was mainly helping companies, yes, to lay off, to get much more flexibility and this with pre visibility. Remember now, in France, you can lay off provided you pay what you need to pay, which is about 1 month salary per year and infinity. And provided you pay this layoff cost, there is no possibility for workers and workers' council to go to court, which means that you have a very good you can very good manage your business without any kind of legal risk. So positive about that, positive about also these reforms of the training apprenticeships and some.
Now when you look at the macro, we had a very good first half. And we have always said that France would be the last country to enter in, let's say, the economic recovery, and that's exactly what we have seen, was the last country to enter in Europe because of the lack of reforms. Then Macron took the reforms, and we had some positive tailwinds. Now what we see and what you see also from the figures of the prism, because they are very transparent, is that momentum of the 1st 6 months has reduced, reduced during July August and also at the early beginning of September. But again, like what we have said in the trading update, there is the momentum of the market.
And on our side, we have put our recipe at work in France. And now since the Q2 and we continue right now, we continue to outperform the market. Let's go on this side now.
Yes. Michael Ford, Bank of Wantable. Two questions. Following up on the slowdown, are there any particular industries that you've seen slowing down faster than others? And the second question would be on the UK.
You mentioned that you always see undercutting from local competitors. Now how is it possible when your cost to deliver is so much better? I don't understand how competitors can keep on undercutting your prices when you seem to have much better scale and lower cost to deliver.
In the UK, you have a lot of local players who see it more as a fee business. So they go from gross margin to EBIT. They only look at their conversion ratio. So we are constantly surprised why people for those low margins are doing business because we started the sales line and because it's quite a flexible labor market, there's a lot less risk than doing business in Germany because in Germany, you have the bench model. So a lot of people do it as in their mined fee business.
So they do it at a very low margin because they start at the gross margin line in their head. And I've scratched my head around that many times since I'm on the business, but that's a little bit of smaller in the business. That's why we grow together, we need to bring better tools because if we win in the U. K, which is the most fragmented market, I think we'll be good touch and proof points that we can get the fragmentation out of the market.
And on your questions regarding the eventually verticals and some, what we said also in the trading update is that, first of all, the slowdown is mainly concentrated on Continental Europe and Southern Europe, especially France, but also in some other countries where we don't have weekly market data like we have in France, we have also tougher comparisons. So if we take Italy, if we take Spain, but this is clear that we see there also a deceleration. Now regarding the verticals, I would say that it is a rather broad based deceleration, which are, if I take the example of France, also confirmed by the macro. You see that kind of revision to lower GDP figure.
Here, George?
Good morning. It's George Wighery from Exane BNP Paribas. 3, please. Firstly, Hans, just going back to the evolution of Q3 and maybe just walking through the building blocks. So you obviously cited CICE pricemix and strategic, which I guess combined are about a 65 basis point negative.
Productivity will be a further negative. So I guess we're summing to a sort of 70 to, I don't know, 80 basis points negative. Just going against that, should we expect savings to start to contribute positively or anything else? I mean, the reason I ask is clearly consensus, I think, prior to today was down 30 basis points. So it sounds like it's going to be a fair bit worse.
So if you could help us square that circle. Secondly, and sort of linked to that, the strategic investments look like will be about a negative 30 basis points for the year, and savings will be about, give or take, 20 basis points. That would add up to negative 10 basis points, whereas your slide, I think 23, shows a negative 5 basis points. It might be rounding, but if you could just help us with that. And the final question is actually on Vettery and slightly disconnected, how you actually vet your clients?
What is it Viki? What Viki actually does for that, please? That would be useful.
Let's start with the Q3 margin. I think the Q3 will still be difficult quarter because of a number of things. I think the good news on the quarter is that the grow together savings will start to come in. We talked about rolling out the front office tools in the U. K.
And how that's working, and we will have the same benefit in the U. S, the digitalization of our time sheet. So we will get the first part of the productivity. When we look at the gross margin, there are 2 things. We have a positive impact from the new ventures of around 30 basis points, but we have CCA and the pricing.
So I think they probably was about the things. You're right, the 5% and the 10% is a little bit of rounding. I think the 2 difficult parts into the quarter are, and I think we need to be split, that margin drag on Germany of 20 basis points, that is not improving as we speak because we still need to deliver the results from all these changes, which Helene has talked about. We're making the right changes, but the results are not there yet. So I would not expect a positive number on Germany in Q3.
We were exiting the quarter with 4%, then we had a little bit of the deceleration which we're seeing in September, while we're now adjusting the cost base, will have an impact on the operating leverage in Q3 because we're also surprised that the growth did not come back as we would have hoped. So that slowdown in the end of August, early September means that we're now adjusting the cost base, It's also a surprise for us and we're not happy with that, but we're now adjusting. So that will be difficult into the
quarter. Rex?
Sure. Just on the question around kind of the vetting process at VETERI. So the vetting process largely focuses around the candidate side, from the AI perspective. And what we're vetting for are we're looking for candidates that we think we can place for effectively for a fee. So it might be think about like it's the best candidate at Stanford University, like the top engineering school.
Like we don't place candidates in out of university, so it's not a good candidate for us. It doesn't mean it's not a great candidate or a great person. So there's the term quality kind of means lots of different things. So we're using a lot of data on candidates that we've been able to place on within that might have unique skills or might have worked for companies that people are not familiar with. And we are effectively prioritizing those candidates in the search that clients see so they can hopefully them faster.
So for example, if you take a company in the U. S. That would not be necessarily known for its technology platform, take like FedEx, right? It's not necessarily known for its technology platform, but we've placed a bunch of candidates from FedEx and we found them to be actually very highly skilled and very talented and doing very well. Like we will spend like so that bit of knowledge will then tend us to focus advertising dollars on those types of candidates and then place those into the platform and then showcase them at a much higher ranking.
From a company perspective, the reason why it's not a machine, it's mostly a sales team that does the company vetting because, 1, we want to make sure it's not a competitor because we don't want to grant access to our database to a competitor. 2, we want to make sure it's someone it's a company that has the ability to pay. So we're not just letting on lots of companies or potential users that are not going to be a good use of our candidates' time. So we do have more of a sales team that bets the companies down, whereas the AI is really more vetting from the candidate perspective.
Okay. We move at the back.
This is Anvesh from Morgan Stanley. Just one question. Can you give us some flavor on pricing model or fee rates for the FMS platforms like yours? Now my understanding is that the fee rates charged to the clients are very low and some of the FMS platforms also charge candidates a percentage of fees of the project. Now if that's true, does this platform work in a skill shot market?
Because why would a candidate put himself through this platform? Thank you.
Yes. It's a good question. And by the way, during the year, we decided after the first trial and the first pilot to pilot. So we pilot the operating models and the business value proposition because if you remember at the beginning, we said we will charge the candidates with a fee a service fee. Now we changed the model, now we are charging the customers because we have seen that it was much better accepted, let's say, from both sides, and that's why we changed it.
The customers is charged. Perhaps, Stijn, we're coming to you.
Matthew Lloyd, HSBC. I just want to ask 2 questions really. 1, I was very interested in how many people had actually been placed through Vettery. We saw 10,000 candidates. We saw a number of things, but the actual matching element was slightly missing.
And the second question is a slightly more general one. What went wrong with the strategic initiatives? We've all sat there, I'll be doing it this afternoon with the sort of 10 basis points of this and 15 basis points of that sort of adding it up. But what went wrong? What could Adecco have done better to control the costs to move forward faster?
And I suppose, subject to that, do you think you're spending too much time of the management time on initiatives and processes and perhaps not enough on going out finding candidates and charging the most you can for them?
So two questions. I think on veterinary, as we have mentioned or not, I don't remember. So we are not too disclosive at this stage of the maturity of the ventures about numbers and so on. I think we have already showed some transparency. And I would encourage you to wait some more months before we start to give more color about some KPIs by ventures and so on.
For sure, starting from next year, for example, we will give more transparency about General Assembly because General Assembly has much more maturity and then we will start to give transparency. This is on battery. 2nd, on the delay and the higher cost on the strategic initiatives, they are mainly related to IT projects. And what you have seen, you have seen the strategy we are putting in place. But as you know, IT development is not something that you can really always have totally under control.
And what we have had, especially with the integrated front office system that we are already we have started to deploy it in U. K. But in some markets, we are coming with the next release because we need more sophistication, for example, in a market like France. And we are encountering some delays in the development the further development of the platform. And when you have development or when you have delay with development, you have 2 impact.
1st, you have some more cost of development. And on the other side, you are later in the market and your productivity savings are coming later. That's why we said higher transition costs.
It's Andy Grebler from Credit Suisse. Just one if I may. You've talked with so much optimism this morning about the opportunities of the likes of Adia and VETERI and these new business ventures. How does that make you look at the rest of your business? Because that's €100,000,000 or so of revenues and you've got €20 plus 1,000,000,000 elsewhere.
Does that optimism? Does it balance out with more pessimism for the rest of your business as the world changes?
That's not the message we tried to convey this morning.
Sure, it's not.
But it means that we have some work extra work to do. Now we think that we have a lot of opportunities on both sides. Absolutely, perhaps we have been a little bit more extensive on the new ventures. But you see that also these new ventures are very complementary to what we do in the other business. And by the way, remember the market penetration of the temporary staffing, which continue to grow because basically our customers are continuing to put more flexibility at work.
And not only temporary staffing, but also all kind of new solutions, flexible solutions. So we are positive regarding the two side, let's say, of the organization. That's also why we have a separate organization for all these new ventures because on one hand, you have heard, we can leverage synergies and what we are finding with the new platform. But we want to have on both sides focus. And with growth together, we have huge opportunity to transform our core legacy, enhance the customer and candidate experience and increase in our market share.
We have just 5% market share globally in this business, huge opportunity. We come to you, Hans.
Yes. Hans Plautus, Kepler Cheuvreux. Three questions from my side. First, going back on the trading update. You already indicated that, let's say, France and Central Europe, you see some deceleration.
Is any of those countries already going into negative territory? Could you maybe give some feeling on that? And secondly, on coming back again on Germany, you indicate some delay, but do you also see some increased turnover of personnel because, let's say, especially at Tuya, there's a lot of new culture they have to adapt to. Is that really impacting your workforce there? And thirdly, on going back on Page 13, the ecosystem, Yes, of course, it's already said it is quite complex overview and especially in people's business, having everything worked together, selling the product externally, how do you organize it?
Could you give me some feeling on how do you make, let's say, that not all the systems or all the products just work along each other with it are combined? And how do you precisely do selling of the individual products?
I think what we see in the training update is that we didn't see a pickup coming when we came out of the vacation period, and that's predominantly France, Spain and Italy. We don't see, I would call it, we're at a positive stability. We don't see and we should remember, some of these markets experienced very high levels of growth, and Germany also plays. I think that leads into your second question. But we see what I would always call a positive stability.
So we're not seeing the negative. And you see the same with LSAs and the perm business is recruiting because some people will say, is this? No, we see that positive stability in the numbers of today.
Now on also further on Germany, yes, when you change the culture, people are living. This is what we observed that what we have observed in all the cases and what this is also what we observed in Germany. It's not new for us. We did the same exercise. We put, for example, the CCPMs, the Customer and Candidate Portfolio Management at work in DIS.
About 2.5 years ago, when Hans and myself started, we made we did the change at DIS. And Peter Blaersch, who was by that time leading DIS and who is now leading Germany, did the same experience. You had some people saying, but I don't want to make customer visits every week and so on. I'm good at recruiting and I don't want to be measured on my number of visits and so on. So it's a major cultural change and we need to go through because we know after this change, we come much stronger and we are then really performing and outperforming the market.
This is on Germany. Your last question was about the ecosystem, yes. It sounds a little bit sophisticated, but it is very pragmatic. You will see this you will meet this afternoon Jake. I don't think Jake is here right now.
But for example, you have in the U. S. A lot of talent scarcity in certain areas of the IT, for sure, tech and IT tech and some cybersecurity and so on. Now what Jake, General Assembly and Moody's U. S.
Are developing is a concept of talent pipeline as a service. What does it mean, talent pipeline as a service? You take people with basically good, let's say, behavior, some basic skills and fun, and you rescale them during 3 months, so that after you can place them at the customer of MODIS. And so MODIS can go to its customers and say, look, if you are interested, I don't know, in cybersecurity specialist or such a profile, if you commit to a certain number, we will produce these candidates. And we can produce them because there is this partnership together with General Assembly where we engineer a total solution.
This is a model that we have already in place, for example, in Japan. In Japan, we hire every year between 5,700 new grads. They come into our training center for 3 months and then we delegate them in to our customers. So this is a kind of aspect of the ecosystem we are developing, really making interaction and connection between the brands so that we have a kind of unique proposal customer proposal. I'm looking at the time let's take the 2 and then we stop before we break for the lunch.
The 2, you and yes, sorry. Andrew?
It's Paul Sullivan from Barclays. Just a couple from me. In terms of SG and A, I mean, how should we think about SG and A if we are about to enter a sort of a prolonged period of positive stability in a sort of from an underlying basis? Because there is the risk, but the cost savings that are scheduled to come through over the next 12 to 18 months just get absorbed by underlying inflation. That's the first question.
Secondly, of the 29% FTEs that you currently employ in administration, where do you think we get to at the end of Grow Together? And what's your long term ambition there?
Yes. First, we are adjusting the cost base as we speak to make sure we enter the 4th quarter with the adjusted cost base on that lower level of growth or that positive stability because we're running at 4% and we're not running at 4%. So that needs an adjustment. If we go into 2019, we will get structurally this 25 basis points from Grow Together because we're driving true productivity. That is an important thing to mention.
We will drive the productivity. I can't today give you an outlook on what the level of positive stability will be for next year because of certain visibility, and we've just seen how in September the numbers changed versus Q2. If we look at your last question, we have a goal on that because if you want to be a customer and candidate facing organization, you want to take out most of the administrative processes. And as you have also seen with tools already like Alia that, that enhances the candidate and client experience. So a big part of the Grow Together savings will come from what we call the percent of indirect, from that 29% to a number which we have a target on.
The reason why I'm not disclosing that target because other people would say they're maybe already better because the definition of indirect people will be fluid on. I think I want to come back, make the link to an early presentation. I think we should not forget that we continue to drive strong operating leverage. This German situation is really driving into the numbers, and our operating leverage, if you take the first half of 'fifteen, 'seventeen, 'eighteen, has improved. While we're making fundamental changes in the core of our business with Grow Together, we have our cybersecurity, we are building these platforms, and they will strengthen the business going forward.
We will not compromise on making the right investments. Let that be clear because we could easily take the 50 basis points away and you would all be happy, but you're not fundamentally transforming the company. It's painful to go to Germany. That, we're doing. Needless to say, we're not pleased with that.
We are seeing that, that strong growth in Southern Europe has not come back as it stands. But we have, and that's, I think, important, a solid margin structure with a lot of investments and that underperformance of Germany. So if we now make sure we get the returns with growth together and get Germany back to the margin structure it should deliver, that's where the margin is. The rest of the business has continued to drive strong operating leverage.
The last question now.
It's Konrad Zomer, ABN AMRO. Because of the lunch, I'll just stick to one question. All the investments that you've made over the last couple of years, both in new ventures but also in the digitization of the business, you've all been able to do in a period where there was positive and good organic or sorry, GDP growth in Europe and in the U. S. And also you've done really well as a company.
Once the next downturn emerges, whenever that may be, how do you think that these investments and these changes will change the way Adecco will react to an economic decline? Because clients will continue to shed people in those years. They will continue to reduce the flexible amount of people they employ. So how has it changed the Adecco reaction to the downturn?
So first of all, with what we see today, if we see a deceleration mainly driven by Continental Europe, it's not that we see any kind of disruption in the world. We have we see the business from everywhere, every market in the world every week. And yes, there is deceleration in Continental Europe, but there is no customers sending or 10s back even in these countries and others. That's point 1, so no disruption. We don't see, for example, a change of business momentum at LHH.
LHH. With LHH, it's very interesting to see how you are in the cycle. We don't see it. So with the knowledge of today, we are still in this positive momentum.
We will always be a cyclical business. I don't think that will go away. So we need to manage recessions. That's part of our, what we call, risk management tool. So when we do our annual budgeting, we simulate that because of a few things which are always important.
First, our cash, the quality of the receivable so that we make sure we can collect that cash to secure that stable dividend because that's something we are promising. I think what's exciting with Grow Together and these new digital ventures is that the managing the ebbs and flows of the cycle will become better because you have a more productive organization enabled by technology. So that means you have to go less up and down with the people. And secondly, which we forget, recessions have 2 areas: the one you don't like and the one you need to come out of. And with better technology, we can come faster out of the blocks because you would not be hesitant do we hire people.
We have better data analytics. We have better tools, which will allow us both sides of the site. So three things. The cash flow management tools, we have in place to manage the recession. I was off the phone with the CFO of 1 company where I didn't like the credit statistics where we put them on insurance and we add that to the invoice.
So we are personally always very involved in the quality of our cash. That's key, and then this transformation will help to drive the cyclicality. And let's not forget, the company hasn't driven through growth in the past. We're going from cycle to cycle. With growth together, we can access and with Adia new parts of the business, which will allow us to grow through the cycle, And that's something we shouldn't forget.
And with this, I invite you for lunch. Enjoy the lunch. Thank you.