TOKYO -- Persol Holdings plans to acquire leading Australian staffing company Programmed Maintenance Services under a deal announced Friday, laying the groundwork for future growth overseas.
The 791 million Australian dollar ($618 million) purchase will mark the biggest investment yet by the Japanese staffing company, recently renamed from Temp Holdings. Persol hopes to quickly cement its foundation in Asia, President Masamichi Mizuta told a news conference.
Persol reached out to Programmed two years ago, when management at the Tokyo-based provider was actively exchanging views with corporate leaders from various countries, with an aim of becoming the top staffing services company in the Asia-Pacific region by 2020.
Programmed was looking for ways to grow beyond Oceania, while Persol was seeking to go on the offensive in Asia outside Japan, so their interests meshed.
Winning over American partner Kelly Services, among other steps, took some time. But a basic agreement was reached in June, kicking off an asset appraisal. A price was set without resistance from either side. Programmed's management team will stay on.
The global market for temporary staffing amounts to some $428 billion. The Asia-Oceania region (excluding Japan) accounts for less than 10% of this but is undercultivated in the absence of the big players seen in the West, such as Switzerland's Adecco. And it is sure to keep growing as the labor market develops and labor mobility increases.
By bringing together the duo's marketing and information networks, Persol aims to secure a solid pool of Asian talent as well as a customer base. The company aims to generate sales of 1 trillion yen in 2020, Mizuta said enthusiastically.
Seizing the moment
Persol is empowered by the tailwind blowing in Japan's staffing sector amid labor shortages and the government-led push to reform work styles.
Temps on assignment increased on the year for 15 straight quarters through the January-March period, according to the Japan Staffing Services Association. Persol has enjoyed five years of record profits through fiscal 2016.
Some worry that the industry could be hurt by an expected labor law change next year to require employers to offer more temps permanent positions.
But Mizuta is optimistic, saying there will be no impact given the supply-demand balance. As long as workers are difficult to come by, employers will not hesitate to pay more per hour to secure temps, he explained.
Current conditions will continue at least through 2020, the president said. Persol is planting the seeds to thrive down the road via the Programmed acquisition while performance back home remains solid.
Persol has a special connection to Australia, with founder Yoshiko Shinohara having created the company as Tempstaff in 1973 after she learned about staffing services there. More than four decades later, the company is going back to where it all began.