Manpower EMEA Economic Insight for December 2010. Looking at the key indicators for the EMEA jobs economy

1. Manpower EMEA
Economic Insight
Issue 8. December 2010
Euro area and EU27 employment stable
EMEA Macro Economic Insight
The number of persons employed in both the Euro Employment growth rates across the EU
Area and the EU27 was stable in Q3 2010 compared Quarter on Quarter
with the previous quarter, according to the latest
figures released by Eurostat. In Q2 2010 employment
grew by 0.1% in both zones. Falls in employment
were recorded in construction (-1.1% in the Euro Area
and -1.0% in the EU27) and manufacturing (-0.3% and
-0.2% respectively). Agriculture fell by 0.2% in the
Euro Area, but grew by 0.4% in the EU27. Financial
services & business activities increased by 0.3% in
the Euro Area and by 0.2% in the EU27. Other servic-
es (which mainly include public administration, health
and also education) rose by 0.2% and 0.1% respec-
tively. Trade, transport & communication services
grew by 0.1% in the Euro Area and remained stable in
the EU27. Compared with the same quarter of the previous year, employment fell by 0.2% in both
the Euro Area and the EU27 in the Q3 2010. In the second quarter of 2010, employment decreased
by 0.6% in both zones. Eurostat estimates that, in the third quarter of 2010, 221.2 million men and
women were employed in the EU27, of which 144.5 million were in the Euro Area. These figures are
seasonally adjusted.
Mixed results for Q1 2001 European MEOS Increase in hourly labour costs
Results for the Q1 2011 global MEOS suggest a more Hourly labour costs in the Euro Area rose by
positive start to the new year for the global labour market. 0.8% in the year up to the third quarter of 2010,
Data reveals improved hiring expectations from 12 months compared with 1.6% for the previous quarter.
ago in 28 of 39 countries and territories, including the G7 This is the lowest increase registered since the
countries of Canada, France, Germany, Italy, Japan, the start of the series in 2000. Across the whole of
UK and the United States, where hiring plans are stable or the EU27, the annual rise was 1.2% up to the
improved from both the fourth quarter of 2010 and this time third quarter of 2010, compared with 1.5% for
last year. Despite continued mixed results across Europe, the previous quarter.
German employers are reporting their strongest hiring plans
since early 2008. The stability and incremental improvement The breakdown by economic activity shows
reflected in the data for the G7 countries indicates progress that in the EU27, labour costs per hour grew by
towards recovery for the global labour market. In fact, Net 0.7% in industry, 0.4% in construction and 1.5%
Employment Outlooks for the G7 countries are all in positive in services.
territory for the first time since the third quarter of 2008.
Euro Area annual inflation stable at 1.9%
Employer hiring plans continue to be mixed across the 21
Euro Area annual inflation was 1.9% in Novem-
countries surveyed within the EMEA region, with positive
ber 2010, unchanged compared with October. A
activity expected in 14 countries. While Net Employment
year earlier the rate was 0.5%. EU annual infla-
Outlooks weakened in 11 countries from three months ago,
tion was 2.3% in November 2010, unchanged
a year-over-year comparison reveals stronger outlooks in 12
compared with October. A year earlier the rate
countries. Hiring activity in the EMEA region is expected to
was 1.0%. In November 2010 monthly inflation
be strongest in Turkey, Germany and Sweden and weak-
was 0.1% in the Euro Area and 0.2% in the EU.
est in Greece and the Czech Republic. The strong hiring
pace anticipated in Turkey is due in part to demand in the
The lowest annual rates were observed in
construction sector where 45 percent of employers intend to
Ireland (-0.8%), Slovakia (1.0%) and the
add staff.
Netherlands (1.4%), and the highest in
The bright spot in Europe continues to be Germany, where Romania (7.7%), Estonia (5.0%) and Greece
the unemployment rate is at its lowest in 18 years. Engi- (4.8%). Compared with October 2010, annual
neers and financial professionals continue to be in high de- inflation rose in ten Member States, remained
mand. The hiring forecast from Finance and Business Ser- stable in five and fell in twelve.
vices employers is the strongest outlook since the survey
began in the German market in 2003. In contrast, employer The lowest 12-month averages were in Ireland
hiring confidence in the Greek and Spanish markets contin- (-1.8%), Latvia (-1.5%) and Slovakia (0.6%) and
ues to erode. However, data for Italy shows improved hiring the highest in Romania (5.8%).
expectations for the third consecutive quarter resulting in
the first positive forecast from Italian employers in more The next issue of Insight will be published on
than two years. Employers in Bulgaria, Slovenia and Turkey 25th January 2011
were surveyed for the first time this quarter.

2. Manpower EMEA
Economic Insight
Issue 8. December 2010
EU End of Year Summit Student demos in UK and Italy
EMEA Economic Insight
Leaders of the EU meet in Brussels last week for their Mass student demonstrations have taken
end-of-year summit. Top of the agenda were the continu- place in central London over the last few
ing efforts that central governments have taken to tackle weeks. In the most recent, over 50,000 stu-
dents took to the streets in protests at cuts to
the on-going debt crisis. Discussions primarily focused on
education funding and a rise in tuition fees.
the improvements to the €750bn joint EU/IMF loan facility. However, the demonstration, the third in as
Ministers also spoke about the need to create a permanent many weeks, failed to stop the UK Parliament
system for handling financial crises from mid-2013. from voting for reform. Similar action also
Following the meeting further pressure may also be put on took place in Naples, Italy where thousands
the European Central Bank to step up its bond-buying of high school children took to the streets in
program to help countries such as Portugal, Ireland and protest at University reform bills.
Greece raise further capital.
New Report on Youth Unemployment
Monster Employment Index rises The global economy is recovering but youth
The November Monster Employment Index Europe reported unemployment is getting worse, according to
a 22% increase in online job opportunities compared to a new OECD report.
year-earlier levels with transport, post & logistics and
“Off to a Good Start? Jobs for Youth” says that
production, manufacturing, maintenance & repair exhibiting
young people are more than twice as likely
the most robust annual growth. Italy noted the largest jump to be unemployed as the average worker. Yet
in opportunities on a monthly basis, whilst Germany and few governments are taking proactive steps
Sweden had the sharpest annual growth. Manufacturing and to boost employment opportunities.
export activity across Europe continues to be a key driver
in the rising levels of job opportunities across the continent, Youth unemployment rates in the OECD
with both sectors reporting substantial growth over the past area are expected to remain at around 18%
12 months. in 2011 and 17% in 2012. This is more than
double the total unemployment rate, which
New survey reveals growing talent shortage stood at 8.6% in October 2010.
New research by the Ifo Institute for Economic Research
“Investing in young people is vital to avoid a
at the University of Munich reveals that 40% of companies
scarred generation at risk of long-term
have problems with finding specialised staff. In the services exclusion,” said OECD Secretary-General
sector (excluding distribution) the reported shortage was Angel Gurría. “We can learn from countries
more than 47%. Medium and large scale firms are equally that have made it easier for young people to
affected by the problem. Only small businesses (50 find jobs. It will help us strengthen the
employees or less) reported fewer problems in finding economic recovery while taking care of the
suitable personnel. most precious asset our countries have.”
By 2015 two thirds of the surveyed firms forecast a Further strike activity in Greece
‘medium’ or ‘strong’ shortage of specialists. By 2020 this Public and private sector workers staged yet
figure increases to +71%. SME businesses see bottlenecks another general strike helping to shut down
public life across wide areas of Greece.
especially for employees with qualified vocational training
Transport networks, including the main port
(59% and 66%, respectively) and fear that the situation will
of Piraeus and Greek airspace as well as
worsen in the future (64% and 67% respectively for 2015). hospitals, government offices, schools and
Companies with 500 or more employees mainly complain TV and radio stations were affected. However
about a shortage of academics (60%). Of the large firms, this had little effect on the Government of
36% reported that they have problems finding George Papandreou as they voted in favour
employees with vocational qualifications. For the future, of accepting austerity measures as part of the
however, these firms expect a growing shortage in this area. EU/IMF back bailout package. Further strike
By 2020, 64% expect to see a shortage of specialists in action is likely in the new year as protestors
continue to demonstrate against changes to
vocationally trained staff. In order to counteract the scarcity
social security and pension benefits and cuts
of specialists, companies are concentrating on targeted fur-
to the public sector workforce.
ther education and professional training (71%). Almost half
of the surveyed firms have special measures to strengthen
the company loyalty of their specialists. Strategy measures
such as outsourcing, acquisitions and co-operations are Is this your copy of the
being used by 15% of companies. Relocation of production Manpower EMEA Economic Insight?
Email graham.murphy@manpower.com to subscribe
to other countries was also listed as a response to the
shortage of specialists.

3. Manpower EMEA
Economic Insight
Issue 8. December 2010
BALKANS GERMANY
EMEA Country Insight
A new tax agreement has just reached between Romania and The German public sector is likely to see a
Bosnia-Herzegovina. The agreement will pave the way for a tough pay negotiation and settlement for 2011.
number of investments by Romanian companies in the Bal- Unions have approached the talks with de-
kans. It will also enhance economic migration between both mands for a flat rate increase of €50 per month
countries. plus a 3% salary increase.
BULGARIA IRISH REPUBLIC
The Bulgarian parliament has voted to increases the state Following acceptance of the ECB/IMF bail-out
retirement age from 2021. The amendments to the Social funds, the Irish government has announced
Insurance Code will also introduce stage rises in pension that a new 90% marginal tax rate will apply this
contributions from 2012. year to bonus payments in the financial
sector. Following a public outcry the govern-
IRISH REPUBLIC ment has also blocked bonus payments of
Austerity measures by the Irish government will mean that the €40m to senior executives and managers at
national minimum wage will fall from €8.65 to €7.65 an hour Allied Irish Bank.
for all new employees. Rates to current employees will not be
changed. NETHERLANDS
A private members bill submitted by both the
LATVIA CDA and Groenlinks parties is seeking to relax
The national minimum wage in Latvia will rise on January 1st legislation around an employee’ rights to flex-
2011 by 11.1% from €254 to €282 a month. This will affect a ible working hours and also their right to work
total of 182,600 employees. from home. The bill is an extension to existing
legislation.
RUSSIAN FEDERATION
Despite cutbacks and austerity measures in several countries SWEDEN
across Europe, civil servants working for central government Tripartite discussions between Government,
departments in the Russian Federation saw their pay rise by employers and trade unions are currently
5.2% between January & September 2010 when compared to taking place to discuss potential changes to
the same period last year. Average earnings are now €1266 per the current immigration rules for workers from
month for Russian civil servants. outside of the EEA. Discussions centre around
the problem of hard-to-fill vacancies and the
BELGIUM existing level of protection for employees.
Despite the rejection of the plan by the socialist union ACOD,
the Belgian rail operator SNCB, is to restructure its opera- PORTUGAL
tions and form a new freight subsidiary which will be known as The European Union has placed pressure on
SNCB Logistics. SNCB was able to reach agreement with the Prime Minister Jose Socrates to amend Por-
ACV-Transcom trade union which means that the reforms can tugal’s Labour Code. Reductions to the level
go ahead. of compensation paid to dismissed workers
and making employers share some of the cost
UNITED KINGDOM burden via a new central redundancy fund are
The UK has released quota details for non-EEA skilled migrant two of the main proposals. There is also the
workers which will come into force from 1st April 2011. Total further potential to encourage flexible working
numbers will be substantially reduced with “Tier one” workers by allowing workers to negotiate individually
cut from 14,000 to just 1,000 and “Tier two” workers capped at on working hours.
20,700. There will be no intra-company quotas but employees
will only be able to transfer into the UK if they earn in excess of RUSSIAN FEDERATION:
£40,000 and will be able to stay for a maximum of 12months. There are an estimated 1.2m people with dis-
However there is now confusion over the legality of the new bill abilities living in Moscow and a new social
as the High Court has deemed the new law illegal. integration scheme has been launched by the
Social Welfare Department of Moscow. Individ-
SPAIN ual schemes include adapting public buildings
The government has proposed that the minimum wage should and the transport infrastructure as well as the
rise by 1.5% to €642.80 per month on January 1st 2011. How- establishment of 800 retraining centres.
ever the government is likely to receive widespread opposi-
tion to the raise from both employers, as it is unaffordable and ITALY:
trade unions, as it is not high enough. The Italian National Insurance Institute for
Workplace Injuries (INAIL) has launched a
CZECH REPUBLIC health and safety drive aimed at improving
Agricultural workers in the Czech Republic (who earn on aver- H&S through technical investments and new
age €700 per month) have decided to called off widespread working practices. A fund of €60m has been
collective action and to accept a new pay offer of 2.7%. set aside for the project.

4. Manpower EMEA
Economic Insight
Issue 8. December 2010
PepsiCo in acquisition mode Apax in exclusive talks for Denmark’s ISS
EMEA Employment Insight
PepsiCo has announced that it is buying a majority 66% Apax, the private equity firm is in exclusive
stake in the Russian dairy & fruit juice maker Wimm-Bill- talks to buy Danish cleaning giant ISS for $8.5
Dann for a total of $3.8bn. PepsiCo also announced that it billion. ISS, one of the world’s largest facilities
services firms, employs more than 500,000
will buy the remaining shareholding once the initial purchase
people, is currently owned by a consortium
has been formalised. The deal is believed to be the biggest headed by Goldman Sachs & Swedish buyout
direct foreign investment in Russia outside of the energy firm EQT. Apax is talking to major sovereign
sector. Announcing the deal PepsiCo said in a statement wealth funds and also large pension funds to
“The transaction will establish PepsiCo as the largest food finance the deal
and beverage business in Russia, making it a leader in the
country’s fast-growing dairy category and build its pres- Icesave compensation agreement reached
Iceland has reached agreement with both
ence in key markets in Eastern Europe and central Asia”
the Dutch and UK governments over com-
Wimm-Bill-Dann was started just 18 years ago with a hand- pensation payments following the collapse
ful of employees based in one room,” said Sergei Plastinin, of Icesave in 2008. Icesave, a subsidiary of
Wimm-Bill-Dann chairman. “Today we have over 16,000 Landsbanki collapsed in October 2008 along
people and 38 production facilities.” The completion of the with two other major Icelandic banks leav-
acquisition is still subject to regulatory approval. ing 400,000 Dutch and UK account holders
without compensation. Following the collapse
Gazprom & Royal Dutch Shell form alliance of its major lending institutions, Iceland was
Gazprom and Royal Dutch Shell signed an agreement “to plunged into a deep recession. This in turn led
pursue broader co-operation”, such as giving Russia’s to a major political storm between the UK and
ambitious state-backed gas company access to Shell’s Iceland. A thawing of relations has occurred
upstream assets outside Russia. The companies have as the UK has recently stopped opposing the
plan for Iceland to join the European Union.
worked together in recent years but fell out in 2006 in a
dispute over the Sakhalin 2 liquefied-gas project. New German-French bridge opens
Germany and France have opened a new
Potential Italian pipeline sale bridge linking Strasbourg and Kehl across the
E. On is in exclusive negotiations with a financial consor- river Rhine as part of an ambitious high-speed
tium to sell its Italian gas network. The Italian gas network rail network to span the EU. The new link will
includes more than 9,300 km of gas pipelines reaching form part of a high-speed rail link from Paris
600,000 customers. E. ON is considering an agreement to Bratislava. The 239m steel bridge took over
with the consortium for an amount between €300-€350m. three years to build at an overall cost of €63m.
Italian and Chinese make move on Draka. Novartis agrees $13bn Alcon deal
Novartis , the Swiss pharmaceuticals giant
Dutch industrial cable maker Draka is subject to a counter
has agreed to buy the remaining shares of US
takeover bid by Chinese industrial group Xinmao. The €1bn
eye-care company Alcon. The deal is expect-
bid is being part financed by Chinese banking giant Minsh- ed to cost Novartis in excess of $12.9bn. No-
eng bank. Xinmao will offer full details to the Dutch regula- vartis has been trying to acquire the remaining
tory authorities by 14 February 2011, although it has stated shareholding since January, when it raised its
that it sees no problems in concluding the deal. However, stake in the firm to 77%. It has also re-insti-
Draka is provisionally moving ahead with a takeover by gated a $10bn share buyback programme.
Prysmian of Italy for €840m. Draka is sought after because
Deutsche Telekom reach agreement with
of its knowledge across several key industrial areas includ-
Vivendi over PTC
ing automotive, data and green energy. The battle to secure German Telecoms giant Deutsche Telekom
Draka has also turned political, with both Italian politicians has finally reached agreement over the
and the EU’s industry commissioner expressing major purchase of Polish mobile telecoms operator
concerns that China’s move into European markets and Polska Telefonia Cyfrowa (PTC). The ongoing
Europe’s tough stance on cartels could undermine European battle with Vivendi started in 2006 with the
cable makers’ competitiveness. initial purchase of PTC, when the agreement
reached split PTC into several business units.
Russian and Indian joint agreement. Deutsche Telekom has agreed to settle all
Russian Prime Minister Dmitry Medvedev has just returned ongoing legal disputes at a cost of €1.4bn.
to Moscow following a two-day visit to India. The two
countries signed agreements on defence, energy and How will the changing world of work affect you?
industrial trade, with both Medvedev and Indian PM Watch the latest world of work trends video
Manmohan Singh vowing to double trade over the next four “Winning in the World of Work”
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