Capgemini seeking Europeans for Latin America market

08 December 2014 Consultancy.uk

Strong growth in the Latin American IT industry is not being met with an adequate local supply of skilled personnel. As a result, international services firm Capgemini is looking to plug its Latin American personnel gap with European workers. As an added benefit, the move will give according to the firm boost its international profile in Latin America, demanded by local customers and clients, while also creating new incentives to attract skilled local IT professionals, with the possibility of an international career.

The Latin American IT market is following a steady growth path, driven by an increasing number of companies expanding their operations in the region, renewing an outdated IT infrastructure, and/or adopting new technologies in order to increase competitiveness. In a recent survey by IDC commissioned by Cisco, 96% of respondents, large international companies, reported the region will become more important for their organisation in the future. "The IT market in Brazil grows far beyond the world-wide average," says IDC analyst Pietro Delai.

Capgemini - Make it Real

While there is considerable demand from local businesses as they expand and embrace the edge that digital and networking technology provides, the local IT skill base in Latin America is not keeping up with demand. The skills gap – evocatively known in Spanish as “la brecha” – will represent a shortcoming of 300,000 networking/communications professionals by 2015. Brazil will be faced with the largest issues, as the shortage will number 117,000 FTE.

For global professional services firm Capgemini the skills shortage in the Latin American market is gradually turning into a major business issue. As it stands, the firm employs over 8,500 of its 10,000 Latin American workforce in Brazil, where the unemployment level is just 4.8%. The firm is looking to capitalise on growth yet the shortage of skilled IT workers, particularly in Brazil, is endangering the realisation of its ambitious growth targets. To counters the labour pressure, Capgemini has announced it will launch a “large-scale recruitment plan” to plug the skills gap with European IT professionals, according to its regional CEO Walter Cappilati.

Brazil faces a shortage of IT talent

By providing an international profile in Latin America, Capgemini hopes to attract local clients and customers that are looking to have international expertise, similar to their international counterparts in Europe and America. “They are expecting us to act as a global group, not local. They want a combination of global and local capabilities,” Cappilati adds. Furthermore, by providing the opportunity for cross-cultural and work exchange for its employees through its international offices, Capgemini intends to create new incentives to attract high skilled Latin American graduates looking for an international career.

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High employment drives deals to access fresh talent

09 April 2019 Consultancy.uk

The UK continues to have a historically low unemployment rate, resulting in a tightening employment market and demand for recruitment services. The industry topped £12.3 billion last year, while valuations continued to rachet up. There were were 32 firm acquisitions in the recruitment services space last year, up significantly on the previous five-year average.

Labour markets globally are tightening, particularly in developed economies. At the same time, access to top talent is becoming increasingly difficult to source, as demand for that talent continues to rise. Higher demand has been one of the key drivers for acquisitions in the space. New analysis of the recruitment M&A market, from consultancy firm BDO, looks at current trends and future projections for activity in the segment.

The UK employment rate has grown considerably over the past decade, with the number of NEET decreasing, more women joining the workforce, and older people continuing to work, among other trends. Participation rates hit more than 75% in 2018, up from around 73% in 2014. The unemployment rate dropped to 4.1% last year, the lowest level in more than 40 years.

UK Recruitment Market

 

The recruitment industry has enjoyed strong growth over the same period, with revenues increasing from around £8 billion in 2014 to £12.3 billion last year. However, the growth rate for the industry is expected to stall for the coming years – the firm is projecting annual growth of 0.1% to 2024. The stall reflects deep seated uncertainties stemming from the future of the UK, from migration to internal employment in an increasingly uncertain future.

According to the firm’s analysis of market trends for UK listed FTSE recruitment companies, their performance over 2018 outperformed the wider FTSE market by a significant market during some months – the end-of-year uncertainty hit both recruitment and non-recruitment firms with relatively equal strength. The drop partly reflects market sentiment about the future of the UK.

FTSE Listed Recruitment Firms Average EV/EBITDA Multiple

 

The study also considered the multiples growth, average EV/EBITDA multiples, over the past year – which has shown considerable ups and downs. The yearly average multiple of 10.4x was above that of 2017’s 9.9x – although a 26% drop at the end of the year was significant. The drop was tied to the relative volatility in macroeconomic conditions affecting the globe, though another major contributing factor has been Brexit and political instability.

Global M&A

The global recruitment M&A market was particularly active in the UK, with 32 deals last year – a five-year high, and well above the 17 recorded for second-place US. Deal activity in the UK was focused on expertise and capacity in industrial and technical sectors, reflecting skills shortages in those segments. The US was largely focused on healthcare-related M&A, representing 25% of their market.

Overall, of the 92 deals in 2018 (a 21% drop on 2017) generalist firms were the most in demand, at 25% of the total, followed by education at 14% and engineering & construction at 13%. Software saw relatively low demand, at 2%.Investment into the UK by country

In terms of investments made into the UK, domestic investment continues to be the most dominant, accounting for 24 deals. Japan made three deals, although Brexit is seeing the country become increasingly nervous about investment. The US accounted for two deals. The longer-term trend shows that domestic investment is up on 2017, hitting the highest level in five years, while the US has reduced its M&A investment into the UK.

Commenting on the results, the firm noted, “The latest report shows the recruitment sector remains strong and continued to grow through 2018 despite facing many challenges. Notwithstanding the personalised nature of these services, the market continues to evolve, seeing traditional recruitment firms utilising available technology along with new entrants showcasing innovative platforms.”

Related: High UK employment masks troubled economy.