France "desperately" needs to boost the competitiveness and attractiveness of its labor market, Adecco Chief Executive Alain Dehaze told CNBC, adding to the continuing debate over France's working practices.
His comments come as Adecco, the world's biggest staffing group, posted a surprise half-billion euro ($542,000) net loss in the third quarter due to a 740 million euro ($804.53 million) impairment of goodwill after regulatory changes in Germany and a weaker macroeconomic outlook in certain markets, the group said.
The earnings showed divergence in the regions, with emerging markets and southern Europe growing strongly and sluggish growth in France and the U.S., two of Adecco's key markets. Dehaze defended the growth figures, however, saying growth was slow but sure.
"Europe grew 3 percent this quarter, North America slowed down slightly from 2 to 1 percent and Japan and the rest of the world grew 10 percent. As we announced, France is slowly but surely recovering, we have always said this country would be the latest one. We see very strong development in Italy and in Spain, without double-digit growth."
Dehaze is largely credited with turning around the fortunes of Adecco's French business. He said French government labor reforms were helping the labor market to regain its competitiveness but more could be done.
"France desperately needs to work on its competitiveness and attractiveness. What we have seen in the last two and three years is a lot of measures to reinforce this competitiveness such as the tax credit, the reduction of social charges and we are pleased with announcements on the simplification of the labor code."
His comments come after France's labor market hit the headlines in the unlikely arena of the U.S. presidential debate last week. Republican presidential hopeful Jeb Bush made a jab at rival Marco Rubio's voting record in the U.S. Senate, saying it was akin to a French working week (of three days).
The French working week is, officially, 35 hours. Gerard Araud, the French Ambassador to the U.S., was quick to point out after Bush's comments that the French work an average of 39.6 hours a week compared to 39.2 for the Germans. Bush apologized earlier this week, saying he had since learned the French work longer hours than the Germans.
A 'strong quarter'
Revenues at Adecco rose 4 percent organically to 5.673 billion euros ($6.17 billion), holding steady the 4 percent underlying growth seen in the first and second quarters, the company reported on Thursday.
Dehaze said he was "very pleased with the strong third quarter" and that the impairment charge did not affect the financial position of the company or its dividend policy.
The net loss of 513 million euros compared with analysts' expectations for net income of 223 million euros in a Reuters poll.
Adecco lowered its target for an earnings before income tax and amortization (EBITA) margin to 5.2 pct excluding one-offs for 2015 from 5.5 percent previously and said it anticipated 2016 margins to be similar to those now expected for 2015.
Reuters contributed to this report.
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