Has the darkest hour passed? The profits of European and American human resources giants have slightly rebounded, and the dawn of industry recovery is beginning to appear

According to Zhitong Finance APP, after a dismal performance at the beginning of the year, human resource service providers in Europe and the United States showed signs of stabilization in their performance in the second quarter. MANPOWER GRC (MAN.US), Robert Half (RHI.US), and Adecco Group (AHEXY.US) reported slight quarter-on-quarter earnings growth as employers began to adapt to geopolitical and economic instability.

The gross profit of human resource companies may have emerged from the trough.

Mixed Performance

Adecco's second-quarter earnings exceeded expectations due to a faster-than-expected increase in flexible positions, and the company also anticipates better earnings in the second half of the year.

Dutch competitor Randstad (RANJY.US) expressed a similar view, reporting stable quarter-on-quarter gross profit. CEO Sander van't Noordende stated during the earnings call that "market sentiment has slightly improved," which may drive demand for temporary positions.

MANPOWER GRC's performance exceeded expectations. CEO Jonas Prising stated that companies are now better able to cope with unforeseen shocks.

Nevertheless, the overall tone of the industry remains cautious, with companies warning that many challenges lie ahead. Prising noted that while the North American market is "resilient," it is cooling down, and the situation in Northern Europe is "extremely severe."

Bloomberg Intelligence analyst Stuart Gordon stated, "We are in a strange vacuum, and I am not sure if the situation will worsen, but some positive signs are needed to attract investors back. If we start to see a recovery in the second half of this year, then next year should be relatively good."

The performance of Robert Walters Group was disappointing, with a 16% decline in gross profit in the first half of the year due to weak recruitment activity in Europe. The company canceled its interim dividend and warned that there would be no significant improvement in recruitment in the short term.

Robert Half's third-quarter guidance was below expectations, and comments about rising small business confidence failed to uplift shareholders. Since the earnings announcement, the company's stock price has fallen by 19%, and it has dropped 51% year-to-date.

Job Market Remains Sluggish

Despite a rebound in recruitment activity in the U.S. in July, job growth in the manufacturing and professional services sectors has slowed—these two sectors are key areas for MANPOWER GRC and Robert Half. Bloomberg Intelligence analysts Gordon and Evgeniy Batchvarov noted that tariffs are putting pressure on factory jobs, while artificial intelligence and business uncertainty are suppressing white-collar recruitment activity. The unemployment rate has also slightly increased In Europe, the situation is even more severe. The unemployment rate in the UK has reached its highest point in four years, while employment conditions in France and Germany remain sluggish.

In the three months ending in June, the number of job vacancies in the UK fell further below pre-pandemic levels, primarily due to significant increases in the minimum wage and the Labour government's implementation of a £26 billion ($35 billion) payroll tax increase policy. Gordon stated, "I'm afraid the worst moment for the UK has yet to come." He noted that labor costs are continuously rising.

Due to fluctuations in consumer and business confidence, as well as ongoing uncertainties surrounding U.S. President Donald Trump's trade policies, a full recovery in the recruitment market may still take some time.

The performance in the next quarter may determine whether the industry can ultimately reverse its downturn. Gordon remarked, "Once these companies emerge from the trough, the rebound will be very, very fast."