annual report 2013
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operational glossary

Agency work

Agency work is a special form of temporary work, where generally the employer does not hire the employee directly on a contract with a limited duration, but through a private employment agency. The employee is mostly hired directly by the employment agency, mostly on a temporary basis but sometimes on a permanent contract. During the contract period the employee can be assigned to different user companies.

Aging population

The process in which the working population is shrinking due to an increasing number of people leaving the labor market because of their age.

Blue-collar worker

Within Staffing we typically divide the market into blue-collar and white-collar work. The distinguishing factor is difference in skill sets. Blue collar is predominantly geared towards industrial and technical job profiles.


Branches are physical office locations from which our consultants operate.


Randstad is known for building strong brands in the HR services sector. We believe strongly that branding is not just about advertising. It is also very much about the philosophy and identity of the company behind it. Behind the Randstad brand portfolio are a number of sophisticated systems that enable smart and efficient collaboration between marketing managers worldwide, without constraining creativity. All appearances of the Randstad brand, and the endorsed brands that have the same family characteristics, benefit from the support of a global, web-based marketing operations management system, incorporating state-of-the-art digital asset management. In short, this means that the marketing materials that are developed in one country are also available for the others, and that various marketing disciplines are spearheaded by experts from different countries, working together on a marketing intranet. Over the past years, the use of this system has lowered the non-visible part of our marketing costs considerably, freeing up resources for investments in a wider reach. Other benefits are increased speed to market, enhanced learning and more time to focus on local actions and adaptations where these make the difference.


Another term for the people we put to work at our clients (temporary and permanent employees).


Our worldwide industry federation, officially known as International Confederation of Private Employment Agencies.


Our concepts represent the services we offer to our clients. We standardize the working processes per concept in order to easily 'copy and paste' them across our operations around the world.


A consultant is a front-office employee who is located at one of our outlets, directly meeting the demands of clients and candidates.


A driver of market growth we try to influence as much as possible is deregulation. While deregulation is a well-known and accepted term, we stress that we are not looking for a system without rules. In fact, we strive on the one hand for the lifting of unjustified restrictions in overregulated markets, and on the other for a fair and effective regulatory environment in markets where this has yet to be introduced.

Dividend policy

Our current dividend policy is to pay € 1.25 per ordinary share if the payout as percentage of adjusted earnings per share is between 30%-60% and our financial position allows for it. While we maintained our current dividend policy over 2012, we will offer shareholders a choice between shares and cash. As from 2013, we will introduce a new dividend policy which aims at a payout ratio of 40%-50% of adjusted earnings per share. We will also offer shareholders a choice between shares and cash dividend. At the same time we aim to install antidilution measures, such as share buy-backs, when our financial position allows for it.

Employees working/candidates/staffing employees

The number of temporary employees currently working for our clients.


Our European industry federation, officially known as European Confederation of Private Employment Agencies.


Full-time equivalent.

Field steering

Our field steering model is used to manage and direct performance across our businesses. By embedding operational performance tools at every level of our organization, the field steering model helps operational managers to take the right decisions, at the right time, and translate them into action. Managers receive up-to-date, accurate reports on a weekly basis, covering a range of key performance indicators. These data enable us to manage our units and teams in the field by adapting to changing client and market demands as they occur.

Inhouse location

An inhouse location is a branch that is located at a client’s premises, where our consultants work on-site dedicated to that specific client.

Managed Services Provider (MSP)

An MSP is a company that takes on primary responsibility for managing an organization's contingent workforce program. An MSP may or may not be independent of a staffing supplier.


Outlets are branches and inhouse locations combined.


Within outplacement we counsel and support organizations in situations when a contract between an employer and an employee has to be ended because of a strategic decision or other reasons. We assist employees in their search for a suitable job to make the transition as smooth as possible.


Outsourcing is the sustainable transfer of several client activities with output responsibility both in the production/logistics and administrative environment.

Penetration rate

The penetration rate is the percentage of flexworkers in the total working population.

Permanent placement

Apart from attracting candidates for temporary jobs, we also service clients by recruiting candidates for permanent positions. The process involved is referred to as permanent placement.


Professionals is the service we offer to our clients where we offer a broad and deep range of candidates with an academic or equivalent degree on a temporary or interim basis, as well as on a permanent placement basis through Search & Selection.


The process of hiring candidates for permanent positions.

Recruitment Process Outsourcing (RPO)

RPO is the transfer of operational responsibility for one or more recruiting functions or tasks, including recruitment administration, from the client to a service provider.


Secondment refers to a Staffing variant where we are the legal employer of the temporary worker.


Specialties are the specific market segments that dedicated units in our Staffing business focus on, such as healthcare, transport, airports and call centers. The knowledge, experience and expertise we gain by focusing on these specialties translate into added value for clients, flexworkers and candidates.

Staff turnover

The number of employees leaving our company.


A service we offer to our clients where we match candidates with temporary positions at our clients.

Temporary work

Compared to part-time work, an even more flexible form of labor is temporary work. This includes both agency workers and limited duration contract workers.

Two-tier board structure

A governance structure, in which the board is split between an Executive Board and a Supervisory Board. The Executive Board is responsible for developing, driving, executing and achieving the approved strategy and strategic targets, while the Supervisory Board acts in the interest of the company by supervising and advising the Executive Board.

Vendor Management System

A VMS is an internet-enabled contingent worker sourcing and billing application that enables a company to procure and manage a wide range of contingent workers and services in accordance with client business rules.

White-collar worker

Within Staffing we typically divide the market into blue-collar and white-collar work. The distinguishing factor is difference in skill sets. White collar is predominantly geared towards administrative job profiles.

sustainability glossary

Business flights

Total distance traveled by airplane for business purposes.

Company cars

Leased cars used by employees or candidates, including record of the average number (unless stated otherwise) of cars and the total number of kilometers driven.

European platform

A Randstad platform, where representatives from our European operating companies – both candidates and employees – and Group management, also in the presence of the representative trade union UNI-Europa, discuss relevant policy issues and operational developments. This European Platform for Social Dialogue meets twice a year.


An incident causing the death of a corporate staff member or candidate.

Fixed-term contract

An employment contract with a particular end date, meaning that the contract ends after a certain event or on the completion of a task.


Individual development plan for employees.

Local sickness rate

Number of working days lost due to sickness within Randstad, based on actual working days. Sickness rate calculation: number of workings days lost / (average FTE x available days).

Lost Time Injury (LTI)

Days off work due to work-related injury, based on actual working days. Injury rate calculation: number of workings days lost / (average FTE x available days).

Misconduct Reporting Procedure (MRP)

Grievance mechanism; a facility, operated by an independent external provider, where serious breaches of the Randstad business principles can be reported if the regular avenues are inappropriate.

National sickness rate

Sickness rate in a country as most recently quoted by local public administration or authorities. In some countries, national sickness rates exclude absence due to work-related accidents and/or pregnancy leave; in other countries these elements are included.

Net Promotor Score (NPS)

The NPS represents the relationship between temporary employment agencies and their potential and actual candidates/clients. This indicator compares the number of respondents who would not recommend the company in question with the number who would.

People Survey

An annual survey, conducted by an external provider, which measures and benchmarks the level of engagement of our employees globally.

Permanent or open-ended contract

An employment contract for an indefinite period of time; this metric includes employees with a permanent or open-term job but without an official contract, which is often the case in e.g. the US.


Reputation Institute’s annual Global RepTrak® Pulse is a standardized scorecard to analyze the company’s reputation among various stakeholders: investors, clients, employees, and candidates. This study provides key insights into what drives their perceptions and how these perceptions influence behavior. The instrument provides Randstad with feedback regarding how the company is perceived in terms of, among other things, workplace, governance, citizenship and leadership.

Senior management

Refers to all levels equal to or above district/regional management, including account management or commercial management reporting to a regional director or higher.

Sickness absence

Includes both short-term and long-term sickness. Generally excludes absence due to work-related accidents and pregnancy leave, unless local authorities use a different definition.

Supplier code

Requires suppliers of goods, works and services to respect our regulatory, social and ecological principles and to adopt practices consistent with these principles.

Training costs

Total expenditure on training of candidates or employees. In addition to external costs of training, an estimate is made of the salary costs of internal trainers.

Training hours

Number of hours spent on training of candidates or employees, both in internal and external programs designed to train people in performing their job responsibilities. Training of employees excludes attendance at the Frits Goldschmeding Academy, which is reported separately.

Turnover rate

The number of employees (FTE) who left the operating company during the year (either leaving the Randstad Group or leaving the operating company due to a transfer within the Randstad Group) divided by the average number of employees.

VSO volunteers in home country/pro bono

Number of employees (headcount) working on an indefinite contract with an operating entity, who have provided support to VSO (e.g., HR/finance/marketing/legal or strategic advice, fundraisers) in their home country or at a VSO office (e.g., in the UK or the Netherlands).

VSO volunteers on overseas placement

Number of employees (headcount) working on an indefinite contract with an operating entity, who have carried out a VSO assignment in Africa, Asia or Latin America.

Volunteer hours

The number of hours actually worked by the volunteer(s) or: number of months of placement x 4 weeks x 36 hours; for short-term volunteers: number of weeks x 36 hours.

Work-related injuries

Accidents during working hours, whether on work premises or while traveling as part of work duties, causing candidates or employees to be injured on a scheduled workday or normal work shift, resulting in days off work.


The Randstad Workmonitor is published four times a year, making both local and global trends in mobility regularly visible over time. The Workmonitor's Mobility Index provides a comprehensive understanding of job market sentiments and employee trends.

financial glossary

Amortization (and impairment) of acquisition-related intangible assets

Upon acquisitions Randstad identifies intangible assets, such as customer relationships, brand names and candidate databases. These acquisition-related intangible assets are amortized over 1 to 8 years, on average, leading to an annual non-cash amortization charge which is included in operating profit.

Capital expenditures

Part of cash flow from investing activities. Amounts incurred for investments in property, plant and equipment (e.g., furniture, computer hardware) and software.

Cash flow from operating activities

EBITDA adjusted for changes in working capital, taxes on income, movements in other balance sheet positions, such as provisions, and certain other non-cash items.

Closing price

Share price of Randstad at the end of a given trading day on Euronext where an ordinary share of Randstad is listed.

Cost of services

Expenses which are directly attributable to revenue. These costs mainly include expenses related to staffing employees, such as wages, social security charges and taxes.

DSO (Days Sales Outstanding, moving average)

This KPI represents the number of days before we are able to convert sales into cash (received from our customer). Formula: trade receivables (before provision for doubtful debts) over the last 12 months divided over the revenue over the last 12 months, including value added tax multiplied by 365/12

Diluted earnings per ordinary share

Diluted earnings per ordinary share are calculated by adjusting the weighted average number of ordinary shares outstanding, assuming conversion of all dilutive potential ordinary shares. The dilutive potential ordinary shares arise from various share-based payment arrangements.

Dividend on ordinary shares

Part of net income attributable to holders of ordinary shares that will be distributed to holders of ordinary shares.


Earnings Before Interest, Taxes and Amortization (and impairment of acquisition-related intangible assets and goodwill). It is basically the same as operating profit adjusted for amortization charges on acquisition-related intangible assets. This is the key performance indicator when looking at the profitability of our business.

EBITA margin

EBITA as percentage of revenue.


Earnings Before Interest, Taxes, Amortization and Depreciation. It is basically the same as operating profit adjusted for amortization and impairment charges on acquisition-related intangible assets and goodwill, depreciation, amortization and impairment of property, plant and equipment and software.

EPS (basic Earnings Per Share)

Net income attributable to holders of ordinary shares divided by the weighted average number of ordinary shares outstanding.

Enterprise value

Market capitalization plus net debt.

Free cash flow

Free cash flow is the sum of net cash flow from operating activities and investing activities adjusted for cash flows for acquisitions and disposals of subsidiaries and associates.

Gross margin

Gross profit as percentage of revenue.

Gross profit

Revenue minus cost of services.


International Financial Reporting Standards.

Incremental conversion ratio

Additional EBITA in a year, when compared with the previous year, as a percentage of additional gross profit in a year, when compared with the previous year. We aim for an incremental conversion ratio of 50%, if gross profit growth has been achieved.

Leverage ratio

Net debt divided by 12-month EBITDA. We aim at a leverage ratio of between 0 and 2x EBITDA, which is important for continuity. The syndicated loan documentation allows us a leverage ratio of 3.5x EBITDA.

Liquidity of shares

Total number of shares traded on Euronext.

Market capitalization

Total shares outstanding multiplied by the share price of Randstad.

Net debt

Cash and cash equivalents minus current borrowings and non-current borrowings.

Net finance costs

Net finance costs include net interest expenses in relation to our net debt position, foreign currency exchange results, net interest expenses due to passage of time, and other items.

Net income

Operating profit minus net finance costs, share of profit (or loss) of associates, and taxes on income.

Net income attributable to holders of ordinary shares

Net income adjusted for the dividend on preferred shares, as well as for results of non-controlling interests.

Net income attributable to holders of ordinary shares before amortization and impairment of acquisition-related intangible assets and goodwill

Net income attributable to holders of ordinary shares, adjusted for amortization and impairment of acquisition-related intangible assets and goodwill after taxes.

Operating expenses

Operating expenses comprise personnel and accommodation expenses in relation to the activities at the outlets and the various headoffices, IT expenses, other general and administrative expenses, as well as the amortization and impairment of acquisition-related intangible assets and goodwill.

Operating expenses margin

Operating expenses as a percentage of revenue.

Operating profit

Gross profit minus operating expenses.

Operating working capital

Trade and other receivables (excluding current part of held-to-maturity investments) minus trade and other payables. The level of working capital is related to the timing of the invoicing and payrolling processes (weekly or monthly). In addition, the payment terms we negotiate with clients and the effectiveness of our collection processes are equally important. Liabilities, such as social security charges, wage tax and value added tax are settled every month and in some countries on a quarterly basis. Payment terms are often determined by law and therefore difficult to influence.

Payout per ordinary share

Dividend on ordinary shares divided by net income attributable to holders of ordinary shares before amortization and impairment of acquisition-related intangible assets and goodwill and one-offs after taxes.


We measure productivity in three ways: (1) number of temporary workers per staff member (EW/FTE), (2) gross profit per staff member (GP/FTE), and (3) gross profit in relation to personnel expenses (GP/PE).

Recovery ratio

The total year-on-year change in operating expenses as a percentage of the decline in gross profit. We aim for a recovery ratio of 50% in case gross profit declines.


We distinguish three categories of revenue: revenue from temporary billings, permanent placement fees, and other revenue. 'Revenue from temporary billings' includes the amounts received or receivable for the services of temporary staff including the salary and salary-related employment costs of those staff. These revenues are generally based on the number of hours worked by the temporary staff. 'Revenue from permanent placements' includes the fee received or receivable for the services provided. The fee generally calculated as a percentage of the candidate’s remuneration package. The category 'other revenue' includes revenue for services such as payrolling, outplacement, outsourcing, managed services provider, consultancy, and related HR offerings.

Revenue categories

Revenue categories are service concept: Staffing (including HR Solutions), Inhouse Services, and Professionals.

Segment reporting

Segments are geographical areas and are reported in line internal reporting.

Share in profit/loss of associates

Associates are companies, in which Randstad Holding nv has significant influence, but no control, over the financial and operational policies, generally accompanying shareholding of between 20% and 50% of the voting rights. The share of profit or loss of the associate is presented in this line of the income statement.

Syndicated credit facility

Randstad has a revolving multi-currency credit facility of € 1,420 million, the majority of which will mature in 2018. In addition, we have a Japanese syndicated credit facility with a group of Japanese banks. The facility amounts to 8 billion Japanese yen, or approximately € 55 million, and will mature in 2016. Finally, we have bilateral credit lines of € 175 million, which will mature in December 2014. The loan documentation of all credit facilities allows a leverage ratio of 3.5 times EBITDA, although we aim for a leverage ratio of between 0 and 2, which is important for continuity.

Taxes on income

Taxes on income comprise current taxes and the realization of deferred taxes. Current taxes on income are the sum of taxes levied on the results before taxes, in the countries, in which those results were generated, based on local tax regulations and against tax rates of the applicable year. Tax-exempt income and expenses not deductible for tax purposes are taken into account in calculating taxes on income.

Velocity of shares

Velocity represents the average holding period of a share in Randstad. It is measured as the total number of shares traded divided by the average number of shares outstanding.