Adecco Bets on High-End HR Consulting with LHH Expansion, Shifting Focus from Traditional Staffing

In a significant strategic shift, global workforce solutions giant Adecco Group (SWX:ADEN) is doubling down on the high-value consulting space. The company has launched a new global HR and talent consulting business under its LHH brand, signaling a move beyond its core temporary staffing roots to compete more directly with firms like Mercer and Korn Ferry.

The launch comes at a pivotal time for Adecco. Its shares recently closed at CHF 22.62, painting a complex performance picture: an 8.7% gain over the past year contrasts with a 23.0% decline over three years and a steep 46.8% drop over five. This new consulting push is widely seen as an attempt to diversify revenue streams, improve margins, and build more stable, long-term client relationships—factors that could potentially re-rate the stock if successful.

"This isn't just a new service line; it's a fundamental repositioning," said a sector analyst who requested anonymity. "The traditional staffing market is fiercely competitive and often cyclical. By leveraging LHH's brand in career transition and development to offer broader organizational consulting, Adecco is targeting a more lucrative and advisory-driven segment of the human capital market."

The success of this initiative hinges on Adecco's ability to convince the market it can build and scale a credible consulting arm. Investors will be watching closely for updates on client wins, fee structures, and the impact on the group's overall profitability mix in upcoming earnings calls.

Market Voices: A Mixed Reaction

We gathered reactions from industry observers:

• Michael Thorne, Portfolio Manager at Veritas Capital: "Strategically, it makes sense. The consulting model offers better margins and stickier revenue than placing temporary workers. If they can execute, this could be the catalyst for a sustained revaluation. The key is whether they can attract top-tier consulting talent."
• Sarah Chen, HR Director at a multinational tech firm: "As a potential client, I'm intrigued. We already use LHH for outplacement. If they can provide the same quality of insight for broader talent strategy, they could become a one-stop shop, which has appeal."
• David Krause, independent financial blogger: "This feels like a desperate Hail Mary from a management team that has presided over a 47% stock collapse in five years! They're jumping into a crowded consulting field against entrenched players. Shareholders should be asking why they didn't fix the core business first. This is a distraction, not a solution."
• Priya Sharma, Senior Analyst at Bergstrom Consulting: "The timing is interesting. With so many companies undergoing digital transformation and workforce restructuring, the demand for strategic talent advice is high. Adecco's global footprint gives them data and reach that pure-play consultants might envy. Execution is everything."

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investors should conduct their own research or consult a financial advisor before making any investment decisions.