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Randstad buys outplacement firm RiseSmart for $100 million

September 25, 2015

Randstad Holding nv acquired a 100% stake in outplacement provider RiseSmart for $100 million in a deal that closed Thursday.

The world’s second-largest staffing firm provided outplacement services before the acquisition, but RiseSmart will be the company’s outplacement provider in the US going forward. Plans call for RiseSmart to operate independently as part of the Randstad Soureright operations. RiseSmart President and CEO Sanjay Sathé will remain, and the business will continue to be based in San Jose, Calif.

Outplacement providers are retained by client companies to assist departing employees find new jobs. However, RiseSmart differs from traditional outplacement firms in its technology and that it operates virtually, said Rebecca Henderson, group president, professional solutions, Randstad US.

Henderson said RiseSmart uses its own search technology to match workers with jobs. In addition, workers using RiseSmart meet over the telephone with a transition coach — who has a recruitment background — as well as a resume writer who helps workers with their resumes and online profiles. Workers also get in contact with a job concierge that takes RiseSmart data and helps them focus on which jobs they should apply for.

RiseSmart gets people back to work 64% faster than the national average, according to Randstad. In addition, 80% going through the program land a job — 72% with the same salary or better.

 “This is great for RiseSmart, this is great for Randstad,” Henderson said. “Randstad is continuing to add to our portfolio around HR services, and this continues to complement strategy there.”

Randstad initially looked at investing in RiseSmart through its Innovation Fund but ultimately decided to purchase the company outright because it was a great match, she said.

The acquisition gives Randstad a larger entry into the outplacement market. The world’s largest staffing firm, Adecco, and third-largest, ManpowerGroup Inc. (NYSE: MAN), already have their own US outplacement businesses, accounting for roughly 40% of market share in 2013, according to Staffing Industry Analysts’ “2014 Largest Outplacement Firms in the United States” report. Adecco’s brand is Lee Hecht Harrison and ManpowerGroup’s brand is Right Management.

“As a standalone company, we disrupted the outplacement industry with our technology-led offering and enjoyed enormous growth,” said RiseSmart leader Sathé. “Now with Randstad’s extensive customer base, global reach and comprehensive services portfolio, we can transform how employers transition talent, protect employer brands and reduce risk — on a massive scale.”

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