ManpowerGroup 2014 Annual Report Download - page 51

ManpowerGroup | Annual Report 2014 49
In Germany, the Confederation of German Trade Unions (representing eight German trade unions and over six million
people) and the Employer’s Association of the Temporary Staffing Industry (representing two major temporary worker
employers’ associations) entered into a new Collective Labor Agreement (CLA). The first phase of the CLA was effective in
November 2013 and January 2014, and required higher wages to temporary employees and higher cost for vacation, sick
pay, and temporary staff time accounts. In 2015, the second phase of the CLA will take effect with the creation of salary
bands in January and approximately a 3.5% to 4.5% wage increase in April. These changes will have an unfavorable impact
on our gross profit margin in Germany, as we pass on many of these additional costs to the client without a mark-up.
However, the first phase of the CLA did not have a significant impact on our consolidated or Northern Europe financial
results in 2014, and we currently do not expect the impact of the other changes will be significant.
The Agency Workers Directive (“AWD”) impacts all EU member states and was passed to ensure “equal treatment” for
agency (temporary) workers. It also requires all member states to review and address unnecessary prohibitions and
restrictions on the use of agency workers. Equal treatment had been in place by law in many countries; therefore, we have
not seen any significant changes. We have seen a decline in gross profit margin in some countries, as any cost increases
could not always be passed on with a normal mark-up, but there was no other significant impact on our business from
these changes.
In June 2013, the employer mandate provisions of the new U.S. healthcare legislation, Patient Protection and Affordable
Care Act (PPACA), were delayed until 2015 from the original effective date of 2014. The employer mandate provisions of
PPACA are expected to have the greatest financial impact on us and our clients with U.S.-based employees. We expect this
legislation will increase the employment costs of our permanent employees and our associates, but we continue to assess
the potential impact. Our intention is to pass on to our U.S. clients any cost increases related to our associates; however,
there is no assurance that we will be fully successful.
Recently Issued Accounting Standards
See Note 1 to the Consolidated Financial Statements.
Forward-Looking Statements
Statements made in this annual report that are not statements of historical fact are forward-looking statements. All forward-
looking statements involve risks and uncertainties. The information under the heading “Forward-Looking Statements” in our
annual report on Form 10-K for the year ended December 31, 2014, which information is incorporated herein by reference,
provides cautionary statements identifying, for purposes of the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995, important factors that could cause our actual results to differ materially from those contained in the
forward-looking statements. Some or all of the factors identified in our annual report on Form 10-K may be beyond our
control. Forward-looking statements can be identified by words such as “expect,” “anticipate,” “intend,” “plan,” “may,”
“believe,” “seek,” “estimate,” and similar expressions. We caution that any forward-looking statement reflects only our belief
at the time the statement is made. We undertake no obligation to update any forward-looking statements to reflect
subsequent events or circumstances.
Management’s Discussion & Analysis