European firms cautious, but still hiring: Manpower

DAVOS, Switzerland (Reuters) - European employers are still hiring strongly although they have become more cautious as a possible economic slowdown looms, the regional head of one of the world's largest employment services firm said on Wednesday.

Barbara Beck, Manpower (MAN.N) president of Europe, Middle East and Africa, told Reuters there had been some slowing in the labor market in sectors such as financial services, among the hardest hit by the credit crisis that emerged last year.

"There is an element of caution creeping in... the finance sector. There is slowing in very specific pockets of a market place," she said in an interview on the sidelines of the World Economic Forum in Davos.

"Everyone is in a wait and see mode. That can lead to a slowdown in the market. Employers are assessing the conditions in the market and there is a very measured approach in hiring."

A decline in the U.S. housing market and multi-billion dollar write-offs of investments in subprime mortgages have led to concerns the United States might dip into a recession and affect the rest of the world.

However, Manpower's quarterly global survey for the first quarter of 2008, where it interviewed nearly 52,000 employers across 27 countries, showed positive hiring.

Employers in France, Italy and the Netherlands reported their most optimistic hiring intentions since the survey began in these countries.

Manpower's surveys have served as a leading indicator and their U.S. surveys turned sharply lower before the two most recent U.S. recessions.

Beck said the current labor market cycle was different from previous cycles as emerging markets showed strength.

"We're seeing the evidence of a decoupling in the market," she said.

Talk of consolidation in the employment sector has intensified since Dutch employment firm Randstad (RAND.AS) said it was buying rival Vedior VDOR.AS in a deal worth 3.2 billion euros ($4.65 billion) to create the world's second-largest staffing company.

Beck said Manpower is not opposed to acquiring other firms to grow but it preferred organic growth.

"Manpower has traditionally taken an organic approach as opposed to major acquisition," she said, adding Manpower was not in discussion to buy Dutch staffing firm USG People (USGP.AS).

(Reporting by Natsuko Waki; editing by Sue Thomas)