February 22, 2018 / 11:11 AM / 10 months ago

ISS flags modest European wage growth despite labour shortages in east

COPENHAGEN, Feb 22 (Reuters) - Danish outsourcing group ISS , one of the world’s biggest private employers, said on Thursday that wage growth in Europe remains modest despite labour shortages in Eastern Europe and a recovery in job markets across the continent.

“Growth in wages is slightly higher than normal, because of a pickup in the European economy, but it doesn’t deviate much from what we have seen previously,” Chief Executive Jeff Gravenhorst told Reuters.

“It’s still in the 1-2 percent range,” he said.

The modest rise comes despite ISS, which employs 489,000 people making it one of the 10 biggest private employers worldwide, facing labour shortages in Eastern Europe.

Those shortages are helping push wages higher, which in turn makes more people return home after seeking work in Western Europe, he said.

ISS operates in 77 countries with continental Europe as the biggest contributor to revenues last year.

The company started primarily as a cleaning business but has expanded gloablly to offer facility services ranging from cleaning offices and cooking meals to guarding buildings and operating call centres.

Part of the reason for modest wage growth across Europe may be that minimum wages for ISS staff in areas such as cleaning have been rising steadily in recent years despite low inflation, Gravenhorst added.

Gravenhorst also said he expects higher wage growth in the United States, because wages have been stagnant in recent years, but that he saw no signs of labour shortages.

ISS said on Thursday revenue last year totalled 79.9 billion Danish crowns, implying an organic revenue growth of 2.4 percent and an operating margin steady at 5.7 percent.

Reporting by Jacob Gronholt-Pedersen; Editing by Adrian Croft

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