* Q4 net income of 141 mln euros vs 116 mln forecast
* To buy back 2 pct of shares
* Ups dividend to 1.10 Sfr/shr vs 0.75
* Shares up 5.8 percent, outperform sector
Adecco (ADEN.VX), the world's biggest temporary staffing company, expects demand to improve as employers seek flexible labour to fill jobs in an uncertain recovery.
This year got off to a good start, with sales rising 17 percent organically in January from a year earlier, Chief Executive Patrick De Maeseneire said on Thursday.
Temporary employment is seen as a leading indicator for wider labour markets. So far, many employers have been reluctant to commit to full-time hiring, preferring temporary workers as a way of staying flexible in case the recovery falters.
The environment will stay favourable for flexible labour in 2011, Adecco said. Permanent jobs will be created but just enough to cover the new entrants into the labour market. Unemployment is likely to remain at high levels in most developed economies.
Shares in Adecco, which fell about 5 percent in the second half of February, were up 5.8 percent to 65.3 francs at 0934 GMT, outperforming the sector .SXNP and the top gainer on the Swiss blue-chip index .SMI.
Adecco also proposed a rise in its dividend to 1.10 francs a share from 0.75 francs in 2009 and a new share buyback of up to 2 percent of shares.
That, coupled with the strong results and a technical recovery, were the factors lifting the stock, traders in Zurich said.
Prior to the release of the results the stock priced in quite a bit a lot of negatives, one trader said.
Adecco, which competes with Dutch group Randstad (RAND.AS) and U.S.-listed Manpower (MAN.N), recorded a fourth-quarter profit of 141 million euros, beating a forecast of 116 million euros in a Reuters poll.
In France, the firm's biggest market, sales rose 20 percent organically in January, 18 percent in North America and nearly 40 percent in Germany.
January growth showed no slowdown compared to Q4, which is positive, Julius Baer said in a note, adding that the outlook boded well.
Joblessness remains stubbornly high in the United States and the recovery has progressed slowly by historical standards. In Europe budget cuts are weighing in several countries and euro zone unemployment has been stuck near a 12-year high for months.
Both Manpower and Randstad have said demand for temporary workers has been picking up in Europe, one of Adecco's most important regions.
New U.S. claims for jobless aid fell in February, indicating healing in the labor market, but declines in new home sales and orders for a range of factory goods in January showed the recovery remains uneven.
In the euro zone, data on manufacturing and German sentiment backed the European Central Bank's belief the euro zone recovery remains on firmly on track, although uneven across the region.
(Additional reporting by Sakari Suoninen in Frankfurt and Rupert Pretterklieber in Zurich; Editing by Erica Billingham)