Hays dented by Eurozone gloom

City A.M. Reporter
Recruiter Hays said quarterly net fees rose two per cent, at the bottom end of expectations, as trading in many markets worsened with clients worried about the global economy.

"Whatever country you go to in the world, all of the European sovereign debt issues are front and centre on the newspapers and press," finance director Paul Venables told reporters on Wednesday.

"You have the pervasive issue of how confident are candidates and I think it should be no surprise that over the last three months those confidence levels have reduced."

The recruitment sector has slowed rapidly since the second half of 2011 as concern about the global economy has seen companies delay hiring and unsettled people who have been thinking about moving jobs.

Hays, which specialises in placing workers in accountancy, construction and IT jobs, said net fees rose 2 percent in the three months to end-June, its fourth quarter, with a strong performance in Germany helping offset the impact of the euro zone crisis on its largest division - continental Europe and the rest of the world. The outcome compared with a company-compiled consensus forecast of 2-4 per cent.

Net fees grew 1 percent in Asia Pacific as tough banking markets in Asia and soft conditions in parts of Australia crimped growth. A tough banking sector, where swathes of jobs have been cut in recent months, also pushed net fees in Britain and Ireland down 9 percent.

Hays, which was comfortable with a Reuters-compiled consensus for earnings before interest and tax (EBIT) of 128 million pounds, said while trading would remain tough, its relatively underdeveloped Asian and South American recruitment markets should return to rapid growth.

"Over any period from 1-3 years I would always expect to see rapid growth in South America and Asia, I just think we are in a bit of a hiatus period at the moment," Venables said.

Asia Pacific's fourth-quarter net fee growth of 1 percent compared with a nine per cent rise in the prior quarter.

This month, rivals Robert Walters and Michael Page International both reported a drop in quarterly fees as euro zone concerns weighed on the sector.