Hays hurt by slowdown in global market

City A.M. Reporter
TOUGH economic conditions have hit the confidence of employers and jobseekers alike in recent months, recruitment company Hays said yesterday, as it reported a drop in business in its home market and a slowdown in growth overseas.

Hays said net fees – or gross profit – rose eight per cent in its second quarter to the end of December, down from 15 per cent in the previous quarter.

“Over the last two to three months the economy and markets have got more uncertain, the discussions we have with our clients on a daily basis are more cautious than they were two or three months ago,” finance director Paul Venables said. “Then, both our client base and as an industry we were full steam ahead and now we are in a cautious position.”

The firm, which makes 70 per cent of its net fees overseas, said its UK banking and public sector markets continued to struggle, with net fees dropping by seven per cent overall.

Growth in mainland Europe and Asia Pacific helped offset this, albeit at slower rates than in the first quarter.

Fees in Europe, led by Germany and France, grew by 20 per cent compared to 34 per cent in its first quarter. Asia Pacific grew by 11 per cent compared to 21 per cent last quarter.

Hays’ permanent recruitment market has been hit particularly hard by global conditions as potential jobseekers are unwilling to move positions in such uncertain times.

Meanwhile a separate report by Markit, KPMG and the Recruitment and Employment Confederation showed that permanent job placements fell for the third consecutive month in December, whilst temporary work placements fell for the first time in two and a half years.