We described the UK results of international recruiting giant, Hays, as a ‘blot on the landscape’ last quarter (see Hays: UK & Ireland blots the landscape). Well, it seems the ‘blot’ spread further in Q2. Net fee income (gross profit) for Hays’ UK & Ireland business declined by 7% (Q1: 4%) with private sector recruitment turning negative (down 4%) as purse-strings tightened in Banking and City-related markets. Public sector recruitment was squeezed even tighter (down 16%). Hays’ other regions all showed double-digit NFI growth, with Continental Europe/RoW up by 20% and Asia/Pacific up by 11% (both at constant exchange rates). As a result, total NFI grew by 8%.
CEO Alistair Cox noted how extreme caution over the macro-economic environment impacted both client and candidate (i.e. potential job-seeker) confidence. In other words, companies are not hiring and employees are wedging themselves firmly in their seats! Indeed, NFI from Hays’ permanent recruitment activities grew only by 1% in Q2 vs 13% for temporary staffing. We'll hear the 'full monty' towards the end of February.
These trends are the same as those seen by much smaller peer Robert Walters (see here) last week and will no doubt be seen again when troubled Michael Page (see Michael Page warns on weakening economic outlook) updates the market again tomorrow. Kleenex at the ready?