Recent optimistic views on the recovery in the UK economy do not seem to have filtered through to the recruitment sector at least as yet. SThree, the UK-headquartered international recruitment firm, saw gross profit (GP) in its domestic business decline by 9% yoy in the 3 months to 25th August, compared to a 1% increase overseas, depressing the UK contribution to just 31% of group GP. This was mainly due to the continued fall in permanent recruitment activity, where UK placements plummeted by 21% yoy. Contractor hire grew slightly, though, with UK placements 1% higher yoy.
Across SThree’s ever expanding worldwide business, GP contracted by 2% yoy, though gained 5% on the prior quarter. ICT recruitment has dropped again to represent 52% of group GP. SThree CEO Gary Elden described the market as a ‘mixed picture’ and felt it was “too early to call a broadly-based recovery”.
Last quarter Elden seemed hopeful of an eventual return to the glory days (see SThree UK looking for ‘normal’) but it appears that his optimism has since been tempered by reality. Just as well. Even when there are early signs of economic recovery, businesses are usually cautious about hiring permanent staff until they are confident that the recovery will be sustained. And even then, they will still ask searching questions as to whether the job can be done well enough by a contractor.