Hays buoyed by public sector
RECRUITMENTgroup Hays said yesterday that it has experienced the most challenging year on record, but that demand for workers in the pubic sector had helped support its earnings.
The recruiter said that net fees from the public sector – which accounts for a third of its UK business – had risen by five per cent in the full year to 30 June, driven by the education and healthcare sectors. This compared to a 37 per cent drop in net fees from the private sector.
Hays said that a “chronic shortage” of staff in education and healthcare would drive continued demand in 2010. The comments came on the same day that government said it had rejected proposals to save £20bn by culling 10 per cent of NHS staff over the next five to ten years.
Despite this, Hays reported a 43 per cent slump in pre-tax profits, to £151m, for the year, on net fees that were 15 per cent lower at £670.8m.
“Currently we are seeing initial signs of stability in the UK and Asia Pacific markets, although no indications of a recovery,” said Hays chief executive Alistair Cox, adding that he anticipated 2010 to be another tough year for the recruitment industry.
The group said it has seen a 28 per cent decline in fees from UK finance and accountancy recruitment, and that the construction and property sectors had plunged by 26 per cent.
The downturn meant that the volumes of temporary contracts fared better than permanent placements, down just seven per cent compared to 29 per cent.
The group itself has been forced to slash costs by 24 per cent, with the closure of over 40 offices in UK and Ireland.