Hays cautions on slowdown
British recruitment giant Hays yesterday warned that UK growth was slowing and that it would have to cut jobs, although it said it still predicted profits in line with market expectations.
Hays, which generates around half its fees in the UK and Ireland, grew total net fees by 16 per cent in the quarter ending 30 June, on the back of strong performances overseas.
But while UK organic growth was still positive at 4 per cent, it was down against last quarter’s 5 per cent, the firm said. Hays said it was seeing signs that fears of an impending recession were beginning to affect its permanent jobs business, especially in the UK.
We’re seeing clients being more cautious and taking more temporary than permanent hiring and that’s what we’d expect to see with the current economic backdrop,” said chief executive Alistair Cox.
The weaker UK growth prompted Hays to shrink its workforce by 5 per cent during the quarter through natural wastage. It expects to cut more jobs in Britain and Ireland in the next year, where it employs 3,120 staff.
The recruitment firm said it was seeing the least demand in City related employment, legal jobs and the struggling construction and property sectors.
“In response to the slowdown, we continue to focus on cost control and productivity. We have reduced the number of consultants in the UK and Ireland,” said the firm.
Internationally, the firm did well, growing by 35 per cent. It also reported strong performance in its temporary jobs business as well as public sector employment, a market it has started pursuing more proactively.