Global recruiter SThree hit by ailing UK jobs market
Global recruiter SThree has felt the pinch of the deteriorating UK jobs market with the region becoming the group’s worst performing large market.
The consultancy – which specialises in connecting workers in science, tech engineering and mathematics with companies in need of staff – recorded a 26 per cent slump in fees in the UK market for the fourth quarter. This was compared to a group average of an eight per cent drop.
Fees, which are a key revenue metric for the group’s core business activity, fell to £27.7m in the UK for the full-year.
Woes continued throughout the year with a 30 per cent drop in quarter one, persisting to consecutive 27 per cent falls in the second and third quarter.
SThree also operates across Europe, Asia and America. The poor UK performance took a chunk out of the group’s wider net fees, which fell 12 per cent.
Still the group expects to hit its pre-tax profit target of £25m.
Timo Lehne, chief executive of SThree, said: “As anticipated, we have not yet seen a widespread market recovery, however we have exited the year with a period of improving new placement activity, complemented by continued resilient extensions.”
He added: “Whilst navigating a challenging macroeconomic backdrop, we have focused this year on what is within our control: positioning the business to capture emerging pockets of growth – achieving growth in two of our top five countries – sharpening our proposition, and maintaining a disciplined focus on operational efficiency.”
UK’s unemployment problem
It comes as fresh figures from the Office for National Statistics (ONS) showed the UK unemployment rate rose above five per cent at a four-year high.
The number of payrolled employees fell by 22,000 in September, according to the ONS, while the unemployment rate hit 5.1 per cent for the period between August and October.
“The number of employees on payroll has fallen again, reflecting subdued hiring activity, while firms told us there were fewer jobs in the latest period,” said Liz McKeown, director of economic statistics at the ONS.
Businesses across the UK have continued to bear the brunt of the Labour government’s first Autumn Budget, which hiked taxes for employers.
In April, Rachel Reeves 1.2 per cent increase to employer’s national insurance contributions came into effect, slapping a hefty amount onto business’ tax bill and sending shockwaves across the job market.
Ahead of the second Budget – which covers the period of unemployment data – many firms hit pause on hiring and investment plans amid jitters over future tax policy.
A Purchasing Managers Index (PMI) from S&P previously showing a delay in decision making for services firms ahead of Reeves’ Budget.