Economic bellwether Hays (HAS), Britain’s biggest recruiter, wraps up three days of updates from the country’s leading staffers with news that the country’s jobs boom is tailing off.
Net fee income (NFI) at Hays, a key measure of performance, increased 7% at constant currencies. Growth in the UK was 1% versus 16% in France and 14% in Germany.
Government plans to increase the minimum wage and broader economic pressure has hit the manufacturing sector in particular, Venables says.
The UK jobs slowdown has seen Hays' share price shed 15% in the last five days.
‘The encouraging thing is this is a slowdown in the UK rather than a decline,’ says Hays chief financial officer Paul Venables.
‘Europe has delivered some stellar growth numbers with record results in seven countries on the continent.’
Public sector recruitment in Britain declined 2%, Venables says, as education and health sectors showed more caution on staffing compared to prior years.
Private sector gains of 3% offset this to an extent, though there were regional differences. Scotland and the North declined 4% and 6% respectively, while there were gains in much of the rest of the country.
Manufacturing was also an area of weakness which Venables says could be related to proposed increases in the minimum wage.
‘The positives at the moment are rising GDP and businesses in the UK that are still looking to grow,’ Venables says.
‘One of the biggest risks is the government itself because if you look at the cost increases they have implemented in recent years it’s in the region of £15 billion of expense to the private sector.
Overall, Venables says businesses and individuals are pausing for breath after a few strong years of progress.
‘You often see periods of uncertainty after a period of growth,’ says Venables.
‘Companies tend to be more cautious on costs and they will wait to see what demand looks like before adding more staff.
‘The conditions are there for growth though there remains uncertainty in the manufacturing sector as these cost increases are pushed onto them.’
After shedding 15% in the last five trading days, a period which included updates from sector peers Walters and Page Group, Hays shares trade 2.3% higher today at 124p.