Tough market conditions weigh on British recruiters

Employers take longer to fill vacant positions due to economic and political uncertainties exacerbated by elections in Britain and France. Picture: iStock

British recruiters warned of tough hiring market conditions in the near term as workers avoid switching jobs and employers take longer to fill vacant positions due to economic and political uncertainties exacerbated by elections in Britain and France.

Higher interest rates and inflationary pressures have also weighed on recruitment companies leading to lay-offs or hiring freezes.

"Our near-term planning now assumes that any material improvement in confidence levels will be gradual, and likely not occur before 2025," Robert Walters chief executive Toby Fowlston said.

Mr Fowlston told Reuters that the elections had an impact in both markets, but especially in the British public sector where recruitments had slowed over the last three months.

Shares in the London-headquartered company dropped as much as 6% in morning trade. PageGroup stock fell 2.4% while Hays was marginally down 0.8%. Hays forecast on Thursday annual profit below market expectations after its June net fee was dented by British and French elections.

Peer PageGroup had warned a day earlier that it expected its full-year profits to nearly halve on concerns that France's political uncertainty was making recruitment activity even more difficult.

"Coming back after that (election) weekend, we had a number of clients contact us... candidates either wanting to pull out of processes to wait to see what happened, or clients putting interviews on pause and recruitment on pause," PageGroup chief executive Nicholas Kirk said.

Robert Walters said that the slowdown in France would continue in the near term.

Total net fee income for Robert Walters fell 12% at constant currency for the three months ending on June 30. Net fee income in Britain fell 18% year-on-year and dropped 20% in France.

Meanwhile, Britain’s services sector and jobs market are likely to show lingering signs of strong inflation this week, a warning sign that may prompt the Bank of England to hold off on cutting interest rates in August.

Official data is expected to show services inflation ticked down to 5.6% in June from 5.7% the month before.

- Reuters and Bloomberg