- UK firms are deferring hiring decisions while candidates turn cautious on offers
PageGroup profits are set to come in below expectations as the recruitment firm continues to suffer from a global hiring slowdown.
The FTSE 250 group saw gross profits slide 8.9 per cent year-on-year to £237.3million in the fourth quarter, as UK revenues slumped almost 20 per cent to £28.6million.
PageGroup, which also saw trade slow in response to year-end salary reviews and bonuses, said on Monday that UK clients were increasingly ‘deferring hiring decisions’ while candidates are ‘becoming increasingly cautious about accepting offers’.
Slump: PageGroup suffers from global hiring slowdown
The group has itself been forced into cutting headcount, letting go 224 ‘fee-earner’ employees in the fourth quarter, 50 of which were in Britain.
PageGroup employed 1,092 fewer staff year-on-year at the end of the fourth quarter.
It follows data from accountancy firm BDO last week that showed recruitment slumped to a decade low in December and is expected to fall further this year.
Consequently, PageGroup told investors full-year earnings would come in ‘slightly below previous guidance’ of £120million to £125million.
PageGroup shares were down 2.5 per cent to 445p by mid-morning, taking them to a one-year loss of around 1.8 per cent.
It follows a similarly update from rival recruiters Hays and Robert Walters, which each flagged difficult trading conditions.
Chief executive Nicholas Kirk said: ‘Despite the year-on-year decline in gross profit, we are still seeing good activity levels, albeit we did see a deterioration in job flow through Q4.
‘However, these activity levels are not all converting into gross profit due to ongoing lower levels of candidate and client confidence.
The UK was PageGroup’s second worst-performing market behind the US, where trade was down 24 per cent, while it also registered double-digit falls in Asia Pacific and South Asia.
India and Latin America were the only bright spots, with revenues up 16 and 11 per cent, respectively.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: ‘Recruitment budgets are dwindling so managers are taking a lot longer to go through the hiring process, particularly when it comes to permanent staff.
‘The situation has worsened in European markets, and there has been no improvement either across Asia, the United States or the UK.
‘Page is also having to deal with a talent shortfall, with a lack of skills flagged among pools of workers, while good potential candidates desire high fees to move.’