The hiring market is still showing no signs of improvement and, if anything, is getting worse, one of Britain’s biggest recruiters has warned.
Page Group endured a slower June than it had been hoping for. The political uncertainty in France, its largest market, has not helped but the FTSE 250 recruiter said that confidence among both employers and candidates remains weak in almost all parts of the world.
Bosses had thought there would be an upturn in the market before summer arrived but it has not materialised. They now think it might not be until 2025 that hiring starts to pick up again.
Given the more downbeat assessment of the outlook for the rest of this year, Page expects its annual operating profits in 2024 to total around £60 million, a third less than it had previously guided.
The profit warning, Page’s second this year, sent the company’s shares tumbling by more than 10 per cent at the opening bell on Tuesday. By the close they had recovered some ground to be down by 16¾p, or 4 per cent, at 405¾p.
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Ever since it was founded back in 1976, Page Group has been known for its accountancy recruitment, which still accounts for some 40 per cent of its business, although it has expanded into other white-collar industries too.
After a boom during the pandemic hiring rush, recruiters have seen demand for their services dry up over the past 18 months or so as the global economy’s post-lockdown recovery has run out of steam. Wars and elections have further sapped confidence.
Between April and June, Page’s net fee income totalled £224.3 million, 15 per cent below the same period of 2023. Trading worsened as the quarter wore on, which does not bode well for the coming months, it said.
In response, the company let go of another 153 recruiters during the period. It now has 5,598 fee earners, a fifth fewer than it did two years ago.
Given the uncertain economic and geopolitical outlook, companies are less keen on hiring full-time workers, instead preferring the flexibility of contractors. That trend has been particularly painful for Page, given that permanent hiring makes up three-quarters of its revenues.
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In France, the company has seen companies delay their hiring decisions and would-be job movers stay put while they wait to see what happens in the political arena.
“We have consistently said that there are low levels of confidence [in France],” Nick Kirk, Page Group chief executive, said. “The political situation is just layering more uncertainty on top of uncertainty, and with it being our biggest market, that clearly creates a level of caution for us looking forward.”
Fees in France were down 14 per cent in the second quarter of this year, but there were declines “across the board”, Kirk, 53, said. In the US, fees fell 19 per cent year-on-year and in the UK, its home market, there was a 17 per cent decline.
In addition to companies being reluctant to hire new staff, candidates are also becoming more nervous about leaving their current employer for fear of being first and last out. In recent years, people have been tempted by big pay rises to move jobs, sometimes in excess of 15 per cent. Page estimates that has now dropped back to closer to 5 per cent.
“It comes down to risk-reward,” Kirk said. “Is [a pay rise of] 5 per cent or 6 per cent going to make you feel comfortable enough to take that risk and potentially expose yourself?”
