£3m UK loss for recruitment firm

Published on Wednesday 22 February 2012 10:14

The boss of recruitment firm Hays has said there is still evidence that bankers were heading overseas as hiring in the sector fell by around 10 per cent and pushed its UK division to a £3 million loss.

Chief executive Alistair Cox said the recruitment squeeze in the banking industry would persist for “some time” and had spread beyond the UK to markets such as Hong Kong as major players restructure their operations.

The recruiter’s results come as the banking industry faces pressure from all sides, as it battles with volatile markets, weak consumer confidence, increased regulatory heat and criticism over pay.

The slowdown, which was behind a 1 per cent drop in private sector fees prompted Hays to close 12 UK outlets. It is cutting its total headcount by 4 per cent, including a 2 per cent drop in the number of consultants to 2,071.

However, the wider group was supported by a strong performance overseas, particularly in Germany, leading to a 21 per cent increase in overall operating profit to £63.1m in the six months to 31 December.

Hays said there were areas of the private sector which continue to show some growth, such as IT, legal and marketing businesses.

Overall in the UK, net fees fell 6 per cent on a like-for-like basis to £116.4m.

Across the group, net fees rose 11 per cent to £373.8m on a like-for-like basis, driven by 16 per cent fee growth in Asia Pacific region and 27 per cent fee growth in the continental Europe and “rest of world” arm.

There was some disappointment for shareholders as the firm announced a 55 per cent cut to its interim dividend to 0.83p.

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