Fees climb for global recruitment firm Hays - but not in UK

GLOBAL recruitment firm Hays yesterday reported strong growth everywhere except in its home UK market where public sector recruitment is down by more than a third in the latest quarter.

The public sector accounts for nearly a quarter of Hays' UK fee income but has fallen to a half of peak levels.

Government austerity measures have seen fees in the UK and Ireland fall by 2 per cent, more than offsetting an 18 per cent rise in hiring activity by the private sector, which was driven by construction and property.

IT and London financial firms also contributed to growth. However, the group cautioned that much of the activity in the UK was replacement hiring, with little evidence so far that the private sector is making up for cuts in the public realm.

Hays finance director Paul Venables said: "In the public sector and in our business I would expect to see the next two years to be bumbling along the bottom, so we don't expect to see growth."

Across all of its operations, which employ some 6,800 staff in 28 countries, net fees grew by 16 per cent on a like-for-like basis. The group noted particularly high activity in continental Europe, South America and Asia, with China, Singapore and Hong Kong all posting "excellent" growth of more than 65 per cent.

Other countries where recruitment was particularly strong included Australia and New Zealand, where business grew by 21 per cent despite the impact of natural disasters.

Flooding in Australia and the earthquake that struck New Zealand in February could trim second-half operating profits by about 2 million, Hays said, but the demand for staff in industries such as banking and mining remains.

The earthquake, tsunami and resulting nuclear disaster in Japan could cut profits by a further 2m.