Hays says London jobs market is "stabilising" despite plunge in profits

The boss of one of the UK’s biggest recruiters today said the jobs market is “stabilising” aided by a rise in hiring in IT and banking in London.

Hays today posted a 45% slump in operating profits as fee revenues dived 11% to £996 million in the year to June 30 while companies hunkered down in lockdown.

Thousands of job losses across sectors including retail, restaurants and aviation have sparked fears unemployment could rise to as much as 3.5 million this year.

But chief executive Alistair Cox today said: “The London market seems stable now and was more resilient than other regions during lockdown, down around 10% as opposed to 20% to 30% elsewhere. The IT market has been very resilient — there weren’t enough technologists going into this, and that trend has been exacerbated.

“We have also seen a modest improvement in banking and financial services, which is significant for London.”

Cox said Hays’ balance sheet was “in the strongest position we have ever had” after a £200 million equity raise in May.

Cox added: “I do think the business has stepped up well to the challenge. The good news is that many of our markets look as though they have stabilised since May.

“We are filling 20,000 roles a month around the world and 1000 permanent roles in the UK. The long term experience of our management teams, some of whom were with us before the global financial crisis has put us on a good footing.”

Most of the company’s UK offices, including on Cheapside in the City and in Victoria, have reopened, with 30% of staff back on a rota basis.

Noting a rise in ads giant WPP's share price this morning, Markets.com analyst Neil Wilson said: "Another good bellwether Hays said it’s seen some stabilisation in fees since May and ‘modest’ signs of improvement in permanent hiring. Net fees were down –11% for the year to the end of June, whilst pre-tax profits were –63% lower as a result of a collapse in recruitment due to the pandemic."

Hays shares fell 1% to 116p, valuing the company at £1.94 billion.