Hays and Michael Page, the UK’s two largest recruitment companies have reported that demand for full-time employees is down, but both have seen better than predicted demand for temporary workers. Both companies are major players in the supply of IT staff.
"Market conditions became noticeably more difficult during the fourth quarter with many jobs being cancelled or put on hold,” said Steve Ingham, Michael Page chief executive. “The impact of the financial crisis is now evident in virtually every market and discipline in which we operate, albeit to varying degrees and with different markets and disciplines at different points in the downturn.”
“We delivered a resilient performance in the second quarter,” said Hays chief executive Alistair Cox, “in the context of an increasingly difficult economic environment. Overall, Group net fees fell by six per cent as market conditions deteriorated in most countries we operate.”
Hays did report though that is public sector business was performing strongly and represented 30 per cent of its fees.
Both companies report that demand for temporary staff is currently strong and put this down to employers being “nervous” about signing long-term commitments. Michael Page reported temporary staffing profits grew by 13 per cent in the fourth quarter of 2008.
With fees falling, Hays and Michael Page have increased the number of people looking for work by making redundancies. Michael Page has reduced its staff by 509 individuals and Hays by 500.
Michael Page reported a slide in gross profits of seven per cent to £118.8 million in its report on the fourth quarter. In a sign of how fast the current recession has descended on all industry sectors at the end of the first quarter of 2008, Michael Page reported a gross profit of £140.3 million, an increase of 33 per cent from the same period in 2007.
Andrew Wayland, CIO at Michael Page instigated a major IT investment programme at the beginning of the year to support the recruitment company’s growth. New business intelligence and recruitment applications were selected for integration.