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Finance

European hiring slowdown prompts warnings from UK recruiters

Published by Global Banking and Finance Review

Posted on January 15, 2025

Featured image for article about Finance

By Shashwat Awasthi

(Reuters) -British recruiters warned that economic and political jitters across Europe have slowed permanent and temporary hiring by companies and that conditions would likely remain subdued in the near term.

Financial and political upheaval in markets including France, Germany, and the UK has led employers to limit hiring and discouraged people from changing jobs. That, coupled with lower unemployment levels, has led recruiters to put out gloomy forecasts and profit warnings.

Hays on Wednesday warned first-half operating profit would miss a company-compiled average consensus of 27 million pounds ($33 million) and come at the lower end of a consensus range of 24 to 33.2 million pounds, dragged down in part by weakness in Germany - its biggest market.

"I think it's clear to see across the euro zone the economic data is fragile," Hays Group Finance Director James Hilton said on a conference call.

"Getting (employment) deals over the line has been increasingly more difficult in Northern and Eastern Europe through the quarter."

PageGroup blamed slowdown in Germany and France in its second profit warning in six months on Monday, and Robert Walters on Tuesday discarded its earlier profit view due to challenging conditions globally.

RBC Capital Markets analysts echoed the companies' sentiment, calling candidate and client confidence "febrile", but said underperformance of the sector would resolve itself sooner rather than later.

Hays CEO Dirk Hahn said in a statement it was too early to say if recent permanent hiring weakness in regions like UK and Ireland and Germany indicated a sustained slowdown.

Growth in the United States was a silver lining for Hays and PageGroup, though the latter's chief executive Nicholas Kirk said it was too early to call it a lasting trend when presenting the company's results on Monday.

Shares of Hays rose 1.5% amid broader market gains on Wednesday, while PageGroup traded flat and Robert Walters edged lower.

($1 = 0.8194 pounds)

(Reporting by Shashwat Awasthi and Prerna Bedi; Editing by Subhranshu Sahu, Tomasz Janowski and Bernadette Baum)