Recruiter Hays weathers fall in public sector jobs

By ED MONK FOR THISISMONEY.CO.UK
Updated: 09:47 EST, 6 January 2011

Recruitment firms Hays saw a fall in fees from the public sector last year as the Government's austerity measures squeezed state jobs.

However, increased demand from the private sector helped offset those lost sales.

In the UK, the Government's austerity drive meant Hays' revenues from placing workers in public sector roles were down by 38% in the final quarter of 2010 compared to the same period the previous year.

Back to work: City employers helped offset public sector job losses

This was worse than in the previous quarter and 45% below peak levels.

But increased demand for City, finance and IT workers meant fees from the private sector were 28% higher in the final quarter.

In the UK overall, Hays grew sales by 1%.

Hays was able to report overall group sales 24% higher in the final quarter, driven by strong growth in Asia and Europe, where several of Hays' operations are back above pre-downturn levels.

Hays' overseas business, which accounts for 65% of its revenues, was up 37% year-on-year.

Chief executive Alistair Cox said: 'The breadth and strength of growth this quarter is reflected by the fact that 19 countries grew net fees by more than 20% versus prior year.

'The outlook remains good across nearly all of our markets, including the UK private sector, and we continue to increase consultant headcount in order to capture the opportunities for growth.'

The number of recruitment consultants employed by Hays in the UK decreased by 8% over the period as it balanced the private sector recovery with the difficulties it faced in the public sector.

Analysts at Investec said the company had enjoyed 'a good quarter with a strong recovery continuing to come through' but shares were flat following the announcement.