£3m UK loss for recruitment firm

Updated: 
MoneyThe boss of recruitment firm Hays has said there was still evidence that bankers were heading overseas as hiring in the sector fell around 10% and pushed its UK division to a £3 million loss.

Chief executive Alistair Cox said the recruitment squeeze in the banking industry would persist for "some time" and had spread beyond the UK to markets such as Hong Kong as major players restructure their operations.

The recruiter's results come as the banking industry faces pressure from all sides, as it battles with volatile markets, weak consumer confidence, increased regulatory heat and criticism over pay.

The slowdown, which was behind a 1% drop in private sector fees, which make up 78% of UK revenues, prompted Hays to close 12 UK outlets, cutting its total headcount by 4%, including a 2% drop in the number of consultants to 2,071.


However, the wider group was supported by a strong performance overseas, particularly in Germany, leading to a 21% increase in overall operating profit to £63.1 million.

Commenting on the banking sector climate, Mr Cox said: "It's quite uniform worldwide, not just focused on the UK. We see the impact in Hong Kong and Singapore and particularly in investment banking, as opposed to retail banking."

He added: "I would expect it to remain tough and challenging for some time to come."

The downturn in the UK also had an impact on public sector recruitment, which represents 22% of the country's revenues and saw fees fall 18% year on year.

Public sector recruitment has been hit by the far-reaching spending cuts rolled out by Chancellor George Osborne as he moves to slash the country's budget deficit.

Hays said there were areas of the private sector which continue to show some growth, such as IT, legal and marketing businesses.

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