UK jobs market lags the world, warns recruiter

Public sector jobs are at a 40-year low, says recruitment giant
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The Independent Online

Hays, the recruitment giant, yesterday unveiled booming job activity in all its markets around the world, except Britain and Ireland.

The employment consultant enjoyed strong growth in Continental Europe, South America and Asia in the first three months of 2010 as recruitment rebounded after the global recession. Hays hired more consultants in those markets to cope with demand.

Net fees rose by more than 20 per cent in 21 countries and markets such as Spain, Austria, the Netherlands and Poland boosted fees by at least 40 per cent.

In the UK and Ireland, fees fell by 2 per cent and the consultant cut its own headcount by 1 per cent, with little prospect of new hires in coming months. The grim British figures were caused by plunging fees in Hays' public sector business, which wiped out gains in private sector recruitment.

Hays' finance director, Paul Venables, said its public sector business faced its worst conditions since it was launched 40 years ago, after local councils imposed hiring freezes.

International expansion in the past 10 years had saved Hays from being too exposed to the fragile UK jobs market, he added.

"If you're a large company and you are looking to deploy resources in the UK, Australia or Brazil, it is fairly obvious where you're going to put your money. We'll take steady recovery in the UK – that is as good as you're going to get."

The figures raise fears that Britain's private sector may not be able to generate enough new jobs to make up for Government spending cuts.

Hays reported an 18 per cent rise in net fees at its private sector business, including construction, IT, legal and financial services. However, its public sector arm, which makes up about a quarter of UK income, saw fees plunge by 37 per cent.

Many of the Chancellor's austerity measures are only now beginning to bite after the new tax year started on Wednesday and further public sector job cuts are expected this year. Unemployment hit a 17-year high in the last quarter of 2010 and youth joblessness was at a record. Public sector employment fell by 45,000 to 6.2 million.

The Organisation for Economic Co-operation and Development predicted this week that Britain's economy will grow at about a third of the pace of other major countries.

Mr Venables said Hays' strong growth outside the UK was partly down to the less developed market for consultants in countries such as Germany and Spain.

Many companies have only just started to use Hays' services after cutting their in-house recruitment hiring departments, he said.

The UK could be nearing the bottom of its recruitment slump but "there is no great stimulus that is going to drive income or business forward," he added. The key question is whether small and medium-size businesses start hiring new staff, he said.