Threat to jobs from AI hits recruiters’ shares
WHILE much of the public is sceptical – or even downright scared – of artificial intelligence, businesses are finding it more helpful than ever.
Unless, that is, they specialise in recruitment.
Credit Suisse analysts took aim at UK recruiting firms as they warned technology will erode much of the industry.
The need for recruiting consultants will never be fully phased out, they stressed, particularly for contract jobs and specialist roles. But administrative jobs are most at risk of being automated and gradually phased out because of AI.
Elsewhere, the boom in online CV libraries and networks such as LinkedIn mean much of the hiring for permanent jobs can be moved to in-house departments.
And gig economy workers have access to platforms and apps to manage their own employment.
The barrage of challenges technology poses piles more gloom on to a sector that is struggling with sluggish hiring in Germany and is bracing for a slowdown in their Asia-Pacific divisions as a result of the coronavirus outbreak.
Robert Walters shares fell 3.6pc, or 20p, to 530p, while Page Group shed 5.8pc, or 23.4p, to 383p, after they were both downgraded from ‘outperform’ to ‘ underperform’, and had the target prices on their shares trimmed.
Hays retained its ‘underperform’ rating, though its shares were moved from 150p to 135p. Analysts said it has ‘embraced technological changes for many years’ – though they noted that hasn’t helped the company’s margins. It dropped 2pc, or 2.7p, to 135.6p.
SThree bucked the trend – rising 1.7pc, or 5.5p, to 323p and keeping a ‘neutral’ rating, mostly because it focuses mostly in STEM markets.
While the threat of the coronavirus looms over recruiting firms, the FTSE 100 shook off immediate concerns about the disease – which triggered sharp drops last week. London’s premier index rose 1.1pc, or 74.28 points, to 6654.89 last night – though the FTSE 250 stayed in the red, closing down 0.15pc, or 29.22 points, to 19301.7.
The mid-cap index was dragged down by double- digit falls from car maker Aston Martin and cinema chain Cineworld. Aston, which put out dire results last week, crashed to a record low of 291p after plunging 13.9pc, or 47p – a fraction of the 1900p it floated at less than 18 months ago.
Yesterday’s drop wasn’t connected to any news from the company, but the effect of the Covid19 outbreak on both sales in China – a key market – and on the nowcancelled Geneva Motor Show – where it planned to relaunch its Vantage car – won’t have helped.
Cineworld ( down 10.8pc, or 16.7p, to 138.5p) is also thought to be suffering from coronavirus anxieties – analysts have warned that cinemas could see attendance dive as people minimise contact with strangers, instead of entering a dark room surrounded by people they don’t know for hours. Mid-cap engineering group Senior expects to return to growth in 2021 despite profits falling 53pc to £28m last year.
The group supplies parts to Boeing’s 737 Max planes which have been grounded after two deadly crashes. Senior shares climbed 4.2pc, or 5.9p, to 147.1p. Military equipment maker Avon
Rubber fell 4.2pc, or 115p, to 2615p, despite winning a £207m armour contract for the US. Avon – which also has a dairy arm – is set to enter the FTSE 250.
And Liberum brokers were upbeat about struggling retailer
Card Factory (up 3.6pc, or 2.9p, to 81.6p), upgrading the greeting cards chain from ‘hold’ to ‘ buy’, saying a 49pc drop in its share price over the past three months is ‘very harsh’.