Pay day for recruiters

IT IS the sign that the economy is on the up. Confidence, which took a titanic knock during the financial crisis and has remained painfully subdued in the years since, has crept back into the offices of Britain, writesPeterCampbell.

Workers with one eye on the career ladder are finally plucking up the courage to jump ship to new companies.

Each move creates a vacancy – with firms now more likely to fill holes in their workforce than at any time in the past six years.

For companies such as Hays, Britain’s biggest white-collar recruiter, it is the sign it has been waiting for. Net profit – the fees the company gets from placing candidates – rose 14pc in Britain.

‘A year ago we said we wanted 7pc growth,’ said finance chief Paul Venables. ‘Now, three quarters later, we’re at double that. We have had exceptional results in the UK, every single region has seen growth.’

He added: ‘The moment a company goes from cost reduction, which we saw two years ago, to growth, they will focus on retaining employees and they will increase wages. A year ago we said we didn’t see much wage inflation. But now we confidently expect to see at least a 3pc pay increase this year.’

The group also raised its full-year profit expectations, saying they would hit £141m for the year – the point at which it is expected to return to paying dividends. Shares, which had risen 63pc in the past 12 months, climbed nearly 5pc to end 6.7p higher at 151.4p.

The group’s overall profits rose 8pc after strong growth in Europe and the rest of the world.

The swelling confidence, which has grown due to the ‘lack of bad economic news’, has impacted all of the recruitment groups in the UK. Robert Walters has seen its shares grow 45pc in the past year, while Michael Page has grown a more modest 19pc. Harvey Nash, which focuses on technology, has increased shares by 65pc, while industry minnow SThree has grown by 17pc.

‘We believe recruitment stocks could now deliver increasing levels of profitability as activity and productivity levels improve, and with increasing client confidence the outlook remains positive,’ said Panmure Gordon analyst Paul Jones.