This week saw trading updates from three prominent London-listed recruitment agencies, with Robert Walters PLC (LSE:RWA)’s interims and PageGroup PLC (LSE:PAGE)’s third-quarter results providing an entrée to Hays PLC (LSE:HAS)’s first-quarter result on Thursday.
While all three are under significant macroeconomic pressures, Hays, the largest of the bunch, has emerged as the strongest member of the trio.
FTSE 250 constituent Hays posted a 7% decline in net fee growth, slightly underperforming the -5% market consensus estimates.
But this was still better than Robert Walters’ 13% decline in net fee income and fellow FTSE 250 constituent PageGroup’s 10.5% year-on-year dip.
Speaking on Hays’ results, analysts at Jefferies noted that “the stable September exit rate chimes more with Robert Walters’ recent narrative than PageGroup”.
This suggests that PageGroup, the middle child among the trio, is under more near-term pressure than its competitors.
Why?
According to industry experts, this is down to PageGroup’s revenue mix, which is weighted further towards permanent recruitment compared to Hays and Robert Walters.
“Hays and Robert Walters have much bigger temporary recruitment businesses which are more resilient during economic uncertainty,” one analyst told Proactive.
‘Time to hire’ poses challenge for sector
The recruitment sector is facing fresh challenges on top of the skills shortage and surging wage obligations.
The ‘time-to-hire’ is extending, according to analysts, referring to the time it takes to bring a candidate to the offer stage.
Furthermore, the percentage of candidates who choose not to proceed with a job change is rising as employers become more competitive with their golden handcuff deals.