If artificial intelligence really is coming for the white-collar worker, someone forgot to tell Hays PLC (LSE:HAS).
The FTSE 250 recruiter’s numbers still read like a hangover from the post-pandemic hiring spree rather than the dawn of a robot age. Placements are at a ten-year low, but that looks more like indigestion than extinction.
A new discussion paper from Panmure Liberum, featuring McKinsey’s productivity adviser Tera Allas, suggests much of the slowdown in recruitment is still cyclical.
Companies hired heavily in 2021 and 2022, and are now cutting back to something closer to normality. Even Amazon, which is trimming 30,000 corporate roles, blames post-pandemic bloat, not machine learning.
That will be small comfort to the listed recruiters, whose shares have been stuck in the doldrums.
Hays PLC (LSE:HAS), PageGroup PLC (LSE:PAGE) and Robert Walters PLC (LSE:RWA) have all been trading closer to the bottom of their 12-month ranges, and investors are understandably twitchy.
The big fear is that AI could hollow out the professional jobs market just as these companies are trying to find their footing.
So far, though, the evidence suggests otherwise. McKinsey’s data shows job adverts have fallen most in roles exposed to AI, programmers, web designers and compliance specialists, but this looks more like a hiring pause than a structural collapse.
As Allas puts it, “the more exposed to AI a particular job is, the more adverts have declined, but it’s not catastrophic.” In other words, automation may be nibbling at the edges, not taking a bite out of the middle.
The more immediate problem is sentiment. Recruiters are facing what one might politely call a confidence deficit.
Businesses are hesitant to hire; candidates are wary of moving. As Allas notes, the UK labour market has broadly “returned to pre-pandemic normality”, but uncertainty, from global trade to the Treasury’s next fiscal twist, is still keeping hiring decisions on ice.
None of this means the AI debate can be ignored. Panmure’s research hints at a creeping skills imbalance: junior and entry-level roles, the traditional starting ground for future managers, are thinning out.
A Harvard study cited in the report found firms adopting AI were hiring fewer graduates than before. That raises a longer-term question: if companies don’t train the next generation, where do the middle managers of 2030 come from?
For the likes of Hays and PageGroup, that shift could prove as much opportunity as a threat.
If AI is to deliver real productivity gains, firms will need people who can combine technical understanding with human judgment, and recruiters who can find them. Matching skills to emerging demand is, after all, what these businesses do for a living.
Their cyclical sensitivity has always made them a play on economic confidence rather than structural change. On that front, there are faint signs of stabilisation.
Hays has spent two years cutting its own headcount back to pre-Covid levels; PageGroup and Robert Walters have done much the same. Costs are leaner, balance sheets are solid, and any uptick in hiring will feed through quickly.
The worry is timing. Investors have seen this film before: recruiters always recover, but never as soon as they expect. If the cycle does turn in 2026 (and that’s a big “if”) today’s valuations could look cheap. Until then, AI may remain more of a conversation topic than an earnings driver.
For now, it’s worth remembering that machines don’t do interviews, assess cultural fit or persuade candidates to relocate to Croydon. Whatever the future of work looks like, it still needs someone to send out the calendar invites.