- REUTERS/Paul Hackett
- Global recruiter PageGroup sees profits rise in virtually every market in Q3. One major exception is the UK, where profits fell 7.6% from £37.8 million last year, to £34.9 million this year. PageGroup blames Brexit’s negative impact on “client and candidate confidence levels.”
LONDON – PageGroup, the global recruitment firm, saw its business improve in virtually every market it operates in apart from the UK, as Brexit takes its toll on the country’s jobs market.
PageGroup released its third quarter trading update on Wednesday, and the numbers shed stark light on the impact that uncertainties around Brexit are having on recruitment in the UK right now.
Globally, PageGroup saw profits grow by 8.8%, rising to £177.3 million, with growth of close to 13% in EMEA, 13.9% in Asia, and 18.4% in the Americas. By contrast, profits in the UK fell by 7.6%, as businesses shied away from aggressive hiring until they are more clear on the outcomes of Brexit negotiations.
Here’s the key extract from Steve Ingham, Page’s CEO (emphasis ours):
France, our second largest market after the UK, and 15% of the Group, continued to grow strongly, +21%. Other countries in Continental Europe performed well, particularly Belgium, the Netherlands, Poland and Spain, all growing in excess of 15%. In Asia, India and Japan also had excellent quarters, growing at 18% and 31% respectively. The UK, however, was down -7.6%, with client and candidate confidence levels continuing to be impacted by the Brexit negotiations and political uncertainty.
The UK makes up just under a fifth of PageGroup’s global business. Confidence and overall recruitment were impacted “particularly amongst our multi-national clients and the more senior permanent candidates,” PageGroup said.
International companies are putting off hiring in senior roles until the outcome of Brexit negotiations is clear. That was true in the financial services sector, PageGroup said, noting that financial services recruiting was “flat.”
In terms of white collar jobs after Brexit, financial services presents what could potentially be one of the biggest challenges to policymakers. Something of an exodus is expected from the UK’s financial services sector should Britain lose its financial passport after Brexit.
Banks and other major financial services firms are already making plans to shift staff out of the UK – London in particular – and move them to other cities in the EU, such as Frankfurt, Dublin, and Paris.
These shifts could intensify if a transition deal for Britain’s exit is not agreed by Christmas, senior Bank of England official Sam Woods warned last week.
Banks need to make final decisions about moving staff by the first quarter of next year at the latest. Banks need at least a year, if not longer, to set up fully functioning branches and subsidiaries in Europe to maintain uninterrupted EU activities.
Without some clarity over future arrangements, banks will look to their worst case contingency plans, which are generally believed to involve large scale staff moves.
The weak performance of the UK market seems to have spooked investors, and by 8.35 a.m. BST (3.35 a.m. ET) shares in the firm are down close to 4.5% to trade at £5.017 each, as the chart below shows: