April 16 (Reuters) - British recruiter Hays reported an 8% fall in third-quarter net fees on Thursday, hurt by continued weak hiring demand in Germany, its largest market, but said it expected fiscal
Asia hiring cushions British recruiters as Europe slump drags on
By Nithyashree R B and Yadarisa Shabong
Recruitment Market Trends and Regional Performance
April 16 (Reuters) - Hiring in Asia is partially offsetting a prolonged downturn in Europe, say British recruitment firms, whose fees are not falling as much as last year but could be affected if the Iran war leads companies to freeze new hires.
Quarterly Results and Fee Performance
Hays on Thursday reported an 8% drop in net fees for January-March, a 12th-straight quarter of declines, as weakness in its biggest market, Germany, outweighed strength in Japan, China, and Hong Kong.
Analyst Reactions and Market Response
However, the decline in Hays' net fees was slower than in the previous quarter and better than feared, analysts at RBC Capital Markets and Jefferies said. Hays' shares rose 4%.
Peer Comparisons
Hays' update broadly echoed peers Robert Walters and PageGroup, which earlier this week also reported fee declines but said the pace of deterioration had eased in some markets.
Regional Highlights and Challenges
Asia as a Growth Driver
Asia appears to be a bright spot for all three recruiters grappling with weak sentiment in Europe, where businesses are slowing hiring, and candidates remain reluctant to switch jobs.
Short-Term Outlook
Still, Hays said the near-term outlook remained challenging.
External Factors Impacting Recruitment
Geopolitical and Economic Uncertainty
The quarterly updates from the recruiters come amid rising uncertainty due to the Iran war, which is expected to lead to broad cost rises if oil prices remain elevated and therefore dampen business sentiment in the coming months.
Interest Rates and Growth Concerns
Elevated interest rates, weak economic growth and geopolitical uncertainty triggered a slump in hiring over the past three years after a post-pandemic boom, forcing recruiters such as Hays to cut costs and shut operations in some markets.
Company Strategies and Investor Sentiment
Profit Outlook and Cost Discipline
Hays, which has a larger exposure to the temporary and contract hiring market, maintained its profit outlook.
Analyst Insights
Analysts at RBC Capital Markets said cost discipline and productivity gains were helping Hays to cushion earnings, but warned that investor patience appeared to be wearing thin with the prolonged downturn in recruitment markets.
Share Price Performance
Shares in Hays, PageGroup and Robert Walters have suffered heavy losses in the past few years.
(Reporting by Nithyashree R B and Yadarisa Shabong in Bengaluru; Editing by Subhranshu Sahu and Susan Fenton)
