Recruitment Business Hays Weakened 'Significantly' After Brexit Vote

Recruitment firm Hays (LSE: HAS.L - news) said its UK and Ireland (Other OTC: IRLD - news) business weakened "significantly" after the Brexit vote.

It saw a "step down" in permanent hiring immediately after the poll, though since then activity has been stable.

Temporary jobs hiring remained "broadly at pre-referendum levels", it said.

The jobs group, seen as a bellwether for the wider economy, said the UK private sector was hit by economic uncertainty.

"This uncertainty increased in the period leading up to, and immediately after, the EU referendum, and we saw activity levels weaken significantly at the end of the financial year," Hays said.

Results for the year to the end of June highlighted a tough banking market with fees from this sector down 12%.

It comes amid fears that parts of London's banking sector could be shifted to Frankfurt or Paris following Britain's decision to leave the EU.

Hays cut the number of its UK and Ireland recruitment consultants by 179, or 8%, to slightly more than 2,000 over the year amid "worsening market conditions".

However, the wider group saw headcount grow as pre-tax profits climbed 11% to £173m, driven by strong performances in Asia and Europe. Net (LSE: 0LN0.L - news) fees were up 6% to £810m.

In the UK and Ireland, net fees for the year were flat at £272m and operating profits up 14% to £52m thanks to improvements in productivity.

Chief (Taiwan OTC: 3345.TWO - news) executive Alistair Cox said: "Following the EU referendum, there is increased uncertainty in the UK market, but we have seen no evidence of any impact elsewhere.

"It is too early to tell what the longer term impact may be."

Official figures have painted a brighter picture of the UK jobs market in the wake of the Brexit vote, showing the number of people claiming unemployment-related benefits fell in July.