Recruiters were among the first to feel the pain following the unexpected vote to leave the European Union last year. Lower economic confidence can be damaging to these businesses as it makes people less willing to move jobs, depriving recruiters of the 'churn' needed to generate placements and fees. However, recruiters' performance post-referendum has been mixed, with some shrugging off the effects with seeming ease and others struggling in the UK.
Robert Walters has recorded growth in permanent, middle management roles in areas such as investment banking, risk and compliance
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Robert Walters' strong UK performance led investors to surmise growth in UK financial services might also have benefited rival
However, first-quarter news from the sector has not been all good. Gattaca (GATC) issued a profit warning for the year ending July 2017, sending the shares down 8 per cent on the day of the announcement. Management at the blue-collar recruitment specialist said it expects profits to be between 10 and 15 per cent lower than its prior expectations due to a delay in hiring decisions.
Analysts say recruiters have demonstrated a reasonable degree of resilience for a number of reasons. The first is that while corporate confidence has faltered since the referendum, making them less likely to hire, consumer confidence has so far held up. The impact of the referendum has also been localised, allowing recruiters to look to their international businesses to drive growth while the UK has tried to find its footing. However, it is worth noting data from GfK, which showed that UK consumer confidence slipped during October and November and has stayed at or around -6 on the index into March so far this year.
By contrast, analysts say growth in continental Europe has been strong due to GDP growth, combined with the recruitment market undergoing structural changes and becoming more mature. Steve Woolf, analyst at Numis, said: "Large areas like Germany have really started to get going and gain some momentum."
He added that recruiters' UK businesses suffered due to uncertainty stemming from successive elections and referendums, as companies are more likely to approach hiring with more caution during times of uncertainty. However, he noted that the latest trading updates may show indications that companies are simply becoming comfortable with uncertainty. "The signs are that the private sector has begun to become more optimistic and shows signs of getting on with it," he said.
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