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Hays says hiring in London's finance industry hit by Brexit
October 18, 2016 / 6:50 AM / 9 months ago

Hays says hiring in London's finance industry hit by Brexit

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(Reuters) - Hiring in London fell sharply after Britain's vote to leave the European Union and companies are still cautious about adding to existing staff levels because of uncertainty over Brexit, recruitment company Hays (HAYS.L) said on Tuesday.

Hays, which places workers in areas such as finance and IT, reported a 10 percent year-on-year fall in net fees at constant currencies from the UK and Ireland in the three months to Sept. 30, after a 4 percent fall in the preceding three months.

But the biggest impact was in London, where net fees tumbled 17 percent.

Finance Director Paul Venables said companies had begun to replace "leavers" since mid-July, but they remained cautious on incremental spending on new jobs as they drew up contingency plans for Brexit.

"The referendum result meant that all businesses stopped hiring, very shortly, for a period of time and after that they've returned to at least replacing leavers," Venables told Reuters.

"Clients are not looking to increase headcount and they're being cautious on any incremental investments," he said.

Surveys this month have suggested companies are wary about making investments in the aftermath of the June vote.

Hiring for permanent jobs in Britain stabilised following a step-down in activity immediately after the vote, which Venables said suggested the market "may well have seen the worst" and Hays "may well get a gradual improvement" through the rest of its financial year.

Barclays and UBS said Hays' UK performance was better than expected. Shares in Hays, which makes just over a quarter of its net fees from the UK and Ireland, were up 2.8 percent at 139.2 pence at 1108 GMT.

Rival PageGroup (PAGE.L) has said confidence among employers was "fragile" following the vote, with finance firms particularly holding off from hiring, while smaller rival Robert Walters (RWA.L) said hiring levels in London investment banking had picked up recently.

Following the vote there has been a lot of speculation that banks in London might start moving some operations to continental Europe to ensure continued access to the EU market.

Venables said Hays had not seen any large outflow of jobs from the UK at the moment.

Hays posted a 3 percent rise in quarterly global net fees, citing strong growth in continental Europe.

Reporting by Esha Vaish in Bengaluru; Editing by Mark Potter and Jane Merriman

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