Strong growth in continental Europe boosted growth at recruiter Hays in the last three months of 2017, but slow fee growth in the UK weighed on the company, driven by uncertainty about Brexit and reluctance by employers to spend.
The London-listed recruiter’s net fees grew 13pc on a like for like basis, helped by 17pc growth in its “continental Europe and the rest of the world” and 16pc in Asia Pacific. In stark contrast, fee growth was just 1pc in the the UK and Ireland, in line with the previous quarter.
The recruiter said that private sector hiring in the UK, which represents 74pc of its divisional fees, grew by 4pc, mostly driven by permanent staff hiring.
But fees in the public sector fell 8pc as Government austerity measures continued to bite.
This also weighed on temporary hiring, along with updated IR35 tax regulations, which govern “off-payroll working” and since April have required public sector employers to determine whether contractors should pay a higher rate of tax. Hays said fees for its temporary hiring business in the UK were down 1pc. Public sector cuts also led to declines in fee incomes for IT and education hiring, Hays said.
However, accountancy and finance, construction and property and office support were all stronger areas in UK hiring.
Finance director Paul Venables said that the slowdown in UK hiring over the past few years had been driven by uncertainty about Brexit, cost control and less investment in sectors such as manufacturing.
Hays' rival Page Group suffered a decline its UK business in 2017, reporting a 3.8pc fall in profit for the year on Wednesday, which it attributed to uncertainty about Brexit.
Much of Hays' growth in continental Europe was driven by Germany, where fees grew by 19pc and where Hays opened three new offices, in Essen, Augsburg and Walldorf, bringing its total number in the country to 22.
Mr Venables said that there had been some “catch-up investment” after the two consecutive downturns in the region - the financial crisis prompted by the collapse of US bank Lehman Brothers, followed by the euro crisis.
The company had net cash of about £35m as of Dec 31, after paying £94.3m in final and special dividends in November.
Hays will report its half-year results on February 22. The group's share price was up 3pc during morning trading at 194p.