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FT editor Roula Khalaf selects her favorite stories in this weekly newsletter.
Who will recruit the recruiters? The industry is in crisis. Robert Walters, who connects people with white-collar jobs, on Tuesday reported a 14 per cent year-on-year drop in net fee income for the third quarter, with the UK being its toughest market.
Figures from UK listed peers this month tell a similar story: hay fell 15 percent and Page Group 16.7 percent. Forecasts have been falling throughout the year. Stock prices have been heading lower since the post-Covid-19 hiring surge.
It’s telling that for an industry that thrives on optimism, green shoots are few and far between. Don’t be intimidated by the UK latest employment figures, showing that payroll employment remained stable in September. Recruitment agencies thrive on turnover. Job vacancies in both the UK and the US are falling, with the latter falling by 1.3 million in August, the latest data sample.
The missing ingredient is trust. Employers are wary of expansive hiring; Candidates are reluctant to change jobs. As a result, more work hours translate into less business. At PageGroup, the proportion of candidates who balk before signing on the dotted line has doubled to 40 percent. Other companies aim to interview about eight candidates per position, compared to the usual six.
There are positives for AI engineers or legal specialists, who are still in demand and commanding big salaries. But for most, there is little incentive to change jobs for a pay rise of perhaps 5 to 7 percent at a time when global uncertainties, from wars to elections, suggest that the adage of “last one in” might apply. , the first to leave.”
Recruiters downplay disintermediation and point to net fee growth during the past peak-to-peak cycle. But hiring notices posted on LinkedIn and social media (including the king of heavy industry, Deere & Co), He turned to TikTok to fill influencer positions: suggests at least some internalization. More and more companies are doling out finder’s fees to employees who present new hires. Ultimately, job boards like Indeed get business.
Recruiters are cutting costs in anticipation of a rebound. This won’t happen before the new year at the earliest, even with some stimulus on the horizon.
Interest rate cuts should help hiring, although previous cycles suggest a six-month delay. The uncertainties will disappear with the UK budget this month and the US elections next month. Generative AI, which can still eat your lunch, has a silver lining: An avalanche of standard AI-generated applications could persuade weary entrepreneurs to find a way back to the specialists. Still, this is still an industry to avoid until employees become more agile.