City Jobs

Hiring in the financial services sector in the City has ‘slowed considerably’ during August because of the faltering global economy.

According to the Morgan McKinley London Employment Monitor, the number of new job vacancies in the City fell by 34% in August compared to the same time last year. The number of individuals registering for new jobs also decreased in August, down by 37% compared with August 2007 and the average City salary has dipped slightly by 2%.

Robert Thesiger, chief executive of Morgan McKinley’s parent company, Imprint, said: “Following the collapse of one of the financial services industry’s major institutions at the weekend, it is evident that the fallout from the credit crisis is not over. These momentous events of the past few days have changed the landscape of not only London’s but also the global financial services sector. It is probably fair to say, therefore, that the period of transition that will now follow will create an equally challenging and nervous environment within financial services and the recruitment market within this sector.”

* - Article from the recruiter

Recruitment firm Hays has a job on its hands

Last year, 80,000 people took the next step in their careers thanks to Hays. Alistair Cox was one of them. An industry outsider, he arrived to become chief executive of the specialist recruiter exactly 12 months ago and so far the civil engineer has made a rather good fist of it.
Yesterday's results were a record and were higher than the City had been expecting. Yet to his credit, Cox made no attempt to deny the simple facts that the trends are not moving in Hays' favour.

The UK, despite moves to expand geographically, still accounts for more than half of revenues and the signs are not good. Demand for temporary contracts are flat at best, while permanent placements are falling. In Australia, too, the markets are softening.

Unemployment has so far proved the dog that didn't bark during the current slowdown, but the beast is now clearing its throat. The most bearish economists are now predicting a jobless total of up to 2.5m (compared with around 1.6m now) if the UK slides into a serious recession.

The difficulty for Hays is that with visibility of barely six weeks ahead, it finds it very difficult to predict where its markets are going. The only thing it knows for sure is that they aren't getting any better - particularly in its largest specialities of accounting and finance, and construction and property.

Some analysts moved to downgrade their forecasts yesterday on the expectation of contracting margins, while less buy-back activity may act as a drag on the share price.

For investors, it is not all bad news; Hays has a strong management team and good track record and boasts fantastic cash conversion. It also carries an attractive yield and a strong balance sheet that contains minimal debt.

For Citigroup, for instance, it means the fall in the share price to under 94p places the stock far below the 110p it believes should be a theoretical trough.

However, on balance, the company is more likely to see bad news rather than good in the months to come, and investors are likely to find better value elsewhere. Sell.

* - Article from the telegraph