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You don’t have to be ‘out and about’ to know that when lockdown is over our high streets and city centres are probably going to look very different to how they did, say, two years before. With almost a year of on/off lockdowns now, it feels like every day another major employer hits the buffers and more people find themselves out of work.
The latest figures from the Office for National Statistics (ONS) show that in the past year overall, since February 2020 the number of payroll employees has fallen by 828,000. Even larger falls were seen at the start of the pandemic and these numbers won’t capture all the self-employed, casual, so-called zero hours and gig economy workers who, if they worked in one of the worst-hit sectors, will have found themselves out of work and not eligible for furlough either.
Data from the ONS Labour Force Survey shows a large increase in the unemployment rate while the employment rate continues to fall. The number of redundancies reached a record high in September to November 2020, although the weekly data show it has dropped from the peak in September.
The number of people temporarily away from work has fallen since its peak in April and May 2020, although it has risen slightly in November. The number of people away from work because of the pandemic and receiving no pay has also fallen since the start of the pandemic but risen slightly over the last month.
The vacancies recovery has slowed in October to December 2020 and these are still below the levels seen before the impact of the coronavirus pandemic.
It’s a dismal scene and one that the likes of recruitment group Hays (HAS) should fill us in a little more when it posts its half-year results on Thursday.
When the recruitment firm itself was cutting jobs - a thousand of them - and warning that its then-full year profits would almost halve as there were “no signs yet” of companies restarting hiring as lockdowns ease across the world, you knew things were looking bad.
At the end of summer it reported an 11% drop in full year net fee income after a brutal final quarter to the end of June when fees fell 35%. The firm also scrapped its final dividend for the financial year that had just ended.
Back in October, when there were vague hopes that we might have been through the worst of the pandemic, Hays said it expected to report only a modest profit in the first half of the year, of around £25 million following stronger fees seen in the second quarter. But that was before the ‘Kent variant’ was known to be widespread and the third national lockdown had been implemented.
Last month the extent of the very-much ongoing pandemic was revealed a little more when Hays said that underlying fees in the three months to 31 December were 19% down year-on-year, with the UK reporting a 20% drop. As a result, it said, first-half operating profits are expected to come in around £25 million.
Even outside the UK, in countries like Australia and New Zealand, where the pandemic has been handled very differently, fees had also dropped 19%.
Hays, which operates in 33 countries covering sectors from IT to construction, said over the period fees from temporary placements, which make up 62% of the group’s total fees, were down 13%. Fees from permanent positions fell 25%. And that was an improvement on the previous three months, when fees were 29% lower, and far lower than the 40% slump in UK fee revenue in the three months to the end of June.
With job hires down, the core of its business is in the firing line, so the question is, what happens next?
All Hays has said so far is that it is “too early” to know. All it can do is “rise to the challenges [it] faces”. Thursday will be an opportunity for the company to set out the latest figures and share its thoughts - and plans - going forwards.
More on Hays PLC
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