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WHEN recruitment company PageGroup (PAGE) raised its earnings guidance a month before its full-year results are due out, it was already evident that rapidly rising wages and record job vacancies meant boom time for the recruitment industry.
With companies crying out for workers and wages spiralling, as the record number of job vacancies has hit more than 1.2 million according to ONS data, the current situation could not have been more different to the one we saw at the start of the pandemic.
Back then demand for staff flatlined, with many companies forced to suspend trading during the various lockdowns, leaving staff homebound and on furlough. It’s no exaggeration to say it felt like the recruitment sector was a lost cause. No one was hiring and few people had the appetite to switch jobs in the wake of such uncertainty.
Investors who held on have been richly rewarded though. PageGroup’s fourth quarter gross profits grew by 55% compared to the same quarter in 2020, when the pandemic was coming up to its first anniversary. Now Page chief executive Steve Ingham says the recruiter is looking at a record quarter and a record year for the group.
Gross profits rose nearly 75% in the UK, with Ingham describing December as the most successful month of the year for the group. And that’s a total turnaround from 2020 when Page had no choice but to cut costs and freeze its own hiring plans.
The shortage of staff has meant wages have spiralled, attracting employee moves that are music to the ears of the recruitment firms. And the trend is across the board, from manual to corporate roles. And that spells very good news for recruitment firms whose stock in trade is workers.
Now that the battle for staff has shifted direction recruitment is now one of the hottest sectors in town. And PageGroup and co are themselves feeling the impact; they themselves are fighting to retain staff who are being offered ever-higher financial incentives from rival firms. The fight for talent has sparked wage inflation, the like of which hasn’t been seen for decades.
Given December’s performance, PageGroup is now expecting 2021 full year operating profits to be “marginally in excess of £165 million”. Previously it had anticipated something in the region of £155 million.
Expect full details when PageGroup posts its full year results on Thursday 3 March 2022.
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