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THE jobs market is on a roll. Since the reopening the employment sector has bounced back, with arts, leisure and food service firms leading the charge. That’s according to the latest jobs data from the Office for National Statistics (ONS).

UK job vacancies hit a record 953,000 in the three months to July. Unemployment fell to 4.7% in the three months to June, down slightly on the previous quarter, while average pay rose 7.4%, the ONS said.

However, while the number of people on payroll has now grown by over half a million in the past three months, there is still capacity in the system. With 182,000 more people on the payroll between June and July, bringing the total number of workers to 28.9 million, that is still 201,000 lower than pre-pandemic. All of which suggests Hays (HAS), the recruitment firm, is in line to post a bumper set of results on Thursday (26 August).

You know things are bad when a recruitment co cuts headcount - as Hays was doing this time last year (1,000 of them along with even more from other ‘big name’ employers) - as unemployment surged.

Today it’s a very different picture. Hays plans to take on 1,000 or so new staff of its own next year, bringing it nearer to its 2018 peak payroll of about 8,000 staff. Bolstering its own ranks must surely mean business is booming. If it is cashing in on the sort of recruitment pattern the ONS reports, then Hays should also be like a proverbial pig in mud, as it takes a fee equal to 20% of the first year’s salary for permanent roles.

Things are decidedly looking up and investors will be hoping things are looking up for them too. Hays has already upgraded its guidance for operating profit in the year to June to £95 million, on the back of “improved fees and good underlying cost management”. That is an improvement on the £85 million forecast in April, but still down 28% on £133 million for the year to June 2020 and 61% down on £248 million the year before.

Headhunters are a notoriously bullish bunch, but when chief financial officer Paul Venables described the strength of the recruitment sector as “quite remarkable”, just 16 months on from the start of one of the most momentous events in our lifetime so far, he wasn’t wrong.

Hays though does have a job on its hands, to show investors it has flipped those earlier ‘warnings’ of rising wage inflation and skills shortages (namely in the technology and life sciences industries) and turned them into opportunity. A continuation of that “positive momentum” from the start of the new financial year would not go amiss.

We will see when it posts full-year results for the year to 30 June on Thursday.

More on Hays

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