Recruiter SThree reports strong net fee income ahead of cooling job market

Net fees for the recruiter which specialises in Stem (science, technology, engineering and maths), were up 19% to £430.6 million from £355.7 million in 2021.

But the new CEO has cautioned that the forecast for 2023 will be tougher amid the sentiment that inflation and recession are bad for recruitment.

SThree recorded a slowdown in hiring activity, between September and November, reflecting the worsening economic outlook which has prompted employers to freeze or slow-down recruiting.

In the group’s final quarter net fees increased by 9% against the same period of 2021, compared with growth of 19% in its third quarter and 23% in its second quarter.

Timo Lehne, who took over the company in May, said: “Towards the end of the year we started to see a softer trading environment, reflecting the uncertain macroeconomic conditions, and we continue to monitor the trends across our regions.” 

On Monday, figures from the Office for National Statistics (ONS), signalled a weakening job market as employers "tap the brakes" amid economic uncertainty.

Vacancies in the three months to November stood at 1.2 million – the fifth quarterly fall in a row and the first annual fall since the beginning of last year. 

While some of the biggest technology companies in the world have made thousands of staff redundant in recent weeks - high profile examples being Twitter, Facebook, Meta and Amazon -  demand for tech staff is still high as companies push for digital agendas.

A recent report by Dice found that 52% of the top 50 employers of tech talent in 2022 were from non-tech industries including healthcare, aerospace and defence, finance and banking, and consulting.

SThree has a particular focus on contract work rather than full-time roles which could give it an advantage during a recession as firms are less willing to recruit full-time staff.

Read more: 1 in 3 won’t switch off over Christmas as recession pressure grows

Adrian Kearsey at broker Panmure Gordon told The Times that the recession could spark more interest in these roles.

“SThree hires for a very broad range of firms facing disruption from the changing world,” he said.

“The harder the world gets, the more employers need the people SThree provides. High street banks, for instance, will need to improve their digital platforms and cybersecurity. And governments won’t say, ‘We’ll take our chances with rising sea levels.’ The dynamics behind SThree... get stronger each year.”