UPDATE: Hays Sees Further Fallout From UK Public Sector Cuts

8th Jul 2010 09:07

(Adds detail, comment.) By Anita Likus Of DOW JONES NEWSWIRES LONDON (Dow Jones)--Hays PLC (HAS.LN), the U.K.'s largest recruiter, expects a further fallout from spending cuts in the public sector and is waiting for the government to announce how many jobs will go in its Autumn spending review. Hays usually benefits from people changing jobs but doesn't expect to find masses of new clients once public sector jobs are cut. Finance Director Paul Venables said on a conference call it won't be easy to transfer public sector employees into the private sector, as they lack a natural skill set and the working pace is too fast in the private sector. He later told Dow Jones Newswires in an interview that public sector employees working in information technology, property and construction maintenance and secretarial positions will be easier to transfer to the private sector, but when employees have been with the public sector throughout their careers, it will be very difficult. "It's not an easy transfer so it will take a couple of years," he said. The company saw a fallout in the public sector about 15 months ago, when authorities made a decision not to replace people who left and those who had secure positions wouldn't move jobs, but Venables said this accelerated three months ago. However, Venables said the private sector in the U.K. is recovering. "The important thing is that the job market in the U.K. is recovering more broadly...although Scotland and the north of England still lag behind," he said. Hays is also continuing with its international expansion as its international divisions are performing strongly. Hays plans to enter Mexico, a new market, in September, and then expand further into the U.S. through a pharmaceutical subsidiary. Venables said that the move further into the U.S. has been requested by clients so it is relatively risk free. The company then plans to enter Argentina next year. Expansion into South America began with Brazil in 2006, which has been growing strongly and will become Hays' sixth biggest market globally this year, Venables said. -By Anita Likus, Dow Jones Newswires; +44 20 7842 9407; [email protected] (END) Dow Jones Newswires July 08, 2010 04:07 ET (08:07 GMT)