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Despite the good news yesterday that unemployment has declined and employment is on the rise, Hays’ chief executive warned that the UK labour market is still facing challenges, not least from small companies which cannot afford to hire staff.
In an interview with the Financial Times this week, Alistair Cox said that thousands of smaller companies face difficulties.
“People who have just got such restricted trade finance ... struggle to make ends meet and [are] certainly not going to be thinking about creating new jobs, if they’re worried about how they’re going to pay their suppliers,” he said.
But he also warned of “zombie” companies which only make end meets by paying back the interest on their debt. “They either disappear or they restrict what they do, so they become a mini-zombie, because they can’t do anything apart from just live from day to day,” Mr Cox said.
Overall, he predicts the UK labour market will take a long time before it fully recovers and this also impacts people’s confidence to change jobs.
Talking about Hays’ business operations in Asia Pacific where gross profit decreased by -9% in the third quarter, he said: “Asia outside Australia and New Zealand is going to become a much more important place, but the place that’s going to lead that for us is Japan and then behind that it’s going to be China.”