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Highlights:
- UK's top recruitment firms have asked the government to reconsider its decision to allow hiring agency workers to replace striking employees.
- The firms said the move would inflame the strikes instead of ending them.
The UK is witnessing strikes by thousands of railway workers as well as the workers in other industries over the wages. Inflation hit 9.1% in May, but the pay offers remained below it, exacerbating the cost-of-living crisis. To curb these strikes, the government plans to remove the regulations that prohibited businesses from hiring agency workers to replace those participating in the strikes. A draft legislation regarding it was introduced this week.
However, this would worsen the problem instead of solving it, the country's top recruitment firms have warned. In a letter to Business Secretary Kwasi Kwarteng, the bosses of these firms have asked the government to reconsider its decision, saying that the proposal would inflame the strikes, not end them.
Among the letter's signatories are 13 major companies, including Hays, Manpower, Adecco, and Randstad. Describing the proposal as 'unhelpful', the firms claimed that it had the potential to impact their businesses and the whole sector would be called into disrepute.
Image source: fizkes, Shutterstock
Notably, the government has stressed that the businesses are not bound to supply agency workers to fill staffing gaps due to strikes. The decision has been taken to ensure that essential services like trains continue operating as effectively as possible, per the Department for Business, Energy and Industrial Strategy. It also argued that the move neither takes away an individual's ability to strike nor does it create any obligation for an agency worker to accept a role.
Amid the news, here's a look at some London-listed recruitment stocks.
Hays Plc (LON: HAS)
Hays Plc provides recruitment services to businesses looking for permanent, contractual, and temporary staff in the UK and abroad. The company's stock price has plunged by over 10% in the past month, and it closed at GBX 111.60 on Thursday. The FTSE 250 constituent has a market cap of £1,844.55 million at present.
SThree Plc (LON: STEM)
The London-headquartered company provides staffing solutions to multiple industries. In the six months to 31 May 2022, the company posted a 25% year-on-year increase in group net fees, with double-digit growth in all key sectors. The FTSE All-Share-listed company holds a market cap of £476.82 million. Its return over the past year hasn't been particularly good at -22.24%.
Impellam Group (LON: IPEL)
The talent acquisition firm provides recruitment solutions to clients across the globe, and it is among the UK's largest staffing companies. The FTSE AIM All-Share constituent has delivered a return of 62.31% to the shareholders over the last 12 months. The year-to-date return stands in the negative zone at -7.26%. With a market cap of £207.57 million, Impellam Group's previous close was at GBX 460.00 (30 June 2022).
Note: The above content constitutes a very preliminary observation or view based on market trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.
