UK Recruitment Firms Tighten Spending as Geopolitical Risks and AI Continue to Slow Hiring

British recruitment companies are reducing expenses to protect profitability as ongoing geopolitical uncertainty and the increasing use of artificial intelligence continue to affect hiring activity.

Recruiters including Hays, PageGroup, and Robert Walters reported that temporary hiring showed signs of improvement in the Americas and parts of Asia, while recruitment demand across Europe remained subdued. Although quarterly net fees declined across the sector, the companies maintained confidence in their annual outlooks, supported by cost-control measures and expected growth in selected markets.

Robert Walters reported a 4% decline in second-quarter net fees. Chief Executive Toby Fowlston said hiring conditions continue to vary across regions and noted that the company is accelerating cost-reduction efforts while trading remains in line with expectations despite a challenging geopolitical environment.

Recruitment firms said economic uncertainty, including the impact of tariffs and the conflict involving Iran, has caused many employers to postpone hiring and investment decisions. As a result, businesses are increasingly choosing temporary and contract roles over permanent hiring.

Hays also said it expects market conditions to remain difficult in the near term, with temporary and contract recruitment proving more resilient than permanent placements. Meanwhile, PageGroup maintained its full-year outlook after reporting second-quarter results that exceeded analyst expectations, while remaining cautious about the months ahead.

To respond to weaker market conditions, Hays has narrowed its geographic focus, while PageGroup and Robert Walters have continued cost-cutting measures and expanded into specialist recruitment areas. France, Germany, and the UK remained challenging markets during the quarter, whereas Japan, the Americas, and parts of Asia showed comparatively stronger performance.