Economic Uncertainty and Political Instability Hamper Hiring in Key Markets
Recruitment companies have raised concerns over declining business confidence in the UK and across the eurozone. Political instability in France and Germany, alongside fears about economic growth, has made firms hesitant to expand their workforce.
PageGroup, a leading FTSE 250 recruitment firm, reported a 24% profit decline in Germany and a 17% drop in France during the last quarter of 2024 compared to the same period in 2023. UK profits also fell by 14%, as businesses grew cautious about hiring. Similarly, Morgan McKinley noted a 12% year-on-year decrease in job vacancies within London’s financial services sector during the same period.
The broader European economy faces challenges as major markets like Germany struggle with sluggish growth, narrowly avoiding recession over the past two years. France continues to grapple with political instability, experiencing its fourth government in 12 months. In the UK, Labour’s Keir Starmer-led administration is navigating economic pressures, including rising bond yields and currency depreciation following Donald Trump’s election and potential tariff increases.
PageGroup CEO Nicholas Kirk described the hiring landscape as difficult, highlighting extended recruitment timelines due to candidate and client uncertainty. Meanwhile, Morgan McKinley’s Mark Astbury pointed to ongoing challenges such as economic volatility, geopolitical instability, and rapid technological shifts.
Adding to the uncertainty, the European Central Bank (ECB) is preparing interest rate cuts aimed at supporting growth. However, ECB Chief Economist Philip Lane stressed the importance of a balanced approach to avoid spurring inflation, noting that “finding a middle path” will be critical.
As Europe’s largest economies contend with mounting difficulties, recruiters warn that the business outlook for the region remains subdued.
