MARKET REPORT: Recruiters warned that AI may put them out of a job


MARKET REPORT: Recruiters’ shares slump after analysts warn that artificial intelligence may put them out of a job

While much of the public is sceptical – or even downright scared – of artificial intelligence, businesses are finding it more helpful than ever.

Unless, that is, they specialise in recruitment. Credit Suisse analysts took aim at UK recruiting firms as they warned technology will erode much of the industry.

The need for recruiting consultants will never be fully phased out, they stressed, particularly for contract jobs and specialist roles. 

Credit Suisse analysts took aim at UK recruiting firms as they warned technology will erode much of the industry

Credit Suisse analysts took aim at UK recruiting firms as they warned technology will erode much of the industry

But administrative jobs are most at risk of being automated and gradually phased out because of AI.

Elsewhere, the boom in online CV libraries and networks such as LinkedIn mean much of the hiring for permanent jobs can be moved to in-house departments.

And gig economy workers have access to platforms and apps to manage their own employment.

The barrage of challenges technology poses piles more gloom on to a sector that is struggling with sluggish hiring in Germany and is bracing for a slowdown in their Asia-Pacific divisions as a result of the coronavirus outbreak.

Robert Walters shares fell 3.6 per cent, or 20p, to 530p, while Page Group shed 5.8 per cent, or 23.4p, to 383p, after they were both downgraded from ‘outperform’ to ‘underperform’, and had the target prices on their shares trimmed.

See also  Friday Papers: foreign bidders in £7bn swoop on RSA

Hays retained its ‘underperform’ rating, though its shares were moved from 150p to 135p. Analysts said it has ’embraced technological changes for many years’ – though they noted that hasn’t helped the company’s margins. It dropped 2 per cent, or 2.7p, to 135.6p.

Stock Watch – Johnson Service Group

Laundry and workwear specialist Johnson Service Group saw its shares jump after hiking its dividend 13 per cent.

It will hand investors 3.5p per share for 2019, after revenues and profits climbed by 9 per cent and 15 per cent respectively.

The firm, which offers laundry services to hotels and restaurants and is the UK’s largest provider of rentable work uniforms, said it did a good job of holding on to customers last year, as well as winning new business. Shares rose 7.6 per cent, or 14p, to 197p.  

SThree bucked the trend – rising 1.7 per cent, or 5.5p, to 323p and keeping a ‘neutral’ rating, mostly because it focuses mostly in STEM markets.

While the threat of the coronavirus looms over recruiting firms, the FTSE 100 shook off immediate concerns about the disease – which triggered sharp drops last week. 

London’s premier index rose 1.1 per cent, or 74.28 points, to 6654.89 last night – though the FTSE 250 stayed in the red, closing down 0.15 per cent, or 29.22 points, to 19301.7.

The mid-cap index was dragged down by double-digit falls from car maker Aston Martin and cinema chain Cineworld. 

Aston, which put out dire results last week, crashed to a record low of 291p after plunging 13.9 per cent, or 47p – a fraction of the 1900p it floated at less than 18 months ago.

See also  Schroders’ Kirrage: UK ‘value’ banquet should run into 2021

Yesterday’s drop wasn’t connected to any news from the company, but the effect of the Covid-19 outbreak on both sales in China – a key market – and on the now-cancelled Geneva Motor Show –where it planned to relaunch its Vantage car – won’t have helped.

Cineworld (down 10.8 per cent, or 16.7p, to 138.5p) is also thought to be suffering from coronavirus anxieties – analysts have warned that cinemas could see attendance dive as people minimise contact with strangers, instead of entering a dark room surrounded by people they don’t know for hours.

Mid-cap engineering group Senior expects to return to growth in 2021 despite profits falling 53 per cent to £28million last year.

The group supplies parts to Boeing’s 737 Max planes which have been grounded after two deadly crashes. Senior shares climbed 4.2 per cent, or 5.9p, to 147.1p.

Military equipment maker Avon Rubber fell 4.2 per cent, or 115p, to 2615p, despite winning a £207million armour contract for the US. Avon – which also has a dairy arm – is set to enter the FTSE 250.

And Liberum brokers were upbeat about struggling retailer Card Factory (up 3.6 per cent, or 2.9p, to 81.6p), upgrading the greeting cards chain from ‘hold’ to ‘buy’, saying a 49 per cent drop in its share price over the past three months is ‘very harsh’.

 

 

 

See also  David Lloyd gyms boss Glenn Earlam is cashing in on a later life boom



READ SOURCE

LEAVE A REPLY

Please enter your comment!
Please enter your name here