Headhunter sees signs of recovery amid the caution

Signs of increasing activity in the recruitment business can be seen as a barometer for the wider economic recovery, according to the firm, although some caution remains in Yorkshire's boardrooms about the risks of double-dip recession and contagion from the Eurozone crisis.

Howgate Sable's assignments received in the nine months to March 31 matched the total achieved in the year to June 30, 2009, said Martin Boyle, the head of the Leeds office.

He said business leaders believe "it's got as bad as it's going to get" and have completed restructuring work in their businesses.

Many restructuring exercises were carried out "under the cloak" of the recession, he said, when in reality the downturn gave management the chance to address inefficient parts of the business.

In contrast to the downturn of the early Nineties, Mr Boyle said the recent recession seemed less drawn out, despite being the longest on record.

"The earlier recession was at least as tough, certainly for the recruitment business and job market in general," when computerisation helped remove vast swathes of the workforce, he said.

Mr Boyle said a lack of experience among business leaders helped compound the panic in the last quarter of 2008. Companies were led by executives who "had no experience of anything other than reasonable productivity and buoyant conditions", he added.

Speaking about current sentiment, Mr Boyle said: "The market remains cautious, certainly about a double-dip and the European banking crisis but with a sense of underlying confidence that whatever is going to happen business can cope rather better now than they could before."

He added: "In good times, people build up a comfortable cost base and avoided taking tough decisions because it's comfortable. It's when they see income heading towards cost base that companies take hard decisions and companies become less patient."

Regarding wages, he is not seeing much pressure.

"Those in employment are pleased to have the jobs that they have," he said. "If somebody is considering a move, salary is part of the consideration but the right people and right job is more important to them at the moment.

"That contrasts with three years ago, where in some sectors there was a scrabble for moderately qualified middle managers."

Howgate Sable turned over just over 5m last year. Mr Boyle said the business is on target for a significant upturn on that figure this year.