RECRUITERS across Europe and the US had a dismal start to the year. US President Donald Trump’s tariffs are now dimming their prospects for the rest of 2025.
Earnings in the sector largely missed the mark, reflecting the current harsh labor market on both sides of the Atlantic — US job openings and hiring are down, with vacancies also lower in the UK and Germany.
Almost unanimously, recruiters warned that US trade policy is weighing on hiring activity. “We’re already operating on a relatively low level of hiring,” Randstad NV Chief Executive Officer Sander van’t Noordende said on an earnings call.
Trump’s back-and-forth is only worsening existing challenges as cost pressures and a worrying global outlook extinguish hiring budgets.
Temporary recruitment — which makes up the majority of staffing firms’ gross profit with the exception of PageGroup Plc — looked like it was stabilizing sequentially in the US at the end of last year after the post-Covid rush for help. “The whole recovery has been thrown into disarray” after Trump’s trade war started, Bloomberg Intelligence Senior Analyst Stuart Gordon said.
Lower attrition for permanent roles adds an extra challenge. Hesitancy by employers to get rid of staff after being badly burned during the pandemic, coupled with employees nervous about the job market staying put in their roles, has stunted movement on either side. “At the moment we’re sitting in a kind of vacuum,” Gordon said.
In the US and Europe, “the permanent recruitment market is really, really slowing down,” Denis Machuel, chief executive at Swiss recruitment giant Adecco Group AG, told Bloomberg in an interview. Clients are in “wait-and-see mode.”
Hays Plc saw fees in Germany, its largest market, decline 9% as an automotive slowdown has held back hiring. The number of new-starter temps in the sector was down about 50% year-on-year, Chief Financial Officer James Hilton said on an earnings call.
“If there’s one place where we have seen some impact, it’s automotive,” Randstad’s Van’t Noordende said.
The unfolding trade war is making it hard to see where to go from here, UK staffing firms Robert Walters Plc and Hays said, with the latter seeing challenges persist into 2026. Meanwhile, British businesses shed workers at the fastest pace since the start of the pandemic in March, ahead of a hike in employment costs in April.
“If you took the uncertainty out of it we’re probably pretty close to the trough, but this is going to elongate any visibility for a recovery” BI’s Gordon said.
American groups Robert Half Inc. — which mainly recruits for office workers — and ManpowerGroup Inc. both reported results that disappointed investors, citing caution among clients as the main factor. Manpower also cut its dividend by half.
Possible Opportunity
One silver lining might be firms that don’t want to take the risk with permanent recruitment due to a lack of visibility are turning to more flexible labor, Adecco’s Machuel said. The company has seen “modest positive momentum” in its hiring numbers since April, according to a statement.
There’s also some hope in US companies expanding their production domestically, said Sean Puddle, Robert Walter’s North America managing director, pointing to Kimberly-Clark Corp. and Apple Inc. Their billion-dollar plans to bolster US manufacturing could boost job creation in construction and manufacturing.
“The big question is how long it will take to translate to the ground level, and how much of a drop-through it will have on the labor market,” Puddle said in an interview. Prices of their goods could also rise, sapping consumer confidence and fueling job losses if business costs go up.
Further afield, China — already grappling with fewer job openings, layoffs and pay cuts before the tariffs — has vowed to strengthen support for employment as trade risks mount. Recruiters there are signaling a trough.
Online talent service platform Tongdao Liepin Group said the mid-to high-end recruitment market is still in the process of bottoming out and recovering, seeing the number of job postings stabilizing toward the end of 2025. Hiring demand for traditional sectors, such as consumer goods, hasn’t recovered, Jefferies analysts including Thomas Chong wrote in a March note.
Peer Kanzhun Ltd. expects recruitment spending to bottom out from last quarter, Chief Financial Officer Yu Zhang said, expecting an upward trajectory post-Chinese New Year. –BLOOMBERG
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