Contractors ‘help slow SThree’s contraction’

Contractors in IT have helped slow the UK contraction at recruitment giant SThree, technology market analysts say.

In a briefing note, IT analysis house TechMarketView points out that the recruiter’s bottom line has benefitted from “increasing demand for contractors across the board”.

In line with the analysis, SThree’s first quarter 2018 trading update shows an 11% annual jump in gross profit for its contractor business, driven mainly by its European unit.

It follows what the recruiter recently described as a ‘challenging’ year in its home territory, but the uptick in demand for contractors in IT (as well as in Life Sciences and Energy) has now “helped put the brakes on the decline in the UK.”

In his note, TechMarketView analyst Anthony Miller also wrote: “[SThree’s] gross profit in [the] UK and Ireland in the first quarter…slipped by 3% to £12.7m, a vast improvement over the 19% decline in Q1 the prior year”.

He added that the recruiter’s UK improvement thanks to contractors mirrored similar trends of late, reported by both staffing company Harvey Nash and IT services outfit FDM Group

And SThree’s CEO Gary Elden hinted that the upturn seems set to continue. “Looking ahead to 2018, the momentum of our contract business and the strength of our performances in the US and continental Europe leave us well-positioned for further growth,” he said.

The recruiter's update adds that benefits from a strategic restructuring will not be realised until “during 2019,” nor will those arising from new office locations -- it has moved its support functions from London to Glasgow, and opened two new offices in the Netherlands and US.