SThree not yet reached turning point

(By Anthony Miller – Friday 11th September 2009 9:00am). There really is little cheer to be derived from increasingly diversified UK ITSA (IT staff agency) SThree’s IMS, either for the company or for the UK IT sector. UK ICT placements were down 70% yoy for the three months to 30th August, though contractor numbers were light ‘only’ 36%. Permanent placement fees fell, but contractor fee rates still held broadly steady. As a result, non-ICT gross profit across the business is now 27% of the mix, compared with 25% in H1. But CEO Russell Clements reiterated his view that there were signs of stability in the UK (see SThree bucks pricing trends) and they have started recruiting again (more so overseas) in anticipation of a recovery that even he concedes is not yet evident.

I asked Clements which skills were still in demand. Much as you would expect, it’s around risk management, security, compliance, data warehousing, business intelligence, project & change management, and systems integration (spurred by industry consolidation). No signs yet of major new projects, though. As for Adecco’s acquisition of leading UK ITSA Spring (see Spring is sprung!), Clements thought this would have no effect on the competitive landscape (actually, he put it, shall we say, in a slightly less charitable way, but I got the point).

Though SThree is sharing much the same pain as peers in the recruitment sector, I still think its multi-brand, SME-targeted model not only has legs, but can keep running.