April 22
CPL profit warning – What does it tell us?
Many business people believe that recruitment agencies are the pulse of the economy. When agencies are performing so is the economy BUT when they struggle so does the economy. CPL announced a profit warning recently and their share price crashed. This has implications for the company and the shareholders BUT it also paints a gloomy picture for the economy.
When an economy slows there is normally less hiring activity and increased redundancy and unemployment. This has a direct impact on recruitment agencies as they have no role to play. You can out spin on this like agencies have a bigger role to play during a recession – perhaps this is true BUT there cannot be a role for the 400 plus agencies in Ireland. I have quite a few contacts in the industry and they are all very positive people but I can read between the lines. We will probably see a cull in the recruitment sector as we have with many other sectors. Recruitment is basically sales and when sales are not ringing something has to give.