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Immigration debate must not damage ability to attract skilled labour into UK, says Hays CFO

What have been the biggest challenges for your business over the past year, and what role did finance play in addressing them?

Paul Venables, chief financial officer of FTSE 250 recruiter Hays: As a highly cyclical business operating in 33 countries globally, with no forward secured revenue stream and limited visibility, the fast-moving global macro-economic environment was the biggest challenge we faced in 2015. The slowdown in China has materially impacted activity levels in businesses such as oil & gas and mining recruitment in markets such as western Australia, Canada and Brazil – though our China business has had a record year. That said, we’ve also seen strong growth in areas such as the US, Asia and southern Europe, and the recovery of our UK business has continued well, characterised by superb operating leverage as we’ve controlled costs and improved productivity.

My role, and that of our finance team, was to ensure that our management teams around the world have fast, accurate and thus useful trading, forward projections and economic data on which to base ongoing investment decisions, and that we exert special vigilance on the cash collectability of receivables in the more materially affected areas of our business.

What is your position on whether the UK should leave or remain within the EU, and what impact will the outcome of the referendum have on your business?

Based on our dealings with thousands of clients in the UK and beyond, we are only too aware of the impact EU regulations have on commercial and trading opportunities for British companies. As the world has changed considerably since the UK first joined the European Common Market in 1973, it seems we have reached the point where a balanced, wide-ranging and open debate is needed about how the systems and structures of today’s EU, and the UK’s relationship with it, should evolve to reflect these changes. We mainly work within each of our 33 operating countries and we are not an export business, so in this sense the impact is minimal. However, as we approach and debate the referendum, increased uncertainty could drive companies to hold off on hiring while they await a clearer picture. This could have a direct impact on the UK’s prospects for continued economic growth.

Which capex projects will you be focusing on in 2016, and how will these be financed?

We completed a major investment into our front-/back-office IT systems globally in 2011. Our capex spend has now returned to more normalised levels and I expect this to continue into 2016. Fundamentally, we are a people business and thus our focus when it comes to investment is on when and where to build headcount to drive growth, and this is funded out of working capital within the business. On capital investment, our most significant spend will be in Germany – our largest-profit business, where we are in the process of the automation of large aspects of our German shared service centre, with the aim of improving customer service, reducing our cost base and thus increasing profitability and the scalability of our shared service centre as our business continues to grow over the next five to ten years. As we pay about 15,000 contractors monthly, and bill and collect in excess of €1bn per annum, the project must be delivered seamlessly.

What business-friendly policies do you want the next government to undertake to improve the environment for UK corporates?

All the government can do is to help create the environment for business to be able to take calculated investment risks. In many respects, I would much prefer the government to do as little as possible and let business help accelerate and broaden the economic recovery in the UK, and do nothing that could put that at risk. There is a need to ensure that the broad debate about immigration does not get in the way of our ability to attract and retain skilled labour into the UK. In many professions, we suffer a real shortage of skilled people and immigration can play a key role in helping to solve that problem and ensure it doesn’t stifle our economic growth.

What is the biggest project the finance function will undertake to support your business’s strategic aims in the year ahead?

We will continue our focus on providing the business with fast and reliable information on which they can make investment and strategic decisions.

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