According to the latest news from Monster Worldwide Inc. (MWW), online job postings surged in August and registered the highest monthly gain in four years following slow hiring activity in summer. However, it was down 24% year over year.
Monster World Wide is an online recruitment firm and the parent company of Monster.com, the leading career website in the world. The company, headquartered in New York, is also the largest advertising agency network for worldwide recruitment.
Management stated that this surge in job postings indicates signs of improvement in the US economy, with the demand for managers and professionals as well as sales and office workers picking up. Online labor demand in the arts, entertainment and recreation industry rebounded from a historic low in July. Demand for staff in sales and commerce related industries also registered an increase in both retail trade and wholesale trade.
However, offerings in health care and social assistance declined for the second consecutive month. Agriculture, forestry, fishing and hunting registered the sharpest decline among industries in August. Public administration services also recorded low demand.
The weak global economy has significantly impacted hiring demand in the past eighteen months. This worldwide slowdown has caused companies to reduce headcount, freeze hiring and delay recruitment related decisions. In 2008, the global online recruitment market decreased approximately 5% and the combined global online and offline market declined approximately 20%.
The primary source of revenue for the company is recruitment advertising. Many of the key industry verticals of financial services, retail, manufacturing and construction served by Monster were severely affected by the slowdown in the global economy and not able to renew their contracts with the company.
Earlier, the company reported second quarter results, which were roughly in line with Street expectations. Profitability improved due to cost cutting measures adopted by the management.
Going forward, though the economy is showing signs of recovery, it is going to be slow and we do not expect the business environment for Monster to have any significant improvement before 2010. The cost-cutting measures undertaken by management should help to boost margins but top-line recovery will be a distant and tough goal. We maintain our Neutral rating on the stock.
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