Thank you, good morning, everyone, and welcome to the PageGroup Q3 Trading Update. I'm Steve Ingham, Chief Executive Officer, and I have with me Kelvin Stagg, Chief Financial Officer. I will now present an overview of our Q3 performance and our COVID-19 strategy before handing over to Kelvin for a financial and regional review. I will follow up with a strategic review and summary. Although I will not read it through, I'd like just to make a reference to the legal formalities that are covered in the cautionary statement in the appendix to this presentation and which will also be available on our website following the call. Although the Group continues to be impacted by COVID-19, we saw an increase in activity levels as the quarter progressed.
Consequently, the Group delivered gross profit of GBP 143.5 million in the quarter, a decline of 31.9% in constant currencies, and an improvement from the decline of 47.6% in Q2. We exited the quarter at -26% year-on-year in September. During the quarter, foreign exchange had an adverse impact on gross profit, with a decline in reported rates of 33.8%. In monetary terms, foreign exchange decreased gross profit by around GBP 4 million. For the quarter, Michael Page declined 30.4% and Page Personnel declined 35.2. We ended the quarter in a strong financial position with net cash of around GBP 152 million. This was down from the GBP 162 million at the end of June, due largely to the purchase of GBP 12.8 million worth of shares into the Group's employee benefit trust to hedge exposures under the Group's share plans.
Our net headcount fell by 202 in the quarter, a reduction of 2.9% on Q2. At the end of September, the Group had a total headcount of 6,783. Above all else, the health and safety of our employees, candidates, and clients was and remains our priority. The Group's overarching strategy for COVID-19 has been to protect and invest in our operating platform. We look to secure as many roles as possible through the crisis, with the key aim of protecting the shape of the business. We've retained our experienced employees, who are continuing to support our clients and candidates. We have retained our broad and diverse platform of brands, disciplines, and geographies. We believe this strategy will ensure we're able to react the quickest as market conditions around the world recover and capitalize on market share opportunities.
We have continued reopening our offices globally, although returning to the office remains entirely voluntary, with 125 out of 142 open at the end of September, although we are mindful of further lockdowns. We returned the majority of our staff from furlough and all staff to full pay from the July 1st. Despite this increasing our cost base over Q2 and the slower months of July and August, improving trading conditions meant we generated a small profit in the Q3. Looking forward, we expect our monthly cost base in Q4 to be broadly in line with September, and Kelvin will expand on this later in the presentation. To ensure we're in the best position to take advantage of market opportunities as we recover, we have been selectively hiring experienced fee earners from the competition, and I will expand on this later in the presentation.
In line with our strategy of investing and protecting the platform, whilst gross profit is down 31% year to date, we have chosen to reduce our fee earner headcount at a slower rate, down 13% over the same period. We reduced our fee earner headcount by 531 in Q2. Most of these had recently joined the Group and therefore had very limited experience or were on performance reviews. The hiring of approaching 300 experienced fee earners meant that our fee earner headcount reduced at a slower rate in Q3, down 169. Operational support staff reduced by 33 in the quarter, which maintained our fee earner to operational support staff ratio at 77/23. At the end of September, the Group had 5,223 fee earners and 1,560 operational support staff, a total headcount of 6,783.
This figure is inclusive of 65 furloughed employees in the U.K., the majority of whom have returned to the business in October. I will now hand over to Kelvin for a financial and regional review.
Thank you, Steve. This fee earner headcount and gross profit chart shows the unprecedented scale of the decline in Group gross profit in Q2 and Q3 and the comparison to the global financial crisis in 2008. Quarterly gross profit due to the pandemic fell 42%, from GBP 205.6 million in Q4 2019 to GBP 118.3 million in Q2 2020. As activity levels started to improve, this increased to GBP 143.5 million in Q3 2020. The decline during the GFC was similar in magnitude but over a longer period, down 45% over four quarters. Our monthly cost base through Q2 reduced by 21% compared to March due to voluntary salary reductions, four-day working weeks, furlough schemes, and a reduction in headcount of 581. Our monthly average cost base in Q3 was down 15% compared to March, which was better than the 10% forecasted at the time of the Q2 trading statement.
This was due to a net reduction in headcount of 202 in Q3, lower than estimated bad debt, and holidays not taken in Q2, resulting in an increased holiday pay accrual unwind. Our monthly average cost base through Q4 is forecast to be around 10% below March, in line with the September run rate. In the Q3, reflecting the exceptionally challenging conditions in many of our markets, permanent recruitment declined 34.2% in constant currencies, while temporary declined 25.1%. Our ratio of permanent to temporary gross profit increased to 72/28, compared to 66/34 at the end of Q2. In Michael Page, permanent recruitment represented 81% of gross profit, while in Page Personnel, it was less, at 52%. Trading conditions remained challenging in the quarter, and all our regions continued to be impacted by the pandemic. Consequently, gross profit for the group was down 31.9%.
Our large high-potential markets, representing 37% of the group, declined by 29%. Our businesses of technology, contracting, digital, and logistics were the more resilient, while construction and retail were among the most challenging. Moving on to each of our four regions, and starting with the largest, Europe, Middle East, and Africa, representing 34% of the group. We saw an improvement in trading conditions as the quarter progressed, with a decline in Q3 of 24.5%, compared to a decline of 42.9% in Q2. Our Michael Page business, representing 57% of the region, was more resilient, with a decline of 20%, compared with a decline of 30% in Page Personnel. Permanent recruitment declined 25% for the quarter, with temporary down 23%. In France, our largest country, representing 30% of EMEA and 16% of the group, we declined 27%.
The improving activity levels we saw in June continued through Q3, and we exited the quarter with a decline of 22% in September. Our business in Germany, representing 23% of EMEA and 12% of the group, proved resilient and declined just 10%. This was driven by our technology-focused contracting business, which grew 4%. Southern Europe declined 25%, with Italy down 23% and Spain down 28%. Trading conditions improved in both countries towards the end of Q3, and we exited the quarter down 14% and 24%, respectively. Benelux declined 31%, with Belgium down 24% and the Netherlands down 33%. The Middle East and Africa, which represented 2% of the group, was down 31%. Journal headcount was down 109 in the quarter, mainly in France and the Netherlands.
In Asia Pacific, representing 21% of the group, trading conditions also improved as we progressed through Q3, and we declined 28.2% for the quarter compared to 41.7% in Q2. In Asia, representing 17% of the group and 80% of the region, we were down 23% and exited in September down 10%. In Greater China, 9% of the group, we declined 22%. We saw a continual improvement in trading conditions in mainland China, and we exited the quarter flat. The improvement was driven by our domestic clients, which now represent over half of our mainland China business. Hong Kong was impacted significantly by both COVID-19 and continuing social unrest and declined 41%. Japan declined by 14%, sorry, 16% in the quarter, but returned to growth in September following a record performance in contracting in our Nikkei market business.
India is currently one of the worst affected countries by COVID-19 and declined 32% for the quarter. Southeast Asia declined 31%, with Singapore down 34%. We opened in the Philippines during the quarter, our sixth country in this large high-potential market. Australia declined 42%, with local lockdowns in some areas and our offices in Melbourne closed. Journal headcount was down 51%, mainly in Greater China and Australia. The Americas, representing 13% of the group, declined 41.9%, with trading impacted throughout North and Latin America. In North America, 9% of the group and 67% of the region, gross profit was down 39%. The U.S. was also down 39% due to significant disruption from COVID-19. Trading conditions remained particularly tough in construction, our largest discipline.
We're yet to see an improvement in activity levels, and September's growth rate was in line with the quarter. In Latin America, 4% of the group and 33% of the region, gross profit declined by 47%. Brazil was down 40%, and Mexico, our largest country in the region, was down 56%. Elsewhere, trading in Argentina has been particularly tough due to the additional impacts of high inflation and currency devaluation, while in Chile, trading has also been impacted by social unrest. Conversely, our technology contracting business in Colombia performed particularly well. Fee earner headcount was down 22 in the quarter. In the U.K., gross profit declined 47.9% in the quarter, up from a decline of 61.5% in Q2. As seen in most of our other regions, activity levels improved as the quarter progressed, and we exited in September down 42%.
In Page Personnel, which represented around a quarter of the U.K. and operates primarily in finance and business support, we declined 51%. Michael Page, which is focused on more senior opportunities, declined by 47%. Overall for the quarter, temporary recruitment was more resilient than permanent, down 40% and 51% respectively. Trading in the private sector was down 49%, while the public sector was impacted to a lesser extent, down 41%. Having reduced our headcount substantially in Q2, we added 59 experienced fee earners in Q3, resulting in our net fee earner headcount increasing by 13 in the Q3. I now hand back to Steve for a strategic update.
Thank you, Kelvin. I will now provide a brief update on our strategy. Far this year, following an unprecedented level of interest, we've added 276 fee earners that have been recruited selectively from our competitors. With an average tenure per fee earner of 4.3 years, these are experienced consultants who in 2019 together generated gross profit of around GBP 40 million. These hires have been focused in our targeted areas of investment such as technology, healthcare and life sciences, and contracting, which have also been more resilient during the pandemic. In addition, we have made a senior appointment into our Page Outsourcing brand to drive our offering within MSP, RPO, and project recruitment. Engaging with key partners such as Salesforce, Dun & Bradstreet, LinkedIn, and Microsoft is key to leveraging technology across the group.
Our new operating system, Customer Connect, is a single-instance, cloud-based front-office technology platform that ensures all brands and all regions can drive growth and support innovation. The data-driven platform delivers a modern user experience, making it easy to engage with our customers at every opportunity to drive productivity. Our transition to this new Salesforce-based platform has been deployed successfully in Poland, Belgium, the U.A.E., South Africa, and most recently, the U.K. Further deployments are planned in Germany in Q4 and the wider group in 2021. Basing Customer Connect on the Salesforce platform has allowed us to fully integrate our market-leading CRM, digital, and customer engagement programs that have been tested and refined over the last five years.
Technology at scale, dealing with volume and acting as a filter to drive quality, allows our marketing program to do more of the heavy lifting so our consultants can focus on what they do best, creating meaningful conversations and relationships with our customers. The integration gives our consultants full visibility of the activity marketing is delivering, and it gives our management the detail on how this is being followed up. For our customers, we're improving their experience by managing their engagement across all touch points, giving them personalized and relevant interactions and ensuring we're measuring our effectiveness for them. We have tested and honed campaigns set up for both candidates and clients across their life cycle with us. Automated and triggered by customer activity, they allow us to keep prospects engaged. The native integration displays what customer activity has taken place, enabling meaningful discussions with our teams.
Candidate campaigns start from application and are delivered based on where they are in the life cycle. Talent pools will be targeted to reengage with passive candidates to ensure we have an engaged database for our consultants to work with. Making these campaigns personalized ensures we drive conversion rates. For clients, we run reactivation campaigns and trace client contact activity and revenue generation. The feedback from our live markets is very positive. The increased visibility for consultants on marketing actions towards contacts is a big plus. Being able to see the marketing journey of an engaged contact helps the pitch of a business development call. For marketing, visibility across consultant follow up on leads allows us to measure campaign effectiveness.
Bottom line, we're investing in this technology to make life easier for our consultants by giving them targeted and active candidate and client leads at their desk. One of our core areas of focus is the development of our data program and ensuring that it provides both operational and strategic advantage for the group. To this end, we have recently launched our Page Insights product across our markets. Page Insights is a business intelligence tool that combines our internal data with global external data sources, such as government information and millions of online adverts, in an accessible format to present insight to our customers. Unique to PageGroup, it provides us with a competitive advantage when engaging and delivering value-add services to our existing and new customers. Our clients want data and insights on recruitment trends to benchmark externally, understand competitive roles, and identify future skills and experiences evolving in their industries.
Our consultants have this data at their fingertips, giving them the confidence to consult on what is needed to ensure the best talent and enabling them to develop high trust and long-term relationships. This is only the first phase. The tool also has the potential to evolve as additional external data sources become available, and Customer Connect provides further internal data alignment opportunities. Another area of strategic investment has been in Page Outsourcing. This is our newest brand and was created to meet the growing demands of our clients. It leverages our internal capabilities in offering a customized solution for high volume hiring and specific project recruitment needs across all levels of the market.
We have a growing track record in this area and significant infrastructure already in place, which is why we have invested during Q3 in a senior executive from one of the major operators in this market to lead Page Outsourcing. This will drive our offering within MSP, RPO, and project recruitment to drive future profitable growth in this sector of the market. We have strong coverage across both permanent and temporary markets and are ideally positioned to deliver these solutions to our clients, given our geographical spread and broad discipline and federal salary level offerings, being able to match whatever the needs of our largest multinational clients. I will now finish with a brief summary of our Q3 results.
The improving activity levels we saw in June continued to progress through the Q3, exiting in September, down 26%, with some markets such as mainland China and Japan, either flat or returning to growth. We continued to focus on protecting our people whilst also protecting and investing in our trading platform. We returned all staff to full pay from the first of July and progressively brought them back from furlough during the quarter. We generated a small profit in the Q3. We expect our cost base in Q4 to be in line with the run rate in September, which was down around 10% compared to March. We're continuing to reopen our offices subject to further local lockdowns. We have been selectively hiring, approaching 300 experienced fee earners from the competition, who together in 2019 generated around GBP 40 million of gross profit.
These hires have largely been in technology, healthcare and life sciences, and contracting. We have a core of engaged, motivated, and experienced employees, and we'll continue to support them and look to add expertise. We know the future remains unpredictable, but we believe now is the right time to continue to invest in our flexible and highly diversified business model. Having seen conditions improve in the Q3, we now look forward to driving improved activity and gross profit in Q4. We have maintained our focus on the long-term vision of the group to drive progress towards our strategic goals. Kelvin and I will now be happy to answer any questions you may have.
As a reminder, ladies and gentlemen, if you would like to ask any questions today, please would you press star one on your telephone keypads now. The first question we have today comes from Matthew Lloyd of HSBC. Matthew, your line is now open.
Good morning, gentlemen. It's Matthew Lloyd at HSBC. Just a couple of questions, really. You've given us a sense for the geographies. I wondered if you could sort of hint at what sort of tier of wage or brands are doing better at the moment than others. Is Page Executive doing best, or is something that's a more clerical brand doing better? Anything else that you might think is sort of unusual. Are clients prepared to talk about moving jobs even though we're in a recession? Just to try and get a feel for what the markets are like at the moment in labor.
Good morning, Matthew. Yeah, of course. Yeah, we are seeing differences between the brands. If you start at Page Executive, which is the most senior brand, focusing on the market, typically in industry anyway, between about £100,000-£250,000 salaries. They have done particularly well through this period. I think that's logical, so it didn't surprise us. It's logical because assignments at that level can take anywhere between three and nine months by the time the candidates work their notice. Realistically, I think they're typically critical roles. Therefore, if they're needed, they're needed. We've seen clients, largely speaking, carry on uninterrupted by the virus, and have continued to hire at that level. Page Executive has done particularly well. Michael Page has then done better than Page Personnel. Again, I would expect that.
A lot of what Michael Page does is technology, is logistics, is digital. Also they hire into fairly critical roles, where there's almost full employment in qualified professional people in the sectors and the disciplines that we recruit. Therefore, they've held up reasonably well, slightly better than the lowest end of the market in Page Personnel, where we've found that some areas of clerical professional work, which is what Page Personnel is focused on, have been not needed as much and particularly with home working. Some of those clerical roles haven't been replaced. So they've been a little quieter. Now, what we're seeing today is a little bit of a reverse of that because temp is now doing better than perm, which again, you'd expect at this stage.
As we're starting to see a recovery, it's not unexpected that clients will be risk-averse and will think to themselves, "Well, we do need some resource. Let's take a temp," and so on. That's typical of a sort of recovery as well, which we're seeing. In terms of activity from candidates, I think the lockdown has been a period for everyone to reflect on many things, which I'm sure everybody's discussed. Career is one of them. Do I work in the right sector? Do I like the way that my company has behaved during a very difficult period? Am I happy on the salary? Am I based in a location or an office environment that I'm happy with? What we've seen is a lot of candidates reacting to that and going, "No, I'm not.
I'm going to change, either the sector or the job or whatever it is that they're looking to do. Maybe their company isn't operating a flexible enough model. We're seeing a lot of candidate movement start to happen, and I think that's what's helping to fuel our recovery that we've seen so far.
Thank you very much.
We now have the next question from Andy Grobler of Credit Suisse. Please go ahead, Andy, whenever you're ready.
Hi. Good morning. Two from me, if I may. Not wanting to be too short-term, I'm going to ask a very short-term question. Lockdowns are beginning to come back in, at least partially across Europe. What are you seeing on a day-to-day basis in terms of client confidence and candidate confidence and how that's adjusting? I know that's a very short-term and difficult question. Secondly, on RPO and MSP. Historically, that wasn't an area of the market that you wanted to really address in size, although some of your competitors did so. What has changed there? Do you think that you have the capacity to really catch up with some fairly entrenched competition in that market?
Sure. Let me tackle the first one. You're right. Of course, we're very mindful of the fact that there are going to be lockdowns locally in different markets. We've had to close our offices in Switzerland, in Holland, and as of yesterday, as you're asking about the immediate, Rome closed as well because we had five cases there. How has it impacted? So far, it hasn't. The local lockdown hasn't. We switched seamlessly from working at home to the office, and back again. That's no problem. Our technology stands up to it. In preference, and you didn't ask this, but I will say our consultants do like to be in the office, the majority of them.
They're quite young, a lot of them, and I think they enjoy, particularly in a sales environment, working with colleagues and being able to see with them, celebrate with them, support each other, and so on. In those offices, we largely saw the majority, if not all of our consultants return to the office, and then with local lockdowns, they've returned to working at home as they did before, with no issues with technology. I think we're just going to have to accept these lockdowns, hopefully short-term, keep reoccurring. We just had one in Kuala Lumpur. We had it earlier in the last month in Jakarta. Offices will reopen again, and hopefully that seamless transition will not affect our activity levels and haven't so far. I can see the question about RPO and MSP, and it's a logical one to ask.
Again, to remind other listeners, we did engage in that market way back before my time as CEO, so some 20 years ago. In fact, we managed Morgan Stanley and HSBC. Back in those days, we found it with the support systems that we had and with the geographic spread that we had then, and with our exposure to certain disciplines, but weaker in others, like technology, we found we couldn't make it work profitably for us. Yes, we made some profit from it, but not with the sort of conversion rates that we like to target. For that reason, we took a strategic decision to stay away from it and focus on our diversification geographically and by discipline and by brand and seniority therefore, as well as change and centralize all of our operational support systems into shared service centers before we engage with that market.
We've been doing that for some time now. We've been focused on large high-potential markets, now 37% of the group. That puts us much more significantly into markets like the U.S., Latin America, China, Asia, where quite a lot of these relationships come from. We're much stronger there. Our brands have clearly grown. Page Executive, Page Personnel, and a much more significant proportion, as is temp, perm, contracting. The shared service centers are fully operational, and we're starting to see a lot of efficiencies from that.
Now in that position, and the fact that a lot of the models for RPO and MSP have moved on in terms of the delivery models, as in delivering candidates to the client, have moved on, we can see those models, and we can see the margins that are now achievable in that market, and we've got an improved capability to actually be able to deliver to our clients. For all of those reasons, we believe now is the right time to do it. In terms of the final part of that question, which I haven't missed, which is, can we catch up? Look, our capability and our track record at the moment is very strong in Latin America, in parts of Europe, in Asia. Very strong. Clearly, for example, in financial services in the middle of London, we don't have a strong record.
I think if a global bank was to turn around to us and offer us the full MSP and RPO for all of their vacancies and all of their staff across the world right now, it would be a struggle to point at a good track record that should justify us winning it. There are a lot of other sectors outside of those traditional MSP RPO clients to target, many of which we're already winning. We think we've got a really good opportunity to grow our track record and then one day maybe circle around and as these things come up every three to five years, to pitch, maybe there will be an opportunity for us to step in.
Well, hopefully that will work. Just on that point, is there an element of this that you were finding that your relationship with some of the larger clients was not as good as it maybe was historically, and this is a way back in and to stay relevant with some of those largest potential clients?
Yeah. First of all, hopefully it will work. Thanks for that. It's already working. Just to put your mind at rest, Andy. Yeah, look, of course. We've never denied this. I think in London, where a lot of corporate banks had gone down the MSP RPO route, clearly we'd seen our volumes decrease. That fitted with our strategy of becoming more diverse as well, because frankly, we saw in the GFC that a high exposure to financial services clearly was quite painful. I joined the business back in the day when financial services represented 40% of the group. That's decreased over the years and the decades I've been here, it's now roughly 5% of the group, I think that's healthy, and we've got a much even spread.
Yes, we have lost ground in some of those markets in high volume recruitment, but at very low margins, which we weren't prepared to work at. I don't worry about that. What we've seen, more importantly, to reassure us and give us the confidence we'll be successful, is that You can imagine in Latin America, in Mexico and Brazil, we've had a lot of requests to do these large-scale projects with our clients. In Latin America, I challenge a lot of those clients to find an alternative to us to actually be able to deliver that. We've actually seen our Page Outsourcing brand growing in success quarter after quarter after quarter. We've built our own track record internally to give us the confidence we will be successful.
Those weren't clients where we lost the business to MSP or RPO operators in the market, and now we're regaining them. These were clients doing it for the first time. There are lots and lots of clients who are still looking to do these large projects or MSP or RPO for the first time. That's what we intend to chase.
Okay. Thank you very much.
Pleasure.
We now have another question on the phone line from Anvesh Agrawal of Morgan Stanley. Please go ahead, Anvesh.
Hi. Good morning, everyone. I got a couple of questions. First, earlier in the presentation, you talked about rolling out the Salesforce platform in a few more geographies. Just from a financial perspective, how should we think about the cost of it in terms of CapEx and OpEx both? Second is just slightly longer term. If we go back 10 years now. Technology disintermediation has been discussed as a problem for the industry overall. Do you see the landscape changing post-COVID, and what are some of the positive or negative trends that you see for your business within that in a post-COVID world?
Let me ask Kelvin to answer the H1 of that question, which I didn't quite catch. It was regarding cost base, I believe.
I think the first part of the question, yeah, a bit tricky on the line when you were asking it, was about in terms of rolling out these new disciplines across geographies across the world, what are likely to be the investment requirements in terms of operational cost and in terms of CapEx cost. Was that right, Anvesh?
Yeah.
Yeah. I think if we're honest, that's part of the attraction of going into these areas. We have shared service centers set up around the world nowadays. We have systems. We operate in perm and temp in most geographies where actually that's applicable. Therefore, there isn't really any capital requirement needed in order to roll out these new disciplines. I know as part of Steve's presentation on strategy, you'll note that we've hired around 300 people from the competition in the last quarter. Many of these people were people that bring the expertise to do these disciplines. We have a track record in permanent recruitment, largely, and therefore probably a disproportionate number of our people in senior roles have a history in perm. We have some really good contracting businesses.
I point to the one obviously in Germany, but we also have a very good technology contracting business in Colombia, for example. Therefore, we've had indeed what is needed to drive these businesses. There isn't really going to be a big push on lots of investment. We're not going to go out and buy businesses. We've effectively acquired a 300-person business for nothing in the last quarter, and we will put people behind them to grow those businesses. It's certainly the case that some of these in contracting take a bit of time in order for the revenue to build up. Obviously, it takes longer than a perm business does. Nonetheless, in terms of investing large amounts of cash into these, by way of CapEx or acquisition, is not the case.
That's good. I would echo that actually as well because the footprint of our offices and geographies is exactly where we want it, and that's been the result of a significant focus over the last 10 years. We just opened an office in the Philippines, which is our sixth country in Southeast Asia, which was probably the smallest of the high potential markets and where we knew we had to open several countries over the last five, six years, which we've done now. I don't see that going any further to a seventh country for some time. If you look at our office counts over the last 15 or 20 years, it's only come down as we've needed fewer, bigger offices. We already have them, but putting new consultants into those offices is not an issue and not very expensive.
Working onto the second part of your question, which was around technology. First of all, clearly, there's one technology which has been very helpful, and that is video interviewing, which we rolled out Microsoft Teams some time ago, and you can imagine it to stay connected with each other and our clients and our candidates we're using all of the time. A lot of interviews, particularly the interviews we did, pre-screening candidates and so on, is now done by video, which means that our offices conveniently, which have a lot of interview rooms, which was the traditional way, now provides us with extra space so that we can social distance as we return to offices. That's all been very helpful.
Certainly going forward, we'll probably not need as many interview rooms as we had in the past because clients are definitely using that as a technique. It's not the whole process, and I think what we've seen is most people return to certainly final interviews being face-to-face. Certainly the early stages of a recruitment process being by video. That speeds the process up for us, helps productivity. What I would say about technology otherwise in other areas, there is a lot of opportunity from technology, and I hopefully talked about that earlier in the presentation, so I won't go over it again. There's lots and lots of ways that we can engage with technology to basically make what we do more accurate.
We don't want our consultants blindly cold calling clients, as I did when I was young, when we can actually use data intelligence, and we have a lot of data, to basically guide them to when clients will be active, what they're likely to be recruiting, guide them to give the client the information around salaries, candidate availability, where they'll be based. Maybe now with more flexible working, they could even be based not close to the offices of our clients. There's lots of advantages we can bring there. Why do I think that's going to be helpful to us, in particular, in relation to competitors? Well, when you look at our larger competitors, they will have a similar ability to engage with technology. Some will do it more than others. You have to remember, in our industry, it's very, very fragmented.
Let me give you an example in the U.K. In the U.K., there are 27,000 recruitment companies with less than 10 fee earners. Trust me, they will not be able to engage with technology in the same way we can. Can they achieve a national coverage when you've only got five consultants? No. Will they be able to access all of the different social media and job boards that we have to access to find candidates that aren't already known to us? No. They won't have a CRM systems in the same sophistication. As a result, when you look at 27,000 times anywhere up to 10 fee earners, you can see we've got a lot of competition in those small boutiques. That's the opportunity for us to take market share and gain. I see it as an opportunity, not as a threat as you're implying.
Well, that's very clear. Thank you so much.
Cheers.
We have no further questions registered at this time, as a reminder, if you would like to ask any further questions, please press star one on your telephone keypad now. We now have a question from Edward Donahue from One Investment. Please go ahead, your line is open.
Good morning, gentlemen. A question with regard to the recruitment of roughly 300 experienced account managers. Normally around this time of year, you have your significant graduate recruitment. Can you just sort of explain the thinking behind why you've decided, and taking your phrase, we've just basically bought a company at close to zero, a very limited cost.
Yeah.
The strategic thinking behind at this particular juncture, and what this actually tells us about your planning and your view on the future.
Sure. The first thing to observe, obviously, at the moment, it's tough. It's a tough market out there, and finding and winning and engaging with clients is obviously tougher than it was this time last year, hence our numbers are down. What we found is that our least experienced consultants, those that don't have a track record of winning and developing and growing relationships, have struggled, and that's why we've, roughly speaking, lost 1,000 people with less than 12 months experience, many of whom have literally never made a placement. When you ask those people to work flexibly or even work totally from home, phoning clients and candidates, they're gonna add a limited amount of value. That's one thing.
That's why this year we haven't engaged with graduate programs and so forth because working from home, we've got wonderful e-learning programs and so on, but a lot of the training and coaching is gained in an office from colleagues guiding them, coaching you, and so on. We've chosen not to do that. However, we still want to push ahead in our strategic areas of development and opportunity. Technology recruitment, it's now 12% of the Group. In some markets, it's as high as 35% of the country's GP. In other countries, it's 5%. We can see a really good opportunity there. It's witnessed in the technology recruitment we do in Germany, in contracting. Incredibly successful, and has been growing now rapidly for some time. There's an opportunity here for us to get proven fee earners, and they can evidence that.
Proven fee earners that have worked in the competition, who previous to this would not talk to us. Because of the way we've so far, we believe, traveled through the virus, because of the investments we've made over the last few years, our track record and our reputation with those people has improved to the point they are happy to engage with us and talk to us. We're able to measure what GP they did last year. It's GBP 40 million. I could easily work out a sort of full profit and loss for 300 people, what their salaries are, what their costs are, what it would cost to put them in an office. GBP 40 million of GP, you could estimate what the OP would be. Yeah, we think it's a smart way of acquiring a recruitment company that's tailored to where we need to make investments.
That's what we've done. These people, unlike a consultant who joins with no recruitment experience as I was when I joined, where it can take anywhere between 3 and 12 months to start delivering on GP. These guys and girls are hitting the ground running, and I think that's really very helpful.
Yeah, that's great. If you don't mind me asking, and maybe you don't want to say because it might be a bit too commercial, but can you give a sort of geographic and a sort of skill set weighting within that recruitment? Just going back to your point on technology.
I could be accurate, but I can't in front of me right now, Edward, which is honestly where I'm at. I can tell you that we've hired quite a lot in China, a lot in Germany, the U.K. This partly reflects where we've got competition because we can't hire loads from the competition in Latin America because frankly, they don't exist. We've done particularly well, I would say, in Germany, in Southern Europe, Spain and Italy, U.K., China. Actually, we've done reasonably well, where there's not much competition, but we've done reasonably well in some of the Southeast Asia countries as well. It's quite a spread, but I could even give you an accurate figure on that. That wouldn't concern me.
That's fine. No, that's great.
Mostly, I will just say this, I'll add as well, sorry. A lot of those people, some have come from the obvious competitors, but a lot of them have come from boutiques. I think it's fair to say that if you were to summarize our industry, it's the boutiques in our industry that perhaps didn't have the cash reserves that some of the PLC competitors have got, that we have as well, that have, I would say, and I'd be bold to say, mishandled how they've gone through the whole virus situation, lockdown and so on. As a result, frankly, those people have disengaged with the companies they've been working for and have been tempted to work for a bigger player like ourselves.
Okay.
Yeah, no problem.
Sorry.
I can just add a little bit more onto that if you'd like. We did hire around 60 in Asia, around 60 in the U.K., nearer to 50 in Germany, in the 20s in the U.S. Quite a spread and plenty others within Southern Europe, France, Australia. As Steve said, not so many in Latin America, around 10, 15 in Latin America. It was very well spread across many different countries, but slightly higher in the U.K. and Asia.
Okay. If I've got time for one last question, can you give any bit more granularity with regard to the European footprint on the temporary side, especially talking with regard to France? Just going back to your point about conservatism from the customer base at this point in a recovery. What are you seeing with regard to either volumes versus what you would have expected or normal and the temp length and any mix change within that as things are reopening?
To be honest, that's the pattern we're seeing. The balance between temp and perm actually in Europe, is much more even than it is elsewhere. About 55% of Europe is perm and about 45% is temp. It's a big old slug. We're seeing the same sort of reaction to the cycle as we'd expected, which is temp gets hit at the beginning of the cycle when the virus first happened. A lot of temps, not in technology, in high-end accounting, but a lot of the junior temps, they're dispensed with. We don't need them. We're in lockdown, et cetera. That's the typical reaction of a client.
Then as things start to recover and they see the lights coming back on again and people going back to offices and so on, then they actually go, "Okay, well, look, let's use the flexible resource, the flexibility that temp gives us," and we hire again. We're seeing our temp numbers recover. Like I say, but with the exception of technology and high-end finance and so on, where if somebody needs that expertise and it means them working from home, they won't worry about it. Yes, they'll hire them from home, or they'll retain them if they've already got them, and let them work from home, at the beginning of the cycle. We've seen our technology temp business or contracting business in Germany, for example, do very well during this whole process. Largely, I could say the same for our contracting business around the world.
One of the other markets that grew in Q3 was Colombia, because it has a decent contracting business, focused around IT. Those particular businesses stood up well.
Okay, gentlemen. Thank you very much indeed. Appreciate it.
Pleasure.
Welcome.
We have no further questions registered at this time. As a reminder, it's star one if you would like to ask any further questions today.
Okay. As there are no further questions, thank you all for joining us this morning. The next date for your calendar is our Q4 trading update, which will be on the 13th of January. Thank you, everyone.
Today's call. Thank you all again for joining. You may now disconnect your line.