In a statement, Hays attributed the quarterly fall to “a more difficult December” in which fees fell by 15%.

In the UK & Ireland (UKI), net fees dropped by 17%; temp fees, which make up more than half of UKI fees, fell by 13%, and perm fees by 21%. Private sector fees, which make up 64% of Hays’s UKI fee revenues, decreased by 21% and public sector fees by 6%.

“As a result of this slowdown at the end of the quarter, we now expect H1 pre-exceptional operating profit of c.£60m, below current market consensus expectations,” the company said in a statement accompany the results, reflecting the quarter ended 31 December 2023.

Hays said its consultant headcount decreased by 5% in the quarter and by 12% year-on-year (YoY). Non-consultant headcount was reduced by 3% in the quarter. “Overall, our actions to reduce costs in H1 24 will deliver c.£30m in annualised savings, with further material savings expected in H2. As a result, we expect to incur an exceptional restructuring charge in H1 FY24 of c.£12m,” the company said.

Commenting on the group’s performance, Hays CEO Dirk Hahn said: “Overall market conditions became increasingly challenging through the quarter, including a clear slowdown in most markets in December, notably in our perm businesses as client and candidate decision-making slowed. Temp volumes remained broadly stable sequentially through the quarter, but declined YoY as we did not see our normal seasonal step-up in worker volumes. 

“As a result, we expect operating profit in our first half to be c.£60m, despite our ongoing actions to reduce costs. Given increased uncertainties and reduced client and candidate confidence, our New Year ‘return to work’ is particularly important, and we are closely monitoring activity levels. It is too early to say if December’s weakness reflects a sustained market slowdown or some placement deferrals, however, we expect near-term market conditions to remain challenging.

“Consequently, we accelerated our cost reduction and efficiency programmes, while focusing on increased operational performance and rigour.”

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