Fee income at Hays fell, as the company continued to experience tough conditions in the fourth quarter. However, the company says it remains profitable, with expected earnings for the year ended 30 June of £158m.

In its trading update, Hays says permanent net fee was hardest hit, with a 57% fall (on a like-for-like basis) compared to the same quarter in 2008.  Demand for temporary staff proved more resilient with a 23% decline.

During the quarter, Hays reduced staff numbers by 8% globally. The total cut, over the financial year, was 26%.

In the UK and Ireland, where net fees fell by 45%, staff numbers were reduced by 5%, with 15 offices closed. This was mainly through consolidating offices in big cities, such as London, Birmingham and Leeds.

Hays’ finance director, Paul Venables, told a conference call that Hays’ strategy was two-fold: “To batten down the hatches for the short term, and best position the company for the upturn.”

Hays was continuing to invest in  growing markets, such as Moscow, and was continuing to roll out its “state of the art” IT platform.

Venables said that although a 40% fall in net fees showed how tough the markets are,  one positive “crumb”  was that the rate of decline in net fees had fallen compared with the two previous quarters.

The company had been able to maintain its pricing structure, said Venables, though with demand from corporates making up a higher proportion of Hays’ business, the mix had changed.  “You get a slightly lower margin from the big corporates than from smaller companies, because you are getting a larger volume,” he explained.

Another positive was that the 8% headcount reduction had been the lowest of any quarter this financial year, said Venables. However, he could not rule out further reductions, telling Recruiter that this depended on the market, which was particularly difficult to predict at the moment. 

Venables said there was little evidence of stability in Hays’ markets, apart from Australia and New Zealand, and in the City of  London.