FINANCIALS: Hays cites ‘challenging’ conditions on quarterly results

Challenging market conditions were cited by global recruiter Hays as the company saw a 14% fall in group fees year-on-year with actual net fees dropping by 17%.

A strengthening of the value of the pound versus the Australian dollar and euro contributed to the decreasing group fees in the quarter ended 31 March 2024, Hays said.

Representing 60% of group fees, temp and contracting fees decreased by 12% against a record year-on-year comparative, Hays said. Fees in permanent hiring fell by 18%, driven by volumes down 23%. “This was partially offset by an increase in our group average per fee, up 5%,” the company said in its trading overview statement.

“We continue to see longer than normal ‘time-to-hire’, impacted by relatively low levels of client and candidate confidence.”

Net fees in the UK and Ireland, which represent 20% of group net fees, decreased by 16%, with temp fees dropping by 15% and permanent hiring down by 18%. In London, the largest UK&I region, net fees fell by 18% and in Ireland, the business decreased by 11%. Reporting sharper falls in the UK&I region were Scotland, down 26%, and South-West and Wales, down 23%. Consultant headcount fell by 6% in the quarter and by 16% year-on-year, Hays reported.

As of the Q3 FY24 end, Hays had about 11,600 employees in 248 offices in 33 countries. The company said, “the vast majority” of its professional and skilled recruitment was still done in-house, with “minimal outsourcing” to recruitment agencies which “presents substantial long-term structural growth opportunities”. The company went on to say: “This has been a key driver of the diversification and internationalisation of the group, with the international business representing 80% of the group’s net fees in Q3 FY24, compared with 25% in FY05.”

Other report highlights included:

  • 2% year-on-year increase in consultant productivity.
  • Costs reduced per period since August 2023 by £4m as part of a planned £50m of annualised cost savings by the end of FY24, of which “c.£20m is expected to be structural”. The company said: “As a result, we incurred a £12.6m exceptional restructuring charge in H1 FY24 with further restructuring charges expected in H2 24.”
  • Group consultant headcount decreased by 6% in Q3 and by 16% year-on-year.
  • Total group headcount dropped by 5% in Q3 and by 13% year-on-year.

Hays CEO Dirk Hahn said: “While economic uncertainties remain, we have a strong and clear strategy and will continue to build a more resilient business through greater focus, increased operational rigour and strong cost management… we are firmly focused on targeting the many structural growth opportunities we see, and, over time, rebuilding our conversion rate.”

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