AUS
NZ
UK
CA
USA
IND
Highlights:
- Net Fees Decline: Hays reported a 14% drop in net fees year-on-year for Q1, with significant declines in both permanent and temporary recruitment.
- Regional Challenges: Germany, the UK, and other key markets faced notable drops in recruitment activity, with the automotive sector and public sector temp roles particularly affected.
- Earnings Outlook: Hays expects pre-exceptional operating profit in H1 2025 to be lower than H2 2024 unless market conditions improve.
Recruitment firm Hays PLC (LSE:HAS) has warned that it expects a decline in earnings for the first half of the current fiscal year due to ongoing challenging market conditions, which significantly impacted its fee revenue in the first quarter. The company reported a 14% year-on-year decline in net fees for the three months ending 30 September, driven by a 20% drop in permanent recruitment fees and a 10% decline in temporary and contracting fees, which make up 61% of Hays' total fee income.
Hays' Chief Executive Dirk Hahn highlighted that the reduction in net fees was in line with expectations given the difficult market environment, especially in permanent recruitment, where extended hiring times and low confidence levels have persisted. The company has been focusing on optimizing operations and resource allocation, leading to a 5% increase in consultant productivity compared to the previous year, though the overall number of consultants decreased by 2% over the quarter.
All of Hays' major regions experienced fee declines, with Germany, its largest market, seeing a 13% drop due to ongoing challenges in the temporary sector and subdued permanent activity. The UK and Ireland also faced a 20% reduction in fees, impacted by lower temporary recruitment in the public sector and weak demand for permanent roles. The company remains cautious about the outlook, indicating that unless there is a significant market recovery, pre-exceptional operating profit for the first half of fiscal 2025 is likely to be lower than the second half of the previous fiscal year.
