Hays Q3 fees slump 14%, restructuring amid economic headwinds
LONDON, UNITED KINGDOM — Global recruitment firm Hays plc delivered disappointing results for the third quarter of fiscal 2024, as challenging economic conditions continued to weigh on hiring activity.
The company reported a 14% year-over-year decline in net fees to £135.6 million ($168 million) between January and March.
Temporary and contractor hiring shows resilience
While temporary and contractor hiring proved more resilient, with fees down 12%, Hays saw a steeper 18% drop in its permanent placement business. This reflected broader economic uncertainty impacting client and candidate confidence levels.
Commenting on the diverging trends, Hays Chief Executive Dirk Hahn said, “Client and candidate activity remains solid overall in Temp and Contracting, with modestly lower numbers of new assignments broadly offset by greater contract extensions. However, we continued to see extended ‘time-to-hire’ in Perm, impacted by low levels of client and candidate confidence.”
Regional performance also diverges
There was a stark regional divide in Hays’ Q3 performance. In Germany, the firm’s largest market, net fees were flat year-over-year at -13%.
However, fees in the United Kingdom and Ireland declined 16%, while those in Australia and New Zealand plunged 23%.
Hahn cited increased cost controls in Germany impacting contractor hours worked, which led to an £8 million ($9.9 million) drag on fees and profits.
Cost cutting and restructuring plans to save $62 million
To combat the tough trading environment, Hays is undergoing a major restructuring to reduce its cost base.
The company is “well on track” to deliver £50 million ($62 million) in annualized cost savings by year-end, with £20 million expected to be structural.
This includes a £12.6 million exceptional restructuring charge booked in H1, with further charges expected.
The firm’s headcount also decreased 6% in Q3 and 16% year-over-year as Hays managed capacity.
In an earlier report, Hays revealed that they had cut 1,150 jobs in 2023, with 650 positions eliminated in the October to December quarter alone as it struggled with a “clear slowdown” in hiring demand.
Hays’ 2024 outlook remains cautious amid economic uncertainties
Looking ahead, Hays expects market conditions to “remain challenging but broadly stable” in the near term. A key sensitivity will be the impact of reduced contractor hours worked in Germany on fees and profits.
Still, the firm remains focused on driving consultant productivity through increased operational rigor. With a diversified global footprint across 33 countries, Hays is aiming to capitalize when hiring conditions improve.
But for now, restructuring and cost discipline are the priorities as economic headwinds persist.
