Recruiter Hays hit by staff reductions in Great Britain and Germany
- Hays announced that like-for-like net fees fell 15% last quarter
Hays is the latest British recruiter to report a drop in compensation following a decline in vacancies in Britain and Germany.
The London-based company announced that like-for-like net fees fell 15 percent in the three months to December compared to the same period last year.
It recorded a 21 percent decline in permanent hiring costs, a 10 percent decline in temporary compensation, and double-digit declines in many of its core areas.
Net fees fell 13 percent in Germany, where the economy just shrank for the second year in a row due to lower exports, increasing competition from China and rising energy prices.
Hays noted that his clients were taking longer to hire people on a full-time basis, while the struggling German auto industry was impacting temporary hiring.
Meanwhile, fees in the British Isles fell 14 percent, while trading in London, northern England and the Republic of Ireland was much weaker.
Trading woes: Hays has become the latest UK recruiter to report worse results after workforce declines in Britain and Germany
Outside Europe, the FTSE 250 company recorded a decline of 14 percent in Australia and New Zealand, 26 percent in Latin America and 38 percent in Hong Kong.
Hays’ trading update follows similar announcements from fellow recruiters PageGroup and Robert Walters earlier this week.
Both companies said their gross profit shrank in the fourth quarter of 2024 due to sluggish performance in Britain and Germany, which they blamed on subdued customer and candidate confidence.
They have also continued to reduce headcount, with Robert Walters cutting staff by 17 percent last year to fewer than 3,000. Hays has reduced its own workforce by 15 percent in the same period.
Rate hikes by central banks since 2021 have made borrowing more expensive for companies looking to expand, prompting many to make layoffs or cut workforces.
The global tech industry has been particularly brutal, losing more than 583,000 jobs since 2022, according to tracking website Layoffs.fyi.
It is not only affected by higher interest rates, but also by people spending less time online after the end of pandemic-related restrictions.
Dirk Hahn, CEO of Hays, said: ‘It is still too early to say whether the recent weakness (in permanent hiring) reflects a more sustained market slowdown or deferral of client and candidate decision-making in the shorter term.
“However, we are executing on our strategy to focus on longer-term growth markets and build a structurally more profitable and resilient business.”
Hays expects to achieve around £25m of pre-exceptional operating profits in the first half of fiscal 2025, which is at the lower end of consensus forecasts.
Hays shares were 1.7 percent higher at 73.65p just after midday on Wednesday, but have been contacted by more than a quarter in the past year.
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